BLACKROCK MUNIHOLDINGS FUND, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number: 811-08081

Name of Fund:   BlackRock MuniHoldings Fund, Inc. (MHD)

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniHoldings Fund, Inc., 55 East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 04/30/2015

Date of reporting period: 04/30/2015


Item 1 – Report to Stockholders


APRIL 30, 2015

 

 

ANNUAL REPORT

 

    LOGO

 

BlackRock MuniAssets Fund, Inc. (MUA)

BlackRock MuniEnhanced Fund, Inc. (MEN)

BlackRock MuniHoldings Fund, Inc. (MHD)

BlackRock MuniHoldings Fund II, Inc. (MUH)

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

BlackRock MuniVest Fund II, Inc. (MVT)

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents     

 

     Page  

The Markets in Review

    3   

Annual Report:

 

Municipal Market Overview

    4   

The Benefits and Risks of Leveraging

    5   

Derivative Financial Instruments

    5   

Fund Summaries

    6   
Financial Statements:  

Schedules of Investments

    20   

Statements of Assets and Liabilities

    63   

Statements of Operations

    65   

Statements of Changes in Net Assets

    67   

Statements of Cash Flows

    71   

Financial Highlights

    73   

Notes to Financial Statements

    80   

Report of Independent Registered Public Accounting Firm

    92   

Automatic Dividend Reinvestment Plan

    93   

Officers and Directors

    94   

Additional Information

    97   

 

                
2    ANNUAL REPORT    APRIL 30, 2015   


The Markets in Review

 

Dear Shareholder,

Financial market performance was generally positive for the 6- and 12-month periods ended April 30, 2015, although volatility increased from the remarkably low levels seen in recent years. In 2014, as the U.S. Federal Reserve (the “Fed”) gradually reduced its bond buying program (which ultimately ended in October), U.S. interest rates surprisingly trended lower and stock prices forged ahead despite high valuations on the back of a multi-year bull market.

Around mid-year, however, geopolitical tensions intensified in Ukraine and the Middle East and oil prices became highly volatile, stoking worries about economic growth outside the United States. As the U.S. economy continued to post stronger data, investors grew concerned that the Fed would raise short-term rates sooner than previously anticipated. The U.S. dollar appreciated and global credit markets tightened, ultimately putting a strain on investor flows, and financial markets broadly weakened in the third quarter.

U.S. economic growth picked up considerably in the fourth quarter while the broader global economy showed signs of slowing. U.S. markets significantly outperformed international markets during this period even as the European Central Bank (“ECB”) and the Bank of Japan eased monetary policy, which drove further strengthening in the U.S. dollar. Oil prices plummeted due to a global supply-and-demand imbalance, sparking a selloff in energy-related assets and stress in emerging markets. Fixed income investors piled into U.S. Treasuries as their persistently low yields became attractive as compared to international sovereign debt.

Equity markets reversed in 2015, with U.S. stocks underperforming international markets. Investors had held high expectations for the U.S. economy, but after a harsh winter, first-quarter data disappointed and high valuations took their toll on U.S. stocks. The continued appreciation of the dollar was an additional headwind for exporters. Although U.S. economic momentum had broadly weakened, the labor market — a key determinant for the Fed’s decision on the future of interest rate policy — showed improvement, keeping investors on edge about when to expect the first rate hike.

In contrast, economic reports in Europe and Asia easily beat investors’ very low expectations, and accommodative policies from central banks in those regions helped international equities rebound. The ECB’s asset purchase program was the largest in scale and effect on the markets. Global sentiment improved with a ceasefire in Ukraine and an improving outlook for Greece’s continued membership in the eurozone. Emerging market stocks rebounded in April as oil prices appeared to stabilize.

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

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of April 30, 2015  
    6-month     12-month  

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

    4.40     12.98

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

    4.65        9.71   

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

    6.81        1.66   

Emerging market equities
(MSCI Emerging Markets
Index)

    3.92        7.80   

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

Bill Index)

    0.01        0.02   

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

    3.59        8.03   

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

    2.06        4.46   

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

    1.27        4.86   

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

    1.52        2.59   
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.    

 

                
   THIS PAGE NOT PART OF YOUR FUND REPORT       3


Municipal Market Overview     

 

For the Reporting Period Ended April 30, 2015      

Municipal Market Conditions

Municipal bonds generated strong performance throughout most of the period, due to a favorable supply-and-demand environment and declining interest rates. (Bond prices rise as rates fall.) Interest rates moved lower in 2014 even as the Fed scaled back its open-market bond purchases. This surprising development, coupled with reassurance from the Fed that short-term rates would remain low for a considerable amount of time, resulted in strong demand for fixed income investments in 2014, with municipal bonds being one of the stronger performing sectors for the year. This trend continued into the beginning of 2015 until rate volatility ultimately increased in February as a result of uneven U.S. economic data and widening central bank divergence, i.e., rate cuts outside the United States while the Fed poised for normalizing U.S. rates. During the 12 months ended April 30, 2015, municipal bonds garnered net inflows of approximately $34 billion (based on data from the Investment Company Institute).

For the same 12-month period, total new issuance remained relatively strong from a historical perspective at $387 billion (considerably higher than the $302 billion issued in the prior 12-month period). A noteworthy portion (roughly 60%) of new supply during this period was attributable to refinancing activity as issuers took advantage of low interest rates and a flatter yield curve to reduce their borrowing costs.

S&P Municipal Bond Index

Total Returns as of April 30, 2015

  6 months:   1.27%

12 months:   4.86%

A Closer Look at Yields

 

LOGO

From April 30, 2014 to April 30, 2015, yields on AAA-rated 30-year municipal bonds decreased by 44 basis points (“bps”) from 3.49% to 3.05%, while 10-year rates decreased 18 bps from 2.30% to 2.12% and 5-year rates increased 7 bps from 1.23% to 1.30% (as measured by Thomson Municipal Market Data). Overall, the municipal yield curve remained relatively steep over the 12-month period even as the spread between 2- and 30-year maturities flattened by 62 bps and the spread between 2- and 10-year maturities flattened by 36 bps.

During the same time period, U.S. Treasury rates fell by 71 bps on 30-year bonds, 60 bps on 10-year bonds and 24 bps in 5-year issues. Accordingly, tax-exempt municipal bonds underperformed Treasuries across the yield curve, most notably in the intermediate portion of the curve as a result of increased supply. Municipals largely moved in line with Treasuries in the very short end of the curve as expectations around future Fed policy changes pressured short-term prices in a similar fashion. In absolute terms, positive performance of muni bonds on the long end of the curve was driven largely by a supply/demand imbalance within the municipal market as investors sought income and incremental yield in an environment where opportunities had become scarce. More broadly, municipal bonds benefited from the greater appeal of tax-exempt investing in light of the higher tax rates implemented in 2014. The asset class is known for its lower relative volatility and preservation of principal with an emphasis on income as tax rates rise. We believe that the municipal market continues to be an attractive avenue for investors seeking yield in the low-rate environment.

Financial Conditions of Municipal Issuers

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

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

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

 

                
4    ANNUAL REPORT    APRIL 30, 2015   


The Benefits and Risks of Leveraging     

 

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

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

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

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

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

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

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

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

 

Derivative Financial Instruments     

 

The Funds may invest in various derivative financial instruments. Derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage. Derivative financial instruments also involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The Funds’ ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    5


Fund Summary as of April 30, 2015    BlackRock MuniAssets Fund, Inc.

 

Fund Overview      

BlackRock MuniAssets Fund, Inc.’s (MUA) (the “Fund”) investment objective is to provide high current income exempt from federal income taxes by investing primarily in a portfolio of medium- to lower-grade or unrated municipal obligations, the interest on which, in the opinion of bond counsel to the issuer, is exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests at least 65% of its assets in municipal bonds that are rated in the medium to lower categories by nationally recognized rating services (for example, Baa or lower by Moody’s Investors Service, Inc. (“Moody’s”) or BBB or lower by Standard & Poor’s Corporation (“S&P”)) or non-rated securities which are of comparable quality. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance      
Ÿ  

For the 12-month period ended April 30, 2015, the Fund returned 17.02% based on market price and 10.11% based on NAV. For the same period, the closed-end Lipper High Yield Municipal Debt Funds category posted an average return of 11.01% based on market price and 9.85% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund moved from a discount to NAV to a premium during the period, which accounts for the difference between performance based on price and performance based on NAV.

The following discussion relates to the Fund’s absolute performance based on NAV:

 

Ÿ  

Municipal bonds generated positive performance during the 12-month period, as the combination of falling U.S. Treasury yields and strengthening municipal finances fueled healthy investor demand. (Bond prices rise when rates fall.) The yield curve flattened during the period, with longer-term bonds generally outperforming shorter-term issues. Higher-rated bonds, while delivering positive absolute performance, lagged the return of lower-rated issues.

 

Ÿ  

Income in the form of coupon payments made up a meaningful portion of the Fund’s total return for the period. In addition, the Fund’s use of leverage provided both incremental return and income in an environment of declining interest rates. The Fund’s positioning with respect to duration (sensitivity to interest rate movements) also helped performance. The Fund’s positioning along the yield curve, which favored longer-dated bonds, was an additional positive as longer-dated bonds generally delivered higher returns than those with shorter maturities.

 

Ÿ  

Fund holdings in non-investment grade and unrated securities contributed both in terms of price appreciation and incremental income. BBB-rated bonds, which represents the Fund’s largest concentration, also contributed significantly as persistent demand from yield-seeking investors fueled outperformance for this credit tier. Exposures to the health care, transportation and utilities sectors were among the top contributors to performance.

 

Ÿ  

The Fund’s holding in New Jersey Economic Development Authority, which financed an energy facility for a casino in Atlantic City, New Jersey, experienced a substantial decline in value in the wake of the casino operator’s bankruptcy filing in June, 2014. In addition, the Fund’s investment in Central Falls Rhode Island Detention Facility Corporation suffered a substantial decline after the issuer filed for receivership and defaulted on its principal and interest payments.

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

 

Fund Information      

Symbol on New York Stock Exchange (“NYSE”)

   MUA

Initial Offering Date

   June 25, 1993

Yield on Closing Market Price as of April 30, 2015 ($14.22)1

   5.27%

Tax Equivalent Yield2

   9.31%

Current Monthly Distribution per Common Share3

   $0.0625

Current Annualized Distribution per Common Share3

   $0.7500

Economic Leverage as of April 30, 20154

   11%

 

  1   

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

 

  2   

Tax equivalent yield assumes the maximum 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 TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to TOB Trusts, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

                
6    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniAssets Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

     

4/30/15

     4/30/14      Change      High      Low  

Market Price

   $ 14.22       $ 12.85         10.66    $ 14.33       $ 12.61   

Net Asset Value

   $ 14.12       $ 13.56         4.13    $ 14.38       $ 13.56   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation  

4/30/15

    4/30/14  

Health

    26     23

Transportation

    19        20   

County/City/Special District/School District

    16        16   

Tobacco

    10        5   

Utilities

    9        14   

Corporate

    8        12   

Education

    8        6   

State

    3        4   

Housing

    1          

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

Credit Quality Allocation1  

4/30/15

    4/30/14  

AA/Aa

    18     21

A

    7        9   

BBB/Baa

    27        27   

BB/Ba

    9        7   

B

    8        9   

CCC/Caa

    1          

N/R2

    30        27   

 

  1   

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

 

  2   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2015 and April 30, 2014, the market value of unrated securities deemed by the investment advisor to be investment grade represents 5% and 4%, respectively, of the Fund’s total investments.

 
Call/Maturity Schedule3  

Calendar Year Ended December 31,

 

2015

    9

2016

    2   

2017

    6   

2018

    8   

2019

    6   

 

  3   

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    7


Fund Summary as of April 30, 2015    BlackRock MuniEnhanced Fund, Inc.

 

Fund Overview      

BlackRock MuniEnhanced Fund, Inc.’s (MEN) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests primarily in long-term municipal bonds rated investment grade quality at the time of investment and invests primarily in long-term municipal bonds with maturities of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance      
Ÿ  

For the 12-month period ended April 30, 2015, the Fund returned 10.33% based on market price and 9.49% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 11.00% based on market price and 9.96% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV.

The following discussion relates to the Fund’s absolute performance based on NAV:

 

Ÿ  

Municipal bonds generated positive performance during the 12-month period, as the combination of falling U.S. Treasury yields and strengthening municipal finances fueled healthy investor demand. (Bond prices rise when rates fall.) During the first-half of the reporting period, yields fell and the yield curve flattened considerably (with longer-term bonds outperforming shorter-term debt). During the second half of the period, yields rose very modestly while the yield curve continued to flatten marginally.

 

Ÿ  

Income in the form of coupon payments made up a meaningful portion of the Fund’s total return for the period. The Fund’s duration exposure contributed positively to performance, as yields fell during the period. (Duration is a measure of interest rate sensitivity). In addition, its exposure to the long end of the yield curve aided performance at a time in which the yield curve flattened. The Fund also benefitted from its exposure to the outperforming transportation and school district sectors. In addition, the Fund’s use of leverage provided both incremental return and income at a time of declining interest rates.

 

Ÿ  

The Fund’s exposure to Chicago general obligation bonds detracted from performance, as did its positions in certain New Jersey credits. The yield spreads on these securities rose significantly due to concerns about pension funding and the resulting downgrades to the issuers’ credit ratings.

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

 

Fund Information      

Symbol on NYSE

   MEN

Initial Offering Date

   March 2, 1989

Yield on Closing Market Price as of April 30, 2015 ($11.67)1

   6.22%

Tax Equivalent Yield2

   10.99%

Current Monthly Distribution per Common Share3

   $0.0605

Current Annualized Distribution per Common Share3

   $0.7260

Economic Leverage as of April 30, 20154

   38%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
8    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniEnhanced Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

      4/30/15      4/30/14      Change      High      Low  

Market Price

   $ 11.67       $ 11.27         3.55    $ 12.13       $ 10.86   

Net Asset Value

   $ 12.27       $ 11.94         2.76    $ 12.72       $ 11.94   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/15     4/30/14  

County/City/Special District/School District

    27     24

Transportation

    20        19   

Utilities

    16        15   

State

    15        22   

Education

    10        8   

Health

    9        8   

Corporate

    2        2   

Housing

    1        2   

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

Credit Quality Allocation1   4/30/15     4/30/14  

AAA/Aaa

    11     13

AA/Aa

    58        58   

A

    25        25   

BBB/Baa

    6        4   

N/R

    2         

 

  1   

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

 

  2   

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

   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2015

    7

2016

    3   

2017

    11   

2018

    11   

2019

    16   

 

  3   

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    9


Fund Summary as of April 30, 2015    BlackRock MuniHoldings Fund, Inc.

 

Fund Overview

BlackRock MuniHoldings Fund, Inc.’s (MHD) (the “Fund”) investment objective is to provide shareholders with current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance
Ÿ  

For the 12-month period ended April 30, 2015, the Fund returned 14.80% based on market price and 11.22% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 11.00% based on market price and 9.96% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV.

The following discussion relates to the Fund’s absolute performance based on NAV:

 

Ÿ  

Municipal bonds generated positive performance during the 12-month period, as the combination of falling U.S. Treasury yields and strengthening municipal finances fueled healthy investor demand. (Bond prices rise when rates fall.) The yield curve flattened during the period, with longer-term bonds generally outperforming shorter-term issues. Higher-rated bonds, while delivering positive absolute performance, lagged the return of lower-rated issues.

 

Ÿ  

Income in the form of coupon payments made up a meaningful portion of the Fund’s total return for the period. In addition, the Fund’s use of leverage provided both incremental return and income in an environment of declining interest rates. The Fund’s positioning with respect to duration (sensitivity to interest rate movements) helped performance. The Fund’s positioning along the yield curve, which favored longer-dated bonds, also aided performance as longer-dated bonds generally delivered higher returns than those with shorter maturities.

 

Ÿ  

Positions in lower-rated investment-grade bonds contributed to performance, as did the Fund’s exposure to the lower end of the credit spectrum (non-investment grade and unrated securities). Lower-rated bonds generated both attractive income and strong price appreciation during the period.

 

Ÿ  

Exposures to the transportation, health care and utilities sectors were among the top contributors to performance.

 

Ÿ  

There were no material detractors from the Fund’s performance during the period.

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

 

Fund Information

Symbol on NYSE

   MHD

Initial Offering Date

   May 2, 1997

Yield on Closing Market Price as of April 30, 2015 ($17.25)1

   6.16%

Tax Equivalent Yield2

   10.88%

Current Monthly Distribution per Common Share3

   $0.0885

Current Annualized Distribution per Common Share3

   $1.0620

Economic Leverage as of April 30, 20154

   36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
10    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniHoldings Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

     

4/30/15

     4/30/14      Change      High      Low  

Market Price

   $ 17.25       $ 16.01         7.75    $ 17.97       $ 15.67   

Net Asset Value

   $ 17.59       $ 16.85         4.39    $ 18.24       $ 16.85   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation  

4/30/15

    4/30/14  

Transportation

    25     22

Health

    18        19   

County/City/Special District/School District

    12        13   

State

    11        13   

Utilities

    11        10   

Education

    10        10   

Corporate

    8        9   

Tobacco

    4        3   

Housing

    1        1   

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

Credit Quality Allocation1  

4/30/15

    4/30/14  

AAA/Aaa

    8     9

AA/Aa

    44        39   

A

    26        29   

BBB/Baa

    11        11   

BB/Ba

    4        3   

B

    2        3   

CCC/Caa

    2        

N/R3

    5        6   

 

  1   

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

 

  2   

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

 

  3  

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2015 and April 30, 2014, the market value of unrated securities deemed by the investment advisor to be investment grade each represents 1%, respectively, of the Fund’s total investments.

   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2015

    5

2016

    3   

2017

    5   

2018

    6   

2019

    26   

 

  4  

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    11


Fund Summary as of April 30, 2015    BlackRock MuniHoldings Fund II, Inc.

 

Fund Overview      

BlackRock MuniHoldings Fund II, Inc.’s (MUH) (the “Fund”) investment objective is to provide shareholders with current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance      
Ÿ  

For the 12-month period ended April 30, 2015, the Fund returned 9.71% based on market price and 10.64% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 11.00% based on market price and 9.96% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’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 the Fund’s absolute performance based on NAV:

 

Ÿ  

Municipal bonds generated positive performance during the 12-month period, as the combination of falling U.S. Treasury yields and strengthening municipal finances fueled healthy investor demand. (Bond prices rise when rates fall.) The yield curve flattened during the period, with longer-term bonds generally outperforming shorter-term issues. Higher-rated bonds, while delivering positive absolute performance, lagged the return of lower-rated issues.

 

Ÿ  

Income in the form of coupon payments made up a meaningful portion of the Fund’s total return for the period. In addition, the Fund’s use of leverage provided both incremental return and income in an environment of declining interest rates. The Fund’s positioning with respect to duration (sensitivity to interest rate movements) helped performance. The Fund’s positioning along the yield curve, which favored longer-dated bonds, also aided performance as longer-dated bonds generally delivered higher returns than those with shorter maturities.

 

Ÿ  

Positions in lower-rated investment-grade bonds contributed to performance, as did the Fund’s exposure to the lower end of the credit spectrum (non-investment grade and unrated securities). Lower-rated bonds generated both attractive income and strong price appreciation during the period.

 

Ÿ  

Exposures to the transportation, health care and utilities sectors were among the top contributors to performance.

 

Ÿ  

There were no material detractors from the Fund’s performance during the period.

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

 

Fund Information      

Symbol on NYSE

   MUH

Initial Offering Date

   February 27, 1998

Yield on Closing Market Price as of April 30, 2015 ($15.28)1

   6.09%

Tax Equivalent Yield2

   10.76%

Current Monthly Distribution per Common Share3

   $0.0775

Current Annualized Distribution per Common Share3

   $0.9300

Economic Leverage as of April 30, 20154

   35%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
12    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniHoldings Fund II, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                         

 

      4/30/15      4/30/14      Change      High      Low  

Market Price

   $ 15.28       $ 14.84         2.96    $ 16.31       $ 14.78   

Net Asset Value

   $ 16.21       $ 15.61         3.84    $ 16.76       $ 15.61   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/15     4/30/14  

Transportation

    23     19

Health

    18        21   

State

    14        14   

County/City/Special District/School District

    13        15   

Utilities

    11        10   

Education

    9        10   

Corporate

    7        7   

Tobacco

    4        3   

Housing

    1        1   

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

Credit Quality Allocation1   4/30/15     4/30/14  

AAA/Aaa

    7     9

AA/Aa

    47        43   

A

    23        26   

BBB/Baa

    11        11   

BB/Ba

    4        2   

B

    2        3   

N/R2

    6        6   

 

  1   

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

 

  2   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2015 and April 30, 2014, the market value of unrated securities deemed by the investment advisor to be investment grade represents 5% and 6%, respectively, of the Fund’s total investments.

 

   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2015

    5

2016

    3   

2017

    6   

2018

    7   

2019

    28   

 

  3   

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    13


Fund Summary as of April 30, 2015    BlackRock MuniHoldings Quality Fund, Inc.

 

Fund Overview

BlackRock MuniHoldings Quality Fund, Inc.’s (MUS) (the “Fund”) investment objective is to provide shareholders with current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing primarily in long-term, investment grade municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests at least 80% of its assets in investment grade municipal obligations with remaining maturities of one year or more at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance      
Ÿ  

For the 12-month period ended April 30, 2015, the Fund returned 9.91% based on market price and 9.20% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 11.00% based on market price and 9.96% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV.

The following discussion relates to the Fund’s absolute performance based on NAV:

 

Ÿ  

Municipal bonds generated positive performance during the 12-month period, as the combination of falling U.S. Treasury yields and strengthening municipal finances fueled healthy investor demand. (Bond prices rise when rates fall.) The yield curve flattened during the period, with longer-term bonds generally outperforming shorter-term issues. Higher-rated bonds, while delivering positive absolute performance, lagged the return of lower-rated issues.

 

Ÿ  

In the environment of declining yields, the Fund’s duration exposure (sensitivity to interest rate movements) contributed positively to performance. Positions in longer-dated bonds in the transportation and utilities sectors were among the top contributors to performance.

 

Ÿ  

Income in the form of coupon payments made up a meaningful portion of the Fund’s total return for the period. In addition, the Fund’s use of leverage provided both incremental return and income at a time of declining interest rates.

 

Ÿ  

There were no material detractors from the Fund’s absolute performance during the period.

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

 

Fund Information

Symbol on NYSE

   MUS

Initial Offering Date

   May 1, 1998

Yield on Closing Market Price as of April 30, 2015 ($13.32)1

   6.08%

Tax Equivalent Yield2

   10.74%

Current Monthly Distribution per Common Share3

   $0.0675

Current Annualized Distribution per Common Share3

   $0.8100

Economic Leverage as of April 30, 20154

   36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
14    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniHoldings Quality Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

     

4/30/15

     4/30/14      Change      High      Low  

Market Price

   $ 13.32       $ 12.88         3.42    $ 13.97       $ 12.66   

Net Asset Value

   $ 14.57       $ 14.18         2.75    $ 15.09       $ 14.18   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation  

4/30/15

    4/30/14  

Transportation

    34     33

County/City/Special District/School District

    29        27   

Utilities

    13        19   

Health

    9        7   

State

    8        9   

Education

    3        2   

Housing

    2        2   

Tobacco

    1        1   

Corporate

    1          

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

Credit Quality Allocation1  

4/30/15

    4/30/14  

AAA/Aaa

    5     6

AA/Aa

    67        67   

A

    25        25   

BBB/Baa

    3        2   

 

  1   

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

   
Call/Maturity Schedule2       

Calendar Year Ended December 31,

 

2015

    2

2016

    3   

2017

      

2018

    27   

2019

    14   

 

  2   

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    15


Fund Summary as of April 30, 2015    BlackRock Muni Intermediate Duration Fund, Inc.

 

Fund Overview      

BlackRock Muni Intermediate Duration Fund, Inc.’s (MUI) (the “Fund”) investment objective is to provide common shareholders with high current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests at least 75% of its assets in municipal bonds rated investment grade and invests at least 80% of its assets in municipal bonds with a duration of three to ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance      
Ÿ  

For the 12-month period ended April 30, 2015, the Fund returned 5.20% based on market price and 7.27% based on NAV. For the same period, the closed-end Lipper Intermediate Municipal Debt Funds category posted an average return of 6.81% based on market price and 7.02% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’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 the Fund’s absolute performance based on NAV:

 

Ÿ  

Municipal bonds generated positive performance during the 12-month period, as the combination of falling U.S. Treasury yields and strengthening municipal finances fueled healthy investor demand. (Bond prices rise when rates fall.) The yield curve flattened during the period, with longer-term bonds generally outperforming shorter-term issues. Higher-rated bonds, while delivering positive absolute performance, lagged the return of lower-rated issues.

 

Ÿ  

In the environment of declining yields, the Fund’s holdings in longer-duration and longer-dated bonds tended to provide the strongest returns. (Duration is a measure of interest-rate sensitivity.) The Fund’s allocations to the tax-backed (states, local and school districts), transportation and health care sectors made positive contributions to performance.

 

Ÿ  

At a time in which lower-rated debt outperformed, the Fund’s positions in higher-yielding and lower investment-grade credits generated the best returns. The Fund’s positions in high-quality pre-refunded bonds also made a positive contribution to performance.

 

Ÿ  

Income in the form of coupon payments made up a meaningful portion of the Fund’s total return for the period. In addition, the Fund’s use of leverage provided both incremental return and income given the decline in prevailing yields.

 

Ÿ  

There were no material detractors from the Fund’s performance during the period.

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

 

Fund Information      

Symbol on NYSE

   MUI

Initial Offering Date

   August 1, 2003

Yield on Closing Market Price as of April 30, 2015 ($14.47)1

   5.43%

Tax Equivalent Yield2

   9.59%

Current Monthly Distribution per Common Share3

   $0.0655

Current Annualized Distribution per Common Share3

   $0.7860

Economic Leverage as of April 30, 20154

   36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
16    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock Muni Intermediate Duration Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

        4/30/15        4/30/14        Change      High        Low  

Market Price

     $ 14.47         $ 14.55           (0.55 )%     $ 15.08         $ 13.93   

Net Asset Value

     $ 15.86         $ 15.64           1.41    $ 16.45         $ 15.62   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/15     4/30/14  

Transportation

    23     20

County/City/Special District/School District

    19        24   

State

    16        16   

Utilities

    10        8   

Corporate

    10        7   

Education

    9        9   

Health

    9        12   

Housing

    2        2   

Tobacco

    2        2   

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

Credit Quality Allocation1   4/30/15     4/30/14  

AAA/Aaa

    4     3

AA/Aa

    50        48   

A

    35        35   

BBB/Baa

    7        8   

BB/Ba

    1        1   

B

    1        1   

CCC/Caa

    2        

N/R3

    2        4   

 

  1   

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

 

  2   

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

 

  3   

The investment advisor evaluates the credit quality of unrated Investments based upon certain factors including but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2015 and April 30, 2014, the market value of unrated securities deemed by the investment advisor to be investment grade represents 1% and less than 1%, respectively, of the Fund’s total investments.

   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2015

    5

2016

    3   

2017

    6   

2018

    7   

2019

    11   

 

  4  

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    17


Fund Summary as of April 30, 2015    BlackRock MuniVest Fund II, Inc.

 

Fund Overview

BlackRock MuniVest Fund II, Inc.’s (MVT) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance
Ÿ  

For the 12-month period ended April 30, 2015, the Fund returned 14.52% based on market price and 10.65% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 11.00% based on market price and 9.96% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund moved from a discount to NAV to a premium during the period, which accounts for the difference between performance based on price and performance based on NAV.

The following discussion relates to the Fund’s absolute performance based on NAV:

 

Ÿ  

Municipal bonds generated positive performance during the 12-month period, as the combination of falling U.S. Treasury yields and strengthening municipal finances fueled healthy investor demand. (Bond prices rise when rates fall.) The yield curve flattened during the period, with longer-term bonds generally outperforming shorter-term issues. Higher-rated bonds, while delivering positive absolute performance, lagged the return of lower-rated issues.

 

Ÿ  

Income in the form of coupon payments made up a meaningful portion of the Fund’s total return for the period. In addition, the Fund’s use of leverage provided both incremental return and income in an environment of declining interest rates. The Fund’s positioning with respect to duration (sensitivity to interest rate movements) helped performance. The Fund’s positioning along the yield curve, which favored longer-dated bonds, also aided performance as longer-dated bonds generally delivered higher returns than those with shorter maturities.

 

Ÿ  

Positions in lower-rated investment-grade bonds contributed to performance, as did the Fund’s exposure to the lower end of the credit spectrum (non-investment grade and unrated securities). Lower-rated bonds generated both attractive income and strong price appreciation during the period.

 

Ÿ  

Exposures to the transportation, health care and utilities sectors were among the top contributors to performance.

 

Ÿ  

There were no material detractors from the Fund’s performance during the period.

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

 

Fund Information

Symbol on NYSE

   MVT

Initial Offering Date

   March 29, 1993

Yield on Closing Market Price as of April 30, 2015 ($16.26)1

   6.13%

Tax Equivalent Yield2

   10.83%

Current Monthly Distribution per Common Share3

   $0.083

Current Annualized Distribution per Common Share3

   $0.996

Economic Leverage as of April 30, 20154

   38%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
18    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniVest Fund II, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

      4/30/15      4/30/14      Change      High      Low  

Market Price

   $ 16.26       $ 15.16         7.26    $ 16.65       $ 15.09   

Net Asset Value

   $ 16.01       $ 15.45         3.62    $ 16.54       $ 15.45   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/15     4/30/14  

Transportation

    24     21

Health

    18        20   

State

    13        15   

Utilities

    13        12   

County/City/Special District/School District

    12        11   

Corporate

    8        8   

Education

    6        8   

Tobacco

    4        3   

Housing

    2        2   

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

Credit Quality Allocation1   4/30/15     4/30/14  

AAA/Aaa

    8     8

AA/Aa

    49        42   

A

    21        28   

BBB/Baa

    11        10   

BB/Ba

    3        3   

B

    2        3   

CCC/Caa

    2        

N/R3

    6        6   

 

  1   

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

 

  2  

Representing less than 1% of Fund’s total investments.

 

  3  

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2015 and April 30, 2014 the market value of unrated securities deemed by the investment advisor to be investment grade represents less than 1% and 1%, respectively, of the Fund’s total investments.

   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2015

    4

2016

    3   

2017

    7   

2018

    12   

2019

    23   

 

  4  

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    19


Schedule of Investments April 30, 2015

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 2.1%

  

County of Jefferson Alabama, RB, Limited Obligation School, Series A:

    

5.25%, 1/01/17

   $ 895      $ 899,457   

5.25%, 1/01/19

     2,000        2,009,960   

5.50%, 1/01/21

     1,215        1,221,051   

County of Jefferson Alabama Sewer, Refunding RB, Sub-Lien, Series D, 6.00%, 10/01/42

     3,745        4,203,950   

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

     2,165        2,524,368   
    

 

 

 
               10,858,786   

Alaska — 1.1%

  

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

    

4.63%, 6/01/23

     1,305        1,305,183   

5.00%, 6/01/32

     1,500        1,308,165   

5.00%, 6/01/46

     4,000        3,141,480   
    

 

 

 
               5,754,828   

Arizona — 1.1%

  

City of Phoenix Arizona IDA, RB:

    

Basis Schools, Inc. Projects, Series A, 5.00%, 7/01/35 (a)

     305        310,826   

Basis Schools, Inc. Projects, Series A, 5.00%, 7/01/45 (a)

     855        857,650   

Great Hearts Academies — Veritas Project, 6.30%, 7/01/42

     500        532,900   

Great Hearts Academies — Veritas Project, 6.40%, 7/01/47

     425        454,342   

Legacy Traditional Schools Project, Series A, 6.50%, 7/01/34 (a)

     570        645,217   

Legacy Traditional Schools Project, Series A, 6.75%, 7/01/44 (a)

     1,000        1,144,390   

City of Phoenix Arizona IDA, Refunding RB, Legacy Traditional School Projects (a):

    

5.00%, 7/01/35

     320        320,992   

5.00%, 7/01/45

     255        252,629   

County of Maricopa Arizona IDA, RB, Arizona Charter School Project 1, Series A, 6.63%, 7/01/20

     720        700,790   

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

     500        602,915   
    

 

 

 
               5,822,651   

California — 5.1%

  

California Municipal Finance Authority, Urban Discovery Academy Project (a):

    

5.50%, 8/01/34

     315        327,710   

6.00%, 8/01/44

     665        697,146   

6.13%, 8/01/49

     580        608,751   
Municipal Bonds    Par  
(000)
    Value  

California (concluded)

  

California School Finance Authority, RB:

    

Alliance for College Ready Public School — 2023 Union LLC Project, Series A, 6.40%, 7/01/48

   1,570      1,829,097   

Value Schools, 6.65%, 7/01/33

     435        487,043   

Value Schools, 6.90%, 7/01/43

     975        1,103,359   

California Statewide Communities Development Authority, Refunding RB:

    

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

     2,175        2,445,353   

Loma Linda University Medical Center, 5.50%, 12/01/54

     2,390        2,633,015   

California Statewide Financing Authority, RB, Tobacco Settlement, Series B, 6.00%, 5/01/43

     1,650        1,650,198   

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

    

6.50%, 5/01/36

     900        1,097,658   

6.50%, 5/01/42

     2,220        2,685,556   

City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/40

     375        451,448   

County of Riverside California Transportation Commission, RB, Senior Lien, Series A, 5.75%, 6/01/48

     2,885        3,286,332   

Golden State Tobacco Securitization Corp., Refunding RB, Asset-Backed, Senior, Series A-1, 5.75%, 6/01/47

     5,020        4,335,222   

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1, 4.75%, 6/01/25

     2,000        2,000,040   
    

 

 

 
               25,637,928   

Colorado — 1.7%

  

Castle Oaks Metropolitan District No. 3, GO, 6.25%, 12/01/44

     500        499,965   

Foothills Metropolitan District, Special Assessment Bonds, 6.00%, 12/01/38

     5,985        6,383,661   

Regional Transportation District, RB, Denver Transit Partners Eagle P3 Project, 6.00%, 1/15/34

     1,500        1,713,465   
    

 

 

 
               8,597,091   

Connecticut — 1.0%

  

Mohegan Tribal Finance Authority, RB, 7.00%, 2/01/45

     755        736,464   

Mohegan Tribe of Indians of Connecticut, RB, Series A, 6.75%, 2/01/45 (a)

     1,420        1,425,737   

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

     2,755        2,754,890   
    

 

 

 
               4,917,091   

 

Portfolio Abbreviations

 

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

 

See Notes to Financial Statements.

 

                
20    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Delaware — 0.2%

  

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

   $ 1,000      $ 1,151,050   

District of Columbia — 0.9%

  

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

    

7.38%, 1/01/30

     1,665        1,666,515   

7.50%, 1/01/39

     1,615        1,616,147   

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

     1,055        1,331,927   
    

 

 

 
               4,614,589   

Florida — 10.2%

  

Boggy Creek Improvement District, Refunding RB, Special Assessment Bonds, 5.13%, 5/01/43

     1,570        1,628,922   

Capital Trust Agency, Inc., RB:

    

1st Mortgage, Silver Creek St. Augustine Project, 8.25%, 1/01/44

     515        549,000   

1st Mortgage, Silver Creek St. Augustine Project, 8.25%, 1/01/49

     1,105        1,177,223   

Faulk Senior Services, 6.75%, 12/01/44

     355        358,511   

Faulk Senior Services, 6.75%, 12/01/49

     670        669,229   

County of Collier Florida Health Facilities Authority, Refunding RB, Series A, 4.00%, 5/01/45

     200        192,222   

County of Collier Florida IDA, Refunding RB, Arlington of Naples Project, Series A, 8.13%, 5/15/44 (a)

     2,510        2,885,521   

County of Miami-Dade IDA, RB, Series A:

    

5.00%, 6/01/35

     1,460        1,534,329   

5.00%, 6/01/40

     2,000        2,085,220   

5.00%, 6/01/48

     1,460        1,513,816   

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

     3,500        3,844,225   

Florida Development Finance Corp., RB, Renaissance Charter School, Series A:

    

5.75%, 6/15/29

     690        692,863   

6.00%, 6/15/34

     835        839,592   

6.13%, 6/15/44

     3,220        3,208,859   

Greeneway Improvement District, RB, Special Assessment Bonds, 5.13%, 5/01/43

     1,970        2,043,934   

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

     410        411,373   

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

     4,500        4,510,800   

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

     720        788,508   

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

     1,485        1,873,342   

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

     4,550        5,975,879   

Midtown Miami Community Development District, Refunding, Special Assessment Bonds:

    

Series A, 5.00%, 5/01/37

     845        891,720   

Series B, 5.00%, 5/01/37

     495        522,369   

Palm Beach County Health Facilities Authority, Refunding RB, Series A, 7.25%, 6/01/34

     500        568,370   

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

     4,539        1,974,567   

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

     835        836,094   
Municipal Bonds    Par  
(000)
    Value  

Florida (concluded)

  

Tolomato Community Development District (c)(d):

    

Series 1, 6.65%, 5/01/40

   50      51,228   

Series 3, 6.65%, 5/01/40

     710        7   

Tolomato Community Development District, Refunding, Special Assessment Bonds:

    

Convertible CAB, Series A2, 0.00%, 5/01/39 (e)

     250        183,143   

Convertible CAB, Series A3, 0.00%, 5/01/40 (e)

     585        349,204   

Convertible CAB, Series A4, 0.00%, 5/01/40 (e)

     305        134,786   

0.00%, 5/01/40 (e)

     2,110        1,221,786   

6.61%, 5/01/40 (c)(d)

     875        9   

Series A1, 6.65%, 5/01/40

     910        926,071   

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

    

6.75%, 5/01/31

     1,660        2,056,209   

7.00%, 5/01/41

     2,735        3,404,473   

5.50%, 5/01/42

     1,260        1,455,905   
    

 

 

 
               51,359,309   

Georgia — 2.0%

  

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

     1,035        1,042,493   

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

     2,745        2,890,760   

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

     3,365        4,200,092   

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

    

6.38%, 11/15/29

     700        799,281   

6.63%, 11/15/39

     880        1,002,654   
    

 

 

 
               9,935,280   

Guam — 1.3%

  

Guam Government Waterworks Authority, RB, Water & Wastewater System:

    

5.25%, 7/01/33

     1,450        1,631,061   

5.50%, 7/01/43

     2,415        2,761,021   

Territory of Guam, GO, Series A:

    

6.00%, 11/15/19

     615        677,404   

7.00%, 11/15/39

     1,115        1,338,636   
    

 

 

 
               6,408,122   

Illinois — 4.2%

  

City of Chicago Illinois Board of Education, GO, Series A, 5.25%, 12/01/41

     3,450        3,339,428   

Illinois Finance Authority, Refunding RB:

    

CAB, Clare Water Tower, Series B, 0.00%, 5/15/50 (c)(d)(f)

     1,214        12   

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

     3,129        31   

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

     4,000        4,299,600   

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

     2,395        2,523,156   

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

     1,175        1,182,626   

Rogers Park Montessori School Project, Series 2014, 6.00%, 2/01/34

     365        380,856   

Rogers Park Montessori School Project, Series 2014, 6.13%, 2/01/45

     860        887,210   

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

     4,170        4,507,603   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    21


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Illinois (concluded)

  

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

   $ 180      $ 210,688   

6.00%, 6/01/28

     710        836,274   

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

     1,794        1,827,602   

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

     1,345        1,345,551   
    

 

 

 
               21,340,637   

Indiana — 1.1%

  

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

    

6.75%, 1/01/34

     825        1,002,391   

7.00%, 1/01/44

     2,000        2,444,800   

Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges East End Crossing Project, Series A, AMT:

    

5.00%, 7/01/44

     470        500,597   

5.00%, 7/01/48

     1,555        1,654,007   
    

 

 

 
               5,601,795   

Iowa — 3.4%

  

Iowa Finance Authority, Refunding RB:

    

Midwestern Disaster Area, Iowa Fertilizer Co. Project, 5.50%, 12/01/22

     4,090        4,364,725   

Midwestern Disaster Area, Iowa Fertilizer Co. Project, 5.25%, 12/01/25

     2,190        2,442,791   

Sunrise Retirement Community Project, 5.50%, 9/01/37

     1,355        1,372,832   

Sunrise Retirement Community Project, 5.75%, 9/01/43

     2,115        2,168,827   

Iowa Tobacco Settlement Authority, Refunding RB:

    

Asset-Backed, CAB, Series B, 5.60%, 6/01/34

     1,200        1,143,192   

Asset-Backed, Series C, 5.63%, 6/01/46

     1,565        1,388,750   

Series C, 5.38%, 6/01/38

     4,900        4,314,303   
    

 

 

 
               17,195,420   

Kentucky — 0.9%

  

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing, 1st Tier, Series A, 5.75%, 7/01/49

     4,000        4,534,520   

Louisiana — 3.0%

  

Juban Crossing Economic Development District, Refunding RB, General Infrastructure Project, Series C, 7.00%, 9/15/44 (a)

     1,055        1,072,228   

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

     5,000        5,543,550   

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

     1,855        2,083,833   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.25%, 5/15/35

     5,570        6,314,765   
    

 

 

 
               15,014,376   

Maine — 0.7%

  

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

     2,955        3,376,088   

Maryland — 2.5%

  

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

     2,840        3,213,772   

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

     3,615        3,893,933   
Municipal Bonds    Par  
(000)
    Value  

Maryland (concluded)

  

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

   4,785      5,305,130   
    

 

 

 
               12,412,835   

Massachusetts — 2.9%

  

Massachusetts Development Finance Agency, RB:

    

Boston Medical Center, Series D, 4.00%, 7/01/45

     3,360        3,212,261   

Boston Medical Center, Series D, 5.00%, 7/01/44

     5,905        6,287,349   

Foxborough Regional Charter School, Series A, 7.00%, 7/01/42

     1,025        1,160,095   

North Hill Communities Issue, Series A, 6.50%, 11/15/43 (a)

     2,020        2,193,397   

Massachusetts Development Finance Agency, Refunding RB, Tufts Medical Center, Series I, 6.75%, 1/01/36

     1,490        1,747,010   
    

 

 

 
               14,600,112   

Michigan — 0.9%

  

City of Detroit Michigan, GO, Financial Recovery (e)(g):

    

Series B-1, 4.00%, 4/01/44

     315        187,728   

Series B-2, 4.00%, 4/01/44

     100        61,343   

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39

     2,785        2,991,007   

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

     415        428,595   

Michigan Finance Authority, Refunding RB, Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 7/01/44

     920        968,594   
    

 

 

 
               4,637,267   

Minnesota — 0.6%

  

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

     1,785        2,092,627   

Woodbury Housing & Redevelopment Authority, RB, St. Therese of Woodbury, 5.13%, 12/01/44

     940        961,582   
    

 

 

 
               3,054,209   

Missouri — 1.0%

  

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

     2,315        2,657,666   

Lees Summit Industrial Development Authority, RB, John Knox Obligated Group, 5.25%, 8/15/39

     2,235        2,292,663   
    

 

 

 
               4,950,329   

New Jersey — 4.5%

  

Casino Reinvestment Development Authority, Refunding RB, 5.25%, 11/01/39

     1,065        1,130,434   

New Jersey EDA, RB:

    

AMT, ACR Energy Partners, Series A, 10.50%, 6/01/32 (a)(c)(d)

     1,940        562,600   

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

     2,250        2,730,960   

Team Academy Charter School Project, 6.00%, 10/01/43

     1,530        1,731,669   

The Goethals Bridge Replacement Project, AMT, 5.38%, 1/01/43

     2,155        2,383,301   

New Jersey EDA, Refunding RB, Series A, 6.00%, 8/01/49 (a)

     500        515,520   

New Jersey Health Care Facilities Financing Authority, Refunding RB:

    

St. Barnabas Health Care System, 4.25%, 7/01/44

     1,030        1,030,721   

 

See Notes to Financial Statements.

 

                
22    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

New Jersey (concluded)

  

New Jersey Health Care Facilities Financing Authority, Refunding RB (concluded):

    

St. Barnabas Health Care System, Series A, 5.63%, 7/01/37

   $ 2,650      $ 3,010,241   

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

     4,090        4,555,851   

Tobacco Settlement Financing Corp. New Jersey, Refunding RB, Series 1A:

    

4.63%, 6/01/26

     2,000        1,923,500   

5.00%, 6/01/29

     3,735        3,195,180   
    

 

 

 
               22,769,977   

New Mexico — 0.6%

  

New Mexico Hospital Equipment Loan Council, Refunding RB, Gerald Champion Regional Medical Center Project, 5.50%, 7/01/42

     2,970        2,976,712   

New York — 8.6%

  

City of New York New York Industrial Development Agency, ARB, AMT:

    

American Airlines, Inc., JFK International Airport, 8.00%, 8/01/28 (g)

     1,765        1,918,484   

British Airways PLC Project, 7.63%, 12/01/32

     4,130        4,155,606   

City of New York New York Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series C-1:

    

6.50%, 7/01/24

     610        612,440   

6.63%, 7/01/29

     1,100        1,104,631   

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

     5,400        5,491,368   

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

     3,695        4,181,521   

County of Dutchess New York Industrial Development Agency, Refunding RB, Bard College Civic Facility, 5.00%, 8/01/46

     5,000        5,005,950   

County of Westchester New York Healthcare Corp., RB, Senior Lien, Series A, 5.00%, 11/01/44

     1,452        1,607,066   

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

     2,000        2,373,400   

New York Liberty Development Corp., Refunding RB:

    

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

     1,270        1,447,546   

3 World Trade Center Project, Class 1, 5.00%, 11/15/44 (a)

     6,670        6,947,272   

3 World Trade Center Project, Class 2, 5.15%, 11/15/34 (a)

     455        495,217   

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

     1,080        1,184,684   

3 World Trade Center Project, Class 3, 7.25%, 11/15/44 (a)

     1,565        1,892,461   

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

     1,335        1,383,447   

Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8, 6.00%, 12/01/36

     1,340        1,576,188   

Westchester Tobacco Asset Securitization, Refunding RB, 5.13%, 6/01/45

     2,500        2,306,975   
    

 

 

 
               43,684,256   

North Carolina — 1.5%

  

North Carolina Medical Care Commission, Refunding RB, 1st Mortgage, Series A:

    

Deerfield Project, 6.13%, 11/01/38

     4,565        5,048,799   
Municipal Bonds    Par  
(000)
    Value  

North Carolina (concluded)

  

North Carolina Medical Care Commission, Refunding RB, 1st Mortgage, Series A (concluded):

    

Retirement Facilities Whitestone Project, 7.75%, 3/01/31

   1,000      1,143,320   

Retirement Facilities Whitestone Project, 7.75%, 3/01/41

     1,420        1,605,452   
    

 

 

 
               7,797,571   

North Dakota — 0.4%

  

City of Williston North Dakota, RB, Eagle Crest Apartments LLC Project, 7.75%, 9/01/38

     2,155        2,247,191   

Ohio — 1.8%

  

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

    

5.75%, 6/01/34

     6,745        5,475,389   

6.00%, 6/01/42

     3,040        2,535,785   

State of Ohio, RB, Portsmouth Bypass Project, AMT, 5.00%, 6/30/53

     845        886,853   
    

 

 

 
               8,898,027   

Oklahoma — 0.3%

    

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

     1,305        1,374,361   

Oregon — 0.7%

    

Hospital Facilities Authority of Multnomah County Oregon, Refunding RB, Mirabella at South Waterfront:

    

5.40%, 10/01/44

     1,245        1,370,371   

5.50%, 10/01/49

     1,765        1,953,202   
    

 

 

 
               3,323,573   

Pennsylvania — 4.4%

    

Allentown Neighborhood Improvement Zone Development Authority, Refunding RB, Series A, 5.00%, 5/01/42

     4,170        4,414,654   

City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 7/01/36

     2,000        2,137,460   

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

     6,165        6,814,791   

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

     1,160        1,215,738   

County of Lehigh Pennsylvania General Purpose Authority, Refunding RB, Bible Fellowship Church Homes, 5.13%, 7/01/32

     1,800        1,869,012   

County of Northampton Pennsylvania IDA, Route 33 Project, Tax Allocation Bonds, 7.00%, 7/01/32

     2,110        2,302,917   

Pennsylvania Economic Development Financing Authority, RB, Rapid Bridge Replacement Project, AMT:

    

5.00%, 12/31/38

     300        323,982   

5.00%, 6/30/42

     320        345,581   

Pennsylvania Economic Development Financing Authority, Refunding RB, National Gypson Co., AMT, 5.50%, 11/01/44

     2,710        2,782,818   
    

 

 

 
               22,206,953   

Puerto Rico — 0.9%

    

Commonwealth of Puerto Rico, GO, Refunding, Series A, 8.00%, 7/01/35

     6,000        4,687,320   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    23


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Rhode Island — 1.0%

    

Central Falls Detention Facility Corp., Refunding RB, 7.25%, 7/15/35 (c)(d)

   $ 4,190      $ 1,043,268   

Tobacco Settlement Financing Corp., Refunding RB:

    

Series A, 5.00%, 6/01/40

     980        1,036,448   

Series B, 4.50%, 6/01/45

     2,805        2,750,471   
    

 

 

 
               4,830,187   

Texas — 10.6%

    

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

     5,080        330,200   

Central Texas Regional Mobility Authority, Refunding RB:

    

CAB, 0.00%, 1/01/28 (f)

     1,000        581,880   

CAB, 0.00%, 1/01/29 (f)

     2,000        1,109,120   

CAB, 0.00%, 1/01/30 (f)

     1,170        619,655   

CAB, 0.00%, 1/01/33 (f)

     3,690        1,663,526   

CAB, 0.00%, 1/01/34 (f)

     4,000        1,692,640   

Senior Lien, 6.25%, 1/01/46

     2,210        2,573,655   

City of Houston Texas Airport System, RB, Special Facilities, Continental Airlines, Inc., AMT, Series A, 6.63%, 7/15/38

     2,890        3,369,682   

City of Houston Texas Airport System, Refunding ARB, United Airlines, Inc. Terminal E Project, AMT, 5.00%, 7/01/29

     910        965,019   

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

    

5.50%, 8/15/31

     955        1,064,252   

5.75%, 8/15/41

     720        811,166   

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

     5,040        5,724,029   

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 1/01/48

     475        547,932   

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

     2,090        2,388,138   

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

    

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

     1,745        1,987,712   

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

     4,200        4,153,926   

County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Trinity Terrace Project:

    

5.00%, 10/01/44

     435        459,399   

5.00%, 10/01/49

     865        912,878   

County of Travis Texas Health Facilities Development Corp., Refunding RB, 7.13%, 1/01/46

     3,080        3,343,248   

La Vernia Higher Education Finance Corp., RB, Kipp, Inc., Series A, 6.38%, 8/15/19 (b)

     860        1,034,116   

Mesquite Health Facility Development Corp., Refunding RB, 5.13%, 2/15/42

     810        822,255   

New Hope Cultural Education Facilities Corp., RB, Stephenville LLC Tarleton State University Project:

    

5.88%, 4/01/36

     1,210        1,392,783   

6.00%, 4/01/45

     1,845        2,124,370   

North Texas Education Finance Corp., ERB, Uplift Education, Series A, 5.25%, 12/01/47

     1,600        1,754,240   

North Texas Tollway Authority, Refunding RB, Series A:

    

5.00%, 1/01/35

     240        264,746   

5.00%, 1/01/38

     370        404,688   

Red River Health Facilities Development Corp., 1st MRB, Project:

    

Eden Home, Inc., 7.25%, 12/15/42

     2,895        2,708,967   

Wichita Falls Retirement Foundation, 5.13%, 1/01/41

     900        922,527   
Municipal Bonds    Par  
(000)
    Value  

Texas (concluded)

    

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

    

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

   3,775      4,557,784   

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

     3,000        3,557,880   
    

 

 

 
               53,842,413   

Utah — 0.6%

    

State of Utah Charter School Finance Authority, Refunding RB, 6.75%, 10/15/43

     2,950        3,123,991   

Vermont — 0.2%

    

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

     770        807,653   

Virginia — 3.0%

    

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

     2,500        2,570,550   

Lower Magnolia Green Community Development Authority, Special Assessment Bonds (a):

    

5.00%, 3/01/35

     510        510,357   

5.00%, 3/01/45

     520        512,824   

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

    

6.63%, 3/01/26

     1,485        1,708,507   

6.88%, 3/01/36

     1,300        1,493,830   

Virginia College Building Authority, Refunding RB, Marymount University Project, Series A:

    

5.00%, 7/01/35

     130        137,976   

5.00%, 7/01/45

     375        393,833   

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

     6,805        7,858,754   
    

 

 

 
               15,186,631   

Washington — 0.6%

    

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

     1,455        1,598,550   

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

     1,495        1,570,752   
    

 

 

 
               3,169,302   

Wisconsin — 0.4%

    

Public Finance Authority, RB, Rose Villa Project, Series A, 5.75%, 11/15/44

     430        454,725   

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

    

7.25%, 9/15/29

     425        497,173   

7.63%, 9/15/39

     855        1,009,037   
    

 

 

 
               1,960,935   
Total Municipal Bonds — 88.0%              444,661,366   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (h)
 

Colorado — 2.5%

  

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

     11,475        12,779,707   

 

See Notes to Financial Statements.

 

                
24    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (h)
   Par  
(000)
    Value  

Florida — 3.3%

  

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

   $ 15,000      $ 16,588,800   

Illinois — 3.0%

  

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien, Series A (NPFGC), 5.00%, 1/01/33 (i)

     6,510        6,701,915   

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

     7,180        8,546,785   
    

 

 

 
               15,248,700   

New York — 11.7%

    

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

    

Fiscal 2013, Series CC, 5.00%, 6/15/47

     14,181        15,790,033   

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

     8,609        9,845,578   

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

     4,520        5,198,709   

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

     18,105        20,722,621   

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

     6,600        7,636,794   
    

 

 

 
               59,193,735   
Municipal Bonds Transferred to
Tender Option Bond Trusts (h)
   Par  
(000)
    Value  

Washington — 1.8%

    

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

   7,966      8,741,727   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 22.3%
        112,552,669   

Total Long-Term Investments

(Cost — $526,023,352) — 110.3%

  

  

    557,214,035   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.02% (j)(k)

     961,095        961,095   
Total Short-Term Securities
(Cost — $961,095) — 0.2%
        961,095   
Total Investments (Cost — $526,984,447) — 110.5%        558,175,130   
Other Assets Less Liabilities — 1.6%        8,247,790   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (12.1%)

   

    (61,081,994
 

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 505,340,926   
 

 

 

 

 

Notes to Schedule of Investments

 

(a)   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.

 

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

 

(c)   Non-income producing security.

 

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

 

(e)   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.

 

(f)   Zero-coupon bond.

 

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

 

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

 

(i)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB Trust Certificates and proceeds received from the sale of the security contributed to the TOB Trust or in the event of a default on the security. In the case of a shortfall or default, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from May 31, 2015 to November 15, 2019, is $16,357,042.

 

(j)   During the year ended April 30, 2015, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at April 30,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       259,703           701,392           961,095         $ 2,325   

 

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

 

Ÿ  

As of April 30, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (197   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 25,289,875      $ (354,299

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    25


Schedule of Investments (concluded)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

 

entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

 

Ÿ  

As of April 30, 2015, the following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 557,214,035              $ 557,214,035   

Short-Term Securities

  $ 961,095                          961,095   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 961,095         $ 557,214,035              $ 558,175,130   
 

 

 

      

 

 

      

 

    

 

 

 

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

  $ (354,299                     $ (354,299

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of April 30, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 280,000                        $ 280,000   

Liabilities:

                

TOB Trust Certificates

            $ (61,065,965             (61,065,965
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 280,000         $ (61,065,965           $ (60,785,965
 

 

 

      

 

 

      

 

    

 

 

 

During the year ended April 30, 2015, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
26    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments April 30, 2015

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 1.4%

  

County of Jefferson Alabama, RB, Limited Obligation School, Series A:

    

5.50%, 1/01/22

   $ 2,750      $ 2,763,695   

4.75%, 1/01/25

     2,200        2,210,956   
    

 

 

 
               4,974,651   

Alaska — 0.8%

    

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

     400        401,732   

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

     990        1,132,896   

Borough of Matanuska-Susitna Alaska, RB, Goose Creek Correctional Center (AGC), 6.00%, 9/01/19 (a)

     1,200        1,434,317   
    

 

 

 
               2,968,945   

Arizona — 1.3%

    

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

     1,300        1,312,051   

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

    

5.00%, 10/01/27

     2,700        3,025,377   

5.00%, 10/01/29

     400        445,824   
    

 

 

 
               4,783,252   

Arkansas — 0.1%

    

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

     390        433,586   

California — 19.4%

    

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

    

5.40%, 10/01/24

     10,185        11,163,778   

5.45%, 10/01/25

     3,700        4,059,973   

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

     5,000        5,998,300   

Cabrillo Community College District, GO, CAB, Election of 2004, Series B (NPFGC), 0.00%, 8/01/37 (b)

     2,400        832,416   

California Health Facilities Financing Authority, RB:

    

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

     550        635,437   

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

     1,200        1,427,952   

California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 7/01/37

     1,090        1,222,522   

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

     2,000        2,142,540   

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

     1,480        1,635,444   

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

     1,420        1,562,809   

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

     850        972,213   

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

     1,500        1,616,475   

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

     2,175        2,638,384   

Golden State Tobacco Securitization Corp., Refunding RB, Series A, 5.00%, 6/01/40

     1,490        1,649,132   
Municipal Bonds    Par  
(000)
    Value  

California (concluded)

    

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

   1,300      1,423,110   

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

     2,500        1,693,150   

Poway Unified School District, GO, Refunding, CAB, School Facilities Improvement, Election of 2008, Series B, 0.00%, 8/01/36 (b)

     3,750        1,521,450   

Rio Hondo Community College District California, GO, CAB, Election of 2004, Series C, 0.00%, 8/01/38 (b)

     5,000        1,897,400   

San Diego California Unified School District, GO (b):

    

Election of 2008, Series C, 0.00%, 7/01/38

     1,600        608,000   

Election of 2008, Series G, 0.00%, 7/01/34

     650        267,586   

Election of 2008, Series G, 0.00%, 7/01/35

     690        266,375   

Election of 2008, Series G, 0.00%, 7/01/36

     1,035        375,995   

Election of 2008, Series G, 0.00%, 7/01/37

     690        235,952   

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

    

0.00%, 7/01/30

     5,000        2,820,500   

Election of 2008, 0.00%, 7/01/31

     1,280        683,277   

San Diego Community College District California, GO, CAB, Election of 2006 (b):

    

0.00%, 8/01/31

     2,145        1,025,525   

0.00%, 8/01/32

     2,680        1,197,451   

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

    

5.00%, 8/01/34

     700        792,309   

5.00%, 8/01/38

     600        671,724   

San Mateo County Community College District, GO, CAB, Election of 2001, Series C (NPFGC), 0.00%, 9/01/30 (b)

     12,740        7,573,675   

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

     1,000        1,120,310   

State of California Public Works Board, LRB, Judicial Council Projects, Series A, 5.00%, 3/01/38

     710        786,510   

Walnut Valley Unified School District, GO, CAB, Election of 2007, Series B, 0.00%, 8/01/36 (b)

     5,500        2,208,800   

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

     5,035        5,547,462   
    

 

 

 
               70,273,936   

Colorado — 1.5%

    

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

     2,000        2,293,560   

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

     2,770        3,083,038   
    

 

 

 
               5,376,598   

District of Columbia — 1.5%

    

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

     5,480        5,619,521   

Florida — 9.1%

    

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

     1,600        1,728,480   

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

     850        948,694   

County of Collier Florida School Board, COP (AGM), 5.00%, 2/15/16 (a)

     3,000        3,112,800   

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

     2,625        2,816,257   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    27


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Florida (concluded)

    

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

   $ 1,450      $ 1,694,339   

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

     4,050        4,489,951   

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

    

5.63%, 10/01/26

     960        1,115,558   

5.38%, 10/01/32

     3,160        3,471,228   

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

     1,400        1,584,184   

County of Miami-Dade Florida, RB, Seaport:

    

Series A, 6.00%, 10/01/38

     2,025        2,443,851   

Series B, AMT, 6.00%, 10/01/30

     640        778,714   

Series B, AMT, 6.25%, 10/01/38

     415        509,828   

Series B, AMT, 6.00%, 10/01/42

     660        794,891   

County of Miami-Dade Florida Aviation, Refunding ARB, AMT, 5.00%, 10/01/34

     190        210,444   

County of Palm Beach Florida Solid Waste Authority, Refunding RB, 5.00%, 10/01/31

     2,000        2,285,820   

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

     275        306,853   

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

    

5.13%, 6/01/27

     2,000        2,313,820   

5.38%, 10/01/29

     1,050        1,221,875   

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

     1,000        1,065,660   
    

 

 

 
               32,893,247   

Georgia — 3.6%

    

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

     1,150        1,249,820   

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

     500        574,665   

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

     7,475        10,216,905   

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

    

5.00%, 4/01/31

     190        209,220   

5.00%, 4/01/33

     140        153,381   

5.00%, 4/01/44

     625        676,844   
    

 

 

 
               13,080,835   

Illinois — 20.4%

    

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

    

Series A, 5.75%, 1/01/39

     5,110        5,823,356   

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

     1,460        1,466,322   

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

    

5.25%, 1/01/33

     2,700        2,709,126   

5.00%, 1/01/34

     5,750        5,586,470   

City of Chicago Illinois, GO, Series A, 5.25%, 1/01/35

     400        397,060   

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

     3,425        3,625,636   

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

     550        590,013   
Municipal Bonds    Par  
(000)
    Value  

Illinois (concluded)

    

City of Chicago Illinois Transit Authority, RB:

    

5.25%, 12/01/49

   900      1,014,858   

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

     595        658,338   

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

     285        312,873   

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

    

5.75%, 8/15/34

     650        760,695   

6.00%, 8/15/41

     1,000        1,178,950   

Illinois Finance Authority, Refunding RB, Silver Cross Hospital And Medical Centers:

    

4.13%, 8/15/37

     700        665,154   

5.00%, 8/15/44

     700        753,032   

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

     2,125        2,126,148   

Illinois Municipal Electric Agency, RB, Series A (NPFGC), 5.25%, 2/01/17 (a)

     1,000        1,079,810   

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

     12,490        12,687,342   

Kane McHenry Cook & De Kalb Counties Unit School District No. 300, GO, Refunding, 5.25%, 1/01/33

     9,145        10,403,992   

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

    

0.00%, 12/15/26

     5,000        3,262,700   

0.00%, 12/15/33

     9,950        4,391,532   

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

    

4.25%, 6/15/42

     1,070        1,072,910   

CAB (AGM), 0.00%, 6/15/44 (b)

     3,450        876,576   

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

     675        795,049   

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

     6,455        7,507,681   

State of Illinois, GO:

    

5.25%, 2/01/33

     830        884,456   

5.50%, 7/01/33

     820        905,551   

5.25%, 2/01/34

     830        882,597   

5.50%, 7/01/38

     445        489,473   

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

     905        1,003,093   
    

 

 

 
               73,910,793   

Indiana — 1.5%

  

Indiana Finance Authority, RB, Series A:

    

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

     1,100        1,260,336   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/40

     890        951,775   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

     515        548,527   

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

    

5.25%, 1/01/29

     600        675,216   

5.50%, 1/01/38

     1,825        2,071,338   
    

 

 

 
               5,507,192   

Iowa — 3.5%

  

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

     5,725        6,519,286   

 

See Notes to Financial Statements.

 

                
28    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Iowa (concluded)

  

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

    

5.60%, 12/01/26

   $ 2,725      $ 2,948,123   

5.70%, 12/01/27

     1,235        1,328,329   

5.80%, 12/01/29

     835        897,024   

5.85%, 12/01/30

     870        935,337   
    

 

 

 
               12,628,099   

Louisiana — 1.2%

  

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

     1,250        1,437,013   

New Orleans Aviation Board, RB, Series B, AMT, 5.00%, 1/01/40

     2,795        3,047,612   
    

 

 

 
               4,484,625   

Massachusetts — 1.5%

  

Massachusetts HFA, Refunding RB, Series C, AMT, 5.35%, 12/01/42

     1,150        1,193,769   

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

     1,280        1,438,349   

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

     2,530        2,735,942   
    

 

 

 
               5,368,060   

Michigan — 2.3%

  

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

     2,500        2,768,575   

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

     400        438,564   

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

     1,700        1,985,889   

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

    

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

     145        167,842   

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

     700        808,472   

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

     900        1,005,759   

State of Michigan HDA, RB, S/F Housing, Series C, AMT, 5.50%, 12/01/28

     790        835,607   

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

     380        420,876   
    

 

 

 
               8,431,584   

Minnesota — 0.8%

  

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

     2,500        2,905,725   

Nebraska — 1.8%

    

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

    

5.00%, 9/01/32

     5,000        5,546,150   

5.25%, 9/01/37

     750        838,868   
    

 

 

 
               6,385,018   

Nevada — 1.6%

    

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

     850        980,067   

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

    

5.25%, 7/01/42

     500        560,120   

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

     3,800        4,275,570   
Municipal Bonds    Par  
(000)
    Value  

Nevada (concluded)

    

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

   75      75,736   
    

 

 

 
               5,891,493   

New Jersey — 10.2%

    

New Jersey EDA, RB:

    

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

     3,125        3,182,500   

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

     7,800        7,943,520   

Private Activity Bond, The Goethals Bridge Replacement Project, AMT:

    

5.13%, 1/01/34

     685        754,390   

5.38%, 1/01/43

     895        989,816   

School Facilities Construction (AGC), 6.00%, 12/15/18 (a)

     1,975        2,314,068   

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

     25        28,788   

School Facilities Construction, Series UU, 5.00%, 6/15/34

     570        602,028   

School Facilities Construction, Series UU, 5.00%, 6/15/40

     1,420        1,477,979   

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

     795        873,943   

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

    

5.50%, 12/01/26

     600        664,164   

5.75%, 12/01/27

     3,870        4,304,911   

New Jersey Housing & Mortgage Finance Agency, Refunding RB, M/F Housing, Series 2, AMT, 4.35%, 11/01/33

     1,230        1,256,064   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     1,460        1,562,463   

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

     1,760        1,835,891   

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

     1,150        1,251,959   

Transportation System, CAB, Series A, 0.00%, 12/15/29 (b)

     4,360        2,181,875   

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

     2,000        2,191,000   

Transportation System, Series B, 5.00%, 6/15/42

     3,500        3,615,290   
    

 

 

 
               37,030,649   

New York — 5.4%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Second General Resolution, Fiscal 2012, Series BB, 5.25%, 6/15/44

     1,425        1,615,380   

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

     1,600        1,832,928   

City of New York New York Transitional Finance Authority, RB, Fiscal 2009, Series S-4, 5.50%, 1/15/34

     2,750        3,150,345   

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

     1,480        1,713,056   

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

     1,500        1,638,390   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    29


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

New York (concluded)

    

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

   $ 700      $ 805,175   

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

     4,000        4,746,800   

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

     1,200        1,386,660   

State of New York HFA, RB, M/F Housing, Series B, AMT, 5.30%, 11/01/37

     2,500        2,568,275   
    

 

 

 
               19,457,009   

Ohio — 1.2%

    

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

     530        660,094   

State of Ohio Turnpike Commission, RB, CAB, Junior Lien, Infrastructure Projects, Series A-2, 0.00%, 2/15/37 (b)

     10,000        3,873,500   
    

 

 

 
               4,533,594   

Pennsylvania — 5.0%

    

Commonwealth Financing Authority, RB, Series B, 5.00%, 6/01/42

     1,600        1,737,904   

Pennsylvania Economic Development Financing Authority, RB, AMT:

    

Pennsylvania Bridges Finco LP, 5.00%, 12/31/34 (d)

     7,290        7,927,292   

Rapid Bridge Replacement Project, 5.00%, 12/31/38

     1,305        1,409,321   

Pennsylvania Higher Educational Facilities Authority, Refunding RB, Thomas Jefferson University, Series A, 5.25%, 9/01/50

     4,125        4,568,974   

Pennsylvania Turnpike Commission, RB:

    

Series A, 5.00%, 12/01/38

     620        691,424   

Series C, 5.50%, 12/01/33

     555        653,806   

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

     575        679,955   

Philadelphia School District, GO:

    

Series E, 6.00%, 9/01/18 (a)

     5        5,810   

Series E, 6.00%, 9/01/38

     395        447,555   
    

 

 

 
               18,122,041   

South Carolina — 6.9%

    

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

    

5.25%, 12/01/15

     3,120        3,211,510   

5.25%, 12/01/15

     2,765        2,846,097   

5.25%, 12/01/15

     1,010        1,039,623   

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

     115        139,319   

South Carolina State Public Service Authority, Refunding RB, Series A:

    

5.50%, 1/01/19 (a)

     80        92,342   

5.50%, 1/01/38

     920        1,038,579   

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

     3,000        3,378,900   

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

    

Series A, 5.50%, 12/01/54

     8,725        9,956,185   

Series E, 5.50%, 12/01/53

     745        848,272   

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

     2,080        2,302,955   
    

 

 

 
               24,853,782   

Tennessee — 1.9%

  

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

     865        1,008,702   
Municipal Bonds    Par  
(000)
    Value  

Tennessee (concluded)

  

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

   5,000      5,813,650   
    

 

 

 
               6,822,352   

Texas — 14.0%

    

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

     1,465        1,606,270   

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

    

6.00%, 11/15/35

     2,100        2,487,765   

5.38%, 11/15/38

     1,350        1,535,287   

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

     575        639,693   

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A, 0.00%, 9/15/36 (b)

     2,130        821,818   

County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Cook Children’s Medical Center, 5.25%, 12/01/39

     750        861,578   

Dallas-Fort Worth International Airport, ARB, Joint Improvement, AMT:

    

Series D, 5.00%, 11/01/38

     1,975        2,121,012   

Series D, 5.00%, 11/01/42

     1,500        1,601,070   

Series H, 5.00%, 11/01/32

     3,000        3,272,430   

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

     975        1,122,761   

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

     3,420        1,235,236   

Mansfield Texas ISD, GO, School Building (PSF-GTD), 5.00%, 2/15/17 (a)

     1,725        1,857,704   

North Texas Tollway Authority, RB, Series B, 0.00%, 9/01/43 (b)

     9,000        2,007,900   

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

    

Series A, 6.00%, 1/01/28

     2,795        3,244,520   

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

     1,600        1,771,920   

Series K-2 (AGC), 6.00%, 1/01/38

     4,015        4,588,021   

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

     3,800        4,305,970   

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

    

0.00%, 9/15/35

     4,990        1,972,148   

0.00%, 9/15/36

     11,525        4,295,828   

0.00%, 9/15/37

     8,245        2,890,285   

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

    

5.00%, 12/15/31

     1,190        1,303,502   

5.00%, 12/15/32

     1,000        1,091,190   

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

     3,750        4,106,512   
    

 

 

 
               50,740,420   

Washington — 0.8%

  

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

     1,600        1,737,456   

Washington Health Care Facilities Authority, RB, Providence Health & Services, Series A:

    

5.00%, 10/01/39

     525        575,951   

5.25%, 10/01/39

     625        696,119   
    

 

 

 
               3,009,526   

 

See Notes to Financial Statements.

 

                
30    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Wisconsin — 0.4%

  

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

   $ 1,375      $ 1,529,193   
Total Municipal Bonds — 119.1%        432,015,726   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
              

Arizona — 0.8%

    

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

     1,200        1,346,112   

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

     1,500        1,631,085   
    

 

 

 
               2,977,197   

California — 2.0%

  

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

     2,810        3,088,752   

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

     2,500        2,736,750   

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

     404        465,787   

University of California, RB, Series O, 5.75%, 5/15/19 (a)

     840        996,399   
    

 

 

 
               7,287,688   

Colorado — 2.4%

  

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

    

5.50%, 7/01/34 (f)

     900        1,025,284   

5.00%, 2/01/41

     7,001        7,498,806   
    

 

 

 
               8,524,090   

District of Columbia — 1.7%

    

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

     1,005        1,174,078   

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

     1,780        2,074,182   

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

     2,530        2,819,735   
    

 

 

 
               6,067,995   

Florida — 11.3%

    

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

    

5.00%, 10/01/32 (f)

     4,000        4,321,440   

5.00%, 10/01/37

     7,500        8,102,700   

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

     4,480        4,968,544   

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

     10,000        10,890,600   

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

     4,621        5,227,386   

County of Orange Florida School Board, COP, Series A:

    

(NPFGC), 5.00%, 8/01/16 (a)

     2,000        2,116,080   

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

     3,544        3,974,630   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
   Par  
(000)
    Value  

Florida (concluded)

    

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

   1,349      1,466,174   
    

 

 

 
               41,067,554   

Illinois — 3.2%

    

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

     2,000        2,138,100   

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

     260        275,854   

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

     4,399        4,917,128   

State of Illinois Toll Highway Authority, RB:

    

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

     1,880        2,061,677   

Series A, 5.00%, 1/01/38

     2,138        2,349,292   
    

 

 

 
               11,742,051   

Louisiana — 1.6%

    

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

     5,400        5,651,532   

Michigan — 2.3%

    

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

     7,550        8,374,687   

Nevada — 3.2%

    

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

     3,778        4,346,834   

County of Clark Nevada Water Reclamation District, GO, Series B:

    

Limited Tax, 5.75%, 7/01/34

     1,829        2,138,902   

5.50%, 7/01/29

     4,499        5,222,359   
    

 

 

 
               11,708,095   

New Jersey — 0.5%

    

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

     1,840        1,939,656   

New York — 4.9%

    

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

     1,260        1,435,453   

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

     5,680        6,324,921   

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

     1,665        1,894,837   

Metropolitan Transportation Authority New York, RB, Sub-Series D-1, 5.25%, 11/15/44

     3,470        3,977,141   

Port Authority of New York & New Jersey, Refunding RB, Construction, 143rd Series, AMT, 5.00%, 10/01/30

     2,500        2,573,925   

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

     1,300        1,469,767   
    

 

 

 
               17,676,044   

Ohio — 0.2%

    

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

     580        652,558   

South Carolina — 0.4%

    

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

     1,275        1,439,335   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    31


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
   Par  
(000)
    Value  

Texas — 1.1%

    

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

   $ 2,200      $ 2,347,906   

North East Texas ISD, GO, School Building, Series A (PSF-GTD), 5.00%, 8/01/17 (a)(f)

     1,600        1,742,864   
    

 

 

 
               4,090,770   

Utah — 1.6%

    

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

     5,000        5,615,100   

Virginia — 0.1%

    

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

     350        394,888   

Washington — 2.1%

    

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

     4,004        4,354,471   

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

     2,880        3,342,211   
    

 

 

 
               7,696,682   

Wisconsin — 1.0%

    

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

    

Series A, 5.00%, 4/01/42

     1,980        2,171,189   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
   Par  
(000)
    Value  

Wisconsin (concluded)

    

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

    

Series C, 5.25%, 4/01/39 (f)

   1,430      1,562,007   
    

 

 

 
               3,733,196   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 40.4%
        146,639,118   
Total Long-Term Investments
(Cost — $526,294,866) — 159.5%
        578,654,844   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.02% (g)(h)

     1,577,185        1,577,185   
Total Short-Term Securities
(Cost — $1,577,185) — 0.5%
        1,577,185   
Total Investments (Cost — $527,872,051) — 160.0%        580,232,029   
Other Assets Less Liabilities — 0.3%        1,082,115   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (21.0%)

   

    (76,111,580
VRDP Shares, at Liquidation Value — (39.3%)        (142,500,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 362,702,564   
    

 

 

 
Notes to Schedule of Investments

 

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

 

(b)   Zero-coupon bond.

 

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

 

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

 

Counterparty      Value        Unrealized
Depreciation
 

Citigroup Global Markets, Inc.

     $ 6,307,036         $ (28,169

 

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

 

(f)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB Trust Certificates and proceeds received from the sale of the security contributed to the TOB Trust or in the event of a default on the security. In the case of a shortfall or default, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from February 1, 2016 to December 1, 2029, is $14,901,727.

 

(g)   During the year ended April 30, 2015, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at April 30,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       3,108,476           (1,531,291        1,577,185         $ 2,056   

 

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

 

Ÿ  

As of April 30, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional Value     Unrealized
Depreciation
 
  (75   5-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 9,009,961      $ (81,554
  (259   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015     33,249,125        (292,718
  Total              $ (374,272
         

 

 

 

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In

 

See Notes to Financial Statements.

 

                
32    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (concluded)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

 

such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

As of April 30, 2015, the following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 578,654,844                   $ 578,654,844   

Short-Term Securities

  $ 1,577,185                               1,577,185   
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 1,577,185         $ 578,654,844                   $ 580,232,029   
 

 

 

      

 

 

      

 

 

      

 

 

 

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

  $ (374,272                          $ (374,272

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of April 30, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 439,000                             $ 439,000   

Liabilities:

                

TOB Trust Certificates

            $ (76,093,825                  (76,093,825

VRDP Shares

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

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 439,000         $ (218,593,825                $ (218,154,825
 

 

 

      

 

 

      

 

 

      

 

 

 

During the year ended April 30, 2015, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    33


Schedule of Investments April 30, 2015

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 3.8%

  

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

   $ 4,550      $ 4,572,659   

County of Jefferson Alabama Sewer, Refunding RB:

    

Senior Lien, Series A (AGM), 5.00%, 10/01/44

     570        619,174   

Senior Lien, Series A (AGM), 5.25%, 10/01/48

     1,090        1,198,869   

Sub-Lien, Series D, 6.00%, 10/01/42

     1,000        1,122,550   

Sub-Lien, Series D, 7.00%, 10/01/51

     1,545        1,850,385   
    

 

 

 
               9,363,637   

Alaska — 0.5%

  

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

     1,660        1,303,714   

Arizona — 2.6%

  

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

     1,715        1,613,626   

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     2,000        2,269,820   

5.00%, 12/01/37

     2,360        2,678,341   
    

 

 

 
               6,561,787   

California — 12.4%

  

California Health Facilities Financing Authority, RB:

    

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

     1,530        1,767,670   

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

     2,200        2,627,966   

California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 7/01/33

     875        990,762   

California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F Housing, Series A:

    

5.25%, 8/15/39

     105        114,584   

5.25%, 8/15/49

     265        288,649   

California Pollution Control Financing Authority, RB, Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45 (a)

     1,025        1,105,842   

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

     1,510        1,669,758   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A, 5.25%, 5/15/39

     555        628,254   

City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/38

     255        307,813   

Montebello Unified School District, GO, CAB (NPFGC), 0.00%, 8/01/22 (b)

     2,405        1,984,606   

San Diego Unified School District California, GO, CAB, Election of 2008, Series A, 0.00%, 7/01/29 (b)

     3,475        2,096,016   

Sequoia Union High School District, GO, Refunding, Election of 2004, Series B (AGM), 5.50%, 7/01/16 (c)

     3,490        3,702,122   

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

     8,370        9,978,212   

State of California Public Works Board, LRB, Various Capital Projects:

    

Series I, 5.00%, 11/01/38

     550        613,646   

Sub-Series I-1, 6.38%, 11/01/34

     820        997,481   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

  

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1, 4.75%, 6/01/25

   $ 2,040      $ 2,040,041   
    

 

 

 
               30,913,422   

Colorado — 2.2%

  

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

     1,455        1,555,933   

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

     115        121,885   

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

     710        814,214   

Regional Transportation District, RB, Denver Transit Partners Eagle P3 Project, 6.00%, 1/15/34

     1,425        1,627,792   

University of Colorado, RB, Series A, 5.38%, 6/01/19 (c)

     1,250        1,454,037   
    

 

 

 
               5,573,861   

Connecticut — 1.1%

  

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

     2,515        2,862,548   

Delaware — 1.4%

  

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

     790        909,330   

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

     2,430        2,647,436   
    

 

 

 
               3,556,766   

District of Columbia — 3.7%

  

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

     1,520        1,615,729   

Metropolitan Washington Airports Authority, Refunding RB, Dulles Toll Road:

    

1st Senior Lien, Series A, 5.00%, 10/01/39

     505        550,849   

1st Senior Lien, Series A, 5.25%, 10/01/44

     1,470        1,643,607   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/35 (b)

     13,485        5,360,827   
    

 

 

 
               9,171,012   

Florida — 5.0%

  

City of Clearwater Florida Water & Sewer Revenue, RB, Series A, 5.25%, 12/01/39

     2,375        2,686,624   

County of Collier Florida Health Facilities Authority, Refunding RB, Series A, 5.00%, 5/01/45

     610        667,255   

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

     750        837,082   

County of Miami-Dade Florida, RB, CAB, Series A (NPFGC), 0.00%, 10/01/37 (b)

     910        276,676   

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

     2,620        2,976,530   

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

     2,095        2,751,531   

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

     605        508,460   

Village Community Development District No. 10, Special Assessment Bonds, 5.13%, 5/01/43

     1,505        1,683,869   
    

 

 

 
               12,388,027   

 

See Notes to Financial Statements.

 

                
34    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Georgia — 1.5%

  

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

   $ 370      $ 425,252   

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

     585        671,808   

Metropolitan Atlanta Rapid Transit Authority, RB, Sales Tax, 3rd Indenture, Series A, 5.00%, 7/01/39

     2,410        2,710,648   
    

 

 

 
               3,807,708   

Hawaii — 0.4%

  

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

     945        1,074,446   

Illinois — 17.3%

  

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

    

Series A, 5.75%, 1/01/39

     2,000        2,279,200   

Series C, 6.50%, 1/01/41

     4,055        4,909,632   

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

    

5.00%, 1/01/35

     2,000        1,924,740   

Project, 5.25%, 1/01/32

     2,195        2,210,036   

Project, 5.00%, 1/01/34

     2,230        2,166,579   

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

     570        618,957   

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

     900        903,870   

City of Chicago Illinois Board of Education, GO, Series A, 5.25%, 12/01/41

     3,210        3,107,120   

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

     730        805,898   

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien Project, 5.00%, 11/01/42

     1,000        1,082,450   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38

     560        639,744   

Illinois Finance Authority, Refunding RB, Central Dupage Health, Series B, 5.50%, 11/01/39

     1,115        1,286,398   

Illinois State Toll Highway Authority, RB, Senior:

    

Series A, 5.00%, 1/01/38

     1,610        1,785,989   

Series C, 5.00%, 1/01/36

     1,870        2,093,446   

Series C, 5.00%, 1/01/37

     2,000        2,233,760   

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

    

CAB, Series B (AGM), 0.00%, 6/15/47 (b)

     13,220        2,862,394   

Series B (AGM), 5.00%, 6/15/50

     3,070        3,205,725   

Series B-2, 5.00%, 6/15/50

     1,740        1,799,456   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     315        368,704   

6.00%, 6/01/28

     800        942,280   

State of Illinois, GO:

    

5.00%, 2/01/39

     1,100        1,137,741   

Series A, 5.00%, 4/01/38

     2,625        2,709,761   

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

     440        491,863   

University of Illinois, RB, Auxiliary Facilities System, Series A:

    

5.00%, 4/01/39

     580        642,866   

5.00%, 4/01/44

     705        780,280   
    

 

 

 
               42,988,889   

Indiana — 4.2%

  

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

    

6.75%, 1/01/34

     560        680,411   

7.00%, 1/01/44

     1,355        1,656,352   
Municipal Bonds   

Par  

(000)

    Value  

Indiana (concluded)

  

Indiana Finance Authority, RB, Series A:

    

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

   $ 2,275      $ 2,606,604   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

     310        330,181   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/48

     1,030        1,095,580   

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

     585        653,902   

Indiana Finance Authority, Refunding RB, Parkview Health System, Series A, 5.75%, 5/01/31

     1,300        1,475,903   

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

     775        891,250   

Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 1/15/40

     880        972,215   
    

 

 

 
               10,362,398   

Iowa — 2.2%

  

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project:

    

5.00%, 12/01/19

     665        718,313   

5.50%, 12/01/22

     1,630        1,739,487   

5.25%, 12/01/25

     320        356,938   

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

     960        1,023,725   

Iowa Tobacco Settlement Authority, Refunding RB, Asset-Backed, Series C, 5.63%, 6/01/46

     1,730        1,535,167   
    

 

 

 
               5,373,630   

Kansas — 0.7%

  

Kansas Development Finance Authority, Refunding RB, Adventist Health, Series C, 5.75%, 11/15/38

     1,520        1,752,697   

Kentucky — 0.6%

  

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     705        777,847   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/23 (d)

     865        599,722   
    

 

 

 
               1,377,569   

Louisiana — 3.5%

  

East Baton Rouge Sewerage Commission, RB, Series A, 5.25%, 2/01/19 (c)

     570        653,619   

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

     3,500        3,880,485   

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

     430        456,423   

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

    

5.50%, 5/15/30

     700        796,397   

5.25%, 5/15/31

     600        674,082   

5.25%, 5/15/32

     765        873,515   

5.25%, 5/15/33

     830        927,625   

5.25%, 5/15/35

     350        396,799   
    

 

 

 
               8,658,945   

Maine — 0.1%

  

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

     210        228,953   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    35


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Maryland — 1.2%

  

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

   $ 300      $ 323,148   

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

     820        909,134   

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

     1,520        1,703,297   
    

 

 

 
               2,935,579   

Massachusetts — 2.5%

  

Massachusetts Development Finance Agency, Refunding RB:

    

Boston University, Series P, 5.45%, 5/15/59

     1,165        1,370,879   

Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42 (a)

     1,575        1,626,565   

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

     255        286,049   

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

     2,900        2,901,392   
    

 

 

 
               6,184,885   

Michigan — 3.0%

  

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39

     3,085        3,313,197   

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

     955        1,071,147   

Michigan Finance Authority, Refunding RB, Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 7/01/44

     630        663,277   

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

     2,105        2,368,083   
    

 

 

 
               7,415,704   

Minnesota — 1.0%

  

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

     2,135        2,502,946   

Mississippi — 0.3%

    

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

     675        764,444   

Missouri — 0.2%

    

Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44

     175        194,432   

State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 5/01/43

     175        191,447   
    

 

 

 
               385,879   

Nebraska — 0.6%

  

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

     575        643,132   

County of Hall Nebraska School District No. 2, GO, Grand Island Public Schools, 5.00%, 12/15/39

     685        774,899   
    

 

 

 
               1,418,031   

New Hampshire — 1.4%

  

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

     3,035        3,526,124   
Municipal Bonds   

Par  

(000)

    Value  

New Jersey — 5.8%

  

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

   $ 735      $ 780,158   

5.25%, 11/01/44

     575        613,548   

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT:

    

5.13%, 9/15/23

     1,410        1,551,437   

5.25%, 9/15/29

     1,365        1,495,480   

New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 4/01/31

     1,550        1,806,122   

New Jersey State Turnpike Authority, RB, Series A, 5.00%, 1/01/43

     1,925        2,114,285   

New Jersey Transportation Trust Fund Authority, RB:

    

Transportation Program, Series AA, 5.00%, 6/15/44

     2,505        2,603,472   

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

     1,575        1,725,413   

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

     1,705        1,796,951   
    

 

 

 
               14,486,866   

New York — 9.7%

  

City of New York New York Industrial Development Agency, ARB, British Airways PLC Project, AMT, 7.63%, 12/01/32

     1,500        1,509,300   

City of New York New York Transitional Finance Authority, RB, Future Tax Secured Bonds, Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42

     1,560        1,755,452   

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

     1,300        1,321,996   

County of Dutchess New York Industrial Development Agency, Refunding RB, Bard College Civic Facility, 5.00%, 8/01/46

     3,800        3,804,522   

City of New York New York Transitional Finance Authority, RB, Future Tax Secured Revenue, Fiscal 2015, Series B, Sub-Series B-1, 5.00%, 8/01/39

     1,090        1,232,027   

County of Westchester New York Healthcare Corp., RB, Senior Lien, Series A, 5.00%, 11/01/44

     264        291,913   

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

     1,450        1,641,255   

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

     1,715        1,970,243   

Metropolitan Transportation Authority, Refunding RB, Dedicated Tax Fund, Series B, 5.00%, 11/15/34

     1,740        1,983,304   

New York Liberty Development Corp., Refunding RB:

    

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

     850        968,830   

3 World Trade Center Project, Class 1, 5.00%, 11/15/44 (a)

     2,930        3,051,800   

3 World Trade Center Project, Class 2, 5.15%, 11/15/34 (a)

     245        266,656   

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

     605        663,643   

Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8:

    

6.00%, 12/01/36

     900        1,058,634   

6.00%, 12/01/42

     875        1,029,228   

Westchester Tobacco Asset Securitization, Refunding RB, 5.13%, 6/01/45

     1,700        1,568,743   
    

 

 

 
               24,117,546   

 

See Notes to Financial Statements.

 

                
36    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

North Carolina — 0.6%

  

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

   $ 970      $ 1,087,302   

North Carolina Medical Care Commission, Refunding RB, 1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

     415        469,199   
    

 

 

 
               1,556,501   

Ohio — 0.5%

  

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

     470        518,142   

State of Ohio, RB, Portsmouth Bypass Project, AMT, 5.00%, 6/30/53

     580        608,727   
    

 

 

 
               1,126,869   

Oklahoma — 0.3%

  

County of Epworth Oklahoma Finance Authority, Refunding RB, Epworth Villa Project, Series A, 5.13%, 4/01/42

     975        838,568   

Pennsylvania — 2.5%

    

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

     885        938,082   

Pennsylvania Economic Development Financing Authority, RB:

    

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

     2,520        2,909,063   

Rapid Bridge Replacement Project, 5.00%, 12/31/38

     425        458,975   

Pennsylvania Economic Development Financing Authority, Refunding RB, National Gypson Co., AMT, 5.50%, 11/01/44

     1,105        1,134,691   

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     795        885,900   
    

 

 

 
               6,326,711   

Rhode Island — 0.7%

  

Tobacco Settlement Financing Corp., Refunding RB, Series B, 4.50%, 6/01/45

     1,900        1,863,064   

South Carolina — 2.3%

  

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

     2,285        2,537,744   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     2,790        3,183,697   
    

 

 

 
               5,721,441   

Tennessee — 2.0%

  

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     980        1,081,263   

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

     1,460        1,459,840   

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

     2,250        2,354,085   
    

 

 

 
               4,895,188   

Texas — 8.3%

  

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/46

     1,480        1,723,534   

Sub-Lien, 5.00%, 1/01/33

     250        271,603   
Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

  

City of Austin Texas Airport System, ARB, Revenue, AMT, 5.00%, 11/15/39

   $ 440      $ 484,141   

City of Austin Texas Electric Utility Revenue, Refunding RB, Series A, 5.00%, 11/15/37

     1,500        1,674,300   

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

     1,050        1,205,767   

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

     1,070        1,198,625   

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 1/01/48

     325        374,900   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (c)

     1,910        2,318,740   

La Vernia Higher Education Finance Corp., RB, Kipp, Inc., Series A, 6.38%, 8/15/19 (c)

     450        541,107   

North Texas Tollway Authority, RB, CAB, Special Project System, Series B, 0.00%, 9/01/37 (b)

     1,400        498,274   

North Texas Tollway Authority, Refunding RB:

    

2nd Tier System, Series F, 6.13%, 1/01/16 (c)

     4,190        4,352,488   

Series A, 5.00%, 1/01/35

     830        915,581   

Series A, 5.00%, 1/01/38

     660        721,875   

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        2,414,720   

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

     1,700        2,016,132   
    

 

 

 
               20,711,787   

Vermont — 0.2%

  

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

     375        379,819   

Virginia — 2.8%

  

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

     1,000        1,028,220   

County of Hanover Virginia EDA, Refunding RB, Covenant Woods, Series A:

    

5.00%, 7/01/42

     625        642,000   

Residential Care Facility, 5.00%, 7/01/47

     970        994,376   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

    

5.25%, 1/01/32

     550        603,405   

6.00%, 1/01/37

     3,180        3,672,423   
    

 

 

 
               6,940,424   

Washington — 0.8%

  

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     1,625        1,885,569   

Wisconsin — 3.1%

    

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

     4,980        5,827,795   

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

     1,710        1,901,760   
    

 

 

 
               7,729,555   

Wyoming — 0.1%

  

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

     210        223,824   
Total Municipal Bonds — 113.1%        281,257,333   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    37


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
   Par  
(000)
    Value  

California — 7.9%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/19 (c)

   $ 2,270      $ 2,669,084   

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

     1,845        2,066,400   

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

     6,600        7,479,450   

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

     4,122        4,681,925   

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

     1,620        1,773,414   

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

     748        862,568   
    

 

 

 
               19,532,841   

Colorado — 2.5%

    

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

    

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

     2,580        2,742,592   

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

     1,650        1,754,825   

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

     1,490        1,697,415   
    

 

 

 
               6,194,832   

Connecticut — 2.8%

    

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

    

Series T-1, 4.70%, 7/01/29

     3,179        3,416,077   

Series X-3, 4.85%, 7/01/37

     3,262        3,500,691   
    

 

 

 
               6,916,768   

Florida — 1.8%

    

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

     3,939        4,495,642   

Georgia — 1.0%

    

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

     2,259        2,499,550   

Massachusetts — 2.0%

    

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

     4,502        5,034,681   

New Hampshire — 0.7%

    

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

     1,409        1,600,087   

New York — 6.5%

    

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

     1,110        1,276,104   

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

     1,110        1,276,674   

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

     7,440        8,515,675   

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

     4,460        5,160,622   
    

 

 

 
               16,229,075   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
   Par  
(000)
    Value  

North Carolina — 0.5%

    

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

   $ 1,080      $ 1,201,349   

Ohio — 4.4%

    

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

     9,644        10,831,682   

Texas — 4.8%

    

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

     1,720        1,907,325   

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

     4,624        5,170,481   

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

     2,350        2,608,664   

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

     2,040        2,328,765   
    

 

 

 
               12,015,235   

Utah — 1.1%

    

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

     2,518        2,765,563   

Virginia — 2.6%

    

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

     3,749        4,147,730   

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

     2,095        2,340,417   
    

 

 

 
               6,488,147   

Washington — 0.8%

    

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

     1,860        2,022,301   

Wisconsin — 1.7%

    

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

     3,959        4,325,559   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 41.1%
             102,153,312   
Total Long-Term Investments
(Cost — $346,121,595) — 154.2%
             383,410,645   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.02% (g)(h)

     1,340,347        1,340,347   
Total Short-Term Securities
(Cost — $1,340,347) — 0.5%
             1,340,347   
Total Investments (Cost — $347,461,942) — 154.7%        384,750,992   
Other Assets Less Liabilities — 1.8%        4,388,864   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (22.8%)

   

    (56,794,134
VMTP Shares, at Liquidation Value — (33.7%)        (83,700,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 248,645,722   
    

 

 

 

 

See Notes to Financial Statements.

 

                
38    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Notes to Schedule of Investments

 

(a)   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.

 

(b)   Zero-coupon bond.

 

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

 

(d)   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.

 

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

 

(f)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB Trust Certificates and proceeds received from the sale of the security contributed to the TOB Trust or in the event of a default on the security. In the case of a shortfall or default, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from October 1, 2016 to February 15, 2031, is $11,665,091.

 

(g)   During the year ended April 30, 2015, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at April 30,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       804,766           535,581           1,340,347         $ 1,766   

 

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

 

Ÿ  

As of April 30, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (133   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 17,073,875      $ (226,222

 

Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

As of April 30, 2015, the following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 383,410,645              $ 383,410,645   

Short-Term Securities

  $ 1,340,347                          1,340,347   
 

 

 

 

Total

  $ 1,340,347         $  383,410,645              $  384,750,992   
 

 

 

 

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

  $ (226,222                     $ (226,222

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

      

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    39


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of April 30, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 189,000                        $ 189,000   

Liabilities:

                

TOB Trust Certificates

            $ (56,783,700             (56,783,700

VMTP Shares

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

 

 

 

Total

  $    189,000         $ (140,483,700           $ (140,294,700
 

 

 

 

During the year ended April 30, 2015, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
40    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments April 30, 2015

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 3.0%

  

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

   $ 3,450      $ 3,467,181   

County of Jefferson Alabama Sewer, Refunding RB, Sub-Lien, Series D, 6.00%, 10/01/42

     1,875        2,104,781   
    

 

 

 
               5,571,962   

Alaska — 0.7%

  

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

     1,660        1,303,714   

California — 16.6%

  

Benicia Unified School District, GO, CAB, Series A (NPFGC), 0.00%, 8/01/20 (a)

     2,000        1,806,180   

California Health Facilities Financing Authority, RB:

    

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

     1,110        1,282,427   

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

     1,585        1,893,330   

California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 7/01/33

     445        503,874   

California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F Housing, Series A:

    

5.25%, 8/15/39

     80        87,302   

5.25%, 8/15/49

     195        212,402   

California Pollution Control Financing Authority, RB, Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45 (b)

     730        787,575   

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

     1,090        1,205,322   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A, 5.25%, 5/15/39

     400        452,796   

City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/38

     185        223,315   

San Diego Unified School District California, GO, CAB, Election of 2008, Series A, 0.00%, 7/01/29 (a)

     2,525        1,523,004   

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

    

0.00%, 7/01/18

     1,945        1,857,942   

0.00%, 7/01/19

     2,070        1,937,727   

Sequoia Union High School District, GO, Refunding, Election of 2004, Series B, 5.50%, 7/01/16 (c)

     3,520        3,733,946   

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     1,265        1,517,127   

6.50%, 4/01/33

     7,325        8,732,426   

State of California Public Works Board, LRB, Various Capital Projects:

    

Series I, 5.00%, 11/01/38

     405        451,867   

Sub-Series I-1, 6.38%, 11/01/34

     600        729,864   

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1, 4.75%, 6/01/25

     1,520        1,520,030   
    

 

 

 
               30,458,456   

Colorado — 1.5%

    

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

     1,055        1,128,185   

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

     510        584,858   

University of Colorado, RB, Series A, 5.38%, 6/01/19 (c)

     920        1,070,172   
    

 

 

 
               2,783,215   
Municipal Bonds    Par  
(000)
    Value  

Delaware — 1.6%

    

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

   570      656,099   

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

     2,050        2,233,434   
    

 

 

 
               2,889,533   

District of Columbia — 3.1%

    

Metropolitan Washington Airports Authority, Refunding RB, Dulles Toll Road:

    

1st Senior Lien, Series A, 5.00%, 10/01/39

     255        278,151   

1st Senior Lien, Series A, 5.25%, 10/01/44

     1,000        1,118,100   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/34 (a)

     10,170        4,318,284   
    

 

 

 
               5,714,535   

Florida — 4.6%

    

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

     1,395        1,395,223   

City of Clearwater Florida Water & Sewer Revenue, RB, Series A, 5.25%, 12/01/39

     1,725        1,951,337   

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

     545        608,280   

County of Collier Florida Health Facilities Authority, Refunding RB, Series A, 5.00%, 5/01/45

     445        486,768   

County of Miami-Dade Florida, RB, CAB, Series A (NPFGC), 0.00%, 10/01/37 (a)

     695        211,308   

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

     1,525        2,002,904   

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

     460        386,598   

Village Community Development District No. 10, Special Assessment Bonds, 5.13%, 5/01/43

     1,220        1,364,997   
    

 

 

 
               8,407,415   

Georgia — 0.9%

    

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

     270        310,319   

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

     420        482,324   

Metropolitan Atlanta Rapid Transit Authority, RB, Sales Tax, 3rd Indenture, Series A, 5.00%, 7/01/39

     740        832,315   
    

 

 

 
               1,624,958   

Hawaii — 0.4%

    

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

     680        773,146   

Idaho — 1.1%

    

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

     2,000        2,003,940   

Illinois — 18.4%

    

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

    

Series A, 5.75%, 1/01/39

     2,500        2,849,000   

Series C, 6.50%, 1/01/41

     2,935        3,553,581   

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

     1,615        1,569,069   

City of Chicago Illinois, GO, Refunding, Project, Series A, 5.25%, 1/01/32

     2,290        2,305,686   

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

     410        445,215   

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

     600        602,580   

City of Chicago Illinois Board of Education, GO, Series A, 5.25%, 12/01/41

     1,350        1,306,732   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    41


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Illinois (concluded)

    

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

   $ 530      $ 585,104   

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien Project, 5.00%, 11/01/42

     3,645        3,945,530   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38

     410        468,384   

Illinois Finance Authority, Refunding RB, Central Dupage Health, Series B, 5.50%, 11/01/39

     800        922,976   

Illinois State Toll Highway Authority, RB:

    

Senior, Series C, 5.00%, 1/01/36

     1,355        1,516,909   

Senior, Series C, 5.00%, 1/01/37

     1,450        1,619,476   

Series A, 5.00%, 1/01/38

     1,165        1,292,346   

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

    

CAB, Series B (AGM), 0.00%, 6/15/47 (a)

     9,555        2,068,849   

Series B (AGM), 5.00%, 6/15/50

     2,230        2,328,588   

Series B-2, 5.00%, 6/15/50

     1,260        1,303,054   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     230        269,213   

6.00%, 6/01/28

     500        588,925   

State of Illinois, GO:

    

5.00%, 2/01/39

     810        837,791   

Series A, 5.00%, 4/01/38

     1,920        1,981,997   

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

     315        352,129   

University of Illinois, RB, Auxiliary Facilities System, Series A:

    

5.00%, 4/01/39

     425        471,066   

5.00%, 4/01/44

     520        575,526   
    

 

 

 
               33,759,726   

Indiana — 4.6%

    

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

    

6.75%, 1/01/34

     415        504,233   

7.00%, 1/01/44

     1,000        1,222,400   

Indiana Finance Authority, RB, Series A:

    

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

     1,660        1,901,961   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

     225        239,647   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/48

     740        787,116   

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

     420        469,468   

Indiana Finance Authority, Refunding RB, Parkview Health System, Series A, 5.75%, 5/01/31

     1,660        1,884,615   

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

     565        649,750   

Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 1/15/40

     640        707,066   
    

 

 

 
               8,366,256   

Iowa — 2.2%

    

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project:

    

5.00%, 12/01/19

     485        523,882   

5.50%, 12/01/22

     1,175        1,253,925   

5.25%, 12/01/25

     230        256,549   

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

     850        906,423   

Iowa Tobacco Settlement Authority, Refunding RB, Asset-Backed, Series C, 5.63%, 6/01/46

     1,270        1,126,973   
    

 

 

 
               4,067,752   
Municipal Bonds    Par  
(000)
    Value  

Kansas — 0.7%

    

Kansas Development Finance Authority, Refunding RB, Adventist Health, Series C, 5.75%, 11/15/38

   1,105      1,274,164   

Kentucky — 0.6%

    

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     520        573,732   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/43 (d)

     635        440,258   
    

 

 

 
               1,013,990   

Louisiana — 3.4%

    

East Baton Rouge Sewerage Commission, RB, Series A, 5.25%, 2/01/19 (c)

     420        481,614   

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

     2,500        2,771,775   

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

     310        329,050   

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

    

5.50%, 5/15/30

     510        580,232   

5.25%, 5/15/31

     435        488,709   

5.25%, 5/15/32

     555        633,727   

5.25%, 5/15/33

     600        670,572   

5.25%, 5/15/35

     255        289,096   
    

 

 

 
               6,244,775   

Maine — 0.1%

    

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

     150        163,538   

Maryland — 1.2%

    

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

     220        236,975   

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

     605        670,764   

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

     1,095        1,227,046   
    

 

 

 
               2,134,785   

Massachusetts — 3.1%

    

Massachusetts Development Finance Agency, Refunding RB:

    

Boston University, Series P, 5.45%, 5/15/59

     845        994,328   

Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42 (b)

     1,155        1,192,815   

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

     360        403,834   

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

     2,100        2,101,008   

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

     970        1,023,214   
    

 

 

 
               5,715,199   

Michigan — 2.9%

    

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39

     2,235        2,400,323   

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

     690        773,918   

Michigan Finance Authority, Refunding RB, Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 7/01/44

     455        479,033   

 

See Notes to Financial Statements.

 

                
42    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Michigan (concluded)

    

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

   $ 1,520      $ 1,709,969   
    

 

 

 
               5,363,243   

Minnesota — 1.0%

    

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

     1,540        1,805,404   

Missouri — 0.2%

    

Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44

     125        138,880   

State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 5/01/43

     130        142,217   
    

 

 

 
               281,097   

New Hampshire — 1.0%

    

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

     1,530        1,777,585   

New Jersey — 4.8%

    

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     530        562,563   

5.25%, 11/01/44

     415        442,822   

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT:

    

5.13%, 9/15/23

     1,040        1,144,322   

5.25%, 9/15/29

     990        1,084,634   

New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 4/01/31

     1,125        1,310,895   

New Jersey Transportation Trust Fund Authority, RB:

    

Transportation Program, Series AA, 5.00%, 6/15/44

     1,810        1,881,151   

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

     1,025        1,122,887   

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

     1,235        1,301,604   
    

 

 

 
               8,850,878   

New York — 8.1%

    

City of New York New York Transitional Finance Authority, RB, Future Tax Secured Bonds, Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42

     740        832,715   

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

     1,000        1,016,920   

County of Dutchess New York Industrial Development Agency, Refunding RB, Bard College Civic Facility, 5.00%, 8/01/46

     2,800        2,803,332   

County of Westchester New York Healthcare Corp., RB, Senior Lien, Series A, 5.00%, 11/01/44

     292        323,558   

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

     1,050        1,188,495   

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

     1,255        1,441,782   

Metropolitan Transportation Authority, Refunding RB, Dedicated Tax Fund, Series B, 5.00%, 11/15/34

     1,270        1,447,584   

New York Liberty Development Corp., Refunding RB:

    

2nd Priority, Bank of America Tower at 1 Bryant Park Project, Class 3, 6.38%, 7/15/49

     615        700,977   

3 World Trade Center Project, Class 1, 5.00%, 11/15/44 (b)

     1,650        1,718,590   
Municipal Bonds    Par  
(000)
    Value  

New York (concluded)

    

New York Liberty Development Corp., Refunding RB (concluded):

    

3 World Trade Center Project, Class 2, 5.15%, 11/15/34 (b)

   175      190,468   

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

     440        482,649   

Port Authority of New York & New Jersey, JFK International Air Terminal LLC Project, ARB, Special Project, Series 8:

    

6.00%, 12/01/36

     650        764,569   

6.00%, 12/01/42

     630        741,044   

Westchester Tobacco Asset Securitization, Refunding RB, 5.13%, 6/01/45

     1,200        1,107,348   
    

 

 

 
               14,760,031   

North Carolina — 0.6%

    

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

     705        790,256   

North Carolina Medical Care Commission, Refunding RB, 1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

     305        344,833   
    

 

 

 
               1,135,089   

Ohio — 0.4%

    

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

     350        385,850   

State of Ohio, RB, Portsmouth Bypass Project, AMT, 5.00%, 6/30/53

     420        440,803   
    

 

 

 
               826,653   

Pennsylvania — 2.5%

    

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

     645        683,687   

Pennsylvania Economic Development Financing Authority, RB:

    

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

     1,830        2,112,534   

AMT, Rapid Bridge Replacement Project, 5.00%, 12/31/38

     310        334,781   

Pennsylvania Economic Development Financing Authority, Refunding RB, National Gypson Co., AMT, 5.50%, 11/01/44

     800        821,496   

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     585        651,889   
    

 

 

 
               4,604,387   

Rhode Island — 0.7%

    

Tobacco Settlement Financing Corp., Refunding RB, Series B, 4.50%, 6/01/45

     1,375        1,348,270   

South Carolina — 2.3%

    

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

     1,650        1,832,507   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     2,040        2,327,864   
    

 

 

 
               4,160,371   

Tennessee — 2.5%

    

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     720        794,398   

County of Hardeman Tennessee Correctional Facilities Corp., RB, Series B, 7.38%, 8/01/17

     1,225        1,227,952   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    43


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Tennessee (concluded)

    

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

   $ 2,500      $ 2,615,650   
    

 

 

 
               4,638,000   

Texas — 7.5%

    

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/46

     1,070        1,246,068   

Sub-Lien, 5.00%, 1/01/33

     180        195,554   

City of Austin Texas Airport System, ARB, Revenue, AMT, 5.00%, 11/15/39

     320        352,102   

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

     535        599,312   

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 1/01/48

     240        276,850   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (c)

     1,380        1,675,320   

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A (a):

    

0.00%, 9/15/40

     2,525        785,629   

0.00%, 9/15/41

     1,395        410,897   

La Vernia Higher Education Finance Corp., RB, Kipp, Inc., Series A, 6.38%, 8/15/19 (c)

     320        384,787   

New Hope Cultural Education Facilities Corp., RB, Collegiate Housing Stephenville III, LLC., 5.00%, 4/01/35

     145        155,788   

North Texas Tollway Authority, RB, CAB, Special Project System, Series B, 0.00%, 9/01/37 (a)

     1,015        361,249   

North Texas Tollway Authority, Refunding RB:

    

2nd Tier System, Series F, 6.13%, 1/01/16

     3,020        3,137,116   

Series A, 5.00%, 1/01/35

     600        661,866   

Series A, 5.00%, 1/01/38

     480        525,000   

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

    

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

     1,165        1,406,574   

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

     1,300        1,541,748   
    

 

 

 
               13,715,860   

Vermont — 0.0%

    

Vermont Educational & Health Buildings Financing Agency, RB, Development & Mental Health, 6.50%, 6/15/32

     80        80,934   

Virginia — 3.1%

    

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

     2,500        2,570,550   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

    

5.25%, 1/01/32

     400        438,840   

6.00%, 1/01/37

     2,325        2,685,026   
    

 

 

 
               5,694,416   

Washington — 0.8%

    

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     1,195        1,386,618   

Wisconsin — 3.1%

    

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

     3,620        4,236,269   
Municipal Bonds    Par  
(000)
    Value  

Wisconsin (concluded)

    

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

   1,235      1,373,493   
    

 

 

 
               5,609,762   
Total Municipal Bonds109.3%              200,309,657   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
              

California — 7.7%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/19 (c)

     1,640        1,928,325   

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

     1,335        1,495,200   

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

     4,770        5,405,602   

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

     2,968        3,370,986   

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

     1,170        1,280,799   

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

     553        638,301   
    

 

 

 
               14,119,213   

Colorado — 2.4%

    

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

    

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

     1,870        1,987,848   

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

     1,200        1,276,236   

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

     1,080        1,230,341   
    

 

 

 
               4,494,425   

Connecticut — 2.7%

    

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

    

Series T-1, 4.70%, 7/01/29

     2,299        2,470,747   

Series X-3, 4.85%, 7/01/37

     2,362        2,534,243   
    

 

 

 
               5,004,990   

Florida — 1.8%

    

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

     2,840        3,240,514   

Georgia — 1.0%

    

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

     1,649        1,824,892   

Massachusetts — 2.0%

    

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

     3,211        3,591,406   

New Hampshire — 0.6%

    

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

     1,019        1,157,510   

New York — 8.5%

    

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

     810        931,211   

 

See Notes to Financial Statements.

 

                
44    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
   Par  
(000)
    Value  

New York (concluded)

    

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

   $ 3,299      $ 3,691,569   

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

     810        931,627   

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

     5,400        6,180,732   

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

     3,250        3,760,542   
    

 

 

 
               15,495,681   

North Carolina — 0.5%

    

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

     800        889,888   

Ohio — 4.3%

    

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

     6,974        7,833,176   

Texas — 5.0%

    

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

     1,260        1,397,227   

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

     3,363        3,760,350   

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

     1,710        1,898,220   

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

     1,800        2,054,792   
    

 

 

 
               9,110,589   

Utah — 0.8%

    

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

     1,394        1,530,937   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
   Par  
(000)
    Value  

Virginia — 2.6%

    

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

   2,729      3,019,547   

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

     1,553        1,734,936   
    

 

 

 
               4,754,483   

Washington — 0.8%

    

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

     1,365        1,484,108   

Wisconsin — 1.7%

    

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

     2,859        3,124,015   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 42.4%
             77,655,827   
Total Long-Term Investments
(Cost — $250,374,330) — 151.7%
             277,965,484   
    
   
Short-Term Securities — 0.4%    Shares         

FFI Institutional Tax-Exempt Fund, 0.02% (g)(h)

     681,480        681,480   
Total Short-Term Securities
(Cost — $681,480) — 0.4%
             681,480   
Total Investments (Cost — $251,055,810) — 152.1%        278,646,964   
Other Assets Less Liabilities — 1.7%        3,143,954   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (23.8%)

   

    (43,576,649
VMTP Shares, at Liquidation Value — (30.0%)        (55,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 183,214,269   
    

 

 

 
Notes to Schedule of Investments

 

(a)   Zero-coupon bond.

 

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

 

(d)   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.

 

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

 

(f)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB Trust Certificates and proceeds received from the sale of the security contributed to the TOB Trust or in the event of a default on the security. In the case of a shortfall or default, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from October 1, 2016 to February 15, 2031, is $8,457,544.

 

(g)   During the year ended April 30, 2015, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at April 30,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       944,029           (262,549        681,480         $ 855   

 

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

 

Ÿ  

As of April 30, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional Value     Unrealized
Depreciation
 
  (92   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 11,810,500      $ (158,235

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    45


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

 

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

As of April 30, 2015, the following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 277,965,484              $ 277,965,484   

Short-Term Securities

  $ 681,480                          681,480   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 681,480         $ 277,965,484              $ 278,646,964   
 

 

 

      

 

 

      

 

    

 

 

 

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

  $ (158,235                     $ (158,235

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of April 30, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 131,000                        $ 131,000   

Liabilities:

                

Bank overdraft

            $ (36,043             (36,043

TOB Trust Certificates

              (43,568,059             (43,568,059

VMTP Shares

              (55,000,000             (55,000,000
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 131,000         $ (98,604,102           $ (98,473,102
 

 

 

      

 

 

      

 

    

 

 

 

During the year ended April 30, 2015, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
46    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments April 30, 2015

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 1.8%

  

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

   $ 2,330      $ 2,695,880   

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

     565        639,371   
    

 

 

 
               3,335,251   

California — 27.5%

  

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

     2,895        3,252,677   

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

     1,730        2,066,537   

Central Unified School District, GO, Election of 2008, Series A (AGC), 5.63%, 8/01/33

     1,325        1,511,414   

City & County of San Francisco California Airports Commission, Refunding ARB, 2nd Series A, AMT:

    

5.50%, 5/01/28

     1,085        1,280,387   

5.25%, 5/01/33

     850        965,107   

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

    

5.50%, 3/01/30

     2,400        2,710,704   

5.75%, 3/01/34

     2,180        2,493,440   

City of Sunnyvale California, Refunding RB, 5.25%, 4/01/40

     1,605        1,820,824   

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

     2,100        2,355,213   

County of Ventura California Community College District, GO, Election of 2002, Series C, 5.50%, 8/01/18 (a)

     1,850        2,120,322   

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

     1,420        1,680,002   

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

     1,000        1,165,060   

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

     1,575        1,753,243   

Oceanside Unified School District, GO, Series A (AGC), 5.25%, 8/01/33

     1,825        2,017,173   

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

     1,335        1,554,754   

San Pablo Joint Powers Financing Authority, Refunding, Tax Allocation Bonds, CAB (NPFGC) (b):

    

0.00%, 12/01/24

     2,635        1,577,127   

0.00%, 12/01/25

     2,355        1,334,767   

0.00%, 12/01/26

     2,355        1,255,003   

Sequoia Union High School District, GO, Refunding, Election of 2004, Series B (AGM), 5.50%, 7/01/16 (a)

     3,150        3,341,457   

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

     4,500        5,035,860   

State of California Public Works Board, LRB:

    

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

     725        848,576   

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

     1,500        1,803,300   

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

     2,465        2,949,003   

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

     540        640,667   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

  

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

   $ 4,070      $ 4,682,291   
    

 

 

 
               52,214,908   

Colorado — 2.2%

  

City & County of Denver Colorado Airport System, ARB, Series A, AMT:

    

5.50%, 11/15/28

     1,000        1,165,520   

5.50%, 11/15/30

     340        393,084   

5.50%, 11/15/31

     405        466,289   

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

     1,900        2,152,681   
    

 

 

 
               4,177,574   

District of Columbia — 1.2%

  

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

     2,000        2,257,260   

Florida — 14.4%

  

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

     400        461,048   

City of St. Petersburg Florida Public Utility Revenue, Refunding RB (NPFGC), 5.00%, 10/01/15 (a)

     2,795        2,851,096   

County of Hillsborough Florida Aviation Authority, Refunding ARB, Tampa International Airport, Series A, AMT, 5.50%, 10/01/29

     1,735        1,998,390   

County of Lee Florida, Refunding ARB, Series A, AMT, 5.38%, 10/01/32

     1,500        1,647,735   

County of Miami-Dade Florida Aviation, Refunding ARB, Series A, AMT, 5.00%, 10/01/31

     2,900        3,220,595   

County of Miami-Dade Florida, RB, Seaport Department:

    

Series A, 5.38%, 10/01/33

     1,015        1,147,579   

Series A, 6.00%, 10/01/38

     1,000        1,206,840   

Series B, AMT, 6.25%, 10/01/38

     460        565,110   

Series B, AMT, 6.00%, 10/01/42

     615        740,694   

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

     4,645        5,209,553   

County of Osceola Florida, RB, Sales Tax, Series A:

    

5.00%, 10/01/40

     685        765,597   

5.00%, 10/01/44

     1,575        1,749,195   

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

     1,040        1,194,804   

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

     3,995        4,584,063   
    

 

 

 
               27,342,299   

Hawaii — 0.5%

  

State of Hawaii, Department of Transportation, COP, AMT:

    

5.25%, 8/01/25

     425        492,860   

5.25%, 8/01/26

     460        529,101   
    

 

 

 
               1,021,961   

Illinois — 17.8%

  

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

    

Series A, 5.75%, 1/01/39

     1,145        1,304,842   

Series C, 6.50%, 1/01/41

     5,225        6,326,221   

City of Chicago Illinois, GO, Refunding, Series A, 5.25%, 1/01/33

     850        852,873   

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

     1,000        1,085,890   

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

     565        611,177   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    47


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

  

City of Chicago Illinois Transit Authority, RB:

    

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

   $ 2,000      $ 2,302,460   

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

     1,000        1,106,450   

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

     1,790        1,976,106   

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

     2,455        2,739,927   

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

     2,050        2,163,939   

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

    

5.50%, 12/01/38

     1,250        1,428,000   

5.25%, 12/01/43

     4,165        4,649,015   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,405        1,644,539   

6.00%, 6/01/28

     400        471,140   

State of Illinois, GO:

    

5.25%, 2/01/31

     875        939,006   

5.25%, 2/01/32

     1,355        1,446,964   

5.50%, 7/01/33

     2,000        2,208,660   

5.50%, 7/01/38

     425        467,475   
    

 

 

 
               33,724,684   

Indiana — 3.8%

  

Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges, Series A, AMT, 5.00%, 7/01/40

     565        604,217   

Indianapolis Local Public Improvement Bond Bank, RB, Series F, 5.25%, 2/01/36

     3,055        3,398,504   

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

     2,780        3,155,244   
    

 

 

 
               7,157,965   

Louisiana — 3.5%

  

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

     1,580        1,720,130   

Lake Charles Harbor & Terminal District, RB, Series B, AMT, 5.50%, 1/01/29

     1,500        1,695,045   

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

     1,615        1,821,736   

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

     1,215        1,344,422   
    

 

 

 
               6,581,333   

Massachusetts — 3.5%

  

Massachusetts Educational Financing Authority, RB, Education Loan, Issue I, AMT, 5.00%, 1/01/26

     1,300        1,447,446   

Massachusetts HFA, Refunding RB, Series C, AMT, 5.35%, 12/01/42

     1,500        1,557,090   

Massachusetts School Building Authority, RB, Dedicated Sales Tax, Series A (AGM), 5.00%, 8/15/15 (a)

     3,600        3,650,616   
    

 

 

 
               6,655,152   

Michigan — 1.2%

  

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

     1,910        2,360,531   

Minnesota — 0.8%

  

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

     1,325        1,540,034   
Municipal Bonds   

Par  

(000)

    Value  

Mississippi — 2.4%

  

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

   $ 2,595      $ 3,348,251   

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

     1,000        1,138,270   
    

 

 

 
               4,486,521   

Nevada — 3.8%

  

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

     1,410        1,586,461   

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

     3,500        3,837,575   

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

     1,500        1,703,385   
    

 

 

 
               7,127,421   

New Jersey — 8.0%

  

New Jersey EDA, RB, The Goethals Bridge Replacement Project, AMT:

    

5.38%, 1/01/43

     3,000        3,317,820   

(AGM) 5.00%, 1/01/31

     790        878,851   

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

     2,100        2,341,731   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     1,890        2,057,568   

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

     1,780        1,949,990   

Transportation System, Series A (AGC), 5.63%, 12/15/28

     3,170        3,650,255   

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

     1,000        1,053,930   
    

 

 

 
               15,250,145   

New York — 5.6%

  

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

    

5.38%, 6/15/43

     1,305        1,535,541   

Fiscal 2009, 5.25%, 6/15/40

     3,410        3,870,998   

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

     2,510        2,887,128   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 166th Series, 5.25%, 7/15/36

     2,000        2,255,640   
    

 

 

 
               10,549,307   

Ohio — 1.2%

  

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

     2,000        2,307,500   

Pennsylvania — 1.6%

  

Pennsylvania Economic Development Financing Authority, RB, PA Bridges Finco LP:

    

5.00%, 12/31/34

     1,170        1,272,282   

5.00%, 12/31/38

     510        550,769   

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

     1,000        1,140,420   
    

 

 

 
               2,963,471   

South Carolina — 3.6%

  

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

     2,180        2,523,633   

 

See Notes to Financial Statements.

 

                
48    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

South Carolina (concluded)

  

County of Charleston South Carolina Airport District, ARB, Series A, AMT:

    

5.50%, 7/01/38

   $ 1,000      $ 1,128,860   

6.00%, 7/01/38

     1,695        1,975,404   

5.50%, 7/01/41

     1,000        1,129,620   
    

 

 

 
               6,757,517   

Texas — 23.3%

  

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

     2,500        2,779,975   

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

     1,360        1,551,828   

City of Houston Texas Utility System, Refunding RB, Combined 1st Lien, Series A (AGC), 6.00%, 11/15/35

     4,000        4,738,600   

Dallas Area Rapid Transit, Refunding RB, Senior Lien, 5.25%, 12/01/38

     2,600        2,908,256   

Dallas-Fort Worth International Airport, ARB, Joint Improvement, AMT:

    

Series A, 5.00%, 11/01/38

     2,965        3,165,286   

Series H, 5.00%, 11/01/37

     2,200        2,369,224   

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

     1,240        1,448,444   

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

     4,250        4,989,287   

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

    

Series A (NPFGC), 5.63%, 1/01/33

     6,585        7,236,586   

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

     4,885        5,409,893   

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

     6,275        6,949,249   

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

     620        708,765   
    

 

 

 
               44,255,393   

Virginia — 1.1%

  

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

     570        631,514   

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

     1,300        1,547,585   
    

 

 

 
               2,179,099   

Washington — 1.5%

    

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

     1,375        1,558,260   

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

     1,075        1,241,647   
    

 

 

 
               2,799,907   
Total Municipal Bonds — 130.3%              247,045,233   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
 

Colorado — 3.1%

    

Colorado Health Facilities Authority, RB, Catholic Health, Series C-3 (AGM), 5.10%, 10/01/41

     5,610        5,963,542   

District of Columbia — 0.6%

    

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

     1,039        1,211,882   

Florida — 4.7%

    

County of Lee Florida Housing Finance Authority, RB, S/F Housing, Multi-County Program, Series A-2, AMT (Ginnie Mae), 6.00%, 9/01/40

     304        310,091   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

Florida (concluded)

    

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1, 6.00%, 7/01/38

   $ 7,500      $ 8,577,150   
    

 

 

 
               8,887,241   

Illinois — 1.5%

    

City of Chicago Illinois, Refunding RB, Waterworks, 2nd Lien (AGM), 5.25%, 11/01/33

     2,508        2,748,018   

Kentucky — 0.8%

    

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

     1,406        1,601,402   

Nevada — 5.3%

    

County of Clark Nevada Water Reclamation District, GO:

    

Limited Tax, 6.00%, 7/01/38

     5,000        5,721,450   

Series B, 5.50%, 7/01/29

     3,749        4,351,966   
    

 

 

 
               10,073,416   

New Jersey — 1.3%

    

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

     2,291        2,426,692   

New York — 5.2%

    

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

     1,400        1,566,120   

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

     4,530        5,184,948   

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

     2,660        3,077,859   
    

 

 

 
               9,828,927   

Utah — 0.6%

    

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

     1,004        1,102,933   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 23.1%
        43,844,053   

Total Long-Term Investments

(Cost — $263,809,651) — 153.4%

  

  

    290,889,286   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.02% (e)(f)

     3,776,544        3,776,544   
Total Short-Term Securities
(Cost — $3,776,544) — 2.0%
             3,776,544   
Total Investments (Cost — $267,586,195) — 155.4%        294,665,830   
Other Assets Less Liabilities — 2.1%        3,870,274   

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

   

    (21,942,336
VMTP Shares, at Liquidation Value — (45.9%)        (87,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 189,593,768   
    

 

 

 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    49


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

Notes to Schedule of Investments

 

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

 

(b)   Zero-coupon bond.

 

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

 

(d)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB Trust Certificates and proceeds received from the sale of the security contributed to the TOB Trust or in the event of a default on the security. In the case of a shortfall or default, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from October 1, 2016 to November 15, 2019, is $2,225,646.

 

(e)   During the year ended April 30, 2015, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at April 30,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       4,947,879           (1,171,335        3,776,544         $ 1,226   

 

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

 

Ÿ  

As of April 30, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (129   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 16,560,375      $ (145,794

 

Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

As of April 30, 2015, the following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 290,889,286              $ 290,889,286   

Short-Term Securities

  $ 3,776,544                          3,776,544   
 

 

 

 

Total

  $ 3,776,544         $ 290,889,286              $ 294,665,830   
 

 

 

 

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

       

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments 2             

Liabilities:

                

Interest rate contracts

  $ (145,794                     $ (145,794

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of April 30, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 183,000                        $ 183,000   

Liabilities:

                

TOB Trust Certificates

            $ (21,936,718             (21,936,718

VMTP Shares

              (87,000,000             (87,000,000
 

 

 

 

Total

  $ 183,000         $ (108,936,718           $ (108,753,718
 

 

 

 

During the year ended April 30, 2015, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
50    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments April 30, 2015

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 2.9%

    

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/34

   $ 4,615      $ 5,349,523   

County of Jefferson Alabama, RB, Limited Obligation School, Series A:

    

5.50%, 1/01/21

     5,500        5,527,390   

5.25%, 1/01/23

     6,500        6,532,370   
    

 

 

 
               17,409,283   

Arizona — 4.9%

    

Arizona Board of Regents, University of Arizona, RB, 5.00%, 8/01/28

     2,000        2,288,100   

Arizona Health Facilities Authority, Refunding RB, Phoenix Children’s Hospital, Series A, 5.00%, 2/01/30

     2,685        2,918,488   

City of Phoenix Arizona IDA, RB, Facility, Legacy Traditional Schools Project, Series A, 5.75%, 7/01/24 (a)

     750        822,705   

City of Tucson Arizona, COP (AGC):

    

4.25%, 7/01/21

     1,870        2,040,245   

4.25%, 7/01/22

     1,895        2,050,902   

City of Tucson Arizona, COP, Refunding (AGC), 4.00%, 7/01/20

     2,325        2,584,888   

County of Maricopa Arizona IDA, RB, Arizona Charter School Project 1, Series A, 6.63%, 7/01/20

     570        554,792   

County of Pima Arizona IDA, RB, Arizona Charter Schools Project, Series K, 6.38%, 7/01/31

     895        897,703   

County of Pinal Arizona Electric District No. 3, Refunding RB, 5.00%, 7/01/25

     1,600        1,804,416   

Glendale Union School District No. 205, GO, Series C:

    

5.00%, 7/01/24

     1,945        2,310,932   

5.00%, 7/01/27

     500        576,855   

Phoenix-Mesa Gateway Airport Authority, RB, Mesa Project, AMT:

    

5.00%, 7/01/27

     700        790,895   

5.00%, 7/01/32

     1,925        2,115,556   

Salt River Project Agricultural Improvement & Power District, RB, Series A, 5.00%, 1/01/25

     4,000        4,425,960   

Scottsdale IDA, Refunding RB, Scottsdale Healthcare, Series C (AGM), 5.00%, 9/01/35

     2,050        2,270,949   

State of Arizona, COP, Department of Administration, Series A (AGM), 4.25%, 10/01/23

     1,000        1,080,390   
    

 

 

 
               29,533,776   

Arkansas — 2.2%

    

Arkansas State University, RB, 5.00%, 12/01/33

     480        544,018   

City of Benton, RB:

    

5.00%, 6/01/28

     600        691,668   

5.00%, 6/01/29

     1,055        1,209,948   

University of Arkansas, Refunding RB:

    

5.00%, 3/01/31

     2,315        2,698,179   

5.00%, 3/01/33

     5,845        6,753,254   

5.00%, 3/01/34

     1,270        1,461,554   
    

 

 

 
               13,358,621   

California — 3.5%

    

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 5.00%, 8/15/22

     2,135        2,501,900   

California Pollution Control Financing Authority, RB, Mandatory Put Bonds, Republic Services, Inc. Project, Series B, AMT, 5.25%, 6/01/23 (b)

     605        653,987   

California Pollution Control Financing Authority, Refunding RB, Pacific Gas, Series C, AMT (NPFGC), 4.75%, 12/01/23

     5,000        5,298,800   
Municipal Bonds   Par  
(000)
    Value  

California (concluded)

   

City of San Jose California, Refunding ARB, Series A-1, AMT, 5.00%, 3/01/25

  2,000      2,238,220   

State of California, GO:

   

5.50%, 4/01/28

    15        15,065   

5.00%, 11/01/32

    2,000        2,185,280   

Various Purposes, 5.75%, 4/01/31

    7,000        8,134,000   
   

 

 

 
              21,027,252   

Colorado — 0.9%

   

Denver Urban Renewal Authority, Refunding, Tax Allocation Bond, Stapleton, Senior-Series A-1, 5.00%, 12/01/23

    2,500        2,921,700   

University of Northern Colorado, Refunding RB, Series A, 5.00%, 6/01/31

    2,000        2,317,740   
   

 

 

 
              5,239,440   

Connecticut — 2.3%

   

Connecticut State Development Authority, RB, Learjet, Inc. Project, AMT, 7.95%, 4/01/26

    1,160        1,192,248   

Connecticut State Health & Educational Facility Authority, Refunding RB, Lawrence & Memorial Hospital, Series F, 5.00%, 7/01/31

    4,530        4,956,500   

State of Connecticut, GO, Series B, 5.00%, 4/15/31

    6,990        7,965,524   
   

 

 

 
              14,114,272   

Florida — 5.9%

   

County of Broward Florida School Board, COP, Refunding, Series A (AGM), 5.00%, 7/01/24

    10,000        11,408,600   

County of Highlands Health Facilities Authority, Refunding RB, Adventis Health, Series G, 5.13%, 11/15/16 (c)

    35        37,442   

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

   

5.50%, 10/01/23

    1,000        1,175,520   

(AGM), 5.00%, 10/01/27

    1,635        1,824,873   

County of Miami-Dade Florida, RB, AMT, Series B:

   

6.00%, 10/01/28

    3,470        4,237,911   

6.00%, 10/01/29

    3,480        4,248,697   

County of Miami-Dade Florida Transit System Sales Surtax Revenue, Refunding RB, 5.00%, 7/01/32

    1,500        1,697,340   

County of Miami-Dade Florida Water & Sewer System Revenue, Refunding RB, Series C (BHAC), 5.00%, 10/01/23

    8,000        8,949,200   

Midtown Miami Community Development District, Refunding, Special Assessment Bonds, Series A, 4.25%, 5/01/24

    1,835        1,953,009   

Sterling Hill Community Development District, Refunding RB, Special Assessment Bonds, Series B, 5.50%, 11/01/10 (d)(e)

    155        92,998   
   

 

 

 
              35,625,590   

Georgia — 3.1%

   

City of Atlanta Georgia Water & Wastewater Revenue, Refunding RB, 5.00%, 11/01/32

    10,000        11,567,500   

Fulton County Development Authority, Refunding RB, Robert Woodruff, Series B, 5.25%, 3/15/24

    3,000        3,356,220   

Medical Center Hospital Authority, Refunding RB, Columbus Regional Healthcare (AGM):

   

4.00%, 8/01/23

    1,500        1,590,135   

4.13%, 8/01/24

    2,000        2,117,840   
   

 

 

 
              18,631,695   

Guam — 0.4%

   

Territory of Guam, RB, Section 30, Series A, 5.38%, 12/01/24

    2,100        2,325,183   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    51


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Hawaii — 0.9%

    

State of Hawaii Airports System, Refunding ARB, Series A, 5.25%, 7/01/29

   $ 5,000      $ 5,747,800   

Illinois — 16.3%

    

City of Chicago Illinois, Refunding RB, GO, Series A, 5.25%, 1/01/30

     1,000        1,009,630   

City of Chicago Illinois Midway International Airport, Refunding ARB, 2nd Lien, Series A, AMT, 5.50%, 1/01/32

     1,500        1,707,750   

City of Chicago Illinois Midway International Airport, Refunding RB, AMT, Series A, 5.00%, 1/01/32

     5,000        5,478,050   

City of Chicago Illinois O’Hare International Airport, Refunding GARB, AMT:

    

Senior Lien, Series A, 5.00%, 1/01/23

     13,000        15,107,170   

Series C, 5.25%, 1/01/28

     1,350        1,537,812   

Series C, 5.25%, 1/01/29

     3,020        3,418,217   

City of Chicago Illinois Transit Authority, RB, 5.25%, 12/01/31

     3,700        4,126,166   

Madison-Macoupin Etc. Counties Community College District No. 536, GO, Refunding, Lewis & Clark Community College:

    

5.00%, 5/01/30

     475        527,630   

5.00%, 5/01/31

     500        554,295   

5.00%, 5/01/32

     500        559,280   

McHenry County Conservation District, GO, 5.13%, 2/01/17 (c)

     12,695        13,699,175   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     3,500        4,096,715   

6.25%, 6/01/24

     12,750        13,561,155   

State of Illinois, GO:

    

5.25%, 2/01/30

     5,000        5,392,300   

5.00%, 5/01/30

     10,000        10,617,700   

State of Illinois Toll Highway Authority, RB, Series A, 5.00%, 1/01/34

     9,140        10,237,440   

Village of Hodgkins Illinois, RB, MBM Project, AMT, 5.90%, 11/01/17

     6,000        6,010,440   

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

     1,290        1,290,529   
    

 

 

 
               98,931,454   

Indiana — 4.1%

    

City of Whiting Indiana, RB, BP Products North America, Inc. Project, 5.25%, 1/01/21

     4,800        5,576,160   

County of Jasper Indiana, Refunding RB, Northern Indiana Public Service Co., Series C (NPFGC), 5.85%, 4/01/19

     2,000        2,275,260   

Indiana Finance Authority, RB, Wastewater, 1st Lien, Series A, 5.25%, 10/01/31

     10,000        11,546,100   

Indiana Finance Authority, Refunding RB, US Steel Corp. Project, 6.00%, 12/01/19

     5,000        5,575,650   
    

 

 

 
               24,973,170   

Iowa — 1.0%

    

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

    

5.25%, 4/01/23

     695        796,053   

5.25%, 4/01/24

     730        844,048   

5.25%, 4/01/25

     520        596,606   

5.25%, 4/01/26

     360        409,853   

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

    

5.00%, 9/01/22

     2,315        2,386,950   

Upper Iowa University Project, 5.00%, 9/01/20

     1,000        1,068,870   
    

 

 

 
               6,102,380   
Municipal Bonds    Par  
(000)
    Value  

Kansas — 1.4%

    

Kansas Development Finance Authority, Refunding RB, Adventist Health System/Sunbelt Obligated Group, Series C, 5.00%, 11/15/23

   $ 1,500      $ 1,705,305   

Seward County Unified School District No. 480 Liberal, GO, Refunding, 5.00%, 9/01/33

     6,000        6,684,360   
    

 

 

 
               8,389,665   

Kentucky — 1.5%

    

State of Kentucky Property & Building Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/24

     8,000        9,135,120   

Louisiana — 6.3%

    

City of Bossier City Louisiana Utilities, Refunding RB, 5.00%, 10/01/32

     2,000        2,285,480   

City of New Orleans Louisiana Aviation Board, Refunding GARB, Restructuring, Series A-2 (AGC), 6.00%, 1/01/23

     850        977,823   

Jefferson Parish Hospital Service District No. 1, Refunding RB, West Jefferson Medical Center, Series A (AGM), 5.50%, 1/01/26

     3,000        3,466,020   

Louisiana Local Government Environmental Facilities & Community Development Authority, Refunding RB, 5.00%, 11/01/32

     7,000        7,969,010   

Louisiana Local Government Environmental Facilities & Community Development Authority, Refunding RB, BRCC Facilities Corp. Project:

    

5.00%, 12/01/27

     3,445        3,876,727   

5.00%, 12/01/28

     3,715        4,154,559   

Louisiana Public Facilities Authority, Refunding RB, Entergy Gulf States Louisiana LLC Project, Series A, 5.00%, 9/01/28

     2,000        2,029,960   

New Orleans Aviation Board, RB, Series A:

    

5.00%, 1/01/31

     855        968,399   

5.00%, 1/01/32

     1,000        1,128,230   

5.00%, 1/01/33

     1,000        1,125,600   

State of Louisiana Gasoline & Fuels Tax Revenue, Refunding RB, 4.00%, 5/01/34

     5,750        5,992,535   

Terrebonne Levee & Conservation District, RB, Sales Tax, 5.00%, 7/01/28

     3,660        4,092,502   
    

 

 

 
               38,066,845   

Maine — 0.3%

    

Portland Housing Development Corp., Refunding RB, Senior Living, Retirement Facilities, Series A, 6.00%, 2/01/34

     1,965        1,987,106   

Maryland — 0.8%

    

Maryland EDC, RB, Transportation Facilities Project, Series A, 5.13%, 6/01/20

     1,750        1,928,938   

Maryland Health & Higher Educational Facilities Authority, RB, Johns Hopkins Health System, Series B, 5.00%, 7/01/33

     1,140        1,276,686   

Maryland Health & Higher Educational Facilities Authority, Refunding RB, 5.00%, 7/01/33

     1,500        1,663,935   
    

 

 

 
               4,869,559   

Massachusetts — 1.2%

    

Massachusetts Health & Educational Facilities Authority, Refunding RB, Winchester Hospital, 5.00%, 7/01/25

     1,060        1,185,822   

Massachusetts School Building Authority, RB, Dedicated Sales Tax, Series A (AGM), 5.00%, 8/15/15 (c)

     5,870        5,952,532   
    

 

 

 
               7,138,354   

Michigan — 2.7%

    

Manistee Area Public Schools, GO, Refunding (Q-SBLF), 5.00%, 5/01/25

     1,000        1,134,580   

 

See Notes to Financial Statements.

 

                
52    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Michigan (concluded)

    

Michigan Finance Authority, Refunding RB, Senior Lien, Detroit Water and Sewer, Series C-3, 5.00%, 7/01/31

   $ 4,000      $ 4,457,000   

Michigan State Building Authority, Refunding RB, Facilities Program, Series II-A, 5.00%, 10/15/24

     2,500        2,892,775   

Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health System, 5.25%, 11/15/24

     4,900        5,561,990   

State of Michigan Trunk Line Revenue, RB, 5.00%, 11/15/31

     2,000        2,271,540   
    

 

 

 
               16,317,885   

Minnesota — 1.5%

    

City of St. Cloud Minnesota, Refunding RB, Centracare Health System, Series A, 4.25%, 5/01/21

     2,300        2,555,300   

St. Cloud Minnesota Independent School District No. 742, GO, Series A, 3.00%, 2/01/31

     350        338,429   

University of Minnesota, RB, Biomedical Science Research Facilities Funding Program:

    

Series B, 5.00%, 8/01/36

     1,000        1,125,960   

Series C, 5.00%, 8/01/27

     1,390        1,624,021   

Series C, 5.00%, 8/01/28

     740        855,943   

Series C, 5.00%, 8/01/29

     1,555        1,789,385   

Series C, 5.00%, 8/01/30

     835        956,250   
    

 

 

 
               9,245,288   

Mississippi — 0.7%

    

Mississippi Business Finance Corp., Refunding RB, System Energy Resource, Inc. Project, 5.88%, 4/01/22

     4,190        4,215,140   

Missouri — 1.9%

    

Health & Educational Facilities Authority of the State of Missouri, Refunding RB, Series A, 5.00%, 6/01/30

     2,000        2,283,540   

Missouri Joint Municipal Electric Utility Commission Power, RB, Prairie State Project, Series A (BHAC), 5.00%, 1/01/17 (c)

     5,000        5,364,850   

Missouri State Environmental Improvement & Energy Resource Authority, Refunding RB, Revolving Funds Program, Series A, 5.00%, 1/01/25

     3,150        3,741,539   
    

 

 

 
               11,389,929   

Montana — 0.3%

    

Montana State Board of Regents, RB, 5.00%, 11/15/30

     1,000        1,157,860   

Yellowstone County School District No. 2 Billings, GO, 5.00%, 6/15/30

     715        840,869   
    

 

 

 
               1,998,729   

Nebraska — 0.9%

    

Lancaster County Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, 5.50%, 1/01/30

     1,000        1,104,460   

Nebraska Public Power District, Refunding RB:

    

Series A, 5.00%, 1/01/30

     1,000        1,127,120   

Series A, 5.00%, 1/01/32

     2,000        2,234,960   

Series A-1, 3.00%, 1/01/33

     900        857,295   
    

 

 

 
               5,323,835   

Nevada — 1.6%

    

Clark County Department of Aviation, Refunding RB, 5.00%, 7/01/33

     5,000        5,629,650   
Municipal Bonds    Par  
(000)
    Value  

Nevada (concluded)

    

County of Humboldt Nevada, Refunding RB, Idaho Power Co. Project, 5.15%, 12/01/24

   $ 3,800      $ 4,275,798   
    

 

 

 
               9,905,448   

New Jersey — 19.2%

    

County of Essex New Jersey Improvement Authority, LRB, Newark Project, Series A (AGM), 5.00%, 11/01/20

     2,000        2,215,560   

Garden State Preservation Trust, RB, Election of 2005, Series A (AGM), 5.80%, 11/01/15 (c)

     5,050        5,192,461   

New Jersey EDA, RB, AMT:

    

5.50%, 1/01/26

     1,500        1,757,460   

5.50%, 1/01/27

     1,000        1,159,340   

Continental Airlines, Inc. Project, 5.13%, 9/15/23

     6,040        6,645,872   

New Jersey EDA, Refunding RB:

    

New Jersey American Water Co., Series E, AMT, 4.70%, 12/01/25

     3,000        3,237,450   

School Facilities Construction, Series AA, 4.25%, 12/15/24

     3,850        3,965,154   

School Facilities Construction, Series EE, 5.00%, 9/01/23

     3,465        3,770,093   

New Jersey Educational Facilities Authority, RB, Higher Education Facilities Trust Fund, 5.00%, 6/15/28

     10,000        10,780,100   

New Jersey Health Care Facilities Financing Authority, Refunding RB, Hackensack University Medical, Series B (AGM), 4.00%, 1/01/24

     635        679,901   

New Jersey Higher Education Student Assistance Authority, Refunding RB:

    

Series 1, AMT, 5.50%, 12/01/26

     1,665        1,843,055   

Series 1, AMT, 5.00%, 12/01/27

     2,585        2,585,284   

Student Loan, Series 1A, 4.75%, 12/01/21

     1,930        2,062,359   

New Jersey State Turnpike Authority, Refunding RB, Series B, 5.00%, 1/01/29

     10,000        11,309,500   

New Jersey Transportation Trust Fund Authority, RB:

    

5.25%, 6/15/32

     12,500        13,519,500   

Series B, 5.25%, 6/15/26

     3,500        3,814,020   

Transportation Program, Series AA, 5.25%, 6/15/31

     12,000        12,893,400   

Transportation System, Series A, 5.25%, 6/15/24

     3,185        3,521,177   

Transportation System, Series B, 5.50%, 6/15/31

     13,970        15,481,554   

Newark Housing Authority, RB, Series A:

    

5.00%, 12/01/23

     1,230        1,433,085   

5.00%, 12/01/25

     1,345        1,546,885   

South Jersey Port Corp., RB, Marine Terminal, Series O-1 (AGC), 4.63%, 1/01/23

     1,375        1,484,821   

State of New Jersey, GO, 5.00%, 6/01/28

     5,000        5,719,100   
    

 

 

 
               116,617,131   

New Mexico — 0.9%

    

Albuquerque Bernalillo County Water Utility Authority, Refunding RB, 4.00%, 7/01/33

     5,510        5,734,257   

New York — 19.1%

    

City of New York New York, GO:

    

Series D1, 5.13%, 12/01/26

     4,615        5,123,573   

Sub-Series B-1, 5.25%, 9/01/22

     8,250        9,358,800   

Sub-Series I-1, 5.50%, 4/01/21

     5,000        5,802,200   

City of New York New York, GO, Refunding, Fiscal 2013, Series E:

    

5.00%, 8/01/24

     4,000        4,579,520   

5.00%, 8/01/30

     6,230        7,090,550   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    53


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

New York (concluded)

    

County of Essex New York Industrial Development Agency, Refunding RB, International Paper Co. Project, Series A, AMT, 5.20%, 12/01/23

   $ 5,000      $ 5,090,300   

County of Westchester New York Healthcare Corp., Refunding RB, Senior Lien, Remarketing, Series A:

    

5.00%, 11/01/24

     5,470        6,171,582   

5.00%, 11/01/30

     1,000        1,090,920   

Long Island Power Authority, Refunding RB, Electric System, Series A, 5.50%, 4/01/24

     1,000        1,120,760   

Metropolitan Transportation Authority, RB:

    

Series B, 5.25%, 11/15/33

     4,405        5,109,051   

Sub-Series B-1, 5.00%, 11/15/24

     2,300        2,743,877   

Sub-Series B-4, 5.00%, 11/15/24

     1,500        1,789,485   

Monroe County Industrial Development Corp., Refunding RB, Series A, 5.00%, 7/01/29

     5,695        6,572,600   

New York City Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.00%, 1/15/23

     3,560        4,030,632   

New York City Trust for Cultural Resources, Refunding RB, Carnegie Hall, Series A, 5.00%, 12/01/29

     2,750        3,138,025   

New York State Dormitory Authority, RB:

    

Education, Series D, 5.00%, 9/15/16 (c)

     5        5,315   

Fordham University, Series A, 5.25%, 7/01/25

     900        1,051,308   

Mount Sinai School of Medicine, Series A (NPFGC), 5.15%, 7/01/24

     1,000        1,159,760   

Municipal Health Facilities Lease, Sub-Series 2-4, 5.00%, 1/15/27

     6,900        7,622,085   

New York University Hospitals Center, Series A, 5.00%, 7/01/22

     1,725        1,971,106   

New York University Hospitals Center, Series A, 5.13%, 7/01/23

     1,670        1,914,889   

North Shore-Long Island Jewish Health System, Series A, 5.50%, 5/01/30

     1,495        1,680,604   

New York State Dormitory Authority, Refunding RB:

    

North Shore-Long Island Jewish Obligated Group, Series E, 5.00%, 5/01/22

     650        729,274   

Series A, 4.00%, 7/01/32

     1,345        1,395,074   

Yeshiva University, 4.25%, 9/01/24

     2,750        2,778,078   

New York State Urban Development Corp., RB, Service Contract, Series B, 5.00%, 1/01/21

     8,000        8,984,080   

Port Authority of New York & New Jersey, ARB, JFK International Air Terminal LLC Project, 5.00%, 12/01/20

     2,475        2,830,361   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 152nd Series, AMT, 5.00%, 11/01/23

     1,000        1,092,660   

Port Authority of New York & New Jersey, Refunding RB:

    

5.00%, 11/01/28

     6,185        7,362,933   

Consolidated, 153rd Series, 5.00%, 7/15/24

     2,010        2,252,848   

State of New York Dormitory Authority, RB, Mental Health Services (AGM):

    

5.00%, 8/15/18 (c)

     30        33,910   

5.00%, 8/15/18 (c)

     10        11,303   

5.00%, 2/15/22

     3,950        4,424,514   

2nd Series, 5.00%, 8/15/18 (c)

     10        11,303   
    

 

 

 
               116,123,280   

North Carolina — 0.4%

    

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

     1,105        1,105,984   
Municipal Bonds    Par  
(000)
    Value  

North Carolina (concluded)

    

North Carolina Medical Care Commission, Refunding RB, WakeMed, Series A, 5.00%, 10/01/31

   $ 1,500      $ 1,661,355   
    

 

 

 
               2,767,339   

Ohio — 1.1%

    

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

     6,000        6,922,500   

Oregon — 1.7%

    

Klamath County School District, GO:

    

5.00%, 6/15/30

     1,000        1,140,910   

5.00%, 6/15/31

     1,000        1,137,050   

Oregon State Facilities Authority, Refunding RB, Series A:

    

5.00%, 11/15/29

     1,000        1,146,260   

Reed College Project, 5.00%, 7/01/29

     1,835        2,101,626   

State of Oregon, GO, Series H, 5.00%, 5/01/36

     2,000        2,276,680   

Umatilla County School District No. 16R Pendleton, GO, Series A, 5.00%, 6/15/32

     2,000        2,324,100   
    

 

 

 
               10,126,626   

Pennsylvania — 6.6%

    

City of Philadelphia Pennsylvania, ARB, Series A, AMT, 5.00%, 6/15/20

     2,895        3,120,405   

City of Pittsburgh Pennsylvania, GO, Refunding, Series B (AGM), 5.25%, 9/01/17

     9,630        10,265,676   

County of Allegheny Pennsylvania, GO, Refunding, Series C-68, 5.00%, 11/01/25

     2,515        2,926,504   

County of Allegheny Pennsylvania, GO, Series C-67:

    

5.00%, 11/01/25

     2,700        3,152,439   

5.00%, 11/01/26

     2,375        2,744,954   

Delaware River JT Toll Bridge Commission, Refunding RB, 5.00%, 7/01/31

     400        460,188   

Pennsylvania Economic Development Financing Authority, RB, AMT, 5.00%, 12/31/30

     5,100        5,584,296   

Pennsylvania Turnpike Commission, RB, Sub-Series B, 5.25%, 12/01/31

     4,000        4,440,720   

South Fork Municipal Authority, Refunding RB, Conemaugh Valley Memorial Hospital, Series A (AGC), 6.00%, 7/01/20 (c)

     6,225        7,621,952   
    

 

 

 
               40,317,134   

Puerto Rico — 1.8%

    

Puerto Rico Housing Finance Authority, Refunding RB, M/F Housing, Subordinate, Capital Fund Modernization, 5.13%, 12/01/27

     10,000        10,706,600   

Rhode Island — 2.0%

    

Narragansett Bay Commission, Refunding RB, Series B, 5.00%, 9/01/32

     4,150        4,817,652   

Providence Redevelopment Agency, Refunding RB, Series A, 5.00%, 4/01/29

     1,000        1,088,020   

Rhode Island Clean Water Finance Agency, RB, 5.00%, 10/01/32

     1,435        1,656,334   

Rhode Island Health & Educational Building Corp., RB, City of Newport Issue Financing Program, Series C, 5.00%, 5/15/30

     2,305        2,589,414   

Rhode Island Health & Educational Building Corp., Refunding RB, 5.00%, 9/01/32

     2,000        2,308,960   
    

 

 

 
               12,460,380   

South Dakota — 0.2%

    

South Dakota Health & Educational Facilities Authority, Refunding RB, Regional Health, 5.00%, 9/01/25

     1,000        1,115,300   

 

See Notes to Financial Statements.

 

                
54    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Tennessee — 1.3%

    

County of Memphis-Shelby Tennessee Sports Authority, Inc., Refunding RB, Memphis Arena Project:

    

Series A, 5.00%, 11/01/23

   $ 2,695      $ 3,055,241   

Series B, 5.00%, 11/01/22

     1,000        1,136,450   

Knox County Health Educational & Housing Facility Board Tennessee, Refunding RB, Eastowne Village Project, 4.00%, 6/01/31 (b)

     3,490        3,734,858   
    

 

 

 
               7,926,549   

Texas — 8.0%

    

City of Grapevine Texas, GO, 5.00%, 2/15/33

     5,685        6,461,059   

City of Houston Texas, Refunding ARB, Series A:

    

Senior Lien, 5.25%, 7/01/29

     4,055        4,495,333   

Subordinate Lien, AMT, 5.00%, 7/01/25

     1,500        1,698,915   

Subordinate Lien, AMT, 5.00%, 7/01/32

     1,010        1,109,980   

Dallas-Fort Worth International Airport Facilities Improvement Corp., ARB, Series 2001-A-1, AMT, 6.15%, 1/01/16

     4,000        4,018,960   

Dallas/Fort Worth International Airport, Refunding RB, AMT:

    

Series E, 5.00%, 11/01/26

     2,185        2,494,920   

Series E, 5.00%, 11/01/27

     4,960        5,638,776   

Series F, 5.00%, 11/01/31

     6,345        7,041,047   

Love Field Airport Modernization Corp., RB, Southwest Airlines Co. Project, AMT, 5.00%, 11/01/28

     1,000        1,117,450   

Red River Education Financing Corp., RB, 5.00%, 3/15/33

     1,340        1,514,642   

San Jacinto River Authority, RB, Special Project (AGM), 5.25%, 10/01/25

     2,910        3,307,011   

Socorro ISD, GO, Refunding, School Building (PSF-GTD), 5.00%, 8/15/32

     2,500        2,868,700   

Via Metropolitan Transit Authority, Refunding RB:

    

5.25%, 8/01/28

     1,585        1,802,827   

5.25%, 8/01/29

     1,720        1,943,256   

5.25%, 8/01/33

     3,000        3,345,990   
    

 

 

 
               48,858,866   

U.S. Virgin Islands — 1.9%

    

Virgin Islands Public Finance Authority, Refunding RB:

    

Series A, 5.25%, 10/01/24

     5,000        6,124,000   

Series C, 5.00%, 10/01/30

     5,000        5,512,850   
    

 

 

 
               11,636,850   

Vermont — 1.0%

    

University of Vermont & State Agricultural College, Refunding RB, 4.00%, 10/01/30

     5,565        5,938,467   

West Virginia — 1.0%

    

West Virginia Hospital Finance Authority, Refunding RB, Charleston Area Medical Center, Inc., Series A, 5.13%, 9/01/23

     4,000        4,427,040   

West Virginia University, RB, West Virginia University Project, Series B, 5.00%, 10/01/30

     1,500        1,694,505   
    

 

 

 
               6,121,545   

Wisconsin — 2.5%

    

Public Finance Authority, Refunding RB, AMT:

    

National Gypsum Co., 5.25%, 4/01/30

     2,410        2,456,778   

Wisconsin Airport Facilities, Senior Obligated Group, Series B, 5.25%, 7/01/28

     4,765        5,310,259   

WPPI Energy, Refunding RB, Supply System, Series A:

    

5.00%, 7/01/31

     1,600        1,827,232   

5.00%, 7/01/32

     1,275        1,449,560   
Municipal Bonds    Par  
(000)
    Value  

Wisconsin (concluded)

    

WPPI Energy, Refunding RB, Supply System, Series A (concluded):

    

5.00%, 7/01/33

   $ 3,500      $ 3,936,205   
    

 

 

 
               14,980,034   
Total Municipal Bonds — 138.2%              839,355,677   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
 

Illinois — 1.6%

    

Du Page & Will Counties Community School District No. 204, GO, School Building, Series A (NPFGC), 5.25%, 12/30/22

     8,650        9,473,809   

Louisiana — 2.4%

    

State of Louisiana, GO, Series A, 5.00%, 8/01/24

     12,000        14,421,960   

Massachusetts — 1.9%

  

Massachusetts Development Finance Agency, Refunding RB, Partners Healthcare, Series L, 5.00%, 7/01/31

     10,175        11,521,132   

Minnesota — 1.9%

  

State of Minnesota, GO, State Various Purposes, Series A, 4.00%, 8/01/29

     10,525        11,791,547   

New York — 7.9%

  

City of New York New York, GO, Refunding, Series E, 5.00%, 8/01/27

     3,507        4,012,504   

City of New York New York, GO, Series I, 5.00%, 3/01/32

     7,009        8,008,270   

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, Series A, 4.75%, 6/15/30

     8,000        8,611,920   

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/25

     4,001        4,673,228   

New York State Urban Development Corp., RB, Personal Income Tax, Series A-1, 5.00%, 3/15/32

     5,501        6,242,721   

Port Authority of New York & New Jersey, ARB, Consolidated, 169th Series, 5.00%, 10/15/26

     5,530        6,209,803   

Port Authority of New York & New Jersey, RB, 178th Series, AMT, 5.00%, 12/01/32

     4,009        4,457,809   

Sales Tax Asset Receivable Corp., Refunding RB, Fiscal 2015, Series A, 5.00%, 10/15/31

     5,010        5,943,163   
    

 

 

 
               48,159,418   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 15.7%
        95,367,866   
Total Long-Term Investments
(Cost — $876,512,408) — 153.9%
        934,723,543   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.02% (g)(h)

     1,356,943        1,356,943   
Total Short-Term Securities
(Cost — $1,356,943) — 0.2%
        1,356,943   
Total Investments (Cost — $877,869,351) — 154.1%        936,080,486   
Other Assets Less Liabilities — 1.9%        11,399,295   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (8.7%)

   

    (52,939,472
VMTP Shares, at Liquidation Value — (47.3%)        (287,100,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 607,440,309   
    

 

 

 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    55


Schedule of Investments (concluded)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

 

Notes to Schedule of Investments

 

(a)   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.

 

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

 

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

 

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

 

(e)   Non-income producing security.

 

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

 

(g)   During the year ended April 30, 2015, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at April 30,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       25,184,531           (23,827,588        1,356,943         $ 4,098   

 

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

 

Ÿ  

As of April 30, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (609   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 78,180,375      $ (688,283

 

Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

As of April 30, 2015, the following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 934,723,543              $ 934,723,543   

Short-Term Securities

  $ 1,356,943                          1,356,943   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 1,356,943         $  934,723,543              $  936,080,486   
 

 

 

      

 

 

      

 

    

 

 

 

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

  $ (688,283                     $ (688,283

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

       

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of April 30, 2015, such assets and/or
liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 864,000                        $ 864,000   

Liabilities:

                

TOB Trust Certificates

            $ (52,931,848             (52,931,848

VMTP Shares

              (287,100,000             (287,100,000
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $    864,000         $ (340,031,848           $ (339,167,848
 

 

 

      

 

 

      

 

    

 

 

 

During the year ended April 30, 2015, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
56    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments April 30, 2015

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 1.9%

  

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

   $ 1,490      $ 1,497,421   

County of Jefferson Alabama Sewer, Refunding RB:

    

Senior Lien, Series A (AGM), 5.00%, 10/01/44

     805        874,448   

Sub-Lien, Series D, 6.00%, 10/01/42

     3,575        4,013,116   
    

 

 

 
               6,384,985   

Alaska — 0.9%

  

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

    

4.63%, 6/01/23

     1,265        1,265,177   

5.00%, 6/01/46

     2,250        1,767,083   
    

 

 

 
               3,032,260   

Arizona — 0.2%

  

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

     860        809,165   

California — 12.6%

  

California Health Facilities Financing Authority, RB:

    

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

     2,200        2,541,748   

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

     3,170        3,786,660   

California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 7/01/33

     890        1,007,747   

California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F Housing, Series A:

    

5.25%, 8/15/39

     145        158,236   

5.25%, 8/15/49

     370        403,019   

California Pollution Control Financing Authority, RB, Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45 (a)

     1,495        1,612,911   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A:

    

5.25%, 5/15/39

     800        905,592   

Senior, 5.00%, 5/15/40

     5,930        6,735,057   

City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/40

     360        433,390   

San Marcos Unified School District, GO, CAB, Election of 2010, Series B, 0.00%, 8/01/42 (b)

     2,000        601,120   

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     2,525        3,028,258   

6.50%, 4/01/33

     14,925        17,792,689   

State of California Public Works Board, LRB, Various Capital Projects:

    

Series I, 5.00%, 11/01/38

     775        864,683   

Sub-Series I-1, 6.38%, 11/01/34

     1,185        1,441,481   

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1, 4.75%, 6/01/25

     965        965,019   
    

 

 

 
               42,277,610   

Colorado — 0.4%

  

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

     1,060        1,213,456   

Connecticut — 1.9%

  

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

     1,375        1,522,331   

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

     3,385        3,852,773   
Municipal Bonds    Par  
(000)
    Value  

Connecticut (concluded)

  

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

   950      949,962   
    

 

 

 
               6,325,066   

Delaware — 1.7%

  

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

     1,125        1,294,931   

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

     4,065        4,428,736   
    

 

 

 
               5,723,667   

District of Columbia — 2.8%

  

District of Columbia, Refunding RB, Kipp Charter School, Series A, 6.00%, 7/01/43

     240        279,149   

Metropolitan Washington Airports Authority, Refunding RB:

    

Dulles Toll Road, CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/33 (b)

     6,590        2,966,818   

Dulles Toll Road, 1st Senior Lien, Series A, 5.25%, 10/01/44

     1,500        1,677,150   

Dulles Toll Road, CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/34 (b)

     4,830        2,050,866   

Dulles Toll Road, CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/35 (b)

     6,515        2,589,973   
    

 

 

 
               9,563,956   

Florida — 2.9%

  

Collier County Health Facilities Authority, Refunding RB, Series A, 5.00%, 5/01/45

     850        929,781   

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

     1,165        1,323,533   

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

     3,015        3,959,841   

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

     1,110        932,877   

Village Community Development District No. 10, Special Assessment Bonds, 5.13%, 5/01/43

     2,395        2,679,646   
    

 

 

 
               9,825,678   

Georgia — 2.5%

  

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

     850        959,888   

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

     515        591,905   

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

     130        149,291   

Metropolitan Atlanta Rapid Transit Authority, RB, Sales Tax, 3rd Indenture, Series A, 5.00%, 7/01/39

     3,465        3,897,259   

Municipal Electric Authority of Georgia, Refunding RB:

    

Series W, 6.60%, 1/01/18

     2,220        2,369,495   

Series X, 6.50%, 1/01/20

     450        503,248   
    

 

 

 
               8,471,086   

Hawaii — 0.5%

  

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

     1,355        1,540,608   

Illinois — 23.3%

  

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

     5,865        7,101,107   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    57


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Illinois (concluded)

  

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

    

5.25%, 1/01/32

   $ 4,555      $ 4,586,202   

5.00%, 1/01/34

     3,200        3,108,992   

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

     820        890,430   

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

     800        803,440   

City of Chicago Illinois Board of Education, GO, Series A, 5.25%, 12/01/41

     4,455        4,312,217   

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

     1,050        1,159,169   

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien:

    

Project, 5.00%, 11/01/42

     3,280        3,550,436   

(AGM), 5.25%, 11/01/33

     1,325        1,451,670   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38

     805        919,632   

Illinois Finance Authority, RB:

    

Advocate Health Care Network, Series D, 6.50%, 11/01/18 (c)

     5,000        5,928,300   

Community Rehabilitation Providers Facilities, Series A, 6.50%, 7/01/22

     275        275,388   

Illinois Finance Authority, Refunding RB, Central Dupage Health, Series B, 5.50%, 11/01/39

     1,610        1,857,489   

Illinois State Toll Highway Authority, RB:

    

Senior, Series C, 5.00%, 1/01/36

     2,615        2,927,466   

Senior, Series C, 5.00%, 1/01/37

     2,800        3,127,264   

Series A, 5.00%, 1/01/38

     2,315        2,568,053   

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

    

Series B (AGM), 5.00%, 6/15/50

     4,315        4,505,766   

Series B-2, 5.00%, 6/15/50

     2,500        2,585,425   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     440        515,016   

6.00%, 6/01/28

     1,140        1,342,749   

Regional Transportation Authority, RB:

    

Series A (AMBAC), 7.20%, 11/01/20

     930        1,081,664   

Series A (NPFGC), 6.70%, 11/01/21

     5,310        6,190,239   

Series C (NPFGC), 7.75%, 6/01/20

     2,160        2,516,594   

State of Illinois, GO:

    

5.00%, 2/01/39

     1,540        1,592,837   

Series A, 5.00%, 4/01/35

     3,000        3,117,120   

Series A, 5.00%, 4/01/38

     3,640        3,757,536   

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

     630        704,258   

University of Illinois, RB, Auxiliary Facilities System, Series A:

    

5.00%, 4/01/39

     810        897,796   

5.00%, 4/01/44

     985        1,090,178   

Village of Hodgkins Illinois, RB, Metropolitan Biosolids Management LLC Project, AMT, 6.00%, 11/01/23

     2,800        2,804,760   

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

     1,250        1,250,513   
    

 

 

 
               78,519,706   

Indiana — 4.3%

    

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

    

6.75%, 1/01/34

     790        959,866   

7.00%, 1/01/44

     1,905        2,328,672   

Indiana Finance Authority, RB, Series A:

    

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

     3,280        3,758,093   
Municipal Bonds    Par  
(000)
    Value  

Indiana (concluded)

    

Indiana Finance Authority, RB, Series A (concluded):

    

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

   450      479,295   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/48

     1,430        1,521,048   

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

     840        938,935   

Indiana Finance Authority, Refunding RB, Parkview Health System, Series A, 5.75%, 5/01/31

     2,795        3,173,192   

Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 1/15/40

     1,270        1,403,083   
    

 

 

 
               14,562,184   

Iowa — 2.6%

    

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project:

    

5.00%, 12/01/19

     960        1,036,963   

5.50%, 12/01/22

     2,340        2,497,178   

5.25%, 12/01/25

     460        513,098   

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

     1,425        1,519,592   

Iowa Tobacco Settlement Authority, Refunding RB, Asset-Backed, Series C, 5.63%, 6/01/46

     3,785        3,358,733   
    

 

 

 
               8,925,564   

Kentucky — 0.6%

    

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     995        1,097,813   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/43 (d)

     1,200        831,984   
    

 

 

 
               1,929,797   

Louisiana — 2.8%

    

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

     3,320        3,967,666   

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

    

5.50%, 5/15/30

     1,020        1,160,464   

5.25%, 5/15/31

     870        977,419   

5.25%, 5/15/32

     1,110        1,267,453   

5.25%, 5/15/33

     1,205        1,346,732   

5.25%, 5/15/35

     505        572,524   
    

 

 

 
               9,292,258   

Maryland — 1.3%

    

Maryland Community Development Administration, Refunding, HRB, Residential, Series D, AMT, 4.90%, 9/01/42

     1,500        1,516,440   

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

     435        468,564   

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

     1,160        1,286,092   

Maryland Health & Higher Educational Facilities Authority, RB, University of Maryland Medical System, Series B (NPFGC), 7.00%, 7/01/22

     840        1,009,445   
    

 

 

 
               4,280,541   

 

See Notes to Financial Statements.

 

                
58    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Massachusetts — 3.3%

    

Massachusetts Development Finance Agency, Refunding RB, Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42 (a)

   $ 2,205      $ 2,277,192   

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

     990        1,110,542   

Massachusetts HFA, RB, AMT:

    

M/F Housing, Series A, 5.20%, 12/01/37

     2,830        2,872,846   

S/F Housing, Series 130, 5.00%, 12/01/32

     2,720        2,772,632   

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

     1,995        2,104,446   
    

 

 

 
               11,137,658   

Michigan — 6.3%

    

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39

     4,425        4,752,317   

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

     1,380        1,547,836   

Michigan Finance Authority, Refunding RB, Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 7/01/44

     880        926,482   

Michigan State Hospital Finance Authority, Refunding RB, Series A:

    

Henry Ford Health System, 5.25%, 11/15/46

     5,080        5,315,559   

McLaren Health Care, 5.75%, 5/15/18 (c)

     7,560        8,611,974   
    

 

 

 
               21,154,168   

Mississippi — 1.5%

    

County of Lowndes Mississippi, Refunding RB, Solid Waste Disposal & Pollution Control, Weyerhaeuser Co. Project, Series A, 6.80%, 4/01/22

     3,000        3,776,880   

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

     1,065        1,206,123   
    

 

 

 
               4,983,003   

Missouri — 0.2%

    

Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44

     255        283,315   

State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 5/01/43

     245        268,025   
    

 

 

 
               551,340   

Nebraska — 0.9%

    

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

    

5.00%, 9/01/42

     1,445        1,573,374   

5.25%, 9/01/37

     825        922,754   

County of Hall Nebraska School District No. 2, GO, Grand Island Public Schools, 5.00%, 12/15/39

     410        463,808   
    

 

 

 
               2,959,936   

New Jersey — 5.1%

    

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     1,025        1,087,976   

5.25%, 11/01/44

     800        853,632   

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

     1,955        2,141,878   

New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 4/01/31

     2,240        2,610,138   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series AA, 6.38%, 10/01/28

     420        436,380   
Municipal Bonds    Par  
(000)
    Value  

New Jersey (concluded)

    

New Jersey State Turnpike Authority, RB, Series A, 5.00%, 1/01/43

   1,985      2,180,185   

New Jersey Transportation Trust Fund Authority, RB:

    

Transportation Program, Series AA, 5.00%, 6/15/44

     3,495        3,632,388   

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

     1,635        1,791,143   

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

     2,460        2,592,668   
    

 

 

 
               17,326,388   

New York — 15.8%

    

City of New York New York Industrial Development Agency, ARB, British Airways PLC Project, AMT, 7.63%, 12/01/32

     1,920        1,931,904   

City of New York New York Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series C-1, 6.50%, 7/01/17

     500        500,250   

City of New York New York Transitional Finance Authority, RB:

    

Fiscal 2009, Series S-3, 5.25%, 1/15/39

     6,700        7,496,563   

Future Tax Secured Bonds, Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42

     2,460        2,768,213   

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

     1,800        1,830,456   

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

     9,405        11,160,913   

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

     10,735        12,287,066   

New York Liberty Development Corp., Refunding RB:

    

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

     1,220        1,390,556   

3 World Trade Center Project, Class 1, 5.00%, 11/15/44 (a)

     4,520        4,707,896   

3 World Trade Center Project, Class 2, 5.15%, 11/15/34 (a)

     340        370,053   

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

     850        932,391   

New York State Dormitory Authority, Refunding RB, General Purpose, Series A, 5.00%, 6/15/31

     1,790        2,063,960   

Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8:

    

6.00%, 12/01/36

     1,165        1,370,343   

6.00%, 12/01/42

     1,250        1,470,325   

Westchester County Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series E-1, 6.50%, 7/01/17

     700        700,763   

Westchester Tobacco Asset Securitization, Refunding RB, 5.13%, 6/01/45

     2,300        2,122,417   
    

 

 

 
               53,104,069   

North Carolina — 1.8%

    

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

     1,675        1,676,491   

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

     1,400        1,569,302   

North Carolina Medical Care Commission, Refunding RB:

    

1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

     595        672,707   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    59


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

North Carolina (concluded)

    

North Carolina Medical Care Commission, Refunding RB (concluded):

    

Carolina Village Project, 6.00%, 4/01/38

   $ 2,000      $ 2,117,700   
    

 

 

 
               6,036,200   

Ohio — 0.5%

    

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

     660        727,604   

State of Ohio, RB, Portsmouth Bypass Project, AMT, 5.00%, 6/30/53

     810        850,119   
    

 

 

 
               1,577,723   

Pennsylvania — 1.9%

    

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

     1,230        1,303,775   

Pennsylvania Economic Development Financing Authority, RB:

    

Aqua Pennsylvania, Inc. Project, Series B, 5.00%, 11/15/40

     1,890        2,129,614   

PA Bridges Finco LP, 5.00%, 12/31/38

     590        637,165   

Pennsylvania Economic Development Financing Authority, Refunding RB, National Gypson Co., AMT, 5.50%, 11/01/44

     1,035        1,062,810   

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     1,105        1,231,346   
    

 

 

 
               6,364,710   

Rhode Island — 0.8%

    

Tobacco Settlement Financing Corp., Refunding RB, Series B, 4.50%, 6/01/45

     2,645        2,593,581   

South Carolina — 3.2%

    

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

     3,280        3,642,801   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     6,180        7,052,060   
    

 

 

 
               10,694,861   

Tennessee — 0.3%

    

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     995        1,097,813   

Texas — 7.6%

    

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

     1,500        97,500   

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

     2,140        2,492,137   

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

     510        585,659   

City of Houston Texas Airport System, Refunding ARB, United Airlines, Inc. Terminal E Project, AMT, 5.00%, 7/01/29

     965        1,023,344   

Clifton Higher Education Finance Corp., RB, Idea Public Schools, 6.00%, 8/15/43

     745        892,227   

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 1/01/48

     455        524,861   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (c)

     2,000        2,428,000   

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

     1,475        1,543,469   
Municipal Bonds    Par  
(000)
    Value  

Texas (concluded)

    

North Texas Tollway Authority, Refunding RB, Series A:

    

5.00%, 1/01/35

   1,150      1,268,576   

5.00%, 1/01/38

     925        1,011,719   

1st Tier, 6.25%, 1/01/39

     7,000        8,031,240   

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        2,414,720   

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

     2,775        3,291,039   
    

 

 

 
               25,604,491   

Utah — 0.9%

    

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

     2,780        3,052,746   

Virginia — 2.7%

    

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc.:

    

5.13%, 10/01/37

     500        515,395   

5.13%, 10/01/42

     3,440        3,537,077   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

    

5.25%, 1/01/32

     1,615        1,771,816   

6.00%, 1/01/37

     2,915        3,366,388   
    

 

 

 
               9,190,676   

Washington — 2.0%

    

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     2,290        2,657,202   

Washington Health Care Facilities Authority, Refunding RB, Catholic Health Initiatives, Series D, 6.38%, 10/01/36

     3,700        4,252,225   
    

 

 

 
               6,909,427   

Wisconsin — 3.3%

    

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

     7,100        8,308,704   

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

     2,465        2,741,425   
    

 

 

 
               11,050,129   
Total Municipal Bonds — 121.3%              408,066,506   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
              

California — 6.3%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/19

     3,271        3,844,892   

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

     2,610        2,923,200   

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

     9,480        10,743,210   

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

     2,290        2,506,863   

 

See Notes to Financial Statements.

 

                
60    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
   Par  
(000)
    Value  

California (concluded)

    

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

   $ 1,077      $ 1,242,098   
    

 

 

 
               21,260,263   

Colorado — 0.7%

    

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

     2,129        2,426,507   

Connecticut — 1.9%

    

Connecticut State Health & Educational Facility Authority, RB, Yale University, Series Z-3, 5.05%, 7/01/42

     6,000        6,478,380   

Florida — 1.9%

    

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

     5,679        6,481,028   

Illinois — 1.0%

    

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

     2,999        3,289,909   

Maryland — 0.7%

    

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

     2,290        2,524,794   

Massachusetts — 0.8%

    

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

     2,266        2,534,123   

New Hampshire — 0.7%

    

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

     2,009        2,280,975   

New York — 5.4%

    

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

    

Series DD, 5.00%, 6/15/37

     6,299        6,927,200   

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

     1,575        1,810,688   

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

     1,610        1,851,753   

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

     6,440        7,451,659   
    

 

 

 
               18,041,300   

North Carolina — 2.0%

    

North Carolina Capital Facilities Finance Agency, Refunding RB, Duke University Project, Series A, 5.00%, 10/01/41

     6,239        6,583,434   

Ohio — 5.4%

    

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

     2,400        2,605,632   
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
   Par  
(000)
    Value  

Ohio (concluded)

    

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

   13,843      15,548,433   
    

 

 

 
               18,154,065   

South Carolina — 1.7%

    

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

     4,995        5,638,806   

Texas — 3.0%

    

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

     2,520        2,794,453   

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

     3,400        3,774,238   

Texas Department of Housing & Community Affairs, RB, S/F Mortgage, Series B, AMT, 5.25%, 9/01/32

     1,391        1,419,942   

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

     1,830        2,089,039   
    

 

 

 
               10,077,672   

Washington — 5.4%

    

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

    

5.00%, 11/01/34

     5,000        5,431,475   

5.00%, 11/01/36

     4,000        4,345,180   

(AGM), 5.00%, 11/01/32

     7,693        8,366,455   
    

 

 

 
               18,143,110   

Wisconsin — 0.8%

    

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

     2,499        2,730,782   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 37.7%
        126,645,148   
Total Long-Term Investments
(Cost — $482,658,196) — 159.0%
        534,711,654   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.02% (i)(j)

     783,716        783,716   
Total Short-Term Securities
(Cost — $783,716) — 0.2%
             783,716   
Total Investments (Cost — $483,441,912) — 159.2%        535,495,370   
Other Assets Less Liabilities — 2.2%        7,277,855   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (19.8%)

   

    (66,452,827
VMTP Shares, at Liquidation Value — (41.6%)        (140,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 336,320,398   
    

 

 

 

 

Notes to Schedule of Investments

 

 

(a)   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.

 

(b)   Zero-coupon bond.

 

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

 

(d)   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.

 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    61


Schedule of Investments (concluded)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

(e)   Non-income producing security.

 

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

 

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

 

(h)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB Trust Certificates and proceeds received from the sale of the security contributed to the TOB Trust or in the event of a default on the security. In the case of a shortfall or default, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from October 1, 2016 to November 15, 2019, is $13,391,269.

 

(i)   During the year ended April 30, 2015, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at April 30,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       1,726,061           (942,345        783,716         $ 2,175   

 

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

 

Ÿ  

As of April 30, 2015, financial futures contracts outstanding were as follows:

 

Contracts

Short

    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (166   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 21,310,250      $ (286,074

 

Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

As of April 30, 2015, the following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

  

Investments:                 

Long-Term Investments1

            $ 534,711,654              $ 534,711,654   

Short-Term Securities

  $ 783,716                          783,716   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 783,716         $ 534,711,654              $ 535,495,370   
 

 

 

      

 

 

      

 

    

 

 

 

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

  $ (286,074                     $ (286,074

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of April 30, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 236,000                        $ 236,000   

Liabilities:

                

TOB Trust Certificates

            $ (66,439,492             (66,439,492

VMTP Shares

              (140,000,000             (140,000,000
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 236,000         $ (206,439,492           $ (206,203,492
 

 

 

      

 

 

      

 

    

 

 

 
During the year ended April 30, 2015, there were no transfers between levels.   

 

See Notes to Financial Statements.

 

                
62    ANNUAL REPORT    APRIL 30, 2015   


Statements of Assets and Liabilities     

 

April 30, 2015   BlackRock
MuniAssets
Fund, Inc.
(MUA)
    BlackRock
MuniEnhanced
Fund, Inc.
(MEN)
    BlackRock
MuniHoldings
Fund, Inc.
(MHD)
    BlackRock
MuniHoldings
Fund II, Inc.
(MUH)
 
       
Assets                                

Investments at value — unaffiliated1

  $ 557,214,035      $ 578,654,844      $ 383,410,645      $ 277,965,484   

Investments at value — affiliated2

    961,095        1,577,185        1,340,347        681,480   

Cash pledged for financial futures contracts

    280,000        439,000        189,000        131,000   

Interest receivable

    9,685,571        7,550,960        5,653,861        4,029,712   

Investments sold receivable

    873,662        1,255,986        35,000        75,000   

Variation margin receivable on financial futures contracts

    27,704        44,041        18,704        12,938   

Deferred offering costs

           212,791                 

Prepaid expenses

    16,725        80,677        29,139        27,627   
 

 

 

 

Total assets

    569,058,792        589,815,484        390,676,696        282,923,241   
 

 

 

 
       
Accrued Liabilities                                

Income dividends payable — Common Shares

    2,237,478        1,788,707        1,250,790        875,767   

Investments purchased payable

           6,335,205                 

Investment advisory fees payable

    257,439        241,053        177,261        128,294   

Interest expense and fees payable

    16,029        17,755        10,434        8,590   

Officer’s and Directors’ fees payable

    5,877        4,551        3,098        2,291   

Bank overdraft

                         36,043   

Other accrued expenses payable

    135,078        131,824        105,691        89,928   
 

 

 

 

Total accrued liabilities

    2,651,901        8,519,095        1,547,274        1,140,913   
 

 

 

 
       
Other Liabilities                                

TOB Trust Certificates

    61,065,965        76,093,825        56,783,700        43,568,059   

VRDP Shares, at liquidation value of $100,000 per share3,4

           142,500,000                 

VMTP Shares, at liquidation value of $100,000 per share3,4

                  83,700,000        55,000,000   
 

 

 

 

Total other liabilities

    61,065,965        218,593,825        140,483,700        98,568,059   
 

 

 

 

Total liabilities

    63,717,866        227,112,920        142,030,974        99,708,972   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 505,340,926      $ 362,702,564      $ 248,645,722      $ 183,214,269   
 

 

 

   

 

 

   

 

 

   

 

 

 
 
Net Assets Applicable to Common Shareholders Consist of                                

Paid-in capital5,6,7

  $ 480,163,630      $ 316,086,151      $ 210,641,316      $ 155,395,939   

Undistributed net investment income

    1,216,905        6,578,502        2,787,827        2,664,406   

Accumulated net realized loss

    (6,875,993     (11,947,795     (1,846,249     (2,278,995

Net unrealized appreciation (depreciation)

    30,836,384        51,985,706        37,062,828        27,432,919   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 505,340,926      $ 362,702,564      $ 248,645,722      $ 183,214,269   
 

 

 

 

Net asset value, per Common Share

  $ 14.12      $ 12.27      $ 17.59      $ 16.21   
 

 

 

 

1    Investments at cost — unaffiliated

  $ 526,023,352      $ 526,294,866      $ 346,121,595      $ 250,374,330   

2    Investments at cost — affiliated

  $ 961,095      $ 1,577,185      $ 1,340,347      $ 681,480   

3    Preferred Shares outstanding, par value $0.10 per share

           1,425        837        550   

4    Preferred Shares authorized, including Auction Market Rate Preferred Shares (“AMPS”)

           8,905        5,837        4,030   

5    Par Value per Common Share

  $ 0.10      $ 0.10      $ 0.10      $ 0.10   

6    Common Shares outstanding

    35,795,571        29,565,404        14,133,224        11,300,218   

7    Common Shares authorized

    200,000,000        199,991,095        199,994,163        199,995,970   

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2015    63


Statements of Assets and Liabilities     

 

April 30, 2015   BlackRock
MuniHoldings
Quality
Fund, Inc.
(MUS)
    BlackRock
Muni Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Assets                        

Investments at value — unaffiliated1

  $ 290,889,286      $ 934,723,543      $ 534,711,654   

Investments at value — affiliated2

    3,776,544        1,356,943        783,716   

Cash pledged for financial futures contracts

    183,000        864,000        236,000   

Interest receivable

    4,177,471        12,677,268        8,541,923   

Investments sold receivable

    572,005        1,086,154        540,000   

Variation margin receivable on financial futures contracts

    18,141        85,644        23,345   

Deferred offering costs

           50,741          

Prepaid expenses

    27,920        40,631        31,325   
 

 

 

 

Total assets

    299,644,367        950,884,924        544,867,963   
 

 

 

 
     
Accrued Liabilities                        

Income dividends payable — Common Shares

    878,156        2,508,405        1,743,943   

Investment advisory fees payable

    133,429        431,381        224,522   

Interest expense and fees payable

    5,618        7,624        13,335   

Officer’s and Directors’ fees payable

    2,388        255,417        4,248   

Other accrued expenses payable

    94,290        209,940        122,025   
 

 

 

 

Total accrued liabilities

    1,113,881        3,412,767        2,108,073   
 

 

 

 
     
Other Liabilities                        

TOB Trust Certificates

    21,936,718        52,931,848        66,439,492   

VMTP Shares, at liquidation value of $100,000 per share3,4

    87,000,000        287,100,000        140,000,000   
 

 

 

 

Total other liabilities

    108,936,718        340,031,848        206,439,492   
 

 

 

 

Total liabilities

    110,050,599        343,444,615        208,547,565   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 189,593,768      $ 607,440,309      $ 336,320,398   
 

 

 

 
     
Net Assets Applicable to Common Shareholders Consist of                        

Paid-in capital5,6,7

  $ 175,117,812      $ 543,479,050      $ 287,577,034   

Undistributed net investment income

    2,749,831        4,715,865        3,245,721   

Undistributed net realized gain (accumulated net realized loss)

    (15,207,716     1,722,542        (6,269,741

Net unrealized appreciation (depreciation)

    26,933,841        57,522,852        51,767,384   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 189,593,768      $ 607,440,309      $ 336,320,398   
 

 

 

 

Net asset value, per Common Share

  $ 14.57      $ 15.86      $ 16.01   
 

 

 

 

1    Investments at cost — unaffiliated

  $ 263,809,651      $ 876,512,408      $ 482,658,196   

2    Investments at cost — affiliated

  $ 3,776,544      $ 1,356,943      $ 783,716   

3    Preferred Shares outstanding, par value $0.10 per share

    870        2,871        1,400   

4    Preferred Shares authorized, including Auction Market Rate Preferred Shares (“AMPS”)

    6,230        15,671        8,400   

5    Par Value per Common Share

  $ 0.10      $ 0.10      $ 0.10   

6    Common Shares outstanding

    13,009,717        38,296,266        21,011,367   

7    Common Shares authorized

    199,993,770        199,984,329        199,991,600   

 

 

See Notes to Financial Statements.      
                
64    ANNUAL REPORT    APRIL 30, 2015   


Statements of Operations     

 

Year Ended April 30, 2015   BlackRock
MuniAssets
Fund, Inc.
(MUA)
    BlackRock
MuniEnhanced
Fund, Inc.
(MEN)
    BlackRock
MuniHoldings
Fund, Inc.
(MHD)
    BlackRock
MuniHoldings
Fund II, Inc.
(MUH)
 
       
Investment Income                                

Interest

  $ 30,384,579      $ 26,172,423      $ 18,260,014      $ 13,232,055   

Interest — affiliated

    2,325        2,056        1,766        855   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total income

    30,386,904        26,174,479        18,261,780        13,232,910   
 

 

 

 
       
Expenses                                

Investment advisory

    3,141,875        2,905,511        2,139,697        1,552,131   

Professional

    140,934        108,222        91,162        74,462   

Accounting services

    83,390        84,328        58,913        46,053   

Transfer agent

    59,871        45,925        26,666        23,709   

Officer and Directors

    45,602        33,721        23,076        16,988   

Custodian

    27,031        28,453        19,288        14,578   

Printing

    13,617        13,663        11,444        10,285   

Registration

    13,312        11,200        10,083        10,081   

Rating agency

           33,435        33,435        33,435   

Miscellaneous

    52,410        53,027        45,971        39,574   
 

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    3,578,042        3,317,485        2,459,735        1,821,296   

Interest expense, fees and amortization of offering costs1

    536,788        1,905,897        1,275,183        886,053   
 

 

 

 

Total expenses

    4,114,830        5,223,382        3,734,918        2,707,349   

Less fees waived by the Manager

    (1,272     (1,376     (1,264     (616
 

 

 

 

Total expenses after fees waived

    4,113,558        5,222,006        3,733,654        2,706,733   
 

 

 

 

Net investment income

    26,273,346        20,952,473        14,528,126        10,526,177   
 

 

 

 
       
Realized and Unrealized Gain (Loss)                                

Net realized gain (loss) from:

       

Investments

    8,214,302        1,537,825        2,581,977        1,846,961   

Financial futures contracts

    (2,378,110     (1,212,800     (1,232,637     (851,733
 

 

 

 
    5,836,192        325,025        1,349,340        995,228   
 

 

 

 

Net change in unrealized appreciation (depreciation) on:

       

Investments

    15,117,533        10,305,800        9,807,414        6,422,325   

Financial futures contracts

    (242,824     (279,548     (142,981     (118,183
 

 

 

 
    14,874,709        10,026,252        9,664,433        6,304,142   
 

 

 

 

Net realized and unrealized gain

    20,710,901        10,351,277        11,013,773        7,299,370   
 

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 46,984,247      $ 31,303,750      $ 25,541,899      $ 17,825,547   
 

 

 

 

1    Related to TOB Trusts and/or Preferred Shares.

       

 

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2015    65


Statements of Operations     

 

Year Ended April 30, 2015   BlackRock
MuniHoldings
Quality
Fund, Inc.
(MUS)
    BlackRock
Muni Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Investment Income                        

Interest

  $ 13,446,918      $ 38,821,459      $ 25,750,810   

Interest — affiliated

    1,226        4,098        2,175   
 

 

 

 

Total income

    13,448,144        38,825,557        25,752,985   
 

 

 

 
     
Expenses                        

Investment advisory

    1,651,398        5,283,037        2,712,510   

Professional

    81,787        165,003        106,028   

Accounting services

    48,376        122,299        80,596   

Transfer agent

    24,797        51,309        34,965   

Officer and Directors

    17,658        62,572        31,261   

Custodian

    15,246        44,321        25,561   

Printing

    10,626        18,580        13,168   

Registration

    10,021        14,485        10,319   

Rating agency

    33,435        33,435        33,435   

Miscellaneous

    33,650        67,059        46,797   
 

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    1,926,994        5,862,100        3,094,640   

Interest expense, fees and amortization of offering costs1

    1,102,628        3,461,467        1,948,208   
 

 

 

 

Total expenses

    3,029,622        9,323,567        5,042,848   

Less fees waived by the Manager

    (41,597     (3,498     (1,601
 

 

 

 

Total expenses after fees waived

    2,988,025        9,320,069        5,041,247   
 

 

 

 

Net investment income

    10,460,119        29,505,488        20,711,738   
 

 

 

 
     
Realized and Unrealized Gain (Loss)                        

Net realized gain (loss) from:

     

Investments

    1,048,585        8,018,203        3,950,928   

Financial futures contracts

    (825,060     (2,313,403     (1,581,010
 

 

 

 
    223,525        5,704,800        2,369,918   
 

 

 

 

Net change in unrealized appreciation (depreciation) on:

     

Investments

    5,096,331        5,080,468        10,670,585   

Financial futures contracts

    (127,125     (605,819     (211,957
 

 

 

 
    4,969,206        4,474,649        10,458,628   
 

 

 

 

Net realized and unrealized gain

    5,192,731        10,179,449        12,828,546   
 

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 15,652,850      $ 39,684,937      $ 33,540,284   
 

 

 

 

1    Related to TOB Trusts and/or Preferred Shares.

     

 

 

 

See Notes to Financial Statements.      
                
66    ANNUAL REPORT    APRIL 30, 2015   


Statements of Changes in Net Assets     

 

    BlackRock MuniAssets
Fund, Inc. (MUA)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets:   2015     2014  
   
Operations                

Net investment income

  $ 26,273,346      $ 27,535,462   

Net realized gain

    5,836,192        1,410,873   

Net change in unrealized appreciation (depreciation)

    14,874,709        (30,547,191
 

 

 

 

Net increase (decrease) in net assets resulting from operations

    46,984,247        (1,600,856
 

 

 

 
   
Distributions to Shareholders From1                

Net investment income

    (27,131,929     (27,002,723
 

 

 

 
   
Capital Share Transactions                

Reinvestment of distributions

    169,233          
 

 

 

 
   
Net Assets                

Total increase (decrease) in net assets

    20,021,551        (28,603,579

Beginning of year

    485,319,375        513,922,954   
 

 

 

   

 

 

 

End of year

  $ 505,340,926      $ 485,319,375   
 

 

 

 

Undistributed net investment income, end of year

  $ 1,216,905      $ 2,315,804   
 

 

 

 
    BlackRock MuniEnhanced
Fund, Inc. (MEN)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2015     2014  
   
Operations                

Net investment income

  $ 20,952,473      $ 21,555,402   

Net realized gain (loss)

    325,025        (2,384,954

Net change in unrealized appreciation (depreciation)

    10,026,252        (18,410,123
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    31,303,750        760,325   
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (21,479,266     (21,389,300
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common distributions

           248,371   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    9,824,484        (20,380,604

Beginning of year

    352,878,080        373,258,684   
 

 

 

   

 

 

 

End of year

  $ 362,702,564      $ 352,878,080   
 

 

 

 

Undistributed net investment income, end of year

  $ 6,578,502      $ 6,889,231   
 

 

 

 

1    Distributions for annual periods determined in accordance with federal income tax regulations.

       

 

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2015    67


Statements of Changes in Net Assets     

 

 

    BlackRock MuniHoldings
Fund, Inc. (MHD)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2015     2014  
   
Operations                

Net investment income

  $ 14,528,126      $ 14,709,802   

Net realized gain (loss)

    1,349,340        (2,609,949

Net change in unrealized appreciation (depreciation)

    9,664,433        (14,535,796
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    25,541,899        (2,435,943
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (15,009,484     (15,321,048

Net realized gain

           (209,037
 

 

 

 

Decrease in net assets resulting from distributions to Common Shareholders

    (15,009,484     (15,530,085
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common distributions

           168,146   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    10,532,415        (17,797,882

Beginning of year

    238,113,307        255,911,189   
 

 

 

 

End of year

  $ 248,645,722      $ 238,113,307   
 

 

 

 

Undistributed net investment income, end of year

  $ 2,787,827      $ 3,236,074   
 

 

 

 
    BlackRock MuniHoldings
Fund II, Inc. (MUH)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2015     2014  
   
Operations                

Net investment income

  $ 10,526,177      $ 10,782,371   

Net realized gain (loss)

    995,228        (2,361,531

Net change in unrealized appreciation (depreciation)

    6,304,142        (11,035,014
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    17,825,547        (2,614,174
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (11,006,412     (11,262,749

Net realized gain

           (1,093,587
 

 

 

 

Decrease in net assets resulting from distributions to Common Shareholders

    (11,006,412     (12,356,336
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    6,819,135        (14,970,510

Beginning of year

    176,395,134        191,365,644   
 

 

 

 

End of year

  $ 183,214,269      $ 176,395,134   
 

 

 

 

Undistributed net investment income, end of year

  $ 2,664,406      $ 3,063,134   
 

 

 

 

1    Distributions for annual periods determined in accordance with federal income tax regulations.

       

 

 

 

See Notes to Financial Statements.      
                
68    ANNUAL REPORT    APRIL 30, 2015   


Statements of Changes in Net Assets     

 

    BlackRock MuniHoldings
Quality Fund, Inc. (MUS)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2015     2014  
   
Operations                

Net investment income

  $ 10,460,119      $ 10,619,445   

Net realized gain (loss)

    223,525        (8,031,093

Net change in unrealized appreciation (depreciation)

    4,969,206        (6,713,391
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    15,652,850        (4,125,039
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (10,537,871     (10,631,996
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    5,114,979        (14,757,035

Beginning of year

    184,478,789        199,235,824   
 

 

 

 

End of year

  $ 189,593,768      $ 184,478,789   
 

 

 

 

Undistributed net investment income, end of year

  $ 2,749,831      $ 2,761,533   
 

 

 

 
    BlackRock Muni Intermediate
Duration Fund, Inc. (MUI)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2015     2014  
   
Operations                

Net investment income

  $ 29,505,488      $ 30,731,598   

Net realized gain (loss)

    5,704,800        (1,509,254

Net change in unrealized appreciation (depreciation)

    4,474,649        (30,874,720
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    39,684,937        (1,652,376
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (31,311,027     (32,953,864

Net realized gain

           (1,979,760
 

 

 

 

Decrease in net assets resulting from distributions to Common Shareholders

    (31,311,027     (34,933,624
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    8,373,910        (36,586,000

Beginning of year

    599,066,399        635,652,399   
 

 

 

 

End of year

  $ 607,440,309      $ 599,066,399   
 

 

 

 

Undistributed net investment income, end of year

  $ 4,715,865      $ 6,555,268   
 

 

 

 

1    Distributions for annual periods determined in accordance with federal income tax regulations.

       

 

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2015    69


Statements of Changes in Net Assets     

 

 

    BlackRock MuniVest
Fund II, Inc. (MVT)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2015     2014  
   
Operations                

Net investment income

  $ 20,711,738      $ 21,507,539   

Net realized gain (loss)

    2,369,918        (4,430,969

Net change in unrealized appreciation (depreciation)

    10,458,628        (20,404,052
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    33,540,284        (3,327,482
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (21,785,415     (22,639,477
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common distributions

    419,446        1,115,168   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    12,174,315        (24,851,791

Beginning of year

    324,146,083        348,997,874   
 

 

 

 

End of year

  $ 336,320,398      $ 324,146,083   
 

 

 

 

Undistributed net investment income, end of year

  $ 3,245,721      $ 4,256,666   
 

 

 

 

1    Distributions for annual periods determined in accordance with federal income tax regulations.

   

 

 

 

See Notes to Financial Statements.      
                
70    ANNUAL REPORT    APRIL 30, 2015   


Statements of Cash Flows     

 

Year Ended April 30, 2015   BlackRock
MuniAssets
Fund, Inc.
(MUA)
    BlackRock
MuniEnhanced
Fund, Inc.
(MEN)
    BlackRock
MuniHoldings
Fund, Inc.
(MHD)
    BlackRock
MuniHoldings
Fund II, Inc.
(MUH)
 
       
Cash Provided by Operating Activities                                

Net increase in net assets resulting from operations

  $ 46,984,247      $ 31,303,750      $ 25,541,899      $ 17,825,547   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

       

(Increase) decrease in interest receivable

    31,266        (4,819     (83,672     (121,154

Increase in variation margin receivable on financial futures contracts

    (27,704     (44,041     (18,704     (12,938

Decrease in prepaid expenses

    1,223        628        576        461   

(Increase) decrease in cash pledged for financial futures contracts

    403,000        (145,000     228,000        114,000   

Increase in investment advisory fees payable

    7,678        8,685        5,695        2,516   

Increase (decrease) in interest expense and fees payable

    1,585        (7,920     (2,702     (2,487

Increase in other accrued expenses payable

    32,969        24,887        11,506        8,548   

Decrease in variation margin payable on financial futures contracts

    (210,940     (94,923     (113,486     (75,517

Increase in Officer’s and Directors’ fees payable

    747        868        680        483   

Net realized gain on investments

    (8,214,302     (1,537,825     (2,581,977     (1,846,961

Net unrealized gain on investments

    (15,117,533     (10,305,800     (9,807,414     (6,422,325

Amortization of premium and accretion of discount on investments

    (141,823     (872,297     3,914        (278,349

Proceeds from sales of long-term investments

    147,973,431        67,987,063        46,417,922        36,211,448   

Purchases of long-term investments

    (133,982,214     (69,090,088     (40,640,256     (29,736,003

Net proceeds from sales (purchases) of short-term securities

    (701,392     1,531,291        (535,581     262,549   
 

 

 

 

Net cash provided by operating activities

    37,040,238        18,754,459        18,426,400        15,929,818   
 

 

 

 
       
Cash Used for Financing Activities                                

Proceeds from TOB Trust Certificates

           3,714,827                 

Repayments of TOB Trust Certificates

    (10,078,540     (999,989     (3,454,373     (4,928,979

Cash dividends paid to Common Shareholders

    (26,961,698     (21,479,266     (15,009,484     (11,068,563

Increase (decrease) in bank overdraft

                  (1,197     35,189   

Amortization of deferred offering costs

           9,969        38,654        32,535   
 

 

 

 

Net cash used for financing activities

    (37,040,238     (18,754,459     (18,426,400     (15,929,818
 

 

 

 
       
Cash                                

Net increase in cash

                           

Cash at beginning of year

                           
 

 

 

 

Cash at end of year

                           
 

 

 

 
       
Supplemental Disclosure of Cash Flow Information                                

Cash paid during the year for interest expense and fees

  $ 535,203      $ 1,903,848      $ 1,239,231      $ 856,005   
 

 

 

 
       
Non-cash Financing Activities                                

Capital shares issued in reinvestment of distributions paid to Common Shareholders

  $ 169,233                        
 

 

 

 

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2015    71


Statements of Cash Flows     

 

 

Year Ended April 30, 2015   BlackRock
MuniHoldings
Quality
Fund, Inc.
(MUS)
    BlackRock
Muni Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Cash Provided by Operating Activities                        

Net increase in net assets resulting from operations

  $ 15,652,850      $ 39,684,937      $ 33,540,284   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

     

(Increase) decrease in interest receivable

    111,107        (10,053     (25,665

Increase in variation margin receivable on financial futures contracts

    (18,141     (85,644     (23,345

Decrease in prepaid expenses

    582        2,097        1,162   

Decrease in cash pledged for financial futures contracts

    67,998        119,000        214,000   

Increase in investment advisory fees payable

    6,262        3,490        7,714   

Decrease in interest expense and fees payable

    (3,338     (15,032     (3,469

Increase in other accrued expenses payable

    7,539        46,408        13,759   

Decrease in variation margin payable on financial futures contracts

    (68,766     (303,754     (138,799

Increase in Officer’s and Directors’ fees payable

    468        32,801        903   

Net realized gain on investments

    (1,048,585     (8,018,203     (3,950,928

Net unrealized gain on investments

    (5,096,331     (5,080,468     (10,670,585

Amortization of premium and accretion of discount on investments

    676,087        4,102,732        431,290   

Proceeds from sales of long-term investments

    34,662,346        183,129,326        56,924,990   

Purchases of long-term investments

    (32,372,492     (189,954,845     (55,861,739

Net proceeds from sales of short-term securities

    1,171,335        23,827,588        1,242,345   
 

 

 

 

Net cash provided by operating activities

    13,748,921        47,480,380        21,701,917   
 

 

 

 
     
Cash Used for Financing Activities                        

Proceeds from TOB Trust Certificates

           3,340,000          

Repayments of TOB Trust Certificates

    (3,250,531     (19,478,284     (275,256

Cash dividends paid to Common Shareholders

    (10,537,871     (31,425,916     (21,479,228

Decrease in bank overdraft

                  (603

Amortization of deferred offering costs

    39,481        83,820        53,170   
 

 

 

 

Net cash used for financing activities

    (13,748,921     (47,480,380     (21,701,917
 

 

 

 
     
Cash                        

Net increase in cash

                    

Cash at beginning of year

                    
 

 

 

 

Cash at end of year

                    
 

 

 

 
     
Supplemental Disclosure of Cash Flow Information                        

Cash paid during the year for interest expense and fees

  $ 1,066,485      $ 3,392,679      $ 1,898,507   
 

 

 

 
     
Non-cash Financing Activities                        

Capital shares issued in reinvestment of distributions paid to Common Shareholders

                $ 419,446   
 

 

 

 

 

 

See Notes to Financial Statements.      
                
72    ANNUAL REPORT    APRIL 30, 2015   


Financial Highlights    BlackRock MuniAssets Fund, Inc. (MUA)

 

    Year Ended April 30,  
    2015     2014     2013     2012     2011  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 13.56      $ 14.36      $ 13.47      $ 12.14      $ 12.63   
 

 

 

 

Net investment income1

    0.73        0.77        0.77        0.76        0.73   

Net realized and unrealized gain (loss)

    0.59        (0.82     0.90        1.32        (0.46
 

 

 

 

Net increase (decrease) from investment operations

    1.32        (0.05     1.67        2.08        0.27   
 

 

 

 

Distributions from net investment income2

    (0.76     (0.75     (0.78     (0.75     (0.76
 

 

 

 

Net asset value, end of year

  $ 14.12      $ 13.56      $ 14.36      $ 13.47      $ 12.14   
 

 

 

 

Market price, end of year

  $ 14.22      $ 12.85      $ 13.96      $ 13.15      $ 11.27   
 

 

 

 
         
Total Return3                                        

Based on net asset value

    10.11%        0.47%        12.70%        17.90%        2.31%   
 

 

 

 

Based on market price

    17.02%        (2.06)%        12.22%        23.99%        (5.17)%   
 

 

 

 
         
Ratios to Average Net Assets                                        

Total expenses

    0.82%        0.82%        0.83%        0.77%        0.78%   
 

 

 

 

Total expenses after fees waived and paid indirectly

    0.82%        0.82%        0.83%        0.77%        0.78%   
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense and fees4

    0.71%        0.70%        0.71%        0.70%        0.74%   
 

 

 

 

Net investment income

    5.24%        5.84%        5.52%        6.00%        6.07%   
 

 

 

 
         
Supplemental Data                                        

Net assets, end of year (000)

  $  505,341      $  485,319      $  513,923      $  481,598      $  433,891   
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 61,066      $ 71,145      $ 76,451      $ 61,510      $ 23,111   
 

 

 

 

Asset coverage, end of year per $1,000 of borrowings

  $ 9,275      $ 7,822      $ 7,722      $ 8,830      $ 19,774   
 

 

 

 

Portfolio turnover rate

    22%        19%        19%        28%        24%   
 

 

 

 

 

  1   

Based on average shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Interest expense and fees relate to TOB Trusts. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2015    73


Financial Highlights    BlackRock MuniEnhanced Fund, Inc. (MEN)

 

    Year Ended April 30,  
    2015     2014     2013     2012     2011  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 11.94      $ 12.63      $ 12.12      $ 10.30      $ 10.90   
 

 

 

 

Net investment income1

    0.71        0.73        0.71        0.69        0.73   

Net realized and unrealized gain (loss)

    0.35        (0.70     0.50        1.82        (0.62

Distributions to AMPS Shareholders from net investment income

                         (0.00 )2      (0.03
 

 

 

 

Net increase from investment operations

    1.06        0.03        1.21        2.51        0.08   
 

 

 

 

Distributions to Common Shareholders from net investment income3

    (0.73     (0.72     (0.70     (0.69     (0.68
 

 

 

 

Net asset value, end of year

  $ 12.27      $ 11.94      $ 12.63      $ 12.12      $ 10.30   
 

 

 

 

Market price, end of year

  $ 11.67      $ 11.27      $ 12.65      $ 11.66      $ 9.99   
 

 

 

 
         
Total Return Applicable to Common Shareholders4                                        

Based on net asset value

    9.49%        1.06%        10.16%        25.12%        0.78%   
 

 

 

 

Based on market price

    10.33%        (4.76)%        14.69%        24.11%        (1.44)%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.44%        1.50%        1.49%        1.70% 5      1.24% 5 
 

 

 

 

Total expenses after fees waived

    1.43%        1.50%        1.49%        1.70% 5      1.24% 5 
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs6

    0.91%        0.92%        0.96% 7      1.35% 5,7      1.09% 5 
 

 

 

 

Net investment income

    5.76%        6.37%        5.65%        6.12% 5      6.89% 5 
 

 

 

 

Distributions to AMPS Shareholders

                         0.03%        0.29%   
 

 

 

 

Net investment income to Common Shareholders

    5.76%        6.37%        5.65%        6.09%        6.60%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $ 362,703      $ 352,878      $ 373,259      $ 357,017      $  303,264   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                              $ 142,575   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year

                              $ 78,179   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 142,500      $ 142,500      $ 142,500      $ 142,500          
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of year

  $  354,528      $  347,633      $  361,936      $  350,538          
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 76,094      $ 73,379      $ 81,244      $ 69,282      $ 61,583   
 

 

 

 

Asset coverage, end of year per $1,000 of borrowings

  $ 5,767      $ 5,809      $ 5,594      $ 6,153      $ 5,924   
 

 

 

 

Portfolio turnover rate

    12%        16%        12%        22%        9%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Amount is greater than $(0.005) per share.

 

  3   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  4   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  5   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  6   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VRDP Shares, respectively.

 

  7   

For the years ended April 30, 2013 and April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity, and remarketing fees were 0.91% and 0.98%, respectively.

 

 

See Notes to Financial Statements.      
                
74    ANNUAL REPORT    APRIL 30, 2015   


Financial Highlights    BlackRock MuniHoldings Fund, Inc. (MHD)

 

    Year Ended April 30,  
    2015     2014     2013     2012     2011  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 16.85      $ 18.12      $ 17.36      $ 14.67      $ 15.75   
 

 

 

 

Net investment income1

    1.03        1.04        1.07        1.12        1.14   

Net realized and unrealized gain (loss)

    0.77        (1.22     1.01        2.67        (1.01

Distributions to VMTP Shareholders from net realized gain

                  (0.01              
Distributions to AMPS Shareholders from:          

Net investment income

                         (0.01     (0.03

Net realized gain

                                (0.00 )2 
 

 

 

 

Net increase (decrease) from investment operations

    1.80        (0.18     2.07        3.78        0.10   
 

 

 

 
Distributions to Common Shareholders from:3          

Net investment income

    (1.06     (1.08     (1.12     (1.09     (1.07

Net realized gain

           (0.01     (0.19            (0.11
 

 

 

 

Total distributions to Common Shareholders

    (1.06     (1.09     (1.31     (1.09     (1.18
 

 

 

 

Net asset value, end of year

  $ 17.59      $ 16.85      $ 18.12      $ 17.36      $ 14.67   
 

 

 

 

Market price, end of year

  $ 17.25      $ 16.01      $ 18.20      $ 18.08      $ 14.51   
 

 

 

 
         
Total Return Applicable to Common Shareholders4                                        

Based on net asset value

    11.22%        (0.15)%        12.20%        26.57%        0.57%   
 

 

 

 

Based on market price

    14.80%        (5.55)%        8.21%        33.28%        (0.21)%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.50%        1.64%        1.60%        1.41% 5      1.28% 5 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.50%        1.64%        1.60%        1.41% 5      1.28% 5 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs6

    0.99%        1.04%        1.02%        1.09% 5,7      1.13% 5 
 

 

 

 

Net investment income

    5.86%        6.48%        5.92%        6.95% 5      7.41% 5 
 

 

 

 

Distributions to AMPS Shareholders

                         0.09%        0.20%   
 

 

 

 

Net investment income to Common Shareholders

    5.86%        6.48%        5.92%        6.86%        7.21%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $ 248,646      $ 238,113      $ 255,911      $ 243,989      $  205,368   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                              $ 83,700   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year

                              $ 86,342   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 83,700      $ 83,700      $ 83,700      $ 83,700          
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $  397,068      $  384,484      $  405,748      $  391,505          
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 56,784      $ 60,238      $ 69,753      $ 61,758      $ 43,488   
 

 

 

 

Asset coverage, end of year per $1,000 of borrowings

  $ 5,379      $ 4,953      $ 4,669      $ 4,951      $ 5,722   
 

 

 

 

Portfolio turnover rate

    11%        20%        16%        19%        15%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Amount is greater than $(0.005) per share.

 

  3   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  4   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  5   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  6   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VMTP Shares, respectively.

 

  7   

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.05%.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2015    75


Financial Highlights    BlackRock MuniHoldings Fund II, Inc. (MUH)

 

    Year Ended April 30,  
    2015     2014     2013     2012     2011  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 15.61      $ 16.93      $ 16.23      $ 13.74      $ 14.65   
 

 

 

 

Net investment income1

    0.93        0.95        0.98        1.03        1.03   

Net realized and unrealized gain (loss)

    0.64        (1.17     0.93        2.45        (0.88

Distributions to VMTP Shareholders from net realized gain

                  (0.01              
Distributions to AMPS Shareholders from:          

Net investment income

                         (0.01     (0.02

Net realized gain

                                (0.00 )2 
 

 

 

 

Net increase (decrease) from investment operations

    1.57        (0.22     1.90        3.47        0.13   
 

 

 

 
Distributions to Common Shareholders from:3          

Net investment income

    (0.97     (1.00     (1.04     (0.98     (0.97

Net realized gain

           (0.10     (0.16            (0.07
 

 

 

 

Total distributions to Common Shareholders

    (0.97     (1.10     (1.20     (0.98     (1.04
 

 

 

 

Net asset value, end of year

  $ 16.21      $ 15.61      $ 16.93      $ 16.23      $ 13.74   
 

 

 

 

Market price, end of year

  $ 15.28      $ 14.84      $ 16.75      $ 16.46      $ 13.35   
 

 

 

 
         
Total Return Applicable to Common Shareholders4                                        

Based on net asset value

    10.64%        (0.40 )%      11.99%        26.08%        0.92%   
 

 

 

 

Based on market price

    9.71%        (4.30 )%      9.25%        31.60%        (2.14)%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.48%        1.61%        1.59%        1.37% 5      1.23% 5 
 

 

 

 

Total expenses after fees waived

    1.48%        1.61%        1.59%        1.37% 5      1.23% 5 
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs6

    1.00%        1.04%        1.03%        1.07% 5,7      1.07% 5 
 

 

 

 

Net investment income

    5.76%        6.36%        5.81%        6.81% 5      7.18% 5 
 

 

 

 

Distributions to AMPS Shareholders

                         0.05%        0.14%   
 

 

 

 

Net investment income to Common Shareholders

    5.76%        6.36%        5.81%        6.76%        7.04%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable Common Shareholders, end of year (000)

  $  183,214      $  176,395      $  191,366      $  182,624      $  154,259   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                              $ 55,050   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year (000)

                              $ 95,056   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 55,000      $ 55,000      $ 55,000      $ 55,000          
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 433,117      $ 420,718      $ 447,938      $ 432,044          
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 43,568      $ 48,497      $ 56,354      $ 48,273      $ 33,617   
 

 

 

 

Asset coverage, end of year per $1,000 of borrowings

  $ 5,205      $ 4,637      $ 4,396      $ 4,783      $ 5,589   
 

 

 

 

Portfolio turnover rate

    11%        18%        16%        18%        15%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Amount is greater than $(0.005) per share.

 

  3   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  4   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  5   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  6   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VMTP Shares, respectively.

 

  7   

For the year ended April 30, 2012, the total expense ratio after fees waived and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.03%.

 

 

See Notes to Financial Statements.      
                
76    ANNUAL REPORT    APRIL 30, 2015   


Financial Highlights    BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

    Year Ended April 30,  
    2015     2014     2013     2012     2011  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 14.18      $ 15.31      $ 14.61      $ 12.48      $ 13.34   
 

 

 

 

Net investment income1

    0.80        0.82        0.83        0.89        0.91   

Net realized and unrealized gain (loss)

    0.40        (1.13     0.76        2.14        (0.85

Distributions to AMPS Shareholders from net investment income

                         (0.01     (0.03
 

 

 

 

Net increase (decrease) from investment operations

    1.20        (0.31     1.59        3.02        0.03   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (0.81     (0.82     (0.89     (0.89     (0.89
 

 

 

 

Net asset value, end of year

  $ 14.57      $ 14.18      $ 15.31      $ 14.61      $ 12.48   
 

 

 

 

Market price, end of year

  $ 13.32      $ 12.88      $ 14.92      $ 14.52      $ 12.31   
 

 

 

 
         
Total Return Applicable to Common Shareholders3                                        

Based on net asset value

    9.20%        (1.07)%        11.06%        24.96%        0.21%   
 

 

 

 

Based on market price

    9.91%        (7.78)%        8.90%        25.90%        (1.60)%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.59%        1.75%        1.80%        1.49% 4      1.34% 4 
 

 

 

 

Total expenses after fees waived

    1.57%        1.67%        1.72%        1.41% 4      1.25% 4 
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs5

    0.99%        0.99%        1.00%        1.06% 4,6      1.10% 4 
 

 

 

 

Net investment income

    5.49%        6.00%        5.48%        6.50% 4      7.04% 4 
 

 

 

 

Distributions to AMPS Shareholders

                         0.08%        0.21%   
 

 

 

 

Net investment income to Common Shareholders

    5.49%        6.00%        5.48%        6.42%        6.83%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $  189,594      $  184,479      $  199,236      $  189,567      $  161,720   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                              $ 87,000   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year

                              $ 71,472   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 87,000      $ 87,000      $ 87,000      $ 87,000          
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 317,924      $ 312,045      $ 329,007      $ 317,893          
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 21,937      $ 25,187      $ 48,934      $ 41,631      $ 31,665   
 

 

 

 

Asset coverage, end of year per $1,000 of borrowings

  $ 9,643      $ 8,324      $ 5,072      $ 5,553      $ 6,107   
 

 

 

 

Portfolio turnover rate

    11%        46%        34%        30%        28%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  5   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VMTP Shares, respectively.

 

  6   

For the year ended April 30, 2012, the total expense ratio after fees waived and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.01%.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2015    77


Financial Highlights    BlackRock Muni Intermediate Duration Fund, Inc.  (MUI)

 

    Year Ended April 30,  
    2015     2014     2013     2012     2011  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 15.64      $ 16.60      $ 16.21      $ 14.45      $ 14.75   
 

 

 

 

Net investment income1

    0.77        0.80        0.82        0.86        0.95   

Net realized and unrealized gain (loss)

    0.27        (0.85     0.58        1.76        (0.31

Distributions to VRDP Shareholders from net realized gain

                  (0.01              

Distributions to AMPS Shareholders from net investment income

                                (0.10
 

 

 

 

Net increase (decrease) from investment operations

    1.04        (0.05     1.39        2.62        0.54   
 

 

 

 

Distributions to Common Shareholders from:2

         

Net investment income

    (0.82     (0.86     (0.87     (0.86     (0.84

Net realized gain

           (0.05     (0.13              
 

 

 

 

Total distributions to Common Shareholders

    (0.82     (0.91     (1.00     (0.86     (0.84
 

 

 

 

Net asset value, end of year

  $ 15.86      $ 15.64      $ 16.60      $ 16.21      $ 14.45   
 

 

 

 

Market price, end of year

  $ 14.47      $ 14.55      $ 16.12      $ 16.45      $ 13.65   
 

 

 

 
         
Total Return Applicable to Common Shareholders3                                        

Based on net asset value

    7.27%        0.50%        8.78%        18.74%        3.86%   
 

 

 

 

Based on market price

    5.20%        (3.73)%        4.09%        27.56%        2.41%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.52%        1.65%        1.91%        1.88%        1.45% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.52%        1.65%        1.91%        1.88%        1.43% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs5

    0.96%        1.00%        1.35% 6      1.65% 6      1.30% 4 
 

 

 

 

Net investment income

    4.82%        5.28%        4.93%        5.58%        6.48% 4 
 

 

 

 

Distributions to AMPS Shareholders

                                0.70%   
 

 

 

 

Net Investment income to Common Shareholders

    4.82%        5.28%        4.93%        5.58%        5.78%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $  607,440      $  599,066      $  635,652      $  617,437      $  549,516   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of year (000)

                       $ 287,100      $ 287,100   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of year

                       $ 315,060      $ 291,402   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 287,100      $ 287,100      $ 287,100                 
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 311,578      $ 308,661      $ 321,405                 
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 52,932      $ 69,070      $ 105,939      $ 81,430      $ 66,609   
 

 

 

 

Asset coverage, end of year per $1,000 of borrowings

  $ 12,476      $ 9,673      $ 7,000      $ 8,582      $ 9,250   
 

 

 

 

Portfolio turnover rate

    18%        22%        16%        27%        21%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  5   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VRDP Shares and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts, VRDP Shares and VMTP Shares, respectively.

 

  6   

For the year ended April 30, 2013 and April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees 0.98% and 0.99%, respectively.

 

 

See Notes to Financial Statements.      
                
78    ANNUAL REPORT    APRIL 30, 2015   


Financial Highlights    BlackRock MuniVest Fund II, Inc. (MVT)

 

    Year Ended April 30,  
    2015     2014     2013     2012     2011  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 15.45      $ 16.69      $ 15.91      $ 13.47      $ 14.41   
 

 

 

 

Net investment income1

    0.99        1.03        1.06        1.12        1.14   

Net realized and unrealized gain (loss)

    0.61        (1.19     0.82        2.41        (0.99

Distributions to AMPS Shareholders from net investment income

                         (0.02     (0.04
 

 

 

 

Net increase (decrease) from investment operations

    1.60        (0.16     1.88        3.51        0.11   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (1.04     (1.08     (1.10     (1.07     (1.05
 

 

 

 

Net asset value, end of year

  $ 16.01      $ 15.45      $ 16.69      $ 15.91      $ 13.47   
 

 

 

 

Market price, end of year

  $ 16.26      $ 15.16      $ 17.31      $ 16.75      $ 13.72   
 

 

 

 
         
Total Return Applicable to Common Shareholders3                                        

Based on net asset value

    10.65%        (0.37)%        11.95%        26.86%        0.73%   
 

 

 

 

Based on market price

    14.52%        (5.74)%        10.28%        31.13%        (1.04)%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.50%        1.63%        1.66%        1.41% 4      1.23% 4 
 

 

 

 

Total expenses after fees waived

    1.50%        1.63%        1.66%        1.41% 4      1.23% 4 
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs5

    0.92%        0.96%        0.96%        1.04% 4,6      1.07% 4 
 

 

 

 

Net investment income

    6.17%        6.93%        6.43%        7.57% 4      8.14% 4 
 

 

 

 

Distributions to AMPS Shareholders

                         0.15%        0.32%   
 

 

 

 

Net investment income to Common Shareholders

    6.17%        6.93%        6.43%        7.42%        7.82%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $  336,320      $  324,146      $  348,998      $  330,941      $  278,284   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                              $ 140,000   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year

                              $ 74,698   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 140,000      $ 140,000      $ 140,000      $ 140,000          
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 340,229      $ 331,533      $ 349,284      $ 336,386          
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 66,439      $ 66,715      $ 99,386      $ 88,540      $ 62,045   
 

 

 

 

Asset coverage, end of year per $1,000 of borrowings

  $ 6,062      $ 5,859      $ 4,512      $ 4,738      $ 5,485   
 

 

 

 

Portfolio turnover rate

    10%        17%        15%        13%        16%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  5   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VMTP Shares, respectively.

 

  6   

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.99%.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2015    79


Notes to Financial Statements     

 

1. Organization:

The following are registered under the 1940 Act, as closed-end management investment companies and referred to herein collectively as the “Funds”:

 

Fund Name   Herein Referred
To As
   Organized      Diversification
Classification
 

BlackRock MuniAssets Fund, Inc.

  MUA      Maryland         Non-diversified   

BlackRock MuniEnhanced Fund, Inc.

  MEN      Maryland         Non-diversified   

BlackRock MuniHoldings Fund, Inc.

  MHD      Maryland         Non-diversified   

BlackRock MuniHoldings Fund II, Inc.

  MUH      Maryland         Non-diversified   

BlackRock MuniHoldings Quality Fund, Inc.

  MUS      Maryland         Non-diversified   

BlackRock Muni Intermediate Duration Fund, Inc.

  MUI      Maryland         Non-diversified   

BlackRock MuniVest Fund II, Inc.

  MVT      Maryland         Non-diversified   

The Board of Directors of the Funds are collectively referred to throughout this report as the “Board of Directors” or the “Board,” and the directors thereof are collectively referred to throughout this report as “Directors.” The Funds determine and make available for publication the NAVs of their Common Shares on a daily basis.

2. Significant Accounting Policies:

The Funds’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Funds:

Valuation: The Funds’ investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds determine the fair values of their financial instruments at market value using independent dealers or pricing services under policies approved by the Board. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to provide oversight of the pricing function for the Funds for all financial instruments.

Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. Financial futures contracts traded on exchanges are valued at their last sale price. Investments in open-end registered investment companies are valued at NAV each business day.

In the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Investments”). When determining the price for Fair Value Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant consistent with the principles of fair value measurement. The pricing of all Fair Value Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., financial futures contracts), or certain borrowings (e.g., TOB transactions) that would be “senior securities” for 1940 Act purposes, the Funds may segregate or designate on their books and records cash or liquid securities having a market value at least equal to the amount of the Funds’ future obligations under such investments or borrowings. Doing so allows the investment or borrowing to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.

Distributions: Distributions from net investment income are declared monthly and paid monthly. Distributions of capital gains are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Distributions to Preferred Shareholders are accrued and determined as described in Note 9.

 

 

                
80    ANNUAL REPORT    APRIL 30, 2015   


Notes to Financial Statements (continued)     

 

Deferred Compensation Plan: Under the Deferred Compensation Plan (the “Plan”) approved by each Fund’s Board, the independent Directors (“Independent Directors”) 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 Directors. This has the same economic effect for the Independent Directors as if the Independent Directors 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 Fund. Deferred compensation liabilities are included in officer’s and directors’ fees payable in the Statements of Assets and Liabilities and will remain as a liability of the Funds until such amounts are distributed in accordance with the Plan.

Recent Accounting Standard: In April 2015, the Financial Accounting Standards Board issued guidance to simplify the presentation of debt issuance costs in financial statements. Under the new guidance, a Fund is required to present such costs in the Statements of Assets and Liabilities as a direct deduction from the carrying value of the related debt liability rather than as an asset.

The standard is effective for financial statements with fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Management is evaluating the impact, if any, of this guidance on the Funds’ financial statements and disclosures.

Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds are prorated among those funds on the basis of relative net assets or other appropriate methods.

The Funds have an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Securities and Other Investments:

Zero-Coupon Bonds: The Funds may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than other debt obligations of similar maturity which provide for regular interest payments.

Forward Commitments and When-Issued Delayed Delivery Securities: The Funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Funds may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Funds may be required to pay more at settlement than the security is worth. In addition, the Funds are not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, the Funds’ maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Schedules of Investments.

Municipal Bonds Transferred to TOB Trusts: The Funds leverage their assets through the use of TOB transactions. The Funds transfer municipal bonds into a special purpose trust (a “TOB Trust”). A TOB Trust typically issues two classes of beneficial interests: short-term floating rate interests (“TOB Trust Certificates”), which are sold to third party investors, and residual inverse floating rate interests (“TOB Residuals”), which are generally issued to the participating funds that contributed the municipal bonds to the TOB Trust.

Other funds managed by the investment advisor may also contribute municipal bonds to a TOB Trust into which a Fund has contributed bonds. If multiple BlackRock-advised funds participate in the same TOB Trust, the economic rights and obligations under the TOB Residual will be shared among the funds ratably in proportion to their participation in the TOB Trust.

The municipal bonds transferred to a TOB Trust typically are high grade municipal bonds. In certain cases, when municipal bonds transferred are lower grade municipal bonds, the TOB transaction includes a credit enhancement feature that provides for the timely payment of principal and interest on the bonds to the TOB Trust by a credit enhancement provider in the event of default of the municipal bond. The TOB Trust would be responsible for the payment of the credit enhancement fee and the Funds, as TOB Residual holders, would be responsible for reimbursement of any payments of principal and interest made by the credit enhancement provider. The municipal bonds transferred to TOB Trusts with a credit enhancement are identified in the Schedules of Investments including the maximum potential amounts owed by the Funds.

The TOB Residuals held by a Fund generally provide the Fund with the right to cause the holders of a proportional share of the TOB Trust Certificates to tender their certificates to the TOB Trust at par plus accrued interest. Thereafter, that Fund may withdraw a corresponding share of the municipal bonds from the TOB Trust.

 

                
   ANNUAL REPORT    APRIL 30, 2015    81


Notes to Financial Statements (continued)     

 

The TOB Trust may be collapsed without the consent of a Fund, upon the occurrence of tender option termination events (“TOTEs”) or mandatory termination events (“MTEs”), as defined in the TOB Trust agreements. TOTEs include the bankruptcy or default of the issuer of the municipal bonds held in the TOB Trust, a substantial downgrade in the credit quality of the issuer of the municipal bonds held in the TOB Trust, failure of any scheduled payment of principal or interest on the municipal bonds, and a judgment or ruling that interest on the municipal bond is subject to federal income taxation. MTEs may include, among other things, a failed remarketing of the TOB Trust Certificates, the inability of the TOB Trust to obtain renewal of the liquidity support agreement and a substantial decline in the market value of the municipal bonds held in the TOB Trust. Upon the occurrence of a TOTE or an MTE, the TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee of the TOB Trust, the remarketing agent and the Liquidity Provider (defined below). In the case of an MTE, after the payment of fees, the TOB Trust Certificate holders would be paid before the TOB Residual holders (i.e., the Funds). In contrast, in the case of a TOTE, after payment of fees, the TOB Trust Certificate holders and the TOB Residual holders would be paid pro rata in proportion to the respective face values of their certificates. During the year ended April 30, 2015, no TOB Trusts in which the Funds participated were terminated without the consent of the Funds.

TOB Trusts are typically supported by a liquidity facility provided by a third party 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 of par plus accrued interest on any business day, subject to the non-occurrence of TOTES (as described above). Depending on the structure of the TOB Trust, the Liquidity Provider may purchase the tendered TOB Trust Certificates. The Liquidity Provider is not obligated to advance such a loan. Any loans made by the Liquidity Provider will be secured by the purchased TOB Trust Certificates held by the TOB Trust. Tendered TOB Trust Certificates are supported by a remarketing agent. However, the remarketing agent is not anticipated to purchase tendered TOB Trust Certificates for its own account in the event of a failed remarketing, which may increase the likelihood that a TOB Trust will need to be collapsed and liquidated in order to purchase the tendered TOB Trust Certificates.

The Funds may invest in TOB Trusts on either a non-recourse or recourse basis. When a Fund invests in TOB Trusts on a non-recourse basis, and the Liquidity Provider is required to make a payment under the liquidity facility, the Liquidity Provider will typically liquidate all or a portion of the municipal bonds held in the TOB Trust and then fund the balance, if any, of the amount owed under the liquidity facility over the liquidation proceeds (the “Liquidation Shortfall”). If a Fund invests in a TOB Trust on a recourse basis, the Fund will typically enter into a reimbursement agreement with the Liquidity Provider where the Fund is required to reimburse the Liquidity Provider the amount of any Liquidation Shortfall. As a result, a Fund investing in a recourse TOB Trust will bear the risk of loss with respect to any Liquidation Shortfall. If multiple funds participate in any such TOB Trust, these losses will be shared ratably, including the maximum potential amounts owed by the Funds at April 30, 2015, in proportion to their participation in the TOB Trust. The recourse TOB Trusts are identified in the Schedules of Investments including the maximum potential amounts owed by the Funds.

Should short-term interest rates rise, the Funds’ investments in TOB transactions may adversely affect the Funds’ net investment income and dividends to Common Shareholders. Also, fluctuations in the market value of municipal bonds deposited into the TOB Trust may adversely affect the Funds’ NAVs per share.

While the Funds’ investment policies and restrictions expressly permit investments in inverse floating rate securities, such as TOB Residuals, they generally do not allow the Funds to borrow money for purposes of making investments. The Funds’ management believes that the Funds’ restrictions on borrowings do not apply to the secured borrowings.

Each Fund’s transfer of the municipal bonds to a TOB Trust is considered a secured borrowing for financial reporting purposes. The cash received by the TOB Trust from the sale of the TOB Trust Certificates, less certain transaction expenses, is paid to a Fund. The Funds typically invest the cash received in additional municipal bonds. The municipal bonds deposited into a TOB Trust are presented in the Funds’ Schedules of Investments and the TOB Trust Certificates are shown in Other Liabilities in the Statements of Assets and Liabilities. Any loans by the TOB Trust to purchase tendered TOB Trust Certificates would be shown as Loan for TOB Trust Certificates.

The carrying amount of the Funds’ payable to the holder of the TOB Trust Certificates or the Liquidity Provider, as reported in the Statements of Assets and Liabilities as TOB Trust Certificates approximates its fair value.

Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by the Funds on an accrual basis. Interest expense incurred on the TOB transaction and other expenses related to remarketing, administration, trustee, liquidity and other services to a TOB Trust are shown as interest expense, fees and amortization of offering costs in the Statements of Operations. Fees paid upon creation of the TOB Trust are recorded as debt issuance costs and are amortized to interest expense, fees and amortization of offering costs in the Statements of Operations to the expected maturity of the TOB Trust. In connection with the restructurings of the TOB Trusts to comply with the Volcker Rule, the non-recurring, legal and restructuring fees are recorded as interest expense, fees and amortization of deferred offering costs in the Statements of Operations. The TOB Trust Certificates have interest rates that generally reset weekly and their holders have the option to tender such certificates to the TOB Trust for redemption at par and any accrued interest at each reset date. At April 30, 2015, the aggregate value of the underlying municipal bonds

 

                
82    ANNUAL REPORT    APRIL 30, 2015   


Notes to Financial Statements (continued)     

 

transferred to the TOB Trusts, the related liability for TOB Trust Certificates and the range of interest rates on the liability for TOB Trust Certificates were as follows:

 

    

Underlying

Municipal

Bonds

Transferred to
TOB Trusts

    

Liability for

TOB Trust

Certificates

    

Range of

Interest Rates

 

MUA

  $ 112,552,669       $ 61,065,965         0.11% - 0.46%   

MEN

  $ 146,639,118       $ 76,093,825         0.11% - 0.39%   

MHD

  $ 102,153,312       $ 56,783,700         0.11% - 0.36%   

MUH

  $ 77,655,827       $ 43,568,059         0.11% - 0.36%   

MUS

  $ 43,844,053       $ 21,936,718         0.11% - 0.31%   

MUI

  $ 95,367,866       $ 52,931,848         0.11% - 0.38%   

MVT

  $ 126,645,148       $ 66,439,492         0.11% - 0.36%   

For the year ended April 30, 2015, the Funds’ average TOB Trust Certificates outstanding and the daily weighted average interest rate, including fees, were as follows:

 

    

Average TOB
Trust

Certificates

Outstanding

    

Daily
Weighted

Average

Interest Rate

 

MUA

  $ 70,178,070         0.75%   

MEN

  $ 74,720,978         0.63%   

MHD

  $ 57,259,980         0.62%   

MUH

  $ 44,246,684         0.62%   

MUS

  $ 22,845,205         0.67%   

MUI

  $ 60,872,049         0.60%   

MVT

  $ 66,567,922         0.61%   

4. Derivative Financial Instruments:

The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to economically manage their exposure to certain risks such as interest rate risk. These contracts may be transacted on an exchange.

Financial Futures Contracts: The Funds invest in long and/or short positions in financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date.

Upon entering into a financial futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Securities deposited as initial margin are designated on the Schedules of Investments and cash deposited, if any, is recorded on the Statements of Assets and Liabilities as cash pledged for financial futures contracts. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin. Variation margin is recorded by the Funds as unrealized appreciation (depreciation) and, if applicable, as a receivable or payable for variation margin in the Statements of Assets and Liabilities.

When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.

 

                
   ANNUAL REPORT    APRIL 30, 2015    83


Notes to Financial Statements (continued)     

 

The following is a summary of the Funds’ derivative financial instruments categorized by risk exposure:

 

Fair Values of Derivative Financial Instruments as of April 30, 2015  
     Statements of Assets and Liabilities Location    Value  
        Derivative Liabilities  
         MUA      MEN      MHD      MUH  

Interest rate contracts

   Net unrealized depreciation1    $ (354,299    $ (374,272    $ (226,222    $ (158,235
 
     Statements of Assets and Liabilities Location           Value  
               Derivative Liabilities  
                 MUS      MUI      MVT  

Interest rate contracts

   Net unrealized depreciation1             $ (145,794    $ (688,283    $ (286,074

 

  1   

Includes cumulative depreciation on financial futures contracts as reported in the Schedules of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

 

The Effect of Derivative Financial Instruments in the Statements of Operations
Year Ended April 30, 2015
 
    Net Realized Loss From         Net Change in Unrealized Appreciation (Depreciation) on  
    MUA     MEN     MHD     MUH         MUA     MEN     MHD     MUH  
Interest rate contracts:                  

Financial futures contracts

  $ (2,378,110   $ (1,212,800   $ (1,232,637   $ (851,733       $ (242,824   $ (279,548   $ (142,981   $ (118,183
    MUS     MUI     MVT               MUS     MUI     MVT        
Interest rate contracts:                  

Financial futures contracts

  $ (825,060   $ (2,313,403   $ (1,581,010               $ (127,125   $ (605,819   $ (211,957        

For the year ended April 30, 2015, the average quarterly balances of outstanding derivative financial instruments were as follows:

 

     MUA     MEN     MHD     MUH     MUS     MUI     MVT  
Financial futures contracts:              

Average notional value of contracts - short

  $ 48,336,883      $ 37,344,975      $ 26,119,438      $ 19,109,031      $ 22,680,039      $ 75,320,770      $ 34,460,516   

Counterparty Credit Risk: A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

Each Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Funds’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of each Fund’s portfolio and provides the necessary personnel, facilities, equipment and certain other services to the operations of each Fund. For such services, each Fund pays the Manager a monthly fee based on a percentage of each Fund’s average daily net assets, at the following annual rates:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Investment advisory fee

    0.55%         0.50%         0.55%         0.55%         0.55%         0.55%         0.50%   

Average daily net assets are the average daily value of each Fund’s total assets minus its total accrued liabilities.

The Manager, for MUS, voluntarily agreed to waive its investment advisory fee on the proceeds of Preferred Shares and TOB Trusts that exceed 35% of total assets minus the sum of its accrued liabilities. This amount is included in fees waived by the Manager in the Statements of Operations. For the year ended April 30, 2015 the waiver was $40,591.

 

                
84    ANNUAL REPORT    APRIL 30, 2015   


Notes to Financial Statements (continued)     

 

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with each Fund’s investments in other affiliated investment companies, if any. These amounts are included in fees waived by the Manager in the Statements of Operations. For the year ended April 30, 2015, the amounts waived were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Amounts waived

  $ 1,272       $ 1,376       $ 1,264       $ 616       $ 1,006       $ 3,498       $ 1,601   

Prior to July 1, 2014, BlackRock Investment Management, LLC (“BIM”), an affiliate of the Manager, served as a sub-advisor to each of the Funds pursuant to sub-advisory agreements with the Manager, and received for its services a monthly fee from the Manager at an annual rate equal to a percentage of the investment advisory fees paid by each Fund to the Manager under the Investment Advisory Agreements. Effective July 1, 2014, the sub-advisory agreements between the Manager and BIM, with respect to each Fund, expired.

Certain officers and/or directors of the Funds are officers and/or directors of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Funds’ Chief Compliance Officer, which is included in officer and directors in the Statements of Operations.

The Funds may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment advisor, common officers, or common trustees. For the year ended April 30, 2015, the purchase transactions with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act for MUA were $1,650,198.

6. Purchases and Sales:

For the year ended April 30, 2015, purchases and sales of investments excluding short-term securities, were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Purchases

  $ 123,424,290       $ 75,425,293       $ 40,640,256       $ 29,736,003       $ 32,372,492       $ 169,883,646       $ 55,861,739   

Sales

  $ 141,690,498       $ 69,243,049       $ 43,202,652       $ 35,280,838       $ 35,234,351       $ 184,000,480       $ 57,444,990   

7. Income Tax Information:

It is the Funds’ policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of their taxable income to their shareholders. Therefore, no federal income tax provision is required.

The Funds file U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Funds’ U.S. federal tax returns remains open for each of the four years ended April 30, 2015. The statutes of limitations on the Funds’ state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Funds as of April 30, 2015, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. As of April 30, 2015, the following permanent differences attributable to amortization methods on fixed income securities and non-deductible expenses were reclassified to the following accounts:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Paid-in capital

          $ (9,970    $ (38,654    $ (32,535    $ (39,481    $ (83,821    $ (53,170

Undistributed net investment income

  $ (240,316    $ 216,064       $ 33,111       $ 81,507       $ 66,050       $ (33,864    $ 62,732   

Accumulated net realized gain (loss)

  $ 240,316       $ (206,094    $ 5,543       $ (48,972    $ (26,569    $ 117,685       $ (9,562

The tax character of distributions paid was as follows:

 

             MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Tax-exempt income1

    4/30/15       $ 26,838,857       $ 22,880,735       $ 15,882,185       $ 11,579,652       $ 11,444,657       $ 34,245,623       $ 22,951,698   
    4/30/14         26,837,760         22,842,187         16,193,850         11,813,581         11,552,557         35,584,757         24,120,086   

Ordinary income2

    4/30/15         293,072         13,467         25         237         348         64,307         312,815   
    4/30/14         164,963         105         227,602         548,988         10,387         628,513         17,371   

Long-term capital gains

    4/30/14                         9,111         604,877                 1,878,099           
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

    4/30/15       $ 27,131,929       $ 22,894,202       $ 15,882,210       $ 11,579,889       $ 11,445,005       $ 34,309,930       $ 23,264,513   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
    4/30/14       $ 27,002,723       $ 22,842,292       $ 16,430,563       $ 12,967,446       $ 11,562,944       $ 38,091,369       $ 24,137,457   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  1  

The Funds designate these amounts paid during the fiscal year ended April 30, 2015, as exempt-interest dividends.

 

  2  

Ordinary income consists primarily of taxable income recognized from market discount and net short-term capital gains. Additionally, all ordinary income distributions are comprised of interest related dividends for non-U.S. residents and are eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations.

 

                
   ANNUAL REPORT    APRIL 30, 2015    85


Notes to Financial Statements (continued)     

 

As of April 30, 2015, the tax components of accumulated net earnings were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Undistributed tax-exempt income

  $ 636,422       $ 5,443,816       $ 2,361,631       $ 1,949,617       $ 2,568,612       $ 3,398,754       $ 2,513,016   

Undistributed ordinary income

    201,283                 226,491         78,978                 81,336         90,724   

Undistributed long-term capital gains

                                            4,594,019           

Capital loss carryforwards

    (7,135,190      (10,190,751      (1,091,220      (1,389,726      (14,851,290              (4,980,650

Net unrealized gains3

    31,474,781         51,363,348         36,507,504         27,179,461         26,758,634         55,887,150         51,120,274   
 

 

 

 

Total

  $ 25,177,296       $ 46,616,413       $ 38,004,406       $ 27,818,330       $ 14,475,956       $ 63,961,259       $ 48,743,364   
 

 

 

 

 

  3   

The differences between book-basis and tax-basis net unrealized gains were attributable primarily to the tax deferral of losses on wash sales and straddles, amortization and accretion methods of premiums and discounts on fixed income securities, the accrual of income on securities in default, the realization for tax purposes of unrealized gains (losses) on certain futures contracts, the deferral of compensation to Directors and the treatment of residual interests in TOB Trusts.

As of April 30, 2015, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

 

Expires April 30,   MUA      MEN      MHD      MUH      MUS      MVT  

2016

  $ 898,916       $ 2,450,150                               $ 2,741,816   

2017

    3,645,754         3,540,378                       $ 494,294           

2018

    396,366         1,225,298                         6,614,798           

2019

    2,194,154         732,655                                   

No expiration date4

            2,242,270       $ 1,091,220       $ 1,389,726         7,742,198         2,238,834   
 

 

 

 

Total

  $ 7,135,190       $ 10,190,751       $ 1,091,220       $ 1,389,726       $ 14,851,290       $ 4,980,650   
 

 

 

 

 

  4  

Must be utilized prior to losses subject to expiration.

During the year ended April 30, 2015, the Funds listed below utilized the following amounts of their respective capital loss carryforward:

 

MUA

  $ 4,900,167   

MUI

  $ 447,981   

As of April 30, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Tax cost

  $ 465,598,599       $ 452,697,831       $ 291,459,788       $ 207,899,444       $ 245,968,092       $ 827,011,676       $ 417,327,503   
 

 

 

    

 

 

    

 

 

 

Gross unrealized appreciation

  $ 49,844,307       $ 53,458,583       $ 38,124,309       $ 27,964,242       $ 27,149,440       $ 59,667,072       $ 54,394,838   

Gross unrealized depreciation

    (18,333,741      (2,018,210      (1,616,805      (784,781      (388,420      (3,530,110      (2,666,463
 

 

 

    

 

 

    

 

 

 

Net unrealized appreciation

  $ 31,510,566       $ 51,440,373       $ 36,507,504       $ 27,179,461       $ 26,761,020       $ 56,136,962       $ 51,728,375   
 

 

 

    

 

 

    

 

 

 

8. Principal Risks:

The Funds invest a substantial amount of their assets in issuers located in a single state or limited number of states. Investment percentages in specific states or U.S. territories are presented in the Schedules of investments.

Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.

As of April 30, 2015, MUA invested a significant portion of its assets in securities in the Health sector; MEN and MUS invested a significant portion of their assets in securities in the County/City/Special District/School District sector; and MEN, MHD, MUH, MUS, MUI and MVT invested a significant portion of their assets in securities in the Transportation sector. Changes in economic conditions affecting such sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.

 

 

                
86    ANNUAL REPORT    APRIL 30, 2015   


Notes to Financial Statements (continued)     

 

The Funds may hold a significant amount of bonds subject to calls by the issuers at defined dates and prices. When bonds are called by issuers and the Funds reinvest the proceeds received, such investments may be in securities with lower yields than the bonds originally held, and correspondingly, could adversely impact the yield and total return performance of a Fund.

The Funds invest a significant portion of their assets in fixed-income securities and/or use derivatives tied to the fixed-income markets. Changes in market interest rates or economic conditions may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Funds may be subject to a greater risk of rising interest rates due to the current period of historically low rates.

On December 10, 2013, regulators published final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”), which prohibit banking entities from engaging in proprietary trading of certain instruments and limit such entities’ investments in, and relationships with, “covered funds” as defined in the Volcker Rule. The Volcker Rule precludes banking entities and their affiliates from sponsoring TOB Trusts as such Trusts have been structured prior to the effective date of the Volcker Rule. Banking entities subject to the Volcker Rule are required to fully comply by July 21, 2015, with respect to investments in and relationships with TOB Trusts that were not in place prior to December 31, 2013, and by July 21, 2016, with respect to investments in and relationships with TOB Trusts that were in place prior to December 31, 2013. As a result, TOB Trusts may need to be restructured or unwound.

In response to the restrictions imposed by the Volcker Rule, market participants have developed a new structure for TOB Trusts designed to ensure that no banking entity is sponsoring the TOB Trust for purposes of the Volcker Rule. Specifically, a Fund will establish, structure and “sponsor” the TOB Trusts in which it holds TOB Residuals. In such a structure, certain responsibilities that previously belonged to the sponsor bank will be performed by, or on behalf of, the Funds. The Funds may utilize service providers in meeting these responsibilities. Service providers to a TOB Trust, such as administrators, liquidity providers, trustees, and remarketing agents, would be acting at the direction of, and as agent of, the Funds as the TOB Residual holder. This structure remains untested. It is possible that regulators could take positions that could limit the market for such newly structured TOB Trust transactions or the Funds’ ability to hold TOB Residuals. Under the new TOB Trust structure, the Funds will have certain additional duties and responsibilities, which may give rise to certain additional risks including, but not limited to, compliance, securities law and operational risks.

The SEC and various federal banking and housing agencies recently adopted credit risk retention rules for securitizations (the “Risk Retention Rules”), which take effect in December 2016. The Risk Retention Rules would require the sponsor of a TOB Trust to retain at least 5% of the credit risk of the underlying assets supporting the TOB Trust’s Municipal Bonds. The Risk Retention Rules may adversely affect the Funds’ ability to engage in TOB Trust transactions or increase the costs of such transactions in certain circumstances.

There can be no assurance that the Funds can successfully enter into restructured TOB Trust transactions in order to refinance their existing TOB Residual holdings prior to the compliance date for the Volcker Rule, which may require that the Funds unwind existing TOB Trusts. There can be no assurance that alternative forms of leverage will be available to the Funds and any alternative forms of leverage may be more or less advantageous to the Funds than existing TOB leverage.

TOB Trust transactions constitute an important component of the municipal bond market. Accordingly, implementation of the Volcker Rule may adversely impact the municipal market, including through reduced demand for and liquidity of municipal bonds and increased financing costs for municipal issuers. Any such developments could adversely affect the Funds. The ultimate impact of these rules on the TOB market and the overall municipal market is not yet certain.

9. Capital Share Transactions:

Each Fund is authorized to issue 200 million shares, all of which were initially classified as Common Shares. The par value for each Fund’s Common Shares is $0.10. The par value for each Funds’ Preferred Shares outstanding is $0.10. The Board is authorized, however, to issue Preferred Shares without approval of Common Shareholders.

Common Shares

For the years shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

 

Year Ended April 30,   MUA      MEN      MHD      MVT  

2015

    11,892                         26,032   

2014

            20,577         9,784         75,746   

Shares issued and outstanding remained constant for MUH, MUS and MUI for the year ended April 30, 2015 and the year ended April 30, 2014.

Preferred Shares

Each Fund’s Preferred Shares rank prior to the Fund’s Common Shares as to the payment of dividends by the Fund and distribution of assets upon dissolution or liquidation of the Fund. The 1940 Act prohibits the declaration of any dividend on the Fund’s Common Shares or the repurchase of the Fund’s

 

                
   ANNUAL REPORT    APRIL 30, 2015    87


Notes to Financial Statements (continued)     

 

Common Shares if the Fund fails to maintain the asset coverage of at least 200% of the liquidation preference of the outstanding Preferred Shares. In addition, pursuant to the Preferred Shares’ governing instruments, the Fund is restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with the Preferred Shares or repurchasing such shares if the Fund fails to declare and pay dividends on the Preferred Shares, redeem any Preferred Shares required to be redeemed under the Preferred Shares’ governing instruments or comply with the basic maintenance amount requirement of the agencies rating the Preferred Shares.

The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Directors for each Fund. In addition, the 1940 Act requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Fund’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.

VRDP Shares

MEN has issued Series W-7 VRDP Shares, $100,000 liquidation value per share, in a privately negotiated offering. The VRDP Shares were offered to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act of 1933, as amended, (the “Securities Act”) and include a liquidity feature, pursuant to a liquidity agreement, that allows the holders of VRDP Shares to have their shares purchased by the liquidity provider in the event of a failed remarketing. MEN is required to redeem the VRDP Shares owned by the liquidity provider after six months of continuous, unsuccessful remarketing. Upon the occurrence of the first unsuccessful remarketing, if any, MEN is required to segregate liquid assets to fund the redemption. The VRDP Shares are subject to certain restrictions on transfer. MUI redeemed all its VRDP Shares on December 21, 2012.

As of the year ended April 30, 2015, the VRDP Shares outstanding were as follows:

 

     Issue Date      Shares Issued      Aggregate Principal      Maturity Date  

MEN

    5/19/11         1,425       $ 142,500,000         6/01/41   

MEN entered into a fee agreement with the liquidity provider that may require a per annum liquidity fee payable to the liquidity provider. These fees, if applicable, are shown as liquidity fees in the Statements of Operations.

The fee agreement between MEN and the liquidity provider was scheduled to expire on July 9, 2015 unless renewed or terminated in advance. On June 16, 2015, the fee agreement was extended to July 7, 2016.

In the event the fee agreement is not renewed or is terminated in advance, and the Fund does 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 Fund is required to redeem any VRDP Shares purchased by the liquidity provider six months after the purchase date. Immediately after the purchase of any VRDP Shares by the liquidity provider, the Fund is required to begin to segregate liquid assets with the Fund’s custodian to fund the redemption. There is no assurance the Fund will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.

MEN is required to redeem its VRDP Shares on the maturity date, unless earlier redeemed or repurchased. Six months prior to the maturity date, MEN is required to begin to segregate liquid assets with the Fund’s custodian to fund the redemption. In addition, MEN is 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 MEN. 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, MEN 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. Subsequent to the issuance of the VRDP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of April 30, 2015, the VRDP Shares were assigned a long-term rating of Aa1 from Moody’s under its new ratings methodology. The VRDP Shares continue to be assigned a long-term rating of AAA from Fitch.

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

 

                
88    ANNUAL REPORT    APRIL 30, 2015   


Notes to Financial Statements (continued)     

 

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.

MEN 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. During the year ended April 30, 2015, none of the VRDP Shares were tendered for remarketing.

For the year ended April 30, 2015, the average annualized dividend rate for MEN’s VRDP Shares was 0.99%.

On June 20, 2012, MEN commenced a three-year term ending June 24, 2015 (“special rate period”) with respect to its VRDP Shares. The implementation of the special rate period resulted in a mandatory tender of the VRDP Shares prior to the commencement of the special rate period. The mandatory tender event was not the result of a failed remarketing.

The liquidity and fee agreements remain in effect for the duration of the special rate period and the VRDP shares are still subject to mandatory redemption by the VRDP Funds on maturity date. The VRDP Shares will not be remarketed or subject to optional or mandatory tender events during such time. During the special rate period, MEN is required to maintain the same asset coverage, basic maintenance amount and leverage requirements for the VRDP Shares. MEN will not pay any liquidity and remarketing fees during the special rate period and instead will pay dividends monthly based on the sum of Securities Industry and Financial Markets Association (“SIFMA”) Municipal Swap Index and a percentage per annum based on the long-term ratings assigned to the VRDP Shares. The short-term ratings were withdrawn by Moody’s, Fitch and/or S&P. Short-term ratings may be re-assigned upon the termination of the special rate period when the VRDP Shares revert back to remarketable securities.

If MEN redeems the VRDP Shares on a date that is one year or more before the end of the special rate period and the VRDP Shares are rated above A1/A by Moody’s and Fitch respectively, then such redemption is subject to a redemption premium payable to the holder of the VRDP Shares based on the time remaining in the special rate period, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. After June 24, 2015, the holder of the VRDP Shares and MEN may mutually agree to extend the special rate period. On June 16, 2015, the special rate period was extended to June 22, 2016. If the special rate period is not extended, the VRDP Shares will revert back to remarketable securities and will be remarketed and available for purchase by qualified institutional investors.

For the year ended April 30, 2015, VRDP Shares issued and outstanding of MEN remained constant.

VMTP Shares

MHD, MUH, MUS, MUI and MVT (collectively, the “VMTP Funds”), have issued Series W-7 VMTP Shares, $100,000 liquidation value per share, in a privately negotiated offering and sale of VMTP Shares exempt from registration under the Securities Act.

On December 7, 2012, MUI issued Series W-7 VMTP Shares, $100,000 liquidation value per share with a maturity date of January 4, 2016. Total proceeds received of $287,100,000 in a private offering of VMTP Shares were used to redeem all of MUI’s existing VRDP Shares on December 21, 2012. The fee agreement for MUI’s VRDP Shares with the liquidity provider, which was for a two year term and was scheduled to expire on December 28, 2012, was terminated upon issuance of the VMTP Shares. Any such liquidity fees incurred by MUI through the date of issuance of the VMTP Shares are shown as liquidity fees in the Statements of Operations.

As of the year ended April 30, 2015, the VMTP Shares outstanding of each Fund were as follows:

 

     Issue Date      Shares Issued      Aggregate Principal      Term Date  

MHD

    12/16/11         837       $ 83,700,000         12/31/15   

MUH

    12/16/11         550       $ 55,000,000         12/31/15   

MUS

    12/16/11         870       $ 87,000,000         12/31/15   

MUI

    12/07/12         2,871       $ 287,100,000         1/04/16   

MVT

    12/16/11         1,400       $ 140,000,000         12/31/15   

Each VMTP Fund is required to redeem its VMTP Shares on the term date, unless earlier redeemed or repurchased or unless extended. During the period, the term dates for MHD, MUH, MUS and MVT were extended until December 31, 2015. There is no assurance that the term of a Fund’s VMTP Shares will be extended further or that a Fund’s VMTP Shares will be replaced with any other preferred shares or other form of leverage upon the redemption or repurchase of the VMTP Shares. Six months prior to term date, each VMTP Fund is required to begin to segregate liquid assets with the Fund’s custodian to fund the redemption. In addition, each VMTP Fund is required to redeem certain of its outstanding VMTP Shares if it fails to maintain certain asset coverage, basic maintenance amount or leverage requirements.

Subject to certain conditions, a Fund’s VMTP Shares may be redeemed, in whole or in part, at any time at the option of the Fund. The redemption price per VMTP Share is equal to the liquidation value per share plus any outstanding unpaid dividends and applicable redemption premium. If the Fund redeems the VMTP Shares on a date that is one year or more prior to the term date and the VMTP Shares are rated above A1/A+ by Moody’s and Fitch, respectively, then such redemption is subject to a prescribed redemption premium (up to 3% of the liquidation preference) payable to the holder of the VMTP Shares based on the time remaining to the term date, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. The

 

                
   ANNUAL REPORT    APRIL 30, 2015    89


Notes to Financial Statements (continued)     

 

VMTP Shares are subject to certain restrictions on transfer, and a Fund may also be required to register the VMTP Shares for sale under the Securities Act under certain circumstances. In addition, amendments to the VMTP governing document generally require the consent of the holders of VMTP Shares.

Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread to the SIFMA Municipal Swap Index. The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by Moody’s and Fitch. At the date of issuance, the VMTP Shares were assigned long-term ratings of Aaa from Moody’s and AAA from Fitch. Subsequent to the issuance of the VMTP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of April 30, 2015, the VMTP Shares were assigned a long-term rating of Aa1 from Moody’s under its new rating methodology. The VMTP Shares continue to be assigned a long-term rating of AAA from Fitch. The dividend rate on the VMTP Shares is subject to a step-up spread if the Funds fail to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions or gross-up payments, and maintaining certain asset coverage and leverage requirements.

For the year ended April 30, 2015, the average annualized dividend rates for the VMTP Shares were as follows:

 

     MHD      MUH      MUS      MUI      MVT  

Rate

    1.04%         1.04%         1.04%         1.04%         1.06%   

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.

For the year ended April 30, 2015, VMTP Shares issued and outstanding of each VMTP Fund remained constant.

Offering Costs: The Funds, with the exception of MUA, incurred costs in connection with the issuance of VRDP Shares and/or VMTP Shares. For VRDP Shares, these costs were recorded as a deferred charge and will be amortized over the 30-year life of the VRDP Shares with the exception of upfront fees paid to the liquidity provider which were amortized over the life of the liquidity agreement. For VMTP Shares, these costs were recorded as a deferred charge and will be amortized over the 3-year life of the VMTP Shares. Amortization of these costs is included in interest expense, fees and amortization of offering costs in the Statements of Operations.

MUI’s offering costs that were recorded as a deferred charge and amortized over the 30-year life of the VRDP Shares were accelerated and charged to expense immediately upon redemption of MUI’s VRDP Shares. Costs incurred in connection with the issuance of MUI’s VMTP Shares will be recorded as a deferred charge and amortized over the three-year life of the VMTP Shares.

10. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:

The Funds paid a net investment income dividend in the following amounts per share on June 1, 2015 to Shareholders of record on May 15, 2015:

 

    

Common

Dividend

Per Share

 

MUA

  $ 0.0625   

MEN

  $ 0.0605   

MHD

  $ 0.0885   

MUH

  $ 0.0775   

MUS

  $ 0.0675   

MUI

  $ 0.0655   

MVT

  $ 0.0830   

Additionally, the Funds declared a net investment income dividend on June 1, 2015 payable to Common Shareholders of record on June 15, 2015 for the same amounts noted above.

The dividends declared on Preferred Shares for the period May 1, 2015 to May 31, 2015 were as follows:

 

     Preferred
Shares
     Series     

Dividends

Declared

 

MEN

    VRDP Shares         W-7       $ 127,859   

MHD

    VMTP Shares         W-7       $ 78,656   

MUH

    VMTP Shares         W-7       $ 51,685   

MUS

    VMTP Shares         W-7       $ 81,757   

MUI

    VMTP Shares         W-7       $ 269,795   

MVT

    VMTP Shares         W-7       $ 131,562   

 

 

                
90    ANNUAL REPORT    APRIL 30, 2015   


Notes to Financial Statements (concluded)     

 

In order to comply with the Volcker Rule, certain TOB Trusts were restructured and the respective TOB Trusts are no longer sponsored by a banking entity. As of June 22, 2015, the following information relates to the restructured TOB Trusts:

 

     Underlying
Municipal
Bonds
Transferred to
restructured
TOB Trusts
     Liability for
TOB Trust
Certificates
associated
with the
restructured
TOB Trusts
 

MEN

  $ 9,214,188       $ 4,765,000   

MHD

  $ 1,907,325       $ 1,290,000   

MUH

  $ 1,397,227       $ 945,000   

MUI

  $ 33,337,695       $ 19,356,855   

MVT

  $ 2,794,453       $ 1,890,000   

 

                
   ANNUAL REPORT    APRIL 30, 2015    91


Report of Independent Registered Public Accounting Firm

 

To the Shareholders and Boards of Directors of

BlackRock MuniAssets Fund, Inc.,

BlackRock MuniEnhanced Fund, Inc.,

BlackRock MuniHoldings Fund, Inc.,

BlackRock MuniHoldings Fund II, Inc.,

BlackRock MuniHoldings Quality Fund, Inc.,

BlackRock Muni Intermediate Duration Fund, Inc., and

BlackRock MuniVest Fund II, Inc.:

We have audited the accompanying statements of assets and liabilities of BlackRock MuniAssets Fund, Inc., BlackRock MuniEnhanced Fund, Inc., BlackRock MuniHoldings Fund, Inc., BlackRock MuniHoldings Fund II, Inc., BlackRock MuniHoldings Quality Fund, Inc., BlackRock Muni Intermediate Duration Fund, Inc., and BlackRock MuniVest Fund II, Inc. (collectively, the “Funds”), including the schedules of investments, as of April 30, 2015, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2015, by correspondence with the custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of BlackRock MuniAssets Fund, Inc., BlackRock MuniEnhanced Fund, Inc., BlackRock MuniHoldings Fund, Inc., BlackRock MuniHoldings Fund II, Inc., BlackRock MuniHoldings Quality Fund, Inc., BlackRock Muni Intermediate Duration Fund, Inc., and BlackRock MuniVest Fund II, Inc., as of April 30, 2015, the results of their operations and their cash flows for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Boston, Massachusetts

June 22, 2015

 

                
92    ANNUAL REPORT    APRIL 30, 2015   


Automatic Dividend Reinvestment Plan     

 

Pursuant to each Fund’s Dividend Reinvestment Plan (the “Reinvestment Plan”), Common Shareholders are automatically enrolled to have all distributions of dividends and capital gains reinvested by Computershare Trust Company, N.A. (the “Reinvestment Plan Agent”) in the respective Fund’s shares pursuant to the Reinvestment Plan. Shareholders who do not participate in the Reinvestment Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street name or other nominee name, then to the nominee) by the Reinvestment Plan Agent, which serves as agent for the shareholders in administering the Reinvestment Plan.

After MUA, MEN, MHD, MUH, MUS, MUI and MVT declare a dividend or determine to make a capital gain distribution, the Reinvestment Plan Agent will acquire shares for the participants’ accounts, depending upon the following circumstances, either (i) through receipt of unissued but authorized shares from the Funds (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market or on the Fund’s primary exchange (“open-market purchases”). If, on the dividend payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition often referred to as a “market premium”), the Reinvestment Plan Agent will invest the dividend amount in newly issued shares acquired on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the dividend payment date, the dollar amount of the dividend will be divided by 95% of the market price on the dividend payment date. If, on the dividend payment date, the NAV is greater than the market price per share plus estimated brokerage commissions (such condition often referred to as a “market discount”), the Reinvestment Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. If the Reinvestment Plan Agent is unable to invest the full dividend amount in open-market purchases, or if the market discount shifts to a market premium during the purchase period, the Reinvestment Plan Agent will invest any un-invested portion in newly issued shares. Investments in newly issued shares made in this manner would be made pursuant to the same process described above and the date of issue for such newly issued shares will substitute for the dividend payment date.

Participation in the Reinvestment Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Reinvestment Plan Agent prior to the dividend record date. Additionally, the Reinvestment Plan Agent seeks to process notices received after the record date but prior to the payable date and such notices often will become effective by the payable date. Where late notices are not processed by the applicable payable date, such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.

The Reinvestment Plan Agent’s fees for the handling of the reinvestment of distributions will be paid by each Fund. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Reinvestment Plan Agent’s open market purchases in connection with the reinvestment of all distributions. The automatic reinvestment of all distributions will not relieve participants of any federal income tax that may be payable on such dividends or distributions.

Each Fund reserves the right to amend or terminate the Reinvestment Plan. There is no direct service charge to participants in the Reinvestment Plan; however, each Fund reserves the right to amend the Reinvestment Plan to include a service charge payable by the participants. Participants in MEN and MUI that request a sale of shares are subject to a $2.50 sales fee and a $0.15 per share fee. Per share fees include any applicable brokerage commissions the Reinvestment Plan Agent is required to pay. Participants in MUA, MHD, MUH, MUS and MVT that request a sale of shares are subject to a $0.02 per share sold brokerage commission. All correspondence concerning the Reinvestment Plan should be directed to Computershare Trust Company, N.A. through the internet at http://www.computershare.com/blackrock, or in writing to Computershare, P.O. Box 30170, College Station, TX 77842-3170, Telephone: (800) 699-1236. Overnight correspondence should be directed to the Reinvestment Plan Agent at Computershare, 211 Quality Circle, Suite 210, College Station, TX 77845.

 

                
   ANNUAL REPORT    APRIL 30, 2015    93


Officers and Directors     

 

Name, Address1
and Year of Birth
 

Position(s)

Held with
Funds

  Length
of Time
Served as a
Director3
  Principal Occupation(s) During Past Five Years   Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen
  Public
Directorships
Independent Directors2               

Richard E. Cavanagh

 

1946

  Chair of the Board and Director  

Since

2007

  Trustee, Aircraft Finance Trust from 1999 to 2009; Director, The Guardian Life Insurance Company of America since 1998; Director, Arch Chemical (chemical and allied products) from 1999 to 2011; Trustee, Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005 to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof since 1996; Faculty Member/Adjunct Lecturer, Harvard University since 2007; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007.  

76 RICs consisting of

76 Portfolios

  None

Karen P. Robards

 

1950

  Vice Chairperson of the Board, Chairperson of the Audit Committee and Director  

Since

2007

  Partner of Robards & Company, LLC (financial advisory firm) since 1987; Co-founder and Director of the Cooke Center for Learning and Development (a not-for-profit organization) since 1987; Investment Banker at Morgan Stanley from 1976 to 1987.  

76 RICs consisting of

76 Portfolios

  AtriCure, Inc. (medical devices); Greenhill & Co., Inc.; Care Investment Trust, Inc. (health care real estate investment trust) from 2007 to 2010

Michael J. Castellano

 

1946

  Director and Member of the Audit Committee  

Since

2011

 

Chief Financial Officer of Lazard Group LLC from 2001 to 2011; Chief Financial Officer of Lazard Ltd from 2004 to 2011; Director, Support Our Aging Religious (non-profit) from 2009 to June 2015; Director, National Advisory Board of Church Management at Villanova University since 2010; Trustee, Domestic Church Media Foundation since 2012; Director, CircleBlack Inc. (financial technology company). since 2015.

 

76 RICs consisting of

76 Portfolios

  None

Frank J. Fabozzi4

 

1948

  Director and Member of the Audit Committee  

Since

2007

 

Editor of and Consultant for The Journal of Portfolio Management since 2006; Professor of Finance, EDHEC Business School since 2011; Visiting Professor, Princeton University from 2013 to 2014; Professor in the Practice of Finance and Becton Fellow, Yale University School of Management from 2006 to 2011.

 

109 RICs consisting of

235 Portfolios

  None

Kathleen F. Feldstein

 

1941

  Director  

Since

2007

  President of Economics Studies, Inc. (private economic consulting firm) since 1987; Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee Emeritus thereof since 2008; Member of the Board of Partners Community Healthcare, Inc. from 2005 to 2009; Member of the Corporation of Partners HealthCare since 1995; Trustee, Museum of Fine Arts, Boston since 1992; Member of the Visiting Committee to the Harvard University Art Museum since 2003; Director, Catholic Charities of Boston since 2009.  

76 RICs consisting of

76 Portfolios

  The McClatchy Company (publishing)

James T. Flynn

 

1939

  Director and Member of the Audit Committee  

Since

2007

  Chief Financial Officer of JPMorgan & Co., Inc. from 1990 to 1995.  

76 RICs consisting of

76 Portfolios

  None

Jerrold B. Harris

 

1942

  Director  

Since

2007

 

Trustee, Ursinus College from 2000 to 2012; Director, Waterfowl Chesapeake (conservation) since 2014; Director, Ducks Unlimited, Inc. (conservation) since 2013; Director, Troemner LLC (scientific equipment) since 2000; Director of Delta Waterfowl Foundation from 2010 to 2012; President and Chief Executive Officer, VWR Scientific Products Corporation from 1990 to 1999.

 

76 RICs consisting of

76 Portfolios

  BlackRock Capital Investment Corp. (business development company)

R. Glenn Hubbard

 

1958

  Director   Since
2007
  Dean, Columbia Business School since 2004; Faculty member, Columbia Business School since 1988.  

76 RICs consisting of

76 Portfolios

  ADP (data and information services); Metropolitan Life Insurance Company (insurance)

 

                
94    ANNUAL REPORT    APRIL 30, 2015   


Officers and Directors (continued)     

 

Name, Address1
and Year of Birth
 

Position(s)

Held with
Funds

  Length
of Time
Served as a
Director3
  Principal Occupation(s) During Past Five Years   Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen
  Public
Directorships
Independent Directors2 (concluded)                    

W. Carl Kester

 

1951

  Director and Member of the Audit Committee  

Since

2007

  George Fisher Baker Jr. Professor of Business Administration, Harvard Business School since 2008, Deputy Dean for Academic Affairs from 2006 to 2010, Chairman of the Finance Unit, from 2005 to 2006, Senior Associate Dean and Chairman of the MBA Program from 1999 to 2005; Member of the faculty of Harvard Business School since 1981.  

76 RICs consisting of

76 Portfolios

  None
 

1   The address of each Director and Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.

 

2   Independent Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 74. The maximum age limitation may be waived as to any Director by action of a majority of the Directors upon finding of good cause thereof. The Board of Directors has unanimously approved further extending the mandatory retirement age for Mr. James T. Flynn until December 31, 2015, which the Board of Directors believes is in the best interest of shareholders.

 

3   Date shown is the earliest date a person has served for the Funds covered by this annual report. Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. As a result, although the chart shows certain Directors as joining the Funds’ board in 2007, those Directors first became members of the boards of other legacy MLIM or legacy BlackRock funds as follows: Richard E. Cavanagh, 1994; Frank J. Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 2004; W. Carl Kester, 1995 and Karen P. Robards, 1998.

 

4   For purposes of this chart, “RICs” refers to investment companies registered under the 1940 Act and “Portfolios” refers to the investment programs of the BlackRock-advised funds. The Closed-End Complex is comprised of 76 RICs. Mr. Perlowski, Dr. Fabozzi and Ms. Novick are also board members of a complex of BlackRock registered open-end funds. Mr. Perlowski is also a board member of the BlackRock Equity-Bond Complex, and Ms. Novick and Dr. Fabozzi are also board members of the BlackRock Equity-Liquidity Complex.

Interested Directors5               

Barbara G. Novick

1960

 

Director

 

Since

2014

 

Vice Chairman of BlackRock since 2006; Chair of BlackRock’s Government Relations Steering Committee since 2009; Head of the Global Client Group of BlackRock, Inc. from 1988 to 2008.

 

109 RICs consisting of 235 Portfolios

  None

John M. Perlowski

1964

 

Director

 

Since

2014

 

Managing Director of BlackRock since 2009; Head of BlackRock Global Fund Services since 2009; Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual Funds from 2003 to 2009 and Senior Vice President thereof from 2007 to 2009; Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director of Family Resource Network (charitable foundation) since 2009.

 

104 RICs consisting of 174 Portfolios

  None
 

5   Mr. Perlowski and Ms. Novick are both “interested persons,” as defined in the 1940 Act, of the Funds based on their positions with BlackRock and its affiliate. Mr. Perlowski and Ms. Novick are also board members of a complex of BlackRock registered open-end funds. Mr. Perlowski is a board member of the BlackRock Equity-Bond Complex and Ms. Novick is a board member of the BlackRock Equity-Liquidity Complex. Interested Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. The maximum age limitation may be waived as to any Director by action of a majority of the Directors upon a finding of good cause thereof.

 

                
   ANNUAL REPORT    APRIL 30, 2015    95


Officers and Directors (concluded)     

 

 

Name, Address1
and Year of Birth
  Position(s)
Held with
the Funds
  Length of
Time Served
  Principal Occupation(s) During Past Five Years
Officers2               

John M. Perlowski

 

1964

  President and Chief Executive Officer  

Since
2011

  Managing Director of BlackRock since 2009; Head of BlackRock Global Fund Services since 2009; Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual Funds from 2003 to 2009 and Senior Vice President thereof from 2007 to 2009; Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director of Family Resource Network (charitable foundation) since 2009.

Robert W. Crothers

 

1981

  Vice President   Since
2012
  Director of BlackRock since 2011; Vice President of BlackRock from 2008 to 2010.

Neal Andrews

 

1966

  Chief Financial Officer   Since
2007
  Managing Director of BlackRock since 2006; Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006.

Jay Fife

 

1970

  Treasurer   Since
2007
  Managing Director of BlackRock since 2007; Director of BlackRock in 2006; Assistant Treasurer of the MLIM and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.

Charles Park

 

1967

  Chief Compliance Officer   Since
2014
  Anti-Money Laundering Compliance Officer for the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex since 2014; Principal of and Chief Compliance Officer for iShares® Delaware Trust Sponsor LLC since 2012 and BlackRock Fund Advisors (“BFA”) since 2006; Chief Compliance Officer for the BFA-advised iShares exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. since 2012.

Janey Ahn

 

1975

  Secretary   Since
2012
  Director of BlackRock since 2009; Vice President of BlackRock from 2008 to 2009; Assistant Secretary of the Funds from 2008 to 2012.
 

1    The address of each Director and Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.

 

2    Officers of the Funds serve at the pleasure of the Board.

 

Effective December 31, 2014, Paul L. Audet and Henry Gabbay resigned as Directors of the Funds. Effective December 31, 2014, Barbara G. Novick and John M. Perlowski were appointed to serve as Directors of the Funds.

 

         

Investment Advisor

BlackRock Advisors, LLC Wilmington, DE 19809

 

Custodian

State Street Bank and
Trust Company

Boston, MA 02110

 

VRDP Tender and Paying Agent

and VMTP Redemption and Paying Agent

The Bank of New York Mellon New York, NY 10289

  

Accounting Agent

State Street Bank and
Trust Company
Boston, MA 02110

 

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom LLP Boston, MA 02116

  Transfer Agent Computershare Trust
Company, N.A.
Canton, MA 02021
 

VRDP Remarketing Agent Citigroup Global Markets Inc.3 New York, NY 10179

   Independent Registered Public Accounting Firm Deloitte & Touche LLP Boston, MA 02116   Address of the Funds 100 Bellevue Parkway Wilmington, DE 19809
    VRDP Liquidity Provider Citibank, N.A.3
New York, NY 10179
    

 

  3  

For MEN.

 

                
96    ANNUAL REPORT    APRIL 30, 2015   


Additional Information     

 

Fund Certification      

The Funds are listed for trading on the NYSE and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. Each Fund filed with the SEC the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.

 

Dividend Policy

Each Fund’s dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of distributions, the Funds may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the distributions paid by the Funds for any particular month may be more or less than the amount of net investment income earned by the Funds during such month. The Funds’ current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.

 

                
   ANNUAL REPORT    APRIL 30, 2015    97


Additional Information (continued)     

 

General Information

The Funds do not make available copies of their Statements of Additional Information because the Funds’ shares are not continuously offered, which means that the Statement of Additional Information of each Fund has not been updated after completion of the respective Fund’s offerings and the information contained in each Fund’s Statement of Additional Information may have become outdated.

During the period, there were no material changes in the Funds’ investment objectives or policies or to the Funds’ charters or by-laws that would delay or prevent a change of control of the Funds that were not approved by the shareholders or in the principal risk factors associated with investment in the Funds. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Funds’ portfolios.

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Funds may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.

Electronic Delivery

Shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the electronic delivery program. Electronic copies of shareholder reports are available on BlackRock’s website.

To enroll in electronic delivery:

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Funds will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (800) 882-0052.

Availability of Quarterly Schedule of Investments

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 882-0052.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800) 882-0052; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com; or by calling (800) 882-0052 and (2) on the SEC’s website at http://www.sec.gov.

Availability of Fund Updates

BlackRock will update performance and certain other data for the Funds on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to check the website for updated performance information and the release of other material information about the Funds. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.

 

                
98    ANNUAL REPORT    APRIL 30, 2015   


Additional Information (concluded)     

 

Shelf Offering Program

From time-to-time, each Fund may seek to raise additional equity capital through an equity shelf program (a “Shelf Offering”). In a Shelf Offering, the Fund may, subject to market conditions, raise additional equity capital by issuing new Common Shares from time to time in varying amounts at a net price at or above the Fund’s net asset value (“NAV”) per Common Share (calculated within 48 hours of pricing). While any such Shelf Offering may allow a Fund to pursue additional investment opportunities without the need to sell existing portfolio investments, it could also entail risks — including that the issuance of additional Common Shares may limit the extent to which the Common Shares are able to trade at a premium to NAV in the secondary market. The Funds have not filed a registration statement with respect to any Shelf Offerings. This report is not an offer to sell Fund Common Shares and is not a solicitation of an offer to buy Fund Common Shares. If the Fund files a registration statement with respect to any Shelf Offering, the prospectus contained therein will contain more complete information about the Fund and should be read carefully before investing.

 

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

 

                
   ANNUAL REPORT    APRIL 30, 2015    99


This report is intended for current holders. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. Certain of the Funds have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in short-term interest rates may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

 

LOGO

 

CEMUNI7-4/15-AR    LOGO


Item 2 –

Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, the code of ethics was amended to update certain information and to make other non-material changes. During the period covered by this report, there have been no waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com.

 

Item 3 –

Audit Committee Financial Expert – The registrant’s board of directors (the “board of directors”), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent:

Michael Castellano

Frank J. Fabozzi

James T. Flynn

W. Carl Kester

Karen P. Robards

The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.

Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements.

Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.

Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.

 

2


Item 4 –

Principal Accountant Fees and Services

The following table presents fees billed by Deloitte & Touche LLP (“D&T”) in each of the last two fiscal years for the services rendered to the Fund:

 

      (a) Audit Fees    (b) Audit-Related Fees1    (c) Tax Fees2    (d) All Other Fees3
Entity Name   

Current

Fiscal Year
End

   Previous
Fiscal Year
End
  

Current

Fiscal Year
End

   Previous
Fiscal Year
End
  

Current

Fiscal Year
End

   Previous
Fiscal Year
End
  

Current

Fiscal Year
End

   Previous
Fiscal Year
End
BlackRock MuniHoldings Fund, Inc.    $35,863    $35,863    $0    $0    $13,362    $13,100    $0    $0

The following table presents fees billed by D&T that were required to be approved by the registrant’s audit committee (the “Committee”) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (“Investment Adviser” or “BlackRock”) and entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (“Fund Service Providers”):

 

      Current Fiscal Year End    Previous Fiscal Year End

(b) Audit-Related Fees1

   $0    $0

(c) Tax Fees2

   $0    $0

(d) All Other Fees3

   $2,391,000    $2,555,000

1 The nature of the services includes assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees.

2 The nature of the services includes tax compliance, tax advice and tax planning.

3 Aggregate fees borne by BlackRock in connection with the review of compliance procedures and attestation thereto performed by D&T with respect to all of the registered closed-end funds and some of the registered open-end funds advised by BlackRock.

(e)(1) Audit Committee Pre-Approval Policies and Procedures:

The Committee has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the Investment Adviser and Fund Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are (a) consistent with the SEC’s auditor independence rules and (b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.

Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g.,

 

3


unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not Applicable

(g) The aggregate non-audit fees paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Fund Service Providers were:

 

         Entity Name

Current Fiscal

Year End

Previous Fiscal

Year End

BlackRock MuniHoldings Fund, Inc. $13,362 $13,100

Additionally, SSAE 16 Review (Formerly, SAS No. 70) fees for the current and previous fiscal years of $2,391,000 and $2,555,000, respectively, were billed by D&T to the Investment Adviser.

(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser, and the Fund Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

 

Item 5 –

Audit Committee of Listed Registrants

 

  (a) The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):  

Michael Castellano

Frank J. Fabozzi

James T. Flynn

W. Carl Kester

Karen P. Robards

 

  (b) Not Applicable

 

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.

 

4


(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 – The board of directors has delegated the voting of proxies for the Fund’s portfolio securities to the Investment Adviser pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov.

 

Item 8 –

Portfolio Managers of Closed-End Management Investment Companies – as of April 30, 2015.

 

  (a)(1) The registrant is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock and Walter O’Connor, Managing Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Each is jointly responsible for the day-to-day management of the registrant’s portfolio, which includes setting the registrant’s overall investment strategy, overseeing the management of the registrant and/or selection of its investments. Messrs. Jaeckel and O’Connor have been members of the registrant’s portfolio management team since 2006 and 2006, respectively.

 

Portfolio Manager Biography
Theodore R. Jaeckel, Jr. Managing Director of BlackRock since 2006; Managing Director of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2005 to 2006; Director of MLIM from 1997 to 2005.
Walter O’Connor Managing Director of BlackRock since 2006; Managing Director of MLIM from 2003 to 2006; Director of MLIM from 1998 to 2003.

 

5


(a)(2) As of April 30, 2015:

 

     

(ii) Number of Other Accounts Managed

and Assets by Account Type

  

(iii) Number of Other Accounts and

Assets for Which Advisory Fee is

Performance-Based

(i) Name of

Portfolio Manager

  

Other

Registered

Investment

Companies

  

Other Pooled

Investment

Vehicles

  

Other

Accounts

  

Other

Registered

Investment

Companies

  

Other Pooled

Investment

Vehicles

  

Other

Accounts

Theodore R. Jaeckel, Jr.

   62    0    0    0    0    0
     $28.93 Billion    $0    $0    $0    $0    $0

Walter O’Connor

   58    0    0    0    0    0
     $22.44 Billion    $0    $0    $0    $0    $0

 

  (iv) Potential Material Conflicts of Interest

BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, Inc., its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, Inc. or any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock, Inc.’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock, Inc. or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Certain portfolio managers also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. It should also be noted that a portfolio manager may be managing certain hedge fund and/or long only accounts, or may be part of a team managing certain hedge fund and/or long only accounts, subject to incentive fees. Such portfolio managers may therefore be entitled to receive a portion of any incentive fees earned on such accounts. Currently, the portfolio managers of this fund are not entitled to receive a portion of incentive fees of other accounts.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock, Inc. has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient

 

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flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.

(a)(3) As of April 30, 2015:

Portfolio Manager Compensation Overview

The discussion below describes the portfolio managers’ compensation as of April 30, 2015.

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.

Base compensation. Generally, portfolio managers receive base compensation based on their position with the firm.

Discretionary Incentive Compensation

Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including
risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s performance and contribution to the overall performance of these portfolios and BlackRock. In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Funds or other accounts managed by the portfolio managers are measured. Among other things, BlackRock’s Chief Investment Officers make a subjective determination with respect to each portfolio manager’s compensation based on the performance of the Funds and other accounts managed by each portfolio manager relative to the various benchmarks. Performance of fixed income funds is measured on a pre-tax and/or after-tax basis over various time periods including 1-, 3- and 5- year periods, as applicable. With respect to these portfolio managers, such benchmarks for the Fund and other accounts are: a combination of market-based indices (e.g., Standard & Poor’s Municipal Bond Index), certain customized indices and certain fund industry peer groups.

Distribution of Discretionary Incentive Compensation. Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. For some portfolio managers, discretionary incentive compensation is also distributed in deferred cash awards that notionally track the returns of select BlackRock investment products they manage and that vest ratably over a number of years. The BlackRock, Inc. restricted stock units, upon vesting, will be settled in BlackRock, Inc. common stock. Typically, the cash portion of the discretionary incentive compensation, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of discretionary incentive compensation in BlackRock, Inc. stock puts compensation earned by a portfolio manager for a given year “at risk” based on

 

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BlackRock’s ability to sustain and improve its performance over future periods. Providing a portion of discretionary incentive compensation in deferred cash awards that notionally track the BlackRock investment products they manage provides direct alignment with investment product results.

Long-Term Incentive Plan Awards — From time to time long-term incentive equity awards are granted to certain key employees to aid in retention, align their interests with long-term shareholder interests and motivate performance. Equity awards are generally granted in the form of BlackRock, Inc. restricted stock units that, once vested, settle in BlackRock, Inc. common stock. The portfolio managers of this Fund have unvested long-term incentive awards.

Deferred Compensation Program — A portion of the compensation paid to eligible United States-based BlackRock employees may be voluntarily deferred at their election for defined periods of time into an account that tracks the performance of certain of the firm’s investment products. Any portfolio manager who is either a managing director or director at BlackRock with compensation above a specified threshold is eligible to participate in the deferred compensation program.

Other compensation benefits. In addition to base salary and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:

Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock, Inc. employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit ($265,000 for 2015). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock, Inc. contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the purchase date. All of the eligible portfolio managers are eligible to participate in these plans.

(a)(4) Beneficial Ownership of Securities – As of April 30, 2015.

 

Portfolio Manager

Dollar Range of Equity Securities

of the Fund Beneficially Owned

Theodore R. Jaeckel, Jr.

None

Walter O’Connor

None

(b) Not Applicable

 

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Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report.

 

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 – See Item 2

(a)(2) – Certifications – Attached hereto

(a)(3) – Not Applicable

(b) – Certifications – Attached hereto

 

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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 MuniHoldings Fund, Inc.
By:

/s/ John M. Perlowski

John M. Perlowski
Chief Executive Officer (principal executive officer) of
BlackRock MuniHoldings Fund, Inc.
Date:   July 1, 2015
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By:

/s/ John M. Perlowski

John M. Perlowski
Chief Executive Officer (principal executive officer) of
BlackRock MuniHoldings Fund, Inc.
Date: July 1, 2015
By:

/s/ Neal J. Andrews

Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniHoldings Fund, Inc.
Date: July 1, 2015

 

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