BLACKROCK MUNIASSETS 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: 811-07642

Name of Fund: BlackRock MuniAssets Fund, Inc. (MUA)

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniAssets 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: 04/30/2016

Date of reporting period: 04/30/2016


Item 1 – Report to Stockholders

 


APRIL 30, 2016

 

 

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

    68   

Statements of Operations

    70   

Statements of Changes in Net Assets

    72   

Statements of Cash Flows

    76   

Financial Highlights

    78   

Notes to Financial Statements

    85   

Report of Independent Registered Public Accounting Firm

    96   

Automatic Dividend Reinvestment Plan

    97   

Officers and Directors

    98   

Additional Information

    101   

 

                
2    ANNUAL REPORT    APRIL 30, 2016   


The Markets in Review

 

Dear Shareholder,

Diverging monetary policies and shifting economic outlooks across regions have been the overarching themes driving financial markets over the past couple of years. Investors spent most of 2015 anticipating the end of the Federal Reserve’s (the “Fed”) near-zero interest rate policy as U.S. growth outpaced other developed markets. The Fed ultimately hiked rates in December, whereas the European Central Bank and the Bank of Japan took additional steps to stimulate growth, even introducing negative interest rates. The U.S. dollar had strengthened considerably ahead of these developments, causing profit challenges for U.S. companies that generate revenues overseas, and pressuring emerging market currencies and commodities prices.

Global market volatility increased in the latter part of 2015 and spilled over into early 2016. Oil prices were a key factor behind the instability after collapsing in mid-2015 due to excess global supply. China, one of the world’s largest consumers of oil, was another notable source of stress for financial markets. Signs of slowing economic growth, a depreciating yuan and declining confidence in the country’s policymakers stoked investors’ worries about the potential impact of China’s weakness on the global economy. Risk assets (such as equities and high yield bonds) suffered in this environment.

After a painful start to the new year, fears of a global recession began to fade as the first quarter wore on, allowing markets to calm and risk assets to rebound. Central bank stimulus in Europe and Japan, combined with a more tempered outlook for rate hikes in the United States, helped bolster financial markets. A softening in U.S. dollar strength offered some relief to U.S. exporters and emerging market economies. Oil prices found firmer footing as global supply showed signs of leveling off.

The selloff in risk assets at the turn of the year brought valuations to more reasonable levels, creating some appealing entry points for investors in 2016. Nonetheless, slow but relatively stable growth in the United States is countered by a less optimistic global economic outlook and uncertainties around the efficacy of China’s policy response, the potential consequences of negative interest rates in Europe and Japan, and a host of geopolitical risks.

For the 12 months ended April 30, 2016, higher-quality assets such as municipal bonds, U.S. Treasuries and investment grade corporate bonds generated positive returns, while riskier assets such as non-U.S. and small cap equities broadly declined.

At BlackRock, we believe investors need to think globally, extend their scope across a broad array of asset classes and be prepared to adjust accordingly 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, 2016  
    6-month     12-month  

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

    0.43     1.21

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

    (1.90     (5.94

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

    (3.07     (9.32

Emerging market equities
(MSCI Emerging Markets Index)

    (0.13     (17.87

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

    0.14        0.15   

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

    3.76        3.74   

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

    2.82        2.72   

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

    3.52        5.16   

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

    2.38        (1.08
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, 2016      

Municipal Market Conditions

Municipal bonds generated positive performance for the period, due to falling interest rates and a favorable supply-and-demand environment. Interest rates were volatile in 2015 (bond prices rise as rates fall) leading up to a long-awaited rate hike from the U.S. Federal Reserve (the “Fed”) that ultimately came in December. However, ongoing reassurance from the Fed that rates would be increased gradually and would likely remain low overall resulted in strong demand for fixed income investments, with municipal bonds being one of the strongest-performing sectors for the 12-month period. Investors favored the relative stability of municipal bonds amid bouts of volatility resulting from uneven U.S. economic data, falling oil prices, global growth concerns, geopolitical risks, and widening central bank divergence — i.e., policy easing outside the United States while the Fed was posturing to commence policy tightening. During the 12 months ended April 30, 2016, municipal bond funds garnered net inflows of approximately $27 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 $380 billion (though lower than the $397 billion issued in the prior 12-month period). A noteworthy portion of new supply during this period was attributable to refinancing activity (roughly 58%) 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, 2016

  6 months:   3.52%

12 months:   5.16%

 

A Closer Look at Yields

 

LOGO

 

From April 30, 2015 to April 30, 2016, yields on AAA-rated 30-year municipal bonds decreased by 47 basis points (“bps”) from 3.05% to 2.58%, while 10-year rates fell by 51 bps from 2.12% to 1.61% and 5-year rates decreased 32 bps from 1.30% to 0.98% (as measured by Thomson Municipal Market Data). The municipal yield curve experienced significant flattening over the 12-month period with the spread between 2- and 30-year maturities flattening by 58 bps and the spread between 2- and 10-year maturities flattening by 62 bps.

 

During the same time period, on a relative basis, tax-exempt municipal bonds broadly outperformed U.S. Treasuries with the greatest outperformance experienced in longer-term issues. In absolute terms, the positive performance of municipal bonds was driven largely by falling interest rates as well as a supply/demand imbalance within the municipal market as investors sought income and incremental yield in an environment where opportunities became increasingly 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.

Financial Conditions of Municipal Issuers

The majority of municipal credits remain strong, despite well-publicized distress among a few issuers. Four of the five states with the largest amount of debt outstanding — California, New York, Texas and Florida — have exhibited markedly improved credit fundamentals during the slow national recovery. However, several states with the largest unfunded pension liabilities have seen their bond prices decline noticeably and remain vulnerable to additional price deterioration. On the local level, Chicago’s credit quality downgrade is an outlier relative to other cities due to its larger pension liability and inadequate funding remedies. 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 remains imperative amid uncertainty in a modestly improving economic environment.

The opinions expressed are those of BlackRock as of April 30, 2016, and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of any individual holdings or market sectors. 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.

The Standard & Poor’s Municipal Bond Index, a broad, market value-weighted index, seeks to measure the performance of the U.S. municipal bond market. All bonds in the index are exempt from U.S. federal income taxes or subject to the AMT. Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index.

 

                
4    ANNUAL REPORT    APRIL 30, 2016   


The Benefits and Risks of Leveraging     

 

The Funds may utilize leverage to seek to enhance the distribution rate on, 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 Funds (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, the Funds’ 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, a 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 a Fund with the proceeds from leverage earn income based on longer-term interest rates. In this case, a Fund’s financing cost of leverage is significantly lower than the income earned on a 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 Funds’ return on assets purchased with leverage proceeds, income to shareholders is lower than if the Funds had not used leverage. Furthermore, the value of the Funds’ 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 Funds’ obligations under their respective leverage arrangements generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Funds’ 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 NAV and market price of a Fund’s Common Shares than if the Funds were not leveraged. In addition, the Funds 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 Funds to incur losses. The use of leverage may limit a Fund’s ability to invest in certain types of securities or use certain types of hedging strategies. The Funds incur expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares. 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 Funds 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 a 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. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other asset without owning or taking physical custody of securities, commodities and/or other referenced assets 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 and involve risks, including the imperfect correlation between the value of a derivative financial instru-

ment and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these 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, if any, are discussed in detail in the Notes to Financial Statements.

 

 

                
   ANNUAL REPORT    APRIL 30, 2016    5


Fund Summary as of April 30, 2016    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.

 

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, 2016 ($14.74)1

   4.88%

Tax Equivalent Yield2

   8.62%

Current Monthly Distribution per Common Share3

   $0.06

Current Annualized Distribution per Common Share3

   $0.72

Economic Leverage as of April 30, 20164

   11%

 

  1   

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate may consist of income, net realized gains and/or a return of capital. See the Additional Information — Section 19(a) Notice for estimated sources and character of distributions. Past performance does not guarantee future results.

 

  2   

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

 

  3   

The monthly distribution per Common Share, declared on June 1, 2016, was decreased to $0.0575 per share. The yield on closing market price, current monthly distribution per Common Share and current annualized distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

  4   

Represents 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.

 

Performance      

Returns for the 12 months ended April 30, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MUA1,2

    9.30     7.90

Lipper Closed-End High Yield Municipal Debt Funds3

    9.79     7.73

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

The Fund’s premium to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV.

 

  3   

Average return.

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

 

 

A positive interest-rate backdrop helped fuel a robust gain for the U.S. municipal bond market during the annual period. U.S. Treasury yields fell (as prices rose) amid an environment of slow global growth, declining yields overseas, and an emerging consensus that the Fed would maintain a gradual approach to raising short-term interest rates. Municipals generally outperformed Treasuries, reflecting favorable supply-and-demand conditions in the market and the overall health of state and local finances outside of select areas such as Puerto Rico, Illinois and New Jersey. Longer-term municipal bonds outpaced their short-term counterparts, while lower-quality securities typically outperformed higher-quality issues.

 

 

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 minimal cash position and use of leverage provided both incremental return and income.

 

 

The Fund’s duration positioning, highlighted by concentrations in longer-dated securities with maturities of 25 years and above, also aided results. (Duration is a measure of interest-rate sensitivity.) Positions in lower-rated investment-grade bonds, as well as holdings of below investment-grade and unrated bonds, further helped performance at a time of elevated demand for higher-risk, higher-yielding investments. Sector concentrations in tobacco and health care contributed strongly given their outperformance relative to the broader municipal market. The Fund’s performance also benefited from minimal exposure to debt issued by Puerto Rico, which lagged the broader market considerably.

 

 

Despite offering generous yields in comparison to the broader market, the Fund’s more-seasoned holdings detracted from performance due to the premium amortization that occurred as the bonds approached their first call dates. (When a bond’s price trades at a premium over its face value, the difference is amortized over time. A bond premium occurs when the price of the bond has increased due to a decline in interest rates.) The Fund’s yield curve positioning also detracted somewhat given the more substantive decline in intermediate term yields in relation to the longer maturities in which the portfolio’s holdings are largely concentrated.

 

 

The Fund’s use of U.S. Treasury futures contracts to manage interest rate risk had a slightly negative impact on performance due to the overall strength in the market.

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.

 

                
6    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniAssets Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

      4/30/16      4/30/15      Change      High      Low  

Market Price

   $ 14.74       $ 14.22         3.66    $ 15.05       $ 13.22   

Net Asset Value

   $ 14.45       $ 14.12         2.34    $ 14.45       $ 13.84   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/16     4/30/15  

Health

    22     26

Transportation

    19        19   

Tobacco

    14        10   

County/City/Special District/School District

    14        16   

Education

    9        8   

Utilities

    8        9   

Corporate

    7        8   

Housing

    4        1   

State

    3        3   

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

Credit Quality Allocation1   4/30/16     4/30/15  

AA/Aa

    19     18

A

    7        7   

BBB/Baa

    24        27   

BB/Ba

    10        9   

B/B

    9        8   

CCC/Caa

    2      1   

N/R3

    31        30   

 

  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   

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, 2016 and April 30, 2015, the market value of unrated securities deemed by the investment advisor to be investment grade each represents 5% of the Fund’s total investments.

 
 
Call/Maturity Schedule4  

Calendar Year Ended December 31,

 

2016

    7

2017

    8   

2018

    8   

2019

    5   

2020

    13   

 

  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, 2016    7


Fund Summary as of April 30, 2016    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.

 

Fund Information      

Symbol on NYSE

   MEN

Initial Offering Date

   March 2, 1989

Yield on Closing Market Price as of April 30, 2016 ($12.55)1

   5.78%

Tax Equivalent Yield2

   10.21%

Current Monthly Distribution per Common Share3

   $0.0605

Current Annualized Distribution per Common Share3

   $0.7260

Economic Leverage as of April 30, 20164

   36%

 

  1   

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

 

  2   

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

 

  3   

The monthly distribution per Common Share, declared on June 1, 2016, was decreased to $0.0565 per share. The yield on closing market price, current monthly distribution per Common Share and current annualized distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

  4   

Represents VRDP Shares and 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.

 

Performance      

Returns for the 12 months ended April 30, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MEN1,2

    14.35     8.50

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    13.64     8.61

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

The Fund moved from a discount NAV to a premium during the period, which accounts for the difference between performance based on price and performance based on NAV.

 

  3   

Average return.

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

 

 

A positive interest-rate backdrop helped fuel a robust gain for the U.S. municipal bond market during the annual period. U.S. Treasury yields fell (as prices rose) amid an environment of slow global growth, declining yields overseas, and an emerging consensus that the Fed would maintain a gradual approach to raising short-term interest rates. Municipals generally outperformed Treasuries, reflecting favorable supply-and-demand conditions in the market and the overall health of state and local finances outside of select areas such as Puerto Rico, Illinois and New Jersey. Longer-term municipal bonds outpaced their short-term counterparts, while lower-quality securities typically outperformed higher-quality issues.

 

 

Given the decline in yields, the Fund’s duration exposure made a significant contribution to performance during the annual period. (Duration is a measure of interest-rate sensitivity.)

 

 

Income in the form of coupon payments made up a meaningful portion of the Fund’s total return. In addition, the Fund’s minimal cash position and use of leverage provided both incremental return and income.

 

 

The 5- to 10-year portion of the yield curve outpaced the broader market during the first half of the period, while longer-term bonds led during the second half. In this environment, the Fund benefited from its exposure to the longer end of the yield curve. The Fund’s performance was also helped by its allocations to the tax-backed local, school district and transportation sectors. In addition, the Fund was aided by its positions in bonds with wider yield spreads at a time in which investors displayed a preference for higher-yielding securities.

 

 

The Fund’s positions in general obligation securities issued by the city of Chicago and the state of Illinois, which trailed the broader market due to investor concerns about budget issues and pension funding liabilities, had a negative impact on performance. Yield spreads on these issues widened significantly, especially during the first half of the reporting period, resulting in slightly lower prices for the full year.

 

 

The Fund’s use of U.S. Treasury futures contracts to manage interest rate risk had a slightly negative impact on performance due to the overall strength in the market.

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.

 

                
8    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniEnhanced Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

      4/30/16      4/30/15      Change      High      Low  

Market Price

   $ 12.55       $ 11.67         7.54    $ 12.70       $ 10.87   

Net Asset Value

   $ 12.52       $ 12.27         2.04    $ 12.57       $ 11.92   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/16     4/30/15  

Transportation

    21     20

County/City/Special District/School District

    21        27   

Utilities

    16        16   

State

    15        15   

Health

    11        9   

Education

    10        10   

Corporate

    4        2   

Housing

    1        1   

Tobacco

    1          

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

Credit Quality Allocation1  

4/30/16

    4/30/15  

AAA/Aaa

    9     11

AA/Aa

    58        58   

A

    25        25   

BBB/Baa

    7        6   

N/R

    1 2       3  

 

  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, 2016, the market value of unrated securities deemed by the investment advisor to be investment grade represents less than 1% of the Fund’s total investments.

 

  3   

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

 
   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2016

    8

2017

    10   

2018

    10   

2019

    15   

2020

    4   

 

  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, 2016    9


Fund Summary as of April 30, 2016    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.

 

Fund Information

Symbol on NYSE

   MHD

Initial Offering Date

   May 2, 1997

Yield on Closing Market Price as of April 30, 2016 ($18.14)1

   5.69%

Tax Equivalent Yield2

   10.05%

Current Monthly Distribution per Common Share3

   $0.086

Current Annualized Distribution per Common Share3

   $1.032

Economic Leverage as of April 30, 20164

   36%

 

  1   

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

 

  2   

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

 

  3   

The monthly distribution per Common Share, declared on June 1, 2016, was decreased to $0.081 per share. The yield on closing market price, current monthly distribution per Common Share and current annualized distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

  4   

Represents VMTP Shares and 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.

 

Performance

Returns for the 12 months ended April 30, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MHD1,2

    11.91     8.65

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    13.64     8.61

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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.

 

  3   

Average return.

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

 

 

A positive interest-rate backdrop helped fuel a robust gain for the U.S. municipal bond market during the annual period. U.S. Treasury yields fell (as prices rose) amid an environment of slow global growth, declining yields overseas, and an emerging consensus that the Fed would maintain a gradual approach to raising short-term interest rates. Municipals generally outperformed Treasuries, reflecting favorable supply-and-demand conditions in the market and the overall health of state and local finances outside of select areas such as Puerto Rico, Illinois and New Jersey. Longer-term municipal bonds outpaced their short-term counterparts, while lower-quality securities typically outperformed higher-quality issues.

 

 

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 minimal cash position and use of leverage provided both incremental return and income.

 

 

The Fund’s duration positioning, highlighted by concentrations in longer-dated securities with maturities of 25 years and above, also aided results. (Duration is a measure of interest-rate sensitivity.) Positions in lower-rated investment-grade bonds, as well as holdings of below investment-grade and unrated bonds, further helped performance at a time of elevated demand for higher-risk, higher-yielding investments. Sector concentrations in transportation, health care and utilities also contributed strongly.

 

 

Despite offering generous yields in comparison to the broader market, the Fund’s more-seasoned holdings detracted from performance due to the premium amortization that occurred as the bonds approached their first call dates. (When a bond’s price trades at a premium over its face value, the difference is amortized over time. A bond premium occurs when the price of the bond has increased due to a decline in interest rates). The Fund’s yield curve positioning also detracted somewhat given the more substantive decline in intermediate term yields in relation to the longer maturities in which the portfolio’s holdings are largely concentrated.

 

 

The Fund’s use of U.S. Treasury futures contracts to manage interest rate risk had a slightly negative impact on performance due to the overall strength in the market.

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.

 

                
10    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniHoldings Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

      4/30/16      4/30/15      Change      High      Low  

Market Price

   $ 18.14       $ 17.25         5.16    $ 18.68       $ 15.75   

Net Asset Value

   $ 17.96 1      $ 17.59         2.10    $ 18.00       $ 17.08   

 

  1   

The net asset value does not reflect adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and therefore differs from amounts reported in the Statements of Assets and Liabilities and the Financial Highlights.

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/16     4/30/15  

Transportation

    24     25

Health

    19        18   

Utilities

    12        11   

County/City/Special District/School District

    12        12   

State

    12        11   

Education

    10        10   

Corporate

    6        8   

Tobacco

    5        4   

Housing

           1   

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

Credit Quality Allocation1   4/30/16    

4/30/15

 

AAA/Aaa

    5     8

AA/Aa

    48        44   

A

    22        26   

BBB/Baa

    13        11   

BB/Ba

    4        4   

B

    1        2   

N/R2

    7        5   

 

  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, 2016 and April 30, 2015, the market value of unrated securities deemed by the investment advisor to be investment grade represents 2% and 1%, respectively, of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    5

2017

    5   

2018

    5   

2019

    25   

2020

    12   

 

  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, 2016    11


Fund Summary as of April 30, 2016    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.

 

Fund Information      

Symbol on NYSE

   MUH

Initial Offering Date

   February 27, 1998

Yield on Closing Market Price as of April 30, 2016 ($16.23)1

   5.73%

Tax Equivalent Yield2

   10.12%

Current Monthly Distribution per Common Share3

   $0.0775

Current Annualized Distribution per Common Share3

   $0.9300

Economic Leverage as of April 30, 20164

   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 monthly distribution per Common Share, declared on June 1, 2016, was decreased to $0.0745 per share. The yield on closing market price, current monthly distribution per Common Share and current annualized distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

  4   

Represents VMTP Shares and 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.

 

Performance      

Returns for the 12 months ended April 30, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MUH1,2

    12.90     8.25

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    13.64     8.61

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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.

 

  3   

Average return.

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

 

 

A positive interest-rate backdrop helped fuel a robust gain for the U.S. municipal bond market during the annual period. U.S. Treasury yields fell (as prices rose) amid an environment of slow global growth, declining yields overseas, and an emerging consensus that the Fed would maintain a gradual approach to raising short-term interest rates. Municipals generally outperformed Treasuries, reflecting favorable supply-and-demand conditions in the market and the overall health of state and local finances outside of select areas such as Puerto Rico, Illinois and New Jersey. Longer-term municipal bonds outpaced their short-term counterparts, while lower-quality securities typically outperformed higher-quality issues.

 

 

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 minimal cash position and use of leverage provided both incremental return and income.

 

 

The Fund’s duration positioning, highlighted by concentrations in longer-dated securities with maturities of 25 years and above, also aided results. (Duration is a measure of interest-rate sensitivity). Positions in lower-rated investment-grade bonds, as well as holdings of below investment-grade and unrated bonds, further helped performance at a time of elevated demand for higher-risk, higher-yielding investments. Sector concentrations in transportation, health care and state tax-backed general obligation bonds also contributed strongly.

 

 

Despite offering generous yields in comparison to the broader market, the Fund’s more-seasoned holdings detracted from performance due to the premium amortization that occurred as the bonds approached their first call dates. (When a bond’s price trades at a premium over its face value, the difference is amortized over time. A bond premium occurs when the price of the bond has increased due to a decline in interest rates.) The Fund’s yield curve positioning also detracted somewhat given the more substantive decline in intermediate term yields in relation to the longer maturities in which the portfolio’s holdings are largely concentrated.

 

 

The Fund’s use of U.S. Treasury futures contracts to manage interest rate risk had a slightly negative impact on performance due to the overall strength in the market.

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.

 

                
12    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniHoldings Fund II, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                         

 

      4/30/16      4/30/15      Change      High      Low  

Market Price

   $ 16.23       $ 15.28         6.22    $ 16.56       $ 14.10   

Net Asset Value

   $ 16.51       $ 16.21         1.85    $ 16.55       $ 15.76   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/16     4/30/15  

Transportation

    22     23

Health

    19        18   

State

    14        14   

Utilities

    12        11   

County/City/Special District/School District

    12        13   

Education

    9        9   

Corporate

    6        7   

Tobacco

    5        4   

Housing

    1        1   

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

Credit Quality Allocation1   4/30/16     4/30/15  

AAA/Aaa

    4     7

AA/Aa

    50        47   

A

    23        23   

BBB/Baa

    11        11   

BB/Ba

    4        4   

B

    1        2   

N/R2

    7        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, 2016 and April 30, 2015, the market value of unrated securities deemed by the investment advisor to be investment grade represents 3% and 5%, respectively, of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    7

2017

    5   

2018

    5   

2019

    27   

2020

    11   

 

  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, 2016    13


Fund Summary as of April 30, 2016    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.

 

Fund Information

Symbol on NYSE

   MUS

Initial Offering Date

   May 1, 1998

Yield on Closing Market Price as of April 30, 2016 ($14.31)1

   5.66%

Tax Equivalent Yield2

   10.00%

Current Monthly Distribution per Common Share3

   $0.0675

Current Annualized Distribution per Common Share3

   $0.8100

Economic Leverage as of April 30, 20164

   37%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the 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.

 

Performance      

 

Returns for the 12 months ended April 30, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MUS1,2

    14.09     8.24

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    13.64     8.61

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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.

 

  3   

Average return.

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

 

 

A positive interest-rate backdrop helped fuel a robust gain for the U.S. municipal bond market during the annual period. U.S. Treasury yields fell (as prices rose) amid an environment of slow global growth, declining yields overseas, and an emerging consensus that the Fed would maintain a gradual approach to raising short-term interest rates. Municipals generally outperformed Treasuries, reflecting favorable supply-and-demand conditions in the market and the overall health of state and local finances outside of select areas such as Puerto Rico, Illinois and New Jersey. Longer-term municipal bonds outpaced their short-term counterparts, while lower-quality securities typically outperformed higher-quality issues.

 

 

On a sector basis, the largest contributions to Fund performance came from transportation and tax-backed local issues. The Fund’s duration positioning, highlighted by concentrations in longer-dated securities with maturities of 25 years and above, also aided results. (Duration is a measure of interest-rate sensitivity.) Exposure to lower-quality bonds on the investment-grade spectrum further benefited results at a time of elevated investor demand for higher-risk, higher-yielding assets. Yield curve positioning was an additional contributor, as the Fund was positioned to capitalize on the outperformance of intermediate- and longer-term bonds versus those with maturities of five years and below. Positions in zero-coupon bonds, which delivered outstanding returns compared to current-coupon issues, also contributed positively.

 

 

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 minimal cash position and use of leverage provided both incremental return and income.

 

 

Despite offering generous yields in comparison to the broader market, the Fund’s more-seasoned holdings detracted from performance due to the premium amortization that occurred as the bonds approached their first call dates. (When a bond’s price trades at a premium over its face value, the difference is amortized over time. A bond premium occurs when the price of the bond has increased due to a decline in interest rates.)

 

 

The Fund’s use of U.S. Treasury futures contracts to manage interest rate risk had a slightly negative impact on performance due to the overall strength in the market.

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.

 

                
14    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniHoldings Quality Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

      4/30/16     

4/30/15

     Change      High      Low  

Market Price

   $ 14.31       $ 13.32         7.43    $ 14.71       $ 12.58   

Net Asset Value

   $ 14.85 1      $ 14.57         1.92    $ 14.90       $ 14.21   

 

  1   

The net asset value does not reflect adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and therefore differs from amounts reported in the Statements of Assets and Liabilities and the Financial Highlights.

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/16     4/30/15  

Transportation

    40     34

County/City/Special District/School District

    25        29   

Utilities

    14        13   

Health

    10        9   

State

    5        8   

Education

    3        3   

Housing

    1        2   

Tobacco

    1        1   

Corporate

    1        1   

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

Credit Quality Allocation1   4/30/16     4/30/15  

AAA/Aaa

    6     5

AA/Aa

    56        67   

A

    32        25   

BBB/Baa

    3        3   

N/R

    3          

 

  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.

 
   
Call/Maturity Schedule2       

Calendar Year Ended December 31,

 

2016

    1

2017

      

2018

    26   

2019

    13   

2020

    4   

 

  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, 2016    15


Fund Summary as of April 30, 2016    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.

 

Fund Information      

Symbol on NYSE

   MUI

Initial Offering Date

   August 1, 2003

Yield on Closing Market Price as of April 30, 2016 ($15.19)1

   4.78%

Tax Equivalent Yield2

   8.45%

Current Monthly Distribution per Common Share3

   $0.0605

Current Annualized Distribution per Common Share3

   $0.7260

Economic Leverage as of April 30, 20164

   36%

 

  1   

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

 

  2   

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

 

  3   

The monthly distribution per Common Share, declared on June 1, 2016, was decreased to $0.0555 per share. The yield on closing market price, current monthly distribution per Common Share and current annualized distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

  4   

Represents VMTP Shares and 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.

 

Performance      

Returns for the 12 months ended April 30, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MUI1,2

    12.27     9.04

Lipper Intermediate Municipal Debt Funds3

    9.22     6.57

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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.

 

  3   

Average return.

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

 

 

A positive interest-rate backdrop helped fuel a robust gain for the U.S. municipal bond market during the annual period. U.S. Treasury yields fell (as prices rose) amid an environment of slow global growth, declining yields overseas, and an emerging consensus that the Fed would maintain a gradual approach to raising short-term interest rates. Municipals generally outperformed Treasuries, reflecting favorable supply-and-demand conditions in the market and the overall health of state and local finances outside of select areas such as Puerto Rico, Illinois and New Jersey. Longer-term municipal bonds outpaced their short-term counterparts, while lower-quality securities typically outperformed higher-quality issues.

 

 

With this as the backdrop, the Fund’s holdings in longer-duration and longer-dated bonds generally provided the best 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 were positive contributors to performance. Consistent with the broader market environment, the strongest returns came from the Fund’s holdings in higher-yielding, lower-rated investment-grade credits. With that said, positions in high-quality, pre-refunded bonds also contributed to performance.

 

 

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 minimal cash position and use of leverage provided both incremental return and income.

 

 

The Fund’s use of U.S. Treasury futures contracts to manage interest rate risk had a slightly negative impact on performance due to the overall strength in the market.

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.

 

                
16    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock Muni Intermediate Duration Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

        4/30/16        4/30/15        Change      High        Low  

Market Price

     $ 15.19         $ 14.47           4.98    $ 15.19         $ 13.48   

Net Asset Value

     $ 16.17 1        $ 15.86           1.95    $ 16.21         $ 15.51   

 

  1   

The net asset value does not reflect adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and therefore differs from amounts reported in the Statements of Assets and Liabilities and the Financial Highlights.

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/16     4/30/15  

Transportation

    24     23

County/City/Special District/School District

    18        19   

State

    14        16   

Education

    13        9   

Health

    11        9   

Utilities

    11        10   

Corporate

    5        10   

Housing

    2        2   

Tobacco

    2        2   

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

Credit Quality Allocation1   4/30/16     4/30/15  

AAA/Aaa

    3     4

AA/Aa

    47        50   

A

    40        35   

BBB/Baa

    5        7   

BB/Ba

    1        1   

B

    1        1   

CCC/Caa

           2 

N/R3

    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.

 

  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, 2016 and April 30, 2015, 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,

 

2016

    5

2017

    5   

2018

    5   

2019

    8   

2020

    8   

 

  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, 2016    17


Fund Summary as of April 30, 2016    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.

 

Fund Information

Symbol on NYSE

   MVT

Initial Offering Date

   March 29, 1993

Yield on Closing Market Price as of April 30, 2016 ($17.38)1

   5.73%

Tax Equivalent Yield2

   10.12%

Current Monthly Distribution per Common Share3

   $0.083

Current Annualized Distribution per Common Share3

   $0.996

Economic Leverage as of April 30, 20164

   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 monthly distribution per Common Share, declared on June 1, 2016, was decreased to $0.079 per share. The yield on closing market price, current monthly distribution per Common Share and current annualized distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

  4   

Represents VMTP Shares and 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.

 

Performance

Returns for the 12 months ended April 30, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MVT1,2

    13.88     7.61

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    13.64     8.61

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

The Fund’s premium to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV.

 

  3   

Average return.

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

 

 

A positive interest-rate backdrop helped fuel a robust gain for the U.S. municipal bond market during the annual period. U.S. Treasury yields fell (as prices rose) amid an environment of slow global growth, declining yields overseas, and an emerging consensus that the Fed would maintain a gradual approach to raising short-term interest rates. Municipals generally outperformed Treasuries, reflecting favorable supply-and-demand conditions in the market and the overall health of state and local finances outside of select areas such as Puerto Rico, Illinois and New Jersey. Longer-term municipal bonds outpaced their short-term counterparts, while lower-quality securities typically outperformed higher-quality issues.

 

 

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 minimal cash position and use of leverage provided both incremental return and income.

 

 

The Fund’s duration positioning, highlighted by concentrations in longer-dated securities with maturities of 25 years and above, also aided results. (Duration is a measure of interest-rate sensitivity.) Positions in lower-rated investment-grade bonds, as well as holdings of below investment-grade and unrated bonds, further helped performance at a time of elevated demand for higher-risk, higher-yielding investments. Sector concentrations in transportation, utilities and health care also contributed strongly.

 

 

Despite offering generous yields in comparison to the broader market, the Fund’s more-seasoned holdings detracted from performance due to the premium amortization that occurred as the bonds approached their first call dates. (When a bond’s price trades at a premium over its face value, the difference is amortized over time. A bond premium occurs when the price of the bond has increased due to a decline in interest rates.) The Fund’s yield curve positioning also detracted somewhat given the more substantive decline in intermediate term yields in relation to the longer maturities in which the portfolio’s holdings are largely concentrated.

 

 

The Fund’s use of U.S. Treasury futures contracts to manage interest rate risk had a slightly negative impact on performance due to the overall strength in the market.

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.

 

                
18    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniVest Fund II, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

      4/30/16      4/30/15      Change      High      Low  

Market Price

   $ 17.38       $ 16.26         6.89    $ 17.78       $ 14.53   

Net Asset Value

   $ 16.17       $ 16.01         1.00    $ 16.21       $ 15.56   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   4/30/16     4/30/15  

Transportation

    24     24

Health

    18        18   

Utilities

    13        13   

State

    13        13   

County/City/Special District/School District

    11        12   

Education

    7        6   

Corporate

    7        8   

Tobacco

    5        4   

Housing

    2        2   

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

Credit Quality Allocation1   4/30/16     4/30/15  

AAA/Aaa

    6     8

AA/Aa

    49        49   

A

    21        21   

BBB/Baa

    10        11   

BB/Ba

    4        3   

B

    2        2   

N/R2

    8        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, 2016 and April 30, 2015 the market value of unrated securities deemed by the investment advisor to be investment grade represents less than 3% and 1%, respectively, of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    6

2017

    8   

2018

    11   

2019

    23   

2020

    12   

 

  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, 2016    19


Schedule of Investments April 30, 2016

  

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      $ 900,370   

5.25%, 1/01/19

     2,000        2,012,000   

5.50%, 1/01/21

     1,215        1,222,290   

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

     3,745        4,393,409   

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

     2,165        2,582,109   
    

 

 

 
               11,110,178   

Alaska — 0.5%

  

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

    

4.63%, 6/01/23

     1,040        1,045,824   

5.00%, 6/01/32

     1,500        1,418,985   
    

 

 

 
               2,464,809   

Arizona — 1.5%

  

City of Phoenix Arizona IDA, RB:

    

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

     500        553,120   

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

     425        471,350   

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

     570        671,072   

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

     1,000        1,190,790   

City of Phoenix Arizona IDA, Refunding RB (a):

    

Basis Schools, Inc. Projects, 5.00%, 7/01/35

     305        323,160   

Basis Schools, Inc. Projects, 5.00%, 7/01/45

     855        889,397   

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

     260        275,683   

Basis Schools, Inc. Projects, Series A, 5.00%, 7/01/46

     290        301,600   

Legacy Traditional School Projects, 5.00%, 7/01/35

     320        336,070   

Legacy Traditional School Projects, 5.00%, 7/01/45

     255        264,285   

Salt Verde Financial Corp., RB, Senior, 5.00%, 12/01/37

     1,650        2,057,220   

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

     500        586,505   
    

 

 

 
               7,920,252   

California — 7.8%

  

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

    

5.50%, 8/01/34

     315        332,936   

6.00%, 8/01/44

     665        706,237   

6.13%, 8/01/49

     580        616,592   
Municipal Bonds   

Par  

(000)

    Value  

California (continued)

  

California School Finance Authority, RB:

    

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

   $ 1,570      $ 1,799,660   

Value Schools, 6.65%, 7/01/33

     435        503,091   

Value Schools, 6.90%, 7/01/43

     975        1,135,709   

California Statewide Communities Development Authority, RB, Loma Linda University Medical Center, Series A (a)(c):

    

5.00%, 12/01/41

     690        750,823   

5.00%, 12/01/46

     920        1,000,298   

5.25%, 12/01/56

     2,760        3,000,368   

California Statewide Communities Development Authority, Refunding RB, American Baptist Homes of the West, 6.25%, 10/01/39

     2,175        2,495,573   

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

     1,650        1,666,500   

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

    

6.50%, 5/01/36

     900        1,091,529   

6.50%, 5/01/42

     2,220        2,686,555   

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

     375        468,851   

County of California Tobacco Securitization Agency, RB, Asset-Backed, Los Angeles County Securitization Corp.:

    

5.60%, 6/01/36

     1,285        1,301,448   

5.70%, 6/01/46

     3,600        3,646,116   

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

     2,885        3,362,237   

Golden State Tobacco Securitization Corp., Refunding RB, Series A-1, Asset-Backed:

    

Bonds, 5.13%, 6/01/47

     3,850        3,753,981   

Senior, 5.75%, 6/01/47

     3,980        3,989,950   

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1:

    

4.75%, 6/01/25

     1,490        1,490,521   

5.00%, 6/01/37

     4,580        4,579,588   
    

 

 

 
               40,378,563   

Colorado — 2.1%

    

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

     500        508,410   

Colorado Health Facilities Authority, Refunding RB, Series A (a):

    

6.13%, 12/01/45

     335        347,639   

6.25%, 12/01/50

     1,115        1,154,750   

Copperleaf Metropolitan District No. 2, GO, Refunding, 5.75%, 12/01/45

     720        760,090   
 

 

Portfolio Abbreviations

 

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

 

See Notes to Financial Statements.

 

                
20    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Colorado (continued)

    

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

   $ 5,985      $ 6,468,887   

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

     1,500        1,739,130   
    

 

 

 
               10,978,906   

Connecticut — 0.9%

    

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

     1,430        1,433,360   

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

     1,420        1,455,557   

Mohegan Tribe of Indians of Connecticut, Refunding RB, Public Improvement, Priority Distribution, Series C, 6.25%, 2/01/30 (a)

     1,835        1,869,241   
    

 

 

 
               4,758,158   

Delaware — 0.7%

    

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

     1,000        1,093,580   

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

     2,280        2,394,524   
    

 

 

 
               3,488,104   

District of Columbia — 0.0%

    

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

     55        53,235   

Florida — 9.4%

    

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

     1,535        1,609,002   

Capital Trust Agency, Inc., RB, Silver Creek St. Augustine Project, Series A:

    

1st Mortgage, 8.25%, 1/01/44 (d)

     515        442,550   

1st Mortgage, 8.25%, 1/01/49 (d)

     1,105        949,714   

5.75%, 1/01/50

     655        654,987   

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

     2,510        2,991,192   

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

    

5.00%, 6/01/35

     1,460        1,577,223   

5.00%, 6/01/40

     2,000        2,138,500   

5.00%, 6/01/48

     2,815        2,987,954   

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

     3,500        3,937,150   

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

    

5.75%, 6/15/29

     690        715,309   

6.00%, 6/15/34

     835        869,218   

6.13%, 6/15/44

     3,220        3,322,557   

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

     1,940        2,033,527   

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

     410        411,456   

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

     535        566,635   

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

     1,485        1,834,718   
Municipal Bonds   

Par  

(000)

    Value  

Florida (continued)

    

Lakewood Ranch Stewardship District, Special Assessment Bonds, Village of Lakewood Ranch Sector Projects:

    

4.00%, 5/01/21

   $ 200      $ 203,910   

4.25%, 5/01/26

     160        162,347   

5.00%, 5/01/36

     460        472,024   

5.13%, 5/01/46

     915        943,548   

Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/21 (b)

     4,550        5,961,455   

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

    

Series A, 5.00%, 5/01/37

     845        899,367   

Series B, 5.00%, 5/01/37

     495        526,848   

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

     500        609,170   

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

     4,358        1,743,158   

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

     575        575,874   

Tolomato Community Development District, Refunding, Special Assessment Bonds:

    

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

     250        200,448   

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

     585        350,602   

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

     305        135,405   

Series 2, 0.00%, 5/01/40 (f)

     805        421,152   

Series A1, 6.65%, 5/01/40

     910        920,420   

Tolomato Community Development District:

    

Series 1, 0.00%, 5/01/40 (f)

     1,305        806,973   

Series 1, 6.65%, 5/01/40 (d)(e)

     50        51,070   

Series 3, 6.61%, 5/01/40 (d)(e)

     875        9   

Series 3, 6.65%, 5/01/40 (d)(e)

     710        7   

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

    

6.75%, 5/01/31

     1,600        1,942,432   

7.00%, 5/01/41

     2,615        3,188,417   

5.50%, 5/01/42

     1,220        1,402,378   
    

 

 

 
               48,558,706   

Georgia — 1.8%

    

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

     580        581,375   

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

     2,615        2,719,234   

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

     3,365        4,149,011   

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

    

6.38%, 11/15/29

     700        805,315   

6.63%, 11/15/39

     880        1,011,903   

Municipal Electric Authority of Georgia, RB, Plant Vogtle Units 3 & 4 Project, Series A, 5.00%, 7/01/60

     265        300,245   
    

 

 

 
               9,567,083   

Guam — 0.4%

    

Territory of Guam, GO, Series A:

    

6.00%, 11/15/19

     505        559,247   

7.00%, 11/15/19 (b)

     1,115        1,353,164   
    

 

 

 
               1,912,411   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    21


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois — 4.7%

  

City of Chicago Illinois, GO, Series A, 5.50%, 1/01/39

   $ 3,600      $ 3,581,244   

Illinois Finance Authority, Refunding RB:

    

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

     1,214        12   

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

     3,129        31   

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

     4,000        4,285,760   

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

     2,395        2,546,244   

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

     1,085        1,087,300   

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

     365        391,101   

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

     860        915,806   

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

     4,170        4,619,276   

Metropolitan Pier & Exposition Authority, RB, McCormick Place Expansion Project, Series A, 5.50%, 6/15/53

     2,370        2,694,145   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     180        212,231   

6.00%, 6/01/28

     710        848,457   

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

     1,730        1,739,844   

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

     1,260        1,260,819   
    

 

 

 
               24,182,270   

Indiana — 1.6%

  

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

    

6.75%, 1/01/34

     825        1,011,467   

7.00%, 1/01/44

     2,000        2,467,300   

City of Vincennes Indiana, Refunding RB, Southwest Indiana Regional Youth Village Project, 6.25%, 1/01/29 (a)

     2,510        2,512,083   

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

    

5.00%, 7/01/44

     470        510,317   

5.00%, 7/01/48

     1,555        1,681,250   
    

 

 

 
               8,182,417   

Iowa — 2.7%

  

Iowa Finance Authority, Refunding RB:

    

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

     2,090        2,175,167   

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

     2,190        2,357,185   

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

     1,355        1,385,420   

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

     2,115        2,182,659   

Iowa Tobacco Settlement Authority, Refunding RB:

    

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

     1,200        1,202,568   

Series C, 5.38%, 6/01/38

     4,900        4,877,803   
    

 

 

 
               14,180,802   

Kentucky — 0.9%

  

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

     4,000        4,599,120   
Municipal Bonds   

Par  

(000)

    Value  

Louisiana — 2.9%

    

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

   $ 1,055      $ 1,108,182   

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

     5,000        5,417,500   

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

     1,855        2,126,869   

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

     5,570        6,274,494   
    

 

 

 
               14,927,045   

Maine — 0.7%

  

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

     2,955        3,359,155   

Maryland — 2.0%

    

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

     2,840        3,227,007   

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

     3,615        3,956,437   

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

     3,085        2,974,279   
    

 

 

 
               10,157,723   

Massachusetts — 1.7%

  

Massachusetts Development Finance Agency, RB:

    

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

     1,905        2,148,173   

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

     1,295        1,345,376   

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

     1,025        1,170,345   

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

     2,020        2,200,083   

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

     1,490        1,758,170   
    

 

 

 
               8,622,147   

Michigan — 0.9%

  

City of Detroit Michigan, GO, Financial Recovery (f)(h):

    

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

     315        121,213   

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

     100        44,446   

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

     2,785        3,099,037   

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

     415        443,797   

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

     920        1,005,578   
    

 

 

 
               4,714,071   

Minnesota — 0.3%

  

City of Rochester Minnesota, RB, Health Care And Facility Homestead Rochester Incorporate, 5.00%, 12/01/49

     1,335        1,386,491   

Missouri — 1.0%

    

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

     2,315        2,620,788   
 

 

See Notes to Financial Statements.

 

                
22    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Missouri (continued)

    

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

   $ 2,235      $ 2,334,078   
    

 

 

 
               4,954,866   

New Jersey — 4.6%

  

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     1,065        1,103,415   

5.25%, 11/01/44

     770        793,423   

County of Essex New Jersey Improvement Authority, RB, AMT, 5.25%, 7/01/45 (a)

     1,150        1,173,242   

New Jersey EDA, RB:

    

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

     2,250        2,717,865   

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

     2,155        2,426,250   

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

     1,530        1,764,029   

New Jersey EDA, Refunding RB, Greater Brunswick Charter School, Inc. Project, Series A, 6.00%, 8/01/49 (a)

     500        522,950   

New Jersey Health Care Facilities Financing Authority, Refunding RB:

    

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

     2,650        3,080,069   

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

     4,090        4,488,611   

New Jersey Transportation Trust Fund Authority, RB, Transportation Program, Series AA, 5.25%, 6/15/41

     1,140        1,242,554   

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

    

5.00%, 6/01/29

     3,735        3,733,767   

5.00%, 6/01/41

     1,070        1,011,086   
    

 

 

 
               24,057,261   

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        3,232,013   

New York — 7.6%

    

City of New York New York Industrial Development Agency, ARB, American Airlines, Inc., JFK International Airport Project, AMT, 8.00%, 8/01/28 (h)

     1,765        1,815,232   

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

    

6.50%, 7/01/24

     610        611,348   

6.63%, 7/01/29

     1,100        1,102,541   

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

     5,400        5,688,954   

County of Dutchess New York IDA, Refunding RB, Bard College Civic Facility, Series A-1, 5.00%, 8/01/46

     3,315        3,165,626   

County of Nassau Tobacco New York Settlement Corp., Refunding RB, Asset-Backed, Series A-3, 5.13%, 6/01/46

     1,170        1,110,365   

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

     1,354        1,537,894   

Erie Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed, Series A, 5.00%, 6/01/45

     2,890        2,876,706   

Metropolitan Transportation Authority, RB, Series C:

    

6.50%, 11/15/18 (b)

     1,490        1,705,931   

6.50%, 11/15/28

     510        583,766   
Municipal Bonds   

Par  

(000)

    Value  

New York (continued)

    

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      $ 1,429,156   

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

     4,705        5,095,703   

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

     455        499,449   

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

     1,080        1,189,847   

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

     1,565        1,924,919   

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

     1,335        1,354,945   

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        1,574,514   

TSASC, Inc., Refunding RB, Series 1, 5.00%, 6/01/34

     1,135        1,134,909   

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

     4,800        4,800,048   
    

 

 

 
               39,201,853   

North Carolina — 1.5%

    

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

    

Deerfield Project, 6.13%, 11/01/38

     4,565        4,985,436   

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

     1,000        1,147,540   

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

     1,420        1,626,511   
    

 

 

 
               7,759,487   

Ohio — 2.6%

    

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

    

Senior Turbo Term, 5.88%, 6/01/47

     4,340        4,199,080   

5.75%, 6/01/34

     6,745        6,432,032   

6.00%, 6/01/42

     3,040        2,994,491   
    

 

 

 
               13,625,603   

Oklahoma — 0.3%

    

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

     1,305        1,389,186   

Oregon — 0.8%

    

Hospital Facilities Authority of Multnomah County Oregon, Refunding RB, Mirabella at South Waterfront, 5.50%, 10/01/49

     1,765        1,939,029   

Polk County Hospital Facility Authority, RB, Dallas Retirement Village Project, Series A:

    

5.13%, 7/01/35

     620        638,476   

5.38%, 7/01/45

     1,435        1,487,995   
    

 

 

 
               4,065,500   

Pennsylvania — 4.2%

    

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

     4,140        4,422,845   

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

     2,000        2,204,800   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    23


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Pennsylvania (continued)

    

County of Cumberland Pennsylvania Municipal Authority, Refunding RB, Diakon Lutheran:

    

6.38%, 1/01/19 (b)

   $ 5,550      $ 6,345,648   

6.38%, 1/01/39

     615        697,742   

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

     1,160        1,194,835   

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

     1,800        1,891,350   

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

     2,110        2,320,325   

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

     2,710        2,845,066   
    

 

 

 
               21,922,611   

Puerto Rico — 0.3%

    

Children’s Trust Fund, Refunding RB, Series A, 0.00%, 5/15/50 (g)

     3,450        308,913   

Commonwealth of Puerto Rico Aqueduct & Sewer Authority, RB, Series A, 6.00%, 7/01/44

     915        606,288   

Commonwealth of Puerto Rico Aqueduct & Sewer Authority, Refunding RB, Senior Lien, Series A:

    

6.13%, 7/01/24

     365        248,886   

6.00%, 7/01/38

     730        491,152   
    

 

 

 
               1,655,239   

Rhode Island — 2.1%

    

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

     4,190        1,040,586   

Tobacco Settlement Financing Corp., Refunding RB:

    

Series A, 5.00%, 6/01/40

     980        1,075,168   

Series B, 4.50%, 6/01/45

     5,055        5,241,934   

Series B, 5.00%, 6/01/50

     3,330        3,532,031   
    

 

 

 
               10,889,719   

Texas — 11.1%

    

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

     5,080        114,300   

Central Texas Regional Mobility Authority, Refunding RB:

    

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

     1,000        659,370   

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

     2,000        1,263,060   

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

     1,170        708,751   

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

     3,690        1,966,069   

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

     4,000        2,024,000   

Senior Lien, 6.25%, 1/01/46

     2,210        2,638,873   

City of Houston Texas Airport System, Refunding ARB, AMT:

    

Special Facilities, Continental Airlines, Inc., Series A, 6.63%, 7/15/38

     2,890        3,352,429   

United Airlines, Inc. Terminal E Project, 5.00%, 7/01/29

     910        1,013,085   

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

    

5.50%, 8/15/31

     955        1,062,132   

5.75%, 8/15/41

     720        807,984   

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

     5,040        5,724,986   

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        561,901   
Municipal Bonds   

Par  

(000)

    Value  

Texas (continued)

    

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

   $ 2,090      $ 2,376,664   

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

    

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

     1,745        1,960,857   

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

     4,200        4,296,096   

County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Trinity Terrace Project, 5.00%, 10/01/49

     865        944,407   

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

     3,080        3,478,552   

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

     810        880,065   

Mission Economic Development Corp., RB, AMT, Senior Lien, Series B, 5.75%, 10/01/31 (a)

     1,325        1,377,960   

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

    

5.88%, 4/01/36

     1,210        1,386,067   

6.00%, 4/01/45

     1,845        2,122,654   

Newark Higher Education Finance Corp., RB, Series A (a):

    

5.50%, 8/15/35

     290        299,779   

5.75%, 8/15/45

     580        595,909   

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

     1,600        1,707,072   

Red River Health Facilities Development Corp., First MRB Project:

    

Eden Home, Inc., 7.25%, 12/15/42 (d)

     2,895        2,546,413   

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

     900        933,183   

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

    

Blueridge Transportation Group, LLC SH 288 Toll Lanes Project, AMT, 5.00%, 12/31/55 (c)

     2,535        2,752,934   

LBJ Infrastructure Group LLC, 7.00%, 6/30/40

     3,775        4,524,640   

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

     3,000        3,535,830   
    

 

 

 
               57,616,022   

Utah — 0.6%

  

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

     2,950        3,115,967   

Vermont — 0.2%

    

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

     770        812,496   

Virginia — 3.1%

    

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

     2,500        2,588,950   

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

    

5.00%, 3/01/35

     510        510,689   

5.00%, 3/01/45

     520        517,603   

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

    

6.63%, 3/01/26

     1,485        1,714,135   

6.88%, 3/01/36

     1,300        1,496,534   

Tobacco Settlement Financing Corp., Refunding RB, Senior Series B-1, 5.00%, 6/01/47

     2,180        1,904,666   
 

 

See Notes to Financial Statements.

 

                
24    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Virginia (continued)

    

Virginia College Building Authority, RB, Marymount University Project, Series B, 5.00%, 7/01/45 (a)

   $ 535      $ 552,858   

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

    

5.00%, 7/01/35

     130        137,032   

5.00%, 7/01/45

     375        387,518   

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

     5,410        6,403,979   
    

 

 

 
               16,213,964   

Washington — 0.8%

  

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

     1,455        1,601,984   

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

     1,495        1,582,891   

Washington State Housing Finance Commission, Refunding RB (a):

    

5.75%, 1/01/35

     315        322,308   

6.00%, 1/01/45

     850        869,508   
    

 

 

 
               4,376,691   

Wisconsin — 1.1%

  

Public Finance Authority, RB, Series A:

    

4.75%, 12/01/35

     775        807,713   

5.00%, 12/01/45

     1,875        1,969,650   

5.15%, 12/01/50

     1,170        1,229,214   

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

    

7.25%, 9/15/19

     425        506,260   

7.63%, 9/15/19

     855        1,039,765   
    

 

 

 
               5,552,602   
Total Municipal Bonds — 88.1%        455,942,726   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
        

Colorado — 2.4%

    

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

     11,468        12,710,253   

Florida — 3.2%

    

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

     15,000        16,361,100   
Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
  

Par  

(000)

    Value  

Illinois — 2.8%

    

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

   $ 7,180      $ 8,544,200   

State of Illinois Toll Highway Authority, RB, Senior Priority, Series A, 5.00%, 1/01/40

     5,056        5,905,351   
    

 

 

 
               14,449,551   

New York — 13.7%

  

City of New York New York Housing Development Corp., RB, M/F Housing, Series D-1, Class B, 4.25%, 11/01/45

     8,996        9,392,640   

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        16,694,649   

Series HH, 5.00%, 6/15/31 (j)

     8,610        10,139,739   

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

     4,520        5,313,811   

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

     18,104        21,507,569   

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

     6,600        7,877,856   
    

 

 

 
               70,926,264   

Washington — 1.8%

  

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

     7,966        9,185,058   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 23.9%
        123,632,226   
Total Long-Term Investments
(Cost — $537,574,582) — 112.0%
        579,574,952   
    
                  
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, 0.19% (k)(l)

     4,296,151        4,296,151   
Total Short-Term Securities
(Cost — $4,296,151) — 0.8%
        4,296,151   
Total Investments (Cost — $541,870,733) — 112.8%        583,871,103   
Liabilities in Excess of Other Assets — (0.0)%        (48,965

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (12.8)%

   

    (66,124,715
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 517,697,423   
    

 

 

 
 
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)   When-issued security.

 

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

 

(e)   Non-income producing security.

 

(f)   Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end.

 

(g)   Zero-coupon bond.

 

(h)   Variable rate security. Rate as of period end.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    25


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

 

(i)   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 4 of the Notes to Financial Statements for details.

 

(j)   All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreement, which expire between February 15, 2019 to November 15, 2019, is $11,849,809. See Note 4 of the Notes to Financial Statements for details.

 

(k)   During the year ended April 30, 2016, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2015
       Net
Activity
    Shares Held
at April 30,
2016
    Income       

BlackRock Liquidity Funds, MuniCash

                 4,296,151        4,296,151      $        435     

FFI Institutional Tax-Exempt Fund

       961,095           (961,095            414       

Total

              4,296,151      $ 849     
           

 

 

 

(l)   Current yield as of period end.

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Contracts
Short
       Issue      Expiration      Notional Value   Unrealized
Appreciation
      
  (17      5-Year U.S. Treasury Note      June 2016      $  2,055,539   $ 7,151     
  (80      10-Year U.S. Treasury Note      June 2016      $10,405,000     70,772     
  (27      Long U.S. Treasury Bond      June 2016      $  4,409,438     68,328     
  (7      Ultra U.S. Treasury Bond      June 2016      $  1,199,406     20,959       
  Total                     $ 167,210     
                

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

Assets — Derivative Financial Instruments      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
    

Foreign
Currency
Exchange
Contracts

     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

       Net unrealized appreciation 1                                     $ 167,210               $      167,210   

1   Includes cumulative appreciation (depreciation) on futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

       

For the year ended April 30, 2016, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

Net Realized Gain (Loss) from:    Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

                                   $ (891,260            $ (891,260
                                                                
Net Change in Unrealized Appreciation (Depreciation) on:                                                        

Futures contracts

                                   $ 521,509               $      521,509   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:         

Average notional value of contracts — short

   $ 15,992,732   

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

                
26    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (concluded)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

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

            $ 579,574,952              $ 579,574,952   

Short-Term Securities

  $ 4,296,151                          4,296,151   
 

 

 

 

Total

  $ 4,296,151         $ 579,574,952              $ 583,871,103   
 

 

 

 
                
Derivative Financial Instruments2                                     

Assets:

                

Interest rate contracts

  $ 167,210                        $ 167,210   

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

       

2    Derivative financial instruments are futures contracts. Futures contracts 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 period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for futures contracts

  $ 243,950                        $ 243,950   

Liabilities:

                

Bank overdraft

            $ (68,716             (68,716

TOB Trust Certificates

              (66,086,523             (66,086,523
 

 

 

 

Total

  $ 243,950         $ (66,155,239           $ (65,911,289
 

 

 

 

During the year ended April 30, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    27


Schedule of Investments April 30, 2016

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 1.3%

  

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

    

5.50%, 1/01/22

   $ 2,750      $ 2,766,500   

4.75%, 1/01/25

     2,200        2,213,200   
    

 

 

 
               4,979,700   

Alaska — 0.7%

  

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

     990        1,139,708   

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

    

6.00%, 9/01/19 (a)

     765        893,673   

6.00%, 9/01/28

     435        505,613   
    

 

 

 
               2,538,994   

Arizona — 0.9%

  

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

    

5.00%, 10/01/27

     2,700        2,994,975   

5.00%, 10/01/29

     400        443,700   
    

 

 

 
               3,438,675   

California — 18.9%

  

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

    

5.40%, 10/01/24

     10,185        10,799,054   

5.45%, 10/01/25

     3,700        3,920,224   

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

     5,000        6,290,300   

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

     2,400        892,344   

California Health Facilities Financing Authority, RB:

    

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

     550        628,210   

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

     1,200        1,449,792   

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

     1,090        1,273,327   

California State University, Refunding RB, Series A:

    

5.00%, 5/01/17 (a)

     850        887,442   

5.00%, 11/01/37

     1,150        1,193,861   

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

     1,480        1,708,897   

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

     1,420        1,528,857   

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

     850        1,001,028   

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

     1,500        1,550,475   

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

     2,175        2,642,647   

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

     1,300        1,371,656   

Mount San Antonio Community College District, GO, Refunding, CAB, Election of 2008, Series A, 6.25%, 8/01/43

     2,500        1,959,200   

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

     3,750        1,809,525   
Municipal Bonds   

Par  

(000)

    Value  

California (continued)

  

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

   $ 5,000      $ 2,345,200   

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

    

Series C, 0.00%, 7/01/38

     1,600        728,512   

Series G, 0.00%, 7/01/34

     650        299,201   

Series G, 0.00%, 7/01/35

     690        298,667   

Series G, 0.00%, 7/01/36

     1,035        420,976   

Series G, 0.00%, 7/01/37

     690        264,015   

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

    

0.00%, 7/01/30

     5,000        3,244,500   

0.00%, 7/01/31

     1,280        793,088   

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

    

0.00%, 8/01/31

     2,145        1,140,754   

0.00%, 8/01/32

     2,680        1,336,596   

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

    

5.00%, 8/01/34

     700        813,169   

5.00%, 8/01/38

     600        695,364   

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

     12,740        8,726,136   

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

     5,500        2,659,800   

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

     5,035        5,449,934   
    

 

 

 
               70,122,751   

Colorado — 0.6%

  

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

     2,000        2,297,160   

District of Columbia — 1.5%

    

District of Columbia Ballpark Revenue, RB, Series B-1, 5.00%, 2/01/31

     5,360        5,401,165   

District of Columbia Ballpark Revenue, Refunding RB, Series B-1, 5.00%, 2/01/31

     120        120,000   
    

 

 

 
               5,521,165   

Florida — 16.0%

  

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

    

5.00%, 10/01/32

     4,000        4,228,720   

5.00%, 10/01/37

     7,500        7,914,600   

County of Brevard Florida Health Facilities Authority, Refunding RB, Health First, Inc. Project, 5.00%, 4/01/39

     1,600        1,820,480   

County of Broward Florida Water & Sewer Utility, Refunding RB, Series A, 5.25%, 10/01/18 (a)

     850        940,772   

County of Duval Florida School Board, COP, Master Lease Program (AGM), 5.00%, 7/01/17 (a)

     2,625        2,759,059   

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

     1,450        1,673,808   

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

     4,050        4,408,223   

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

    

5.63%, 10/01/26

     960        1,128,163   

5.38%, 10/01/32

     3,160        3,635,327   

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1, 5.75%, 7/01/18 (a)

     1,400        1,546,678   
 

 

See Notes to Financial Statements.

 

                
28    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

Municipal Bonds   

Par  

(000)

    Value  

Florida (continued)

  

County of Miami-Dade Florida, RB, Seaport:

    

Series A, 6.00%, 10/01/38

   $ 2,025      $ 2,494,658   

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

     640        798,983   

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

     415        519,501   

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

     660        794,752   

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

     190        218,549   

County of Miami-Dade Florida Educational Facilities Authority, RB, University Miami, Series A, 5.00%, 4/01/40

     3,490        4,059,463   

County of Miami-Dade School Board Foundation, Inc., 5.00%, 5/01/18 (a)

     10,000        10,844,400   

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

     2,000        2,023,000   

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

     2,000        2,334,260   

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

     275        305,126   

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

    

5.13%, 6/01/27

     2,000        2,353,020   

5.38%, 10/01/29

     1,050        1,243,074   

South Florida Water Management District, COP (AGC), 5.00%, 10/01/16 (a)

     1,000        1,018,860   
    

 

 

 
               59,063,476   

Georgia — 3.5%

  

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

     1,150        1,230,788   

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

     500        603,665   

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

     7,475        10,480,398   

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

    

5.00%, 4/01/33

     140        160,780   

5.00%, 4/01/44

     380        427,523   
    

 

 

 
               12,903,154   

Illinois — 18.0%

  

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien, Series A, 5.75%, 1/01/39

     5,110        5,958,056   

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

    

5.00%, 1/01/34

     3,750        3,625,837   

Project, 5.25%, 1/01/33

     1,185        1,170,661   

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

     400        393,428   

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

     3,425        3,595,325   

City of Chicago Illinois Transit Authority, RB:

    

5.25%, 12/01/49

     900        1,020,942   

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

     595        655,036   

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

     45        49,631   

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

    

5.75%, 8/15/34

     650        768,268   

6.00%, 8/15/41

     1,000        1,186,700   

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

    

4.13%, 8/15/37

     700        728,784   

5.00%, 8/15/44

     350        391,920   
Municipal Bonds   

Par  

(000)

    Value  

Illinois (continued)

  

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

   $ 2,105      $ 2,107,989   

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

     1,000        1,035,220   

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

     12,490        12,563,816   

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

     9,145        10,675,233   

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

    

0.00%, 12/15/26

     5,000        3,391,600   

0.00%, 12/15/33

     9,950        4,732,817   

Metropolitan Pier & Exposition Authority, Refunding RB, CAB, McCormick Place Expansion Project, Series B (AGM), 0.00%, 6/15/44 (c)

     3,450        1,019,854   

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

     675        806,632   

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

     5,555        6,368,585   

State of Illinois, GO:

    

5.25%, 2/01/33

     830        906,061   

5.50%, 7/01/33

     820        904,583   

5.25%, 2/01/34

     830        902,002   

5.50%, 7/01/38

     445        486,238   

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

     905        1,018,849   
    

 

 

 
               66,464,067   

Indiana — 0.9%

  

Indiana Finance Authority, RB, Series A:

    

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

     1,100        1,298,627   

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

     515        559,177   

Private Activity Bond, Ohio River Bridges, AMT, 5.00%, 7/01/40

     890        972,218   

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC), 5.25%, 1/01/29

     600        667,572   
    

 

 

 
               3,497,594   

Iowa — 3.2%

  

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

     5,725        6,448,297   

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

    

5.60%, 12/01/26

     2,465        2,658,527   

5.70%, 12/01/27

     1,115        1,195,358   

5.80%, 12/01/29

     755        808,454   

5.85%, 12/01/30

     790        846,572   
    

 

 

 
               11,957,208   

Louisiana — 1.2%

  

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

     2,795        3,146,192   

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

     1,250        1,410,087   
    

 

 

 
               4,556,279   

Massachusetts — 1.5%

  

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

     1,150        1,207,397   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    29


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

Municipal Bonds   

Par  

(000)

    Value  

Massachusetts (continued)

  

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

   $ 1,280      $ 1,495,398   

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

     2,530        2,659,485   
    

 

 

 
               5,362,280   

Michigan — 2.6%

  

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

     2,500        2,718,875   

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

     400        450,148   

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

     1,700        2,008,363   

Michigan Finance Authority, Refunding RB, Trinity Health Credit Group, 5.00%, 12/01/21 (a)

     20        24,162   

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, Series D, 5.00%, 9/01/39

     1,040        1,180,411   

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

    

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

     145        168,661   

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

     700        814,226   

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

     900        1,044,522   

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

     790        847,346   

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

     380        432,064   
    

 

 

 
               9,688,778   

Minnesota — 0.8%

  

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

    

6.50%, 11/15/18 (a)

     385        439,531   

6.50%, 11/15/38

     2,115        2,382,971   
    

 

 

 
               2,822,502   

Nebraska — 1.7%

  

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

     750        842,580   

Central Plains Nebraska Energy Project, RB, Gas Project No. 3, 5.00%, 9/01/32

     5,000        5,597,650   
    

 

 

 
               6,440,230   

Nevada — 1.6%

  

City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/19 (a)

     850        976,072   

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

    

5.25%, 7/01/42

     500        561,965   

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

     3,800        4,272,378   

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

     75        75,251   
    

 

 

 
               5,885,666   

New Jersey — 9.4%

  

County of Hudson New Jersey Improvement Authority, RB, 5.25%, 5/01/51 (d)

     815        971,024   

New Jersey EDA, RB:

    

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

     3,125        3,157,250   
Municipal Bonds   

Par  

(000)

    Value  

New Jersey (continued)

  

New Jersey EDA, RB (continued):

    

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

   $ 7,800      $ 7,880,496   

Private Activity Bond, The Goethals Bridge Replacement Project, AMT, 5.13%, 1/01/34

     685        774,543   

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

     895        1,007,654   

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

     1,975        2,241,704   

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

     25        28,159   

Series WW, 5.25%, 6/15/33

     155        170,934   

Series WW, 5.00%, 6/15/34

     205        219,727   

Series WW, 5.00%, 6/15/36

     925        984,912   

Series WW, 5.25%, 6/15/40

     265        289,897   

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

    

5.50%, 12/01/26

     545        615,910   

5.75%, 12/01/27

     3,520        3,994,531   

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

     1,080        1,141,366   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     1,460        1,595,795   

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

     1,760        1,872,217   

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

     2,000        2,184,220   

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

     1,150        1,272,532   

Transportation System, Series B, 5.50%, 6/15/31

     1,000        1,113,940   

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

     2,500        2,632,525   

Transportation System, Series D, 5.00%, 6/15/32

     625        678,269   
    

 

 

 
               34,827,605   

New York — 5.2%

  

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        1,696,448   

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

     1,600        1,799,152   

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

     2,750        3,092,293   

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

     1,480        1,788,713   

County of Erie New York Industrial Development Agency, RB, City School District of Buffalo, Series A (AGM), 5.75%, 5/01/17 (a)

     1,500        1,577,745   

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

     700        823,011   

Metropolitan Transportation Authority, RB, Series C:

    

6.50%, 11/15/18 (a)

     2,985        3,417,586   

6.50%, 11/15/28

     1,015        1,161,810   
 

 

See Notes to Financial Statements.

 

                
30    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

Municipal Bonds   

Par  

(000)

    Value  

New York (continued)

  

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

   $ 1,200      $ 1,368,264   

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

     2,500        2,562,100   
    

 

 

 
               19,287,122   

Ohio — 1.4%

  

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

     530        658,981   

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

     10,000        4,675,200   
    

 

 

 
               5,334,181   

Pennsylvania — 4.8%

  

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

     1,600        1,812,032   

Pennsylvania Economic Development Financing Authority, RB, Pennsylvania Bridge Finco LP, AMT:

    

5.00%, 12/31/34

     7,290        8,352,955   

5.00%, 12/31/38

     1,305        1,471,218   

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

     2,480        2,883,124   

Pennsylvania Turnpike Commission, RB:

    

Series A, 5.00%, 12/01/38

     620        719,367   

Series C, 5.50%, 12/01/33

     555        679,309   

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

     575        678,742   

Pennsylvania Turnpike Commission, Refunding RB, Series A-1, 5.00%, 12/01/40

     765        884,585   

Philadelphia School District, GO, Series E:

    

6.00%, 9/01/18 (a)

     5        5,603   

6.00%, 9/01/38

     395        419,071   
    

 

 

 
               17,906,006   

Rhode Island — 1.1%

  

Tobacco Settlement Financing Corp., Refunding RB, Series B:

    

4.50%, 6/01/45

     1,055        1,094,014   

5.00%, 6/01/50

     2,630        2,789,562   
    

 

 

 
               3,883,576   

South Carolina — 6.0%

  

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

     115        140,433   

South Carolina Ports Authority, RB, AMT, 5.25%, 7/01/50

     2,330        2,651,377   

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

     3,000        3,359,730   

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

    

Series A, 5.50%, 12/01/54

     8,725        10,246,815   

Series E, 5.50%, 12/01/53

     745        867,865   

State of South Carolina Public Service Authority, Refunding RB:

    

Santee Cooper, Series B, 5.00%, 12/01/38

     2,080        2,400,070   

Series A, 5.50%, 1/01/19 (a)

     80        90,011   

Series A, 5.50%, 1/01/19 (a)

     920        1,035,129   

Series E, 5.25%, 12/01/55

     1,050        1,231,241   
    

 

 

 
               22,022,671   

Tennessee — 1.6%

  

Metropolitan Government of Nashville & Davidson County Health & Educational Facilities Board, Refunding RB, Vanderbilt University, Series B, 5.50%, 10/01/19 (a)

     5,000        5,736,850   
Municipal Bonds   

Par  

(000)

    Value  

Texas — 13.5%

    

Central Texas Turnpike System, Refunding RB, CAB, Series B, 0.00%, 8/15/37 (c)

   $ 1,815      $ 775,695   

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

    

5.38%, 5/15/19 (a)

     1,280        1,453,504   

6.00%, 5/15/19 (a)

     1,990        2,297,037   

6.00%, 11/15/35

     110        127,620   

5.38%, 11/15/38

     70        78,320   

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

     575        672,388   

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

     2,130        947,083   

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

     750        882,113   

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

    

Series D, 5.00%, 11/01/38

     1,975        2,202,737   

Series D, 5.00%, 11/01/42

     1,500        1,665,675   

Series H, 5.00%, 11/01/32

     3,000        3,400,020   

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

     975        1,163,341   

Leander ISD, GO, Refunding, CAB, Series D, 0.00%, 8/15/38 (c)

     3,420        1,435,750   

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

     1,725        1,784,564   

North Texas Tollway Authority, Refunding RB:

    

1st Tier System, Series A, 6.00%, 1/01/28

     2,795        3,160,949   

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

     3,800        4,235,176   

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

     4,015        4,508,925   

1st Tier System, Series S, 5.75%, 1/01/18 (a)

     805        871,187   

1st Tier System, Series SE, 5.75%, 1/01/40

     795        853,178   

Series B, 5.00%, 1/01/40

     495        566,998   

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

    

0.00%, 9/15/35

     4,990        2,155,530   

0.00%, 9/15/36

     11,525        4,686,295   

0.00%, 9/15/37

     8,245        3,153,713   

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

    

5.00%, 12/15/32

     705        789,156   

Natural Gas Utility Improvements, 5.00%, 12/15/31

     1,190        1,338,893   

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien, AMT, Blueridge Transportation Group (d):

    

5.00%, 12/31/45

     820        905,050   

5.00%, 12/31/50

     455        497,943   

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

     3,080        3,516,128   
    

 

 

 
               50,124,968   

Utah — 1.5%

  

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

     5,000        5,449,200   

Washington — 1.1%

    

Central Puget Sound Regional Transit Authority, RB, Series A, 5.00%, 11/01/17 (a)

     1,600        1,702,688   

Port of Seattle Washington, RB, Series C, AMT, 5.00%, 4/01/40

     1,015        1,158,582   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    31


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

Municipal Bonds   

Par  

(000)

    Value  

Washington (continued)

    

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

    

5.00%, 10/01/39

   $ 525      $ 577,447   

5.25%, 10/01/39

     625        696,000   
    

 

 

 
               4,134,717   

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        1,558,727   
Total Municipal Bonds — 120.9%              447,805,302   
    
                  
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        1,336,944   

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

     1,500        1,595,610   
    

 

 

 
               2,932,554   

California — 1.9%

  

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

     2,500        2,637,800   

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

     404        459,110   

San Diego County Water Authority Financing Corp., COP, Refunding, Series A (AGM):

    

5.00%, 5/01/18 (a)

     466        504,697   

5.00%, 5/01/33

     2,344        2,536,735   

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

     840        965,798   
    

 

 

 
               7,104,140   

Colorado — 2.3%

  

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

    

5.50%, 7/01/34 (f)

     900        1,012,158   

5.00%, 2/01/41

     7,000        7,628,810   
    

 

 

 
               8,640,968   

Connecticut — 0.4%

  

Connecticut State Health & Educational Facility Authority, Refunding RB, Trinity Health Credit Group, 5.00%, 12/01/45

     1,381        1,620,684   

District of Columbia — 1.6%

    

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

     1,005        1,165,016   

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

     1,779        2,002,631   

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

     2,530        2,908,336   
    

 

 

 
               6,075,983   

Florida — 4.3%

  

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

     4,480        5,210,554   

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

     4,621        5,266,944   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

Florida (continued)

  

County of Orange Florida School Board, COP, Series A (AGC), 5.50%, 8/01/19 (a)

   $ 3,544      $ 4,069,384   

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

     1,349        1,423,798   
    

 

 

 
               15,970,680   

Illinois — 4.4%

  

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

     2,000        2,049,860   

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

     260        275,745   

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

     4,399        4,879,661   

State of Illinois Toll Highway Authority, RB:

    

Senior Priority, Series A, 5.00%, 1/01/40

     2,730        3,189,240   

Senior Priority, Series B, 5.50%, 1/01/18 (a)

     1,880        2,028,755   

Senior, Series B, 5.00%, 1/01/40

     1,050        1,228,530   

Series A, 5.00%, 1/01/38

     2,138        2,432,610   
    

 

 

 
               16,084,401   

Louisiana — 1.5%

  

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

     5,400        5,401,350   

Massachusetts — 0.5%

    

Commonwealth of Massachusetts, GO, Series A, 5.00%, 3/01/46

     1,461        1,711,854   

Michigan — 3.2%

    

Michigan Finance Authority, RB:

    

Beaumont Health Credit Group, 5.00%, 11/01/44

     1,970        2,269,590   

Hospital, Trinity Health Credit Group, 5.00%, 12/01/39

     7,510        8,445,971   

Michigan State Building Authority, Refunding RB, Facilities Program, Series I, 5.00%, 10/15/45

     870        1,006,181   
    

 

 

 
               11,721,742   

Nevada — 4.2%

  

City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/19 (a)(f)

     3,778        4,338,329   

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

    

Limited Tax, 5.75%, 7/01/34

     1,829        2,101,039   

5.50%, 7/01/29

     4,499        5,110,354   

Las Vegas Valley Water District Nevada, GO, Refunding, Water Improvement, Series A, 5.00%, 6/01/46

     3,460        4,091,519   
    

 

 

 
               15,641,241   

New Jersey — 0.5%

  

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

     1,840        1,981,382   

New York — 4.3%

    

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        1,391,643   

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        6,687,279   

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        2,006,075   
 

 

See Notes to Financial Statements.

 

                
32    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

New York (continued)

    

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

   $ 3,470      $ 4,238,848   

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

     1,300        1,440,114   
    

 

 

 
               15,763,959   

Ohio — 0.2%

  

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

     580        653,074   

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        1,433,827   

Texas — 0.6%

    

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

     2,200        2,273,194   

Virginia — 0.1%

    

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

     350        394,930   

Washington — 2.1%

    

Central Puget Sound Regional Transit Authority, RB, Series A (AGM), 5.00%, 11/01/17 (a)

     4,004        4,261,235   

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

     2,880        3,606,278   
    

 

 

 
               7,867,513   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

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      $ 2,215,858   

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

     1,430        1,550,996   
    

 

 

 
               3,766,854   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 34.3%
        127,040,330   
Total Long-Term Investments
(Cost — $515,055,654) — 155.2%
        574,845,632   
    
   
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, 0.19% (g)(h)

     2,133,375        2,133,375   
Total Short-Term Securities
(Cost — $2,133,375) — 0.6%
             2,133,375   
Total Investments (Cost — $517,189,029) — 155.8%        576,979,007   
Other Assets Less Liabilities — 0.8%        3,060,387   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (18.1)%

   

    (67,197,330
VRDP Shares, at Liquidation Value — (38.5)%        (142,500,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 370,342,064   
    

 

 

 
 
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)   Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end.

 

(c)   Zero-coupon bond.

 

(d)   When-issued security.

 

(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 4 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. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreement, which expire between October 1, 2016 to December 1, 2029, is $11,957,838. See Note 4 of the Notes to Financial Statements for details.

 

(g)   Current yield as of period end.

 

(h)   During the year ended April 30, 2016, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2015
       Net
Activity
       Shares Held
at April 30,
2016
    Income       

BlackRock Liquidity Funds, MuniCash

                 2,133,375           2,133,375      $ 332     

FFI Institutional Tax-Exempt Fund

       1,577,185           (1,577,185               417       

Total

                 2,133,375      $        749     
              

 

 

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Contracts
Short
       Issue      Expiration      Notional
Value
  Unrealized
Appreciation
      
  (9      5-Year U.S. Treasury Note      June 2016      $1,088,227   $ 3,856     
  (51      10-Year U.S. Treasury Note      June 2016      $6,633,188     28,615     
  (27      Long U.S. Treasury Bond      June 2016      $4,409,437     60,097     
  (7      Ultra U.S. Treasury Bond      June 2016      $1,199,406     18,782       
  Total                     $ 111,350     
                

 

 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    33


Schedule of Investments (concluded)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

Assets — Derivative Financial Instruments      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

       Net unrealized appreciation 1                                     $ 111,350               $ 111,350   

1    Includes cumulative appreciation (depreciation) on futures contracts, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

        

For the year ended April 30, 2016, the effect of derivative financial instruments in the Statements of Operations was as follows:   
Net Realized Gain (Loss) from:      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

                                              $ (680,157            $ (680,157
               
Net Change in Unrealized Appreciation (Depreciation) on:                                                          

Futures contracts

                                              $ 485,622               $      485,622   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:

        

Average notional value of contracts — short

   $ 15,064,436   

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

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

            $ 574,845,632              $ 574,845,632   

Short-Term Securities

  $ 2,133,375                          2,133,375   
 

 

 

 

Total

  $ 2,133,375         $ 574,845,632              $ 576,979,007   
 

 

 

 
                
Derivative Financial Instruments2                                     

Assets:

                

Interest rate contracts

  $ 111,350                        $ 111,350   

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

       

2    Derivative financial instruments are futures contracts. Futures contracts 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 period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for futures contracts

  $ 200,900                        $ 200,900   

Liabilities:

                

Bank overdraft

            $ (175,432             (175,432

TOB Trust Certificates

              (67,159,660             (67,159,660

VRDP Shares

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

 

 

 

Total

  $ 200,900         $ (209,835,092           $ (209,634,192
 

 

 

 

During the year ended April 30, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
34    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments April 30, 2016

  

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      $ 4,577,300   

County of Jefferson Alabama Sewer, Refunding RB:

    

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

     570        636,245   

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

     1,090        1,225,967   

Sub-Lien, Series D, 6.00%, 10/01/42

     1,000        1,173,140   

Sub-Lien, Series D, 7.00%, 10/01/51

     1,545        1,926,275   
    

 

 

 
               9,538,927   

Alaska — 0.6%

    

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

     1,660        1,553,063   

Arizona — 2.3%

    

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

     565        547,717   

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     2,000        2,448,920   

5.00%, 12/01/37

     2,360        2,942,448   
    

 

 

 
               5,939,085   

California — 12.4%

    

California Health Facilities Financing Authority, RB:

    

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

     1,530        1,747,566   

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

     2,200        2,642,728   

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

     875        1,035,431   

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

    

5.25%, 8/15/39

     105        119,094   

5.25%, 8/15/49

     265        299,405   

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

     1,025        1,126,342   

California Statewide Communities Development Authority, RB, Series A:

    

John Muir Health, 5.13%, 7/01/39

     1,510        1,675,451   

Loma Linda University Medical Center, 5.00%, 12/01/41 (a)(b)

     380        413,497   

Loma Linda University Medical Center, 5.00%, 12/01/46 (a)(b)

     460        500,149   

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

     555        622,083   

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

     255        318,819   

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

     2,405        2,113,779   

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

     3,475        2,358,239   

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

     3,490        3,520,537   

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

     8,370        9,753,142   
Municipal Bonds   

Par  

(000)

    Value  

California (continued)

    

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

    

Series I, 5.00%, 11/01/38

   $ 550      $ 656,012   

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

     820        980,704   

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

     1,520        1,520,532   
    

 

 

 
               31,403,510   

Colorado — 2.4%

    

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

     1,455        1,569,901   

County of Adams Colorado, COP, Refunding, 4.00%, 12/01/40

     545        588,224   

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

     710        815,492   

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

     1,425        1,652,173   

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

     1,250        1,422,213   
    

 

 

 
               6,048,003   

Connecticut — 1.1%

    

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

     2,515        2,864,761   

Delaware — 1.7%

    

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

     790        863,928   

Delaware Transportation Authority, RB, 5.00%, 6/01/55

     840        959,826   

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

     2,430        2,552,059   
    

 

 

 
               4,375,813   

District of Columbia — 4.1%

    

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

     1,520        1,730,961   

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

    

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

     505        561,373   

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

     1,470        1,640,417   

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

     13,485        6,504,894   
    

 

 

 
               10,437,645   

Florida — 5.0%

    

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

     2,375        2,672,801   

County of Broward Florida Water & Sewer Utility, Refunding RB, Series A, 5.25%, 10/01/18 (d)

     750        830,093   

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

     960        1,089,446   

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

     910        300,600   

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

     2,620        2,998,092   

Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/21 (d)

     2,095        2,744,890   

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

     590        511,070   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    35


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Municipal Bonds   

Par  

(000)

    Value  

Florida (continued)

    

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

   $ 1,475      $ 1,645,230   
    

 

 

 
               12,792,222   

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        446,712   

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

     585        656,996   

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

     2,410        2,691,416   
    

 

 

 
               3,795,124   

Hawaii — 0.4%

    

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

     945        1,078,113   

Illinois — 15.5%

    

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

    

Series A, 5.75%, 1/01/39

     2,000        2,331,920   

Series C, 6.50%, 1/01/41

     4,055        4,917,417   

City of Chicago Illinois, GO, Project, 5.00%, 1/01/34

     1,265        1,223,116   

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

    

Project, 5.25%, 1/01/32

     2,195        2,176,320   

5.00%, 1/01/35

     2,000        1,931,580   

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

     897        901,072   

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

     730        797,415   

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

     1,000        1,087,200   

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

     560        636,457   

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

     1,115        1,272,505   

Illinois State Toll Highway Authority, RB:

    

Senior, Series C, 5.00%, 1/01/36

     1,870        2,184,740   

Senior, Series C, 5.00%, 1/01/37

     2,000        2,328,260   

Series A, 5.00%, 1/01/38

     1,610        1,831,488   

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

    

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

     13,220        3,410,892   

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

     3,070        3,283,211   

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

     1,740        1,823,068   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     315        371,404   

6.00%, 6/01/28

     800        956,008   

State of Illinois, GO:

    

5.00%, 2/01/39

     1,100        1,160,643   

Series A, 5.00%, 4/01/38

     2,625        2,759,584   

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

     440        488,114   

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

    

5.00%, 4/01/39

     580        652,964   

5.00%, 4/01/44

     705        788,980   
    

 

 

 
               39,314,358   
Municipal Bonds   

Par  

(000)

    Value  

Indiana — 4.3%

    

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

    

6.75%, 1/01/34

   $ 560      $ 686,571   

7.00%, 1/01/44

     1,355        1,671,596   

Indiana Finance Authority, RB, Series A:

    

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

     2,275        2,685,797   

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

     310        336,592   

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

     1,030        1,113,626   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.25%, 1/01/51

     290        317,309   

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

     585        654,750   

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

     1,300        1,474,928   

Indiana Municipal Power Agency, RB, Series B, 6.00%, 1/01/19 (d)

     775        879,997   

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

     880        1,025,754   
    

 

 

 
               10,846,920   

Iowa — 2.1%

    

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

    

5.00%, 12/01/19

     665        687,005   

5.50%, 12/01/22

     1,630        1,696,422   

5.25%, 12/01/25

     320        344,429   

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

     870        924,845   

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

     1,730        1,729,810   
    

 

 

 
               5,382,511   

Kansas — 0.7%

    

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

     1,520        1,746,146   

Kentucky — 0.6%

    

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

     705        797,968   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/43 (e)

     865        695,443   
    

 

 

 
               1,493,411   

Louisiana — 3.4%

    

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

     570        637,933   

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

     3,500        3,792,250   

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

     430        474,092   

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

    

5.50%, 5/15/30

     700        786,492   

5.25%, 5/15/31

     600        674,256   
 

 

See Notes to Financial Statements.

 

                
36    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Municipal Bonds   

Par  

(000)

    Value  

Louisiana (continued)

    

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

    

5.25%, 5/15/32

   $ 765      $ 870,914   

5.25%, 5/15/33

     830        930,331   

5.25%, 5/15/35

     350        394,268   
    

 

 

 
               8,560,536   

Maine — 0.1%

    

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

     210        232,031   

Maryland — 1.0%

    

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

     300        328,335   

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

     530        510,978   

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

     1,520        1,753,852   
    

 

 

 
               2,593,165   

Massachusetts — 1.3%

    

Massachusetts Development Finance Agency, Refunding RB:

    

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

     1,165        1,441,606   

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

     1,575        1,582,701   

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

     255        284,185   
    

 

 

 
               3,308,492   

Michigan — 3.0%

    

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

     3,085        3,432,864   

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

     955        1,079,074   

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

     630        688,603   

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

     2,105        2,393,911   
    

 

 

 
               7,594,452   

Minnesota — 1.0%

    

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series A, 6.75%, 11/15/18 (d)

     2,135        2,450,809   

Mississippi — 0.3%

    

University of Southern Mississippi, RB, Campus Facilities Improvements Project, 5.38%, 9/01/19 (d)

     675        774,684   

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        199,026   

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

     175        195,657   
    

 

 

 
               394,683   

Nebraska — 0.2%

    

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

     575        645,978   
Municipal Bonds   

Par  

(000)

    Value  

New Hampshire — 1.4%

    

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

   $ 3,035      $ 3,479,810   

New Jersey — 7.2%

    

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     735        761,511   

5.25%, 11/01/44

     1,095        1,128,310   

County of Essex New Jersey Improvement Authority, RB, AMT, 5.25%, 7/01/45 (a)

     775        790,663   

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

    

5.13%, 9/15/23

     1,410        1,571,995   

5.25%, 9/15/29

     1,365        1,510,878   

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

     1,550        1,816,027   

New Jersey State Turnpike Authority, RB:

    

Series A, 5.00%, 1/01/43

     1,925        2,217,638   

Series E, 5.00%, 1/01/45

     1,875        2,165,606   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     2,505        2,657,605   

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

     1,575        1,720,073   

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

     1,705        1,835,586   
    

 

 

 
               18,175,892   

New York — 8.0%

    

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

     1,560        1,821,581   

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

     1,300        1,369,563   

County of Dutchess New York IDA, Refunding RB, Bard College Civic Facility, Series A-1, 5.00%, 8/01/46

     1,800        1,718,892   

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

     241        274,025   

Erie Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed, Series A, 5.00%, 6/01/45

     1,405        1,398,537   

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

     1,450        1,622,999   

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

     1,715        2,078,992   

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

     1,740        1,989,551   

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        956,522   

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

     2,275        2,463,916   

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

     245        268,934   

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

     605        666,534   

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

    

6.00%, 12/01/36

     900        1,057,509   

6.00%, 12/01/42

     875        1,026,961   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    37


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Municipal Bonds   

Par  

(000)

    Value  

New York (continued)

    

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

   $ 1,700      $ 1,700,017   
    

 

 

 
               20,414,533   

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        1,079,484   

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

     415        475,353   
    

 

 

 
               1,554,837   

Ohio — 0.5%

    

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

     470        520,327   

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

     580        636,150   
    

 

 

 
               1,156,477   

Oklahoma — 0.4%

    

County of Epworth Oklahoma Finance Authority, Refunding RB, Epworth Villa Project, Series A, 5.13%, 4/01/42

     975        951,600   

Pennsylvania — 3.0%

    

City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 7/01/42

     460        504,716   

Pennsylvania Economic Development Financing Authority, RB:

    

American Water Co. Project, 6.20%, 4/01/39

     2,520        2,861,460   

Pennsylvania Bridge Finco LP, AMT, 5.00%, 6/30/42

     2,015        2,260,649   

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

     1,105        1,160,073   

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     795        913,932   
    

 

 

 
               7,700,830   

Rhode Island — 1.9%

    

Tobacco Settlement Financing Corp., Refunding RB, Series B:

    

4.50%, 6/01/45

     1,900        1,970,262   

5.00%, 6/01/50

     2,605        2,763,045   
    

 

 

 
               4,733,307   

South Carolina — 3.8%

    

State of South Carolina Ports Authority, RB:

    

5.25%, 7/01/40

     2,285        2,581,776   

AMT, 5.25%, 7/01/55

     925        1,048,450   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     2,790        3,276,632   

State of South Carolina Public Service Authority, Refunding RB, Series E, 5.25%, 12/01/55

     2,260        2,650,099   
    

 

 

 
               9,556,957   

Tennessee — 1.9%

    

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     980        1,109,233   
Municipal Bonds   

Par  

(000)

    Value  

Tennessee (continued)

    

County of Hardeman Tennessee Correctional Facilities Corp., RB, 7.75%, 8/01/17

   $ 1,010      $ 1,010,040   

County of Shelby Tennessee Health Educational & Housing Facilities Board, Refunding RB, St. Jude’s Children’s Research Hospital, 5.00%, 7/01/31

     2,250        2,267,820   

Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board, RB, Vanderbilt University Medical Center, Series A, 5.00%, 7/01/46

     495        571,354   
    

 

 

 
               4,958,447   

Texas — 6.0%

    

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/46

     1,480        1,767,209   

Sub-Lien, 5.00%, 1/01/33

     250        277,943   

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

     425        479,332   

City of Austin Texas Airport System, ARB, Revenue, AMT, 5.00%, 11/15/39

     440        497,741   

City of Austin Texas Electric Utility Revenue, Refunding RB, Series A, 5.00%, 11/15/37

     1,500        1,727,040   

City of Dallas Texas Waterworks & Sewer System, Refunding RB, 5.00%, 10/01/35

     1,050        1,212,865   

City of Houston Texas Airport System, Refunding ARB, Senior Lien, Series A, 5.50%, 7/01/39

     1,070        1,171,254   

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        384,459   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (d)

     1,910        2,225,360   

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

     450        528,791   

North Texas Tollway Authority, RB, CAB, Special Project System, Series B, 0.00%, 9/01/37 (c)

     1,400        598,892   

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

    

LBJ Infrastructure Group LLC, 7.00%, 6/30/40

     2,000        2,397,160   

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

     1,700        2,003,637   
    

 

 

 
               15,271,683   

Vermont — 0.0%

    

Vermont Educational & Health Buildings Financing Agency, RB, Developmental & Mental Health, Series A, 6.00%, 6/15/17

     20        20,264   

Virginia — 2.3%

    

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

     1,000        1,035,580   

County of Hanover Virginia EDA, Refunding RB, Covenant Woods, Series A:

    

5.00%, 7/01/42

     625        646,406   

Residential Care Facility, 5.00%, 7/01/47

     970        1,001,428   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

    

5.25%, 1/01/32

     550        619,889   

6.00%, 1/01/37

     2,230        2,639,718   
    

 

 

 
               5,943,021   
 

 

See Notes to Financial Statements.

 

                
38    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Municipal Bonds   

Par  

(000)

    Value  

Washington — 2.3%

    

Grant County Public Utility District No. 2, Refunding RB, Series A:

    

5.00%, 1/01/41

   $ 1,355      $ 1,594,700   

5.00%, 1/01/43

     1,555        1,825,772   

Port of Seattle Washington, RB, Series C, AMT, 5.00%, 4/01/40

     540        616,388   

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     1,625        1,937,731   
    

 

 

 
               5,974,591   

Wisconsin — 3.6%

    

State of Wisconsin, Refunding RB, Series A, 6.00%, 5/01/36

     4,980        5,726,751   

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

     1,710        1,938,490   

State of Wisconsin Health & Educational Facilities Authority, Refunding RB, Medical College of Wisconsin, Inc., 4.00%, 12/01/46 (b)

     1,305        1,368,802   
    

 

 

 
               9,034,043   

Wyoming — 0.1%

    

Wyoming Municipal Power Agency, Inc., RB, Series A, 5.00%, 1/01/42

     210        227,795   
Total Municipal Bonds — 112.0%              284,318,529   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
 

California — 7.6%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/19 (d)

     2,271        2,584,084   

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

     1,845        2,038,024   

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/39

     6,600        7,449,882   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Senior Series A, 5.00%, 5/15/40

     4,121        4,682,437   

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

     1,620        1,709,295   

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

     748        850,203   
    

 

 

 
               19,313,925   

Colorado — 3.6%

    

Colorado Health Facilities Authority, RB, Catholic Health (AGM) (d):

    

Series C-3, 5.10%, 4/29/18

     2,580        2,803,660   

Series C-7, 5.00%, 5/01/18

     1,650        1,790,134   

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

     1,490        1,675,684   

County of Adams Colorado, COP, Refunding, 4.00%, 12/01/45

     2,700        2,872,503   
    

 

 

 
               9,141,981   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
  

Par  

(000)

    Value  

Connecticut — 2.6%

    

Connecticut State Health & Educational Facility Authority, RB, Yale University:

    

Series T-1, 4.70%, 7/01/29

   $ 3,179      $ 3,320,263   

Series X-3, 4.85%, 7/01/37

     3,262        3,418,328   
    

 

 

 
               6,738,591   

Florida — 1.8%

    

County of Miami-Dade Florida, RB, Water & Sewer System, 5.00%, 10/01/34

     3,939        4,506,722   

Georgia — 1.0%

    

Private Colleges & Universities Authority, Refunding RB, Emory University, Series C, 5.00%, 9/01/38

     2,259        2,469,594   

Massachusetts — 2.1%

    

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

     4,502        5,286,636   

New Hampshire — 0.6%

    

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

     1,409        1,591,871   

New York — 7.5%

    

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        1,258,177   

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

     1,110        1,304,940   

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

     7,440        8,838,239   

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

     4,460        5,323,521   

Port Authority of New York & New Jersey, Refunding ARB, 194th Series, 5.25%, 10/15/55

     1,860        2,241,412   
    

 

 

 
               18,966,289   

North Carolina — 1.3%

  

North Carolina Capital Facilities Finance Agency, Refunding RB:

    

Duke University Project, Series B, 5.00%, 10/01/55

     1,830        2,159,693   

Wake Forest University, 5.00%, 1/01/38

     1,080        1,189,393   
    

 

 

 
               3,349,086   

Ohio — 4.3%

  

State of Ohio, Refunding RB, Cleveland Clinic Health System Obligated Group, Series A, 5.50%, 1/01/39

     9,644        10,814,803   

Texas — 4.8%

    

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

     1,720        1,999,620   

County of Harris Texas, RB, Senior Lien, Toll Road, Series A, 5.00%, 8/15/38 (g)

     4,624        5,146,203   

County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

     2,350        2,731,758   

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

     2,041        2,413,931   
    

 

 

 
               12,291,512   

Utah — 1.1%

  

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

     2,519        2,754,828   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    39


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
  

Par  

(000)

    Value  

Virginia — 2.5%

    

University of Virginia, Refunding RB, GO, 5.00%, 6/01/40

   $ 3,749      $ 4,067,718   

Virginia Small Business Financing Authority, Refunding RB, Sentara Healthcare, 5.00%, 11/01/40

     2,095        2,349,894   
    

 

 

 
               6,417,612   

Washington — 0.8%

  

Central Puget Sound Regional Transit Authority, RB, Series A (AGM), 5.00%, 11/01/17 (d)

     1,860        1,979,000   

Wisconsin — 1.7%

    

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

     3,959        4,295,067   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 43.3%
        109,917,517   
Total Long-Term Investments
(Cost — $350,669,245) — 155.3%
        394,236,046   
Short-Term Securities — 0.6%   

Shares

    Value  

BlackRock Liquidity Funds, MuniCash, 0.19% (h)(i)

     1,575,949      $ 1,575,949   
Total Short-Term Securities
(Cost — $1,575,949) — 0.6%
             1,575,949   
Total Investments (Cost — $352,245,194) — 155.9%        395,811,995   
Other Assets Less Liabilities — 0.8%        2,069,353   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (23.7)%

   

    (60,317,535
VMTP Shares, at Liquidation Value — (33.0)%        (83,700,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 253,863,813   
    

 

 

 
 
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)   When-issued security.

 

(c)   Zero-coupon bond.

 

(d)   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.

 

(e)   Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end.

 

(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 4 of the Notes to Financial Statements for details.

 

(g)   All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between October 1, 2016 to February 15, 2031, is $11,665,098. See Note 4 of the Notes to Financial Statements for details.

 

(h)   During the year ended April 30, 2016, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate      Shares Held
at April 30,
2015
       Net
Activity
    Shares Held
at April 30,
2016
    Income       

BlackRock Liquidity Funds, MuniCash

                 1,575,949        1,575,949      $ 302     

FFI Institutional Tax-Exempt Fund

       1,340,347           (1,340,347            637       

Total

              1,575,949      $        939     
           

 

 

 

(i)   Current yield as of period end.

 

Derivative Financial Instruments as of Period End

Futures Contracts

 

Contracts
Short
       Issue      Expiration      Notional Value   Unrealized
Appreciation
      
  (18      5-Year U.S. Treasury Note      June 2016      $2,176,453   $ 7,571     
  (46      10-Year U.S. Treasury Note      June 2016      $5,982,875     39,190     
  (22      Long U.S. Treasury Bond      June 2016      $3,592,875     54,480     
  (9      Ultra U.S. Treasury Bond      June 2016      $1,542,094     25,987       
  Total                     $ 127,228     
                

 

 

 

See Notes to Financial Statements.

 

                
40    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

Assets — Derivative Financial Instruments      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

       Net unrealized appreciation 1                                     $ 127,228               $ 127,228   

1    Includes cumulative appreciation (depreciation) on futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

        

For the year ended April 30, 2016, the effect of derivative financial instruments in the Statements of Operations was as follows:   
Net Realized Gain (Loss) from:      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

                                              $ (681,621            $ (681,621
                         

Net Change in Unrealized Appreciation (Depreciation) on:

                                                         

Futures contracts

                                              $ 353,450               $      353,450   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:

       

Average notional value of contracts — short

  $ 11,793,391   

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

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

            $ 394,236,046              $ 394,236,046   

Short-Term Securities

  $ 1,575,949                          1,575,949   
 

 

 

 

Total

  $ 1,575,949         $ 394,236,046              $ 395,811,995   
 

 

 

 
                
Derivative Financial Instruments2                                     

Assets:

                

Interest rate contracts

  $ 127,228                        $ 127,228   

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

        

2    Derivative financial instruments are futures contracts. Futures contracts 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 period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for futures contracts

  $ 192,550                        $ 192,550   

Liabilities:

                

Bank overdraft

            $ (96,118             (96,118

TOB Trust Certificates

              (60,288,863             (60,288,863

VMTP Shares

              (83,700,000             (83,700,000
 

 

 

 

Total

  $ 192,550         $ (144,084,981           $ (143,892,431
 

 

 

 

During the year ended April 30, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    41


Schedule of Investments April 30, 2016

  

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      $ 3,470,700   

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

     1,875        2,199,637   
    

 

 

 
               5,670,337   

Alaska — 0.8%

    

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

     1,660        1,553,063   

Arizona — 0.5%

    

Salt Verde Financial Corp., RB, Senior, 5.00%, 12/01/37

     810        1,009,908   

California — 15.2%

    

Benicia Unified School District, GO, CAB, Series A (NPFGC), 0.00%, 8/01/20 (a)

     2,000        1,874,240   

California Health Facilities Financing Authority, RB:

    

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

     1,110        1,267,842   

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

     1,585        1,903,965   

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

     445        526,591   

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

    

5.25%, 8/15/39

     80        90,738   

5.25%, 8/15/49

     195        220,317   

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

     730        802,175   

California Statewide Communities Development Authority, RB, Series A:

    

John Muir Health, 5.13%, 7/01/39

     1,090        1,209,431   

Loma Linda University Medical Center, 5.00%, 12/01/41 (b)(c)

     275        299,241   

Loma Linda University Medical Center, 5.00%, 12/01/46 (b)(c)

     335        364,239   

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

     400        448,348   

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

     185        231,300   

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

     2,525        1,713,541   

San Marino Unified School District, GO, Series A (NPFGC), 0.00%, 7/01/19 (a)

     2,070        1,997,943   

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

     3,020        3,046,425   

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     1,265        1,503,655   

6.50%, 4/01/33

     7,325        8,535,456   

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

    

Series I, 5.00%, 11/01/38

     405        483,064   

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

     600        717,588   

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

     1,130        1,130,396   
    

 

 

 
               28,366,495   

Colorado — 1.7%

    

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

     1,055        1,138,313   
Municipal Bonds   

Par  

(000)

    Value  

Colorado (continued)

    

County of Adams Colorado, COP, Refunding, 4.00%, 12/01/40

   $ 400      $ 431,724   

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

     510        585,776   

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

     920        1,046,749   
    

 

 

 
               3,202,562   

Delaware — 1.9%

    

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

     570        623,341   

Delaware Transportation Authority, RB, 5.00%, 6/01/55

     605        691,303   

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

     2,050        2,152,971   
    

 

 

 
               3,467,615   

District of Columbia — 3.5%

    

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

    

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

     255        283,466   

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

     1,000        1,115,930   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/34 (a)

     10,170        5,111,747   
    

 

 

 
               6,511,143   

Florida — 3.9%

    

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

     1,725        1,941,298   

County of Broward Florida Water & Sewer Utility, Refunding RB, Series A, 5.25%, 10/01/18 (d)

     545        603,201   

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

     700        794,388   

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

     695        229,579   

Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/21 (d)

     1,525        1,998,070   

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

     450        389,799   

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

     1,190        1,327,338   
    

 

 

 
               7,283,673   

Georgia — 1.0%

    

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

     270        325,979   

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

     420        471,689   

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

     740        826,410   

Municipal Electric Authority of Georgia, RB, Plant Vogtle Units 3 & 4 Project, Series A, 5.00%, 7/01/60

     255        288,915   
    

 

 

 
               1,912,993   

Hawaii — 0.4%

    

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

     680        775,785   

Idaho — 1.1%

    

County of Power Idaho Industrial Development Corp., RB, FMC Corp. Project, AMT, 6.45%, 8/01/32

     2,000        2,004,400   
 

 

See Notes to Financial Statements.

 

                
42    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois — 17.2%

    

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

    

Series A, 5.75%, 1/01/39

   $ 2,500      $ 2,914,900   

Series C, 6.50%, 1/01/41

     2,935        3,559,216   

City of Chicago Illinois, GO, Project, Series A, 5.00%, 1/01/34

     915        884,704   

City of Chicago Illinois, GO, Refunding, Project, Series A, 5.25%, 1/01/32

     2,290        2,270,512   

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

     598        600,715   

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

     530        578,946   

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

     3,645        3,962,844   

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

     410        465,977   

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

     800        913,008   

Illinois State Toll Highway Authority, RB:

    

Senior, Series C, 5.00%, 1/01/36

     1,355        1,583,060   

Senior, Series C, 5.00%, 1/01/37

     1,450        1,687,989   

Series A, 5.00%, 1/01/38

     1,165        1,325,269   

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

    

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

     9,555        2,465,286   

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

     2,230        2,384,874   

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

     1,260        1,320,152   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     230        271,184   

6.00%, 6/01/28

     500        597,505   

State of Illinois, GO:

    

5.00%, 2/01/39

     810        854,655   

Series A, 5.00%, 4/01/38

     1,920        2,018,438   

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

     315        349,445   

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

    

5.00%, 4/01/39

     425        478,465   

5.00%, 4/01/44

     520        581,942   
    

 

 

 
               32,069,086   

Indiana — 4.7%

    

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

    

6.75%, 1/01/34

     415        508,798   

7.00%, 1/01/44

     1,000        1,233,650   

Indiana Finance Authority, RB, Series A:

    

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

     1,660        1,959,746   

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

     225        244,300   

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

     740        800,081   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.25%, 1/01/51

     210        229,776   

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

     420        470,077   

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

     1,660        1,883,370   

Indiana Municipal Power Agency, RB, Series B, 6.00%, 1/01/19 (d)

     565        641,546   

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

     640        746,003   
    

 

 

 
               8,717,347   
Municipal Bonds   

Par  

(000)

    Value  

Iowa — 1.5%

    

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

    

5.00%, 12/01/19

   $ 485      $ 501,049   

5.25%, 12/01/25

     230        247,558   

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

     770        818,541   

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

     1,270        1,269,860   
    

 

 

 
               2,837,008   

Kansas — 0.7%

    

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

     1,105        1,269,402   

Kentucky — 0.6%

    

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

     520        588,573   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/43 (e)

     635        510,527   
    

 

 

 
               1,099,100   

Louisiana — 3.3%

    

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

     420        470,056   

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

     2,500        2,708,750   

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

     310        341,787   

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

    

5.50%, 5/15/30

     510        573,015   

5.25%, 5/15/31

     435        488,836   

5.25%, 5/15/32

     555        631,840   

5.25%, 5/15/33

     600        672,528   

5.25%, 5/15/35

     255        287,252   
    

 

 

 
               6,174,064   

Maine — 0.1%

    

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

     150        165,737   

Maryland — 1.0%

    

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

     220        240,779   

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

     390        376,003   

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

     1,095        1,263,466   
    

 

 

 
               1,880,248   

Massachusetts — 1.9%

    

Massachusetts Development Finance Agency, Refunding RB:

    

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

     845        1,045,628   

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

     1,155        1,160,648   

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

     360        401,202   

Massachusetts HFA, Refunding RB, Series F, AMT, 5.70%, 6/01/40

     960        1,010,832   
    

 

 

 
               3,618,310   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    43


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

Municipal Bonds   

Par  

(000)

    Value  

Michigan — 3.0%

    

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

   $ 2,235      $ 2,487,018   

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

     690        779,645   

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

     455        497,324   

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

     1,520        1,728,620   
    

 

 

 
               5,492,607   

Minnesota — 1.0%

    

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series A, 6.75%, 11/15/18 (d)

     1,540        1,767,797   

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        142,161   

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

     130        145,345   
    

 

 

 
               287,506   

New Hampshire — 0.9%

    

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

     1,530        1,754,237   

New Jersey — 6.1%

    

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     530        549,117   

5.25%, 11/01/44

     790        814,032   

County of Essex New Jersey Improvement Authority, RB, AMT, 5.25%, 7/01/45 (b)

     560        571,318   

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

    

5.13%, 9/15/23

     1,040        1,159,485   

5.25%, 9/15/29

     990        1,095,801   

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

     1,125        1,318,084   

New Jersey State Turnpike Authority, RB, Series E, 5.00%, 1/01/45

     1,355        1,565,011   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     1,810        1,920,265   

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

     1,025        1,119,413   

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

     1,235        1,329,589   
    

 

 

 
               11,442,115   

New York — 7.7%

    

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

     740        864,083   

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

     1,000        1,053,510   

County of Dutchess New York IDA, Refunding RB, Bard College Civic Facility, Series A-1, 5.00%, 8/01/46

     1,355        1,293,944   

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

     271        307,579   
Municipal Bonds   

Par  

(000)

    Value  

New York (continued)

    

Erie Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed, Series A, 5.00%, 6/01/45

   $ 1,020      $ 1,015,308   

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

     1,050        1,175,275   

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

     1,255        1,521,361   

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

     1,270        1,452,143   

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

     615        692,072   

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

     1,495        1,619,145   

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

     175        192,096   

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

     440        484,752   

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

    

6.00%, 12/01/36

     650        763,757   

6.00%, 12/01/42

     630        739,412   

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

     1,200        1,200,012   
    

 

 

 
               14,374,449   

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        784,573   

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

     305        349,356   
    

 

 

 
               1,133,929   

Ohio — 0.5%

    

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

     350        387,478   

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

     420        460,660   
    

 

 

 
               848,138   

Pennsylvania — 2.4%

    

City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 7/01/42

     335        367,565   

Pennsylvania Economic Development Financing Authority, RB:

    

American Water Co. Project, 6.20%, 4/01/39

     1,830        2,077,965   

Pennsylvania Bridge Finco LP, AMT, 5.00%, 6/30/42

     440        493,641   

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

     800        839,872   

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     585        672,516   
    

 

 

 
               4,451,559   

Rhode Island — 1.8%

    

Tobacco Settlement Financing Corp., Refunding RB, Series B:

    

4.50%, 6/01/45

     1,375        1,425,847   

5.00%, 6/01/50

     1,895        2,009,970   
    

 

 

 
               3,435,817   
 

 

See Notes to Financial Statements.

 

                
44    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

Municipal Bonds   

Par  

(000)

    Value  

South Carolina — 3.7%

    

State of South Carolina Ports Authority, RB:

    

5.25%, 7/01/40

   $ 1,650      $ 1,864,302   

AMT, 5.25%, 7/01/55

     670        759,418   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     2,040        2,395,817   

State of South Carolina Public Service Authority, Refunding RB, Series E, 5.25%, 12/01/55

     1,635        1,917,217   
    

 

 

 
               6,936,754   

Tennessee — 2.5%

    

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     720        814,947   

County of Hardeman Tennessee Correctional Facilities Corp., RB, Series B, 7.38%, 8/01/17

     845        847,163   

County of Shelby Tennessee Health Educational & Housing Facilities Board, Refunding RB, St. Jude’s Children’s Research Hospital, 5.00%, 7/01/31

     2,500        2,519,800   

Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board, RB, Vanderbilt University Medical Center, Series A, 5.00%, 7/01/46

     360        415,530   
    

 

 

 
               4,597,440   

Texas — 5.3%

    

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/46

     1,070        1,277,644   

Sub-Lien, 5.00%, 1/01/33

     180        200,119   

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

     310        349,630   

City of Austin Texas Airport System, ARB, Revenue, AMT, 5.00%, 11/15/39

     320        361,994   

City of Houston Texas Airport System, Refunding ARB, Senior Lien, Series A, 5.50%, 7/01/39

     535        585,627   

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        283,908   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (d)

     1,380        1,607,852   

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        907,914   

0.00%, 9/15/41

     1,395        475,527   

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

     320        376,029   

New Hope Cultural Education Facilities Corp., RB, Collegiate Housing Tarleton State University Project, 5.00%, 4/01/35

     145        160,370   

North Texas Tollway Authority, RB, CAB, Special Project System, Series B, 0.00%, 9/01/37 (a)

     1,015        434,197   

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

    

LBJ Infrastructure Group LLC, 7.00%, 6/30/40

     1,165        1,396,346   

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

     1,300        1,532,193   
    

 

 

 
               9,949,350   

Vermont — 0.1%

    

Vermont Educational & Health Buildings Financing Agency, RB, Development & Mental Health, 6.50%, 6/15/32

     80        80,970   
Municipal Bonds   

Par  

(000)

    Value  

Virginia — 2.7%

    

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

   $ 2,500      $ 2,588,950   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

    

5.25%, 1/01/32

     400        450,828   

6.00%, 1/01/37

     1,640        1,941,317   
    

 

 

 
               4,981,095   

Washington — 2.3%

    

Grant County Public Utility District No 2, Refunding RB, Series A:

    

5.00%, 1/01/41

     985        1,159,247   

5.00%, 1/01/43

     1,125        1,320,896   

Port of Seattle Washington, RB, Series C, AMT, 5.00%, 4/01/40

     390        445,169   

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     1,195        1,424,978   
    

 

 

 
               4,350,290   

Wisconsin — 3.5%

    

State of Wisconsin, Refunding RB, Series A, 6.00%, 5/01/36

     3,620        4,162,819   

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

     1,235        1,400,021   

State of Wisconsin Health & Educational Facilities Authority, Refunding RB, Medical College of Wisconsin, Inc., 4.00%, 12/01/46 (c)

     945        991,201   
    

 

 

 
               6,554,041   
Total Municipal Bonds — 108.3%              202,026,370   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
              

California — 7.5%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/19 (d)

     1,640        1,866,915   

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

     1,335        1,474,668   

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/39

     4,770        5,384,233   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Senior Series A, 5.00%, 5/15/40

     2,967        3,371,355   

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

     1,170        1,234,491   

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

     553        629,150   
    

 

 

 
               13,960,812   

Colorado — 3.5%

    

Colorado Health Facilities Authority, RB, Catholic Health (AGM) (d):

    

Series C-3, 5.10%, 4/29/18

     1,870        2,032,110   

Series C-7, 5.00%, 5/01/18

     1,200        1,301,916   

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

     1,080        1,214,590   

County of Adams Colorado, COP, Refunding, 4.00%, 12/01/45

     1,950        2,074,585   
    

 

 

 
               6,623,201   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    45


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
  

Par  

(000)

    Value  

Connecticut — 2.6%

    

Connecticut State Health & Educational Facility Authority, RB, Yale University:

    

Series T-1, 4.70%, 7/01/29

   $ 2,299      $ 2,401,448   

Series X-3, 4.85%, 7/01/37

     2,362        2,474,618   
    

 

 

 
               4,876,066   

Florida — 1.7%

    

County of Miami-Dade Florida, RB, Water & Sewer System, 5.00%, 10/01/34

     2,840        3,248,500   

Georgia — 1.0%

    

Private Colleges & Universities Authority, Refunding RB, Emory University, Series C, 5.00%, 9/01/38

     1,649        1,803,022   

Massachusetts — 2.0%

    

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

     3,211        3,771,134   

New Hampshire — 0.6%

    

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

     1,019        1,151,566   

New York — 9.4%

    

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        918,129   

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

     3,299        3,652,241   

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

     810        952,254   

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

     5,400        6,414,851   

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

     3,250        3,879,247   

Port Authority of New York & New Jersey, Refunding ARB, 194th Series, 5.25%, 10/15/55

     1,350        1,626,831   
    

 

 

 
               17,443,553   

North Carolina — 1.3%

    

North Carolina Capital Facilities Finance Agency, Refunding RB:

    

Duke University Project, Series B, 5.00%, 10/01/55

     1,320        1,557,811   

Wake Forest University, 5.00%, 1/01/38

     800        881,032   
    

 

 

 
               2,438,843   

Ohio — 4.2%

    

State of Ohio, Refunding RB, Cleveland Clinic Health System Obligated Group, Series A, 5.50%, 1/01/39

     6,974        7,820,970   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
  

Par  

(000)

    Value  

Texas — 5.0%

    

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

   $ 1,260      $ 1,464,838   

County of Harris Texas, RB, Senior Lien, Toll Road, Series A, 5.00%, 8/15/38 (g)

     3,363        3,742,693   

County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

     1,710        1,987,790   

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

     1,801        2,129,939   
    

 

 

 
               9,325,260   

Utah — 0.8%

    

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

     1,395        1,524,994   

Virginia — 2.5%

    

University of Virginia, Refunding RB, GO, 5.00%, 6/01/40

     2,729        2,961,299   

Virginia Small Business Financing Authority, Refunding RB, Sentara Healthcare, 5.00%, 11/01/40

     1,553        1,741,961   
    

 

 

 
               4,703,260   

Washington — 0.8%

    

Central Puget Sound Regional Transit Authority, RB, Series A (AGM), 5.00%, 11/01/17 (d)

     1,365        1,452,331   

Wisconsin — 1.7%

    

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

     2,859        3,101,993   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 44.6%
             83,245,505   

Total Long-Term Investments

(Cost — $254,101,213) — 152.9%

             285,271,875   
    
   
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, 0.19% (h)(i)

     866,768        866,768   

Total Short-Term Securities
(Cost — $866,768) — 0.5%

   

    866,768   
Total Investments (Cost — $254,967,981) — 153.4%        286,138,643   
Other Assets Less Liabilities — 0.8%        1,540,144   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (24.7)%

   

    (46,125,476
VMTP Shares, at Liquidation Value — (29.5)%        (55,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 186,553,311   
    

 

 

 
 
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)   When-issued security.

 

(d)   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.

 

(e)   Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end.

 

(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 4 of the Notes to Financial Statements for details.

 

(g)   All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between October 1, 2016 to February 15, 2031, is $8,457,549. See Note 4 of the Notes to Financial Statements for details.

 

See Notes to Financial Statements.

 

                
46    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

 

(h)   During the year ended April 30, 2016, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate      Shares Held
at April 30,
2015
       Net
Activity
       Shares Held
at April 30,
2016
    Income       

BlackRock Liquidity Funds, MuniCash

                 866,768           866,768      $ 131     

FFI Institutional Tax-Exempt Fund

       681,480           (681,480               452       

Total

                 866,768      $      583     
              

 

 

 

(i)   Current yield as of period end.

 

Derivative Financial Instruments as of Period End

Futures Contracts

 

Contracts
Short
     Issue      Expiration      Notional
Value
  Unrealized
Appreciation
      
  (10    5-Year U.S. Treasury Note      June 2016      $1,209,141   $ 3,979     
  (22    10-Year U.S. Treasury Note      June 2016      $2,861,375     19,462     
  (10    Long U.S. Treasury Bond      June 2016      $1,633,125     24,790     
  (4    Ultra U.S. Treasury Bond      June 2016      $   685,375     10,057       
  Total                   $ 58,288     
              

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

Assets — Derivative Financial Instruments      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

       Net unrealized appreciation 1                                     $ 58,288               $ 58,288   

1    Includes cumulative appreciation (depreciation) on futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

        

For the year ended April 30, 2016, the effect of derivative financial instruments in the Statements of Operations was as follows:   
Net Realized Gain (Loss) from:      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

                                              $ (469,399            $ (469,399
                         

Net Change in Unrealized Appreciation (Depreciation) on:

                                                         

Futures contracts

                                              $ 216,523               $    216,523   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:

        

Average notional value of contracts — short

   $ 7,576,646   

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    47


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

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

            $ 285,271,875                   $ 285,271,875   

Short-Term Securities

  $ 866,768                               866,768   
 

 

 

 

Total

  $ 866,768         $ 285,271,875                   $ 286,138,643   
 

 

 

 
                
Derivative Financial Instruments 2                                         

Assets:

                

Interest rate contracts

  $ 58,288                             $ 58,288   

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

       

2    Derivative financial instruments are futures contracts. Futures contracts 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 period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for futures contracts

  $ 90,200                             $ 90,200   

Liabilities:

                

Bank overdraft

            $ (63,159                  (63,159

TOB Trust Certificates

              (46,103,103                  (46,103,103

VMTP Shares

              (55,000,000                  (55,000,000
 

 

 

 

Total

  $ 90,200         $ (101,166,262                $ (101,076,062
 

 

 

 

During the year ended April 30, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
48    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments April 30, 2016

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 1.7%

  

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/19 (a)

   $ 2,330      $ 2,687,562   

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

     565        629,862   
    

 

 

 
               3,317,424   

California — 26.0%

  

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

     2,895        3,197,875   

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

     1,730        2,078,145   

Central Unified School District, GO, Election of 2008, Series A (AGC), 5.63%, 8/01/33

     1,325        1,508,089   

City & County of San Francisco California Airports Commission, Refunding ARB, AMT, Series A:

    

2nd, 5.50%, 5/01/28

     1,085        1,323,114   

2nd, 5.25%, 5/01/33

     850        992,817   

5.00%, 5/01/44

     1,090        1,234,174   

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

     1,575        1,718,813   

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

    

5.50%, 3/01/30

     2,400        2,798,808   

5.75%, 3/01/34

     2,180        2,567,343   

City of Sunnyvale California, Refunding RB, 5.25%, 4/01/40

     1,605        1,838,865   

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

     2,100        2,299,206   

County of Ventura California Community College District, GO, Election of 2002, Series C, 5.50%, 8/01/18 (a)

     1,850        2,048,931   

Golden Empire Schools Financing Authority, Refunding RB, Kern High School District Project, 0.91%, 5/01/17 (b)

     1,140        1,139,590   

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

     1,420        1,791,870   

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

     1,000        1,167,170   

Oceanside Unified School District, GO, Series A (AGC), 5.25%, 8/01/33

     1,825        1,986,184   

Redondo Beach Unified School District, GO, Election of 2008, Series E, 5.50%, 8/01/21 (a)

     1,335        1,638,339   

Riverside County Public Financing Authority, RB, Capital Facilities Project, 5.25%, 11/01/40

     2,500        3,010,400   

San Pablo Joint Powers Financing Authority, RB (NPFGC) (c):

    

0.00%, 12/01/16 (a)

     4,725        2,910,813   

0.00%, 12/01/24

     940        598,169   

0.00%, 12/01/25

     840        505,310   

0.00%, 12/01/26

     840        477,624   

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

    

5.50%, 11/01/30

     1,500        1,870,125   

5.50%, 11/01/31

     2,465        3,061,579   

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

     725        888,393   

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

     540        656,996   
Municipal Bonds    Par  
(000)
    Value  

California (continued)

  

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

   $ 4,070      $ 4,898,082   
    

 

 

 
               50,206,824   

Colorado — 2.2%

  

City & County of Denver Colorado Airport System, ARB, Series A, AMT:

    

5.50%, 11/15/28

     1,000        1,196,650   

5.50%, 11/15/30

     340        404,647   

5.50%, 11/15/31

     405        480,715   

Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM), 6.00%, 5/15/19 (a)

     1,900        2,115,441   
    

 

 

 
               4,197,453   

District of Columbia — 1.2%

    

District of Columbia Water & Sewer Authority, Refunding RB, Series A, 5.50%, 10/01/18 (a)

     2,000        2,226,560   

Florida — 15.7%

    

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

     400        486,784   

County of Broward Florida Airport System Revenue, ARB, Series A, AMT, 5.00%, 10/01/45

     2,845        3,246,230   

County of Hillsborough Florida Aviation Authority, Refunding ARB, Tampa International Airport, Series A, AMT, 5.50%, 10/01/29

     1,735        2,064,858   

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

     230        235,660   

County of Lee Florida, Refunding ARB, Series A, AMT, 5.38%, 10/01/32

     1,500        1,725,630   

County of Miami-Dade Florida, RB, Seaport:

    

Series A, 5.38%, 10/01/33

     1,015        1,180,547   

Series A, 6.00%, 10/01/38

     1,000        1,231,930   

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

     460        575,833   

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

     615        740,565   

County of Miami-Dade Florida Aviation, Refunding ARB, Series A, AMT, 5.00%, 10/01/31

     2,900        3,333,492   

County of Miami-Dade Florida Educational Facilities Authority, RB, University Miami, Series A, 5.00%, 4/01/40

     3,465        4,030,384   

County of Orange Florida School Board, COP, Series A (AGC), 5.50%, 8/01/19 (a)

     4,645        5,334,039   

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

     1,040        1,247,126   

Tohopekaliga Water Authority, Refunding RB, Series A, 5.25%, 10/01/21 (a)

     3,995        4,845,376   
    

 

 

 
               30,278,454   

Hawaii — 1.4%

    

State of Hawaii, Department of Transportation, COP, AMT:

    

5.25%, 8/01/25

     425        511,662   

5.25%, 8/01/26

     460        551,071   

State of Hawaii, Department of Transportation, RB, Series A, AMT, 5.00%, 7/01/45

     1,500        1,706,700   
    

 

 

 
               2,769,433   

Illinois — 15.8%

    

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

    

Series A, 5.75%, 1/01/39

     1,145        1,335,024   

Series C, 6.50%, 1/01/41

     5,225        6,336,253   

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

     1,000        1,115,790   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    49


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

Municipal Bonds    Par  
(000)
    Value  

Illinois (continued)

    

City of Chicago Illinois Transit Authority, RB:

    

Federal Transit Administration, Section 5309, Series A (AGC), 6.00%, 12/01/18 (a)

   $ 2,000      $ 2,265,100   

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

     1,000        1,100,900   

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

     1,790        1,955,307   

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

     2,050        2,199,219   

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

    

5.50%, 12/01/38

     2,250        2,557,192   

5.25%, 12/01/43

     4,015        4,459,822   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,405        1,656,579   

6.00%, 6/01/28

     400        478,004   

State of Illinois, GO:

    

5.25%, 2/01/31

     875        958,869   

5.25%, 2/01/32

     1,355        1,481,069   

5.50%, 7/01/33

     2,000        2,206,300   

5.50%, 7/01/38

     425        464,385   
    

 

 

 
               30,569,813   

Indiana — 3.8%

    

Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges, Series A, AMT, 5.00%, 7/01/40

     565        617,195   

Indianapolis Local Public Improvement Bond Bank, RB, Series F, 5.25%, 2/01/36

     3,055        3,518,902   

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

     2,780        3,120,800   
    

 

 

 
               7,256,897   

Louisiana — 1.6%

    

Lake Charles Harbor & Terminal District, RB, Series B, AMT (AGM), 5.50%, 1/01/29

     1,500        1,805,370   

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

     1,215        1,334,422   
    

 

 

 
               3,139,792   

Massachusetts — 0.8%

    

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

     1,500        1,574,865   

Michigan — 1.2%

    

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

     1,910        2,240,812   

Minnesota — 0.8%

    

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

    

6.50%, 11/15/18 (a)

     205        234,036   

6.50%, 11/15/38

     1,120        1,261,904   
    

 

 

 
               1,495,940   

Mississippi — 2.4%

    

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

     2,595        3,490,976   

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

     1,000        1,202,730   
    

 

 

 
               4,693,706   

Nebraska — 0.8%

    

Public Power Generation Agency, RB, Whelan Energy Center, Series 2-A (d):

    

5.00%, 1/01/38

     320        375,401   

5.00%, 1/01/39

     320        374,489   
Municipal Bonds    Par  
(000)
    Value  

Nebraska (continued)

    

Public Power Generation Agency, RB, Whelan Energy Center, Series 2-A (d) (continued):

    

5.00%, 1/01/40

   $ 355      $ 415,787   

5.00%, 1/01/41

     320        374,490   
    

 

 

 
               1,540,167   

Nevada — 3.6%

    

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

     1,410        1,585,277   

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

     3,500        3,773,910   

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

     1,500        1,691,280   
    

 

 

 
               7,050,467   

New Jersey — 7.9%

    

New Jersey EDA, RB, Private Activity Bond, The Goethals Bridge Replacement Project, AMT:

    

5.38%, 1/01/43

     3,000        3,377,610   

(AGM), 5.00%, 1/01/31

     790        890,267   

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

     2,100        2,358,531   

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

    

Series A, 5.50%, 6/15/41

     1,780        1,943,956   

Series A (AGC), 5.63%, 12/15/28

     3,170        3,559,117   

Series AA, 5.50%, 6/15/39

     1,890        2,091,380   

Series B, 5.25%, 6/15/36

     1,000        1,076,590   
    

 

 

 
               15,297,451   

New York — 5.5%

  

City of New York New York Municipal Water Finance Authority, Refunding RB, 2nd General Resolution, Series EE:

    

Fiscal 2009, 5.25%, 6/15/40

     3,410        3,836,250   

Water & Sewer System, 5.38%, 6/15/43

     1,305        1,531,940   

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

     2,510        2,951,082   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 166th Series, 5.25%, 7/15/36

     2,000        2,335,660   
    

 

 

 
               10,654,932   

Ohio — 1.2%

  

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

     2,000        2,416,620   

Pennsylvania — 3.6%

    

Pennsylvania Turnpike Commission, RB, Series B, 5.00%, 12/01/45

     4,990        5,762,153   

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

     1,000        1,160,700   
    

 

 

 
               6,922,853   

South Carolina — 5.8%

  

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

     2,180        2,640,634   

County of Charleston South Carolina Airport District, ARB, Series A, AMT:

    

5.50%, 7/01/38

     1,000        1,153,930   

6.00%, 7/01/38

     1,695        2,016,050   

5.50%, 7/01/41

     1,000        1,152,540   

South Carolina Ports Authority, RB, AMT, 5.25%, 7/01/50

     1,095        1,246,033   
 

 

See Notes to Financial Statements.

 

                
50    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

Municipal Bonds    Par  
(000)
    Value  

South Carolina (continued)

    

State of South Carolina Public Service Authority, Refunding RB, Series E, 5.25%, 12/01/55

   $ 2,500      $ 2,931,525   
    

 

 

 
               11,140,712   

Tennessee — 1.5%

  

Metropolitan Nashville Airport Authority, ARB, Series B, AMT, 5.00%, 7/01/40

     2,500        2,874,425   

Texas — 23.7%

    

Austin Community College District Public Facility Corp., RB, Educational Facilities Project, Round Rock Campus, 5.25%, 8/01/18 (a)

     2,500        2,750,125   

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

     1,360        1,622,942   

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

    

6.00%, 5/15/19 (a)

     3,790        4,374,759   

6.00%, 11/15/35

     210        243,638   

Dallas Area Rapid Transit, Refunding RB:

    

Senior Lien, 5.25%, 12/01/18 (a)

     1,490        1,658,996   

Senior Lien, 5.25%, 12/01/38

     1,110        1,228,293   

Series A, 5.00%, 12/01/48

     1,425        1,685,690   

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

    

Series A, 5.00%, 11/01/38

     2,965        3,305,738   

Series H, 5.00%, 11/01/37

     2,200        2,457,246   

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

     1,240        1,499,371   

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

     4,250        5,025,540   

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

    

Series A, 5.63%, 1/01/18 (a)

     2,940        3,175,641   

Series A, 5.63%, 1/01/33

     3,645        3,902,337   

Series S, 5.75%, 1/01/18 (a)

     7,820        8,462,960   

Series SE, 5.75%, 1/01/40

     3,340        3,586,800   

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

     620        739,635   
    

 

 

 
               45,719,711   

Virginia — 1.1%

    

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

     570        656,298   

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

     1,300        1,491,165   
    

 

 

 
               2,147,463   

Washington — 1.5%

    

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

     1,375        1,598,754   

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

     1,075        1,257,986   
    

 

 

 
               2,856,740   
Total Municipal Bonds — 130.8%              252,589,514   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
 

Colorado — 3.1%

  

Colorado Health Facilities Authority, RB, Catholic Health, Series C-3 (AGM), 5.10%, 4/29/18 (a)

     5,610        6,097,633   

Connecticut — 1.1%

    

Connecticut State Health & Educational Facility Authority, Refunding RB, Trinity Health Credit Group, 5.00%, 12/01/45

     1,771        2,078,704   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

District of Columbia — 0.6%

    

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

   $ 1,039      $ 1,170,076   

Florida — 4.3%

    

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1, 6.00%, 7/01/18 (a)

     7,500        8,381,400   

Illinois — 1.4%

    

City of Chicago Illinois, Refunding RB, Waterworks, 2nd Lien (AGM), 5.25%, 11/01/33

     2,508        2,664,009   

Kentucky — 0.8%

    

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

     1,406        1,561,724   

Michigan — 1.8%

    

Michigan State Building Authority, Refunding RB, Facilities Program, Series I, 5.00%, 10/15/45

     3,020        3,492,721   

Nevada — 5.1%

    

County of Clark Nevada Water Reclamation District, GO:

    

Limited Tax, 6.00%, 7/01/18 (a)

     5,000        5,565,650   

Series B, 5.50%, 7/01/29

     3,749        4,258,629   
    

 

 

 
               9,824,279   

New Jersey — 1.3%

    

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

     2,289        2,435,008   

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        1,549,436   

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

     4,530        5,381,347   

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

     2,660        3,175,014   
    

 

 

 
               10,105,797   

Utah — 0.6%

    

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

     1,005        1,098,652   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 25.3%
        48,910,003   

Total Long-Term Investments

(Cost — $270,744,967) — 156.1%

  

  

    301,499,517   
    
   
Short Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, 0.19% (g)(h)

     1,352,893        1,352,893   

Total Short-Term Securities

(Cost — $1,352,893) — 0.7%

  

  

    1,352,893   
Total Investments (Cost — $272,097,860) — 156.8%        302,852,410   
Other Assets Less Liabilities — 0.9%        1,700,519   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (12.6)%

   

    (24,442,672
VMTP Shares, at Liquidation Value — (45.1)%        (87,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 193,110,257   
 

 

 

 
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    51


Schedule of Investments (continued)

  

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)   Variable rate security. Rate as of period end.

 

(c)   Zero-coupon bond.

 

(d)   When-issued security.

 

(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 4 of the Notes to Financial Statements for details.

 

(f)   All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between October 1, 2016 to November 15, 2019, is $2,225,650. See Note 4 of the Notes to Financial Statements for details.

 

(g)   During the year ended April 30, 2016, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate      Shares Held
at April 30,
2015
       Net
Activity
    Shares Held
at April 30,
2016
    Income  

BlackRock Liquidity Funds, MuniCash

                 1,352,893        1,352,893      $ 465   

FFI Institutional Tax-Exempt Fund

       3,776,544           (3,776,544            505   

Total

              1,352,893      $      970   
           

 

 

 

 

(h)   Current yield as of period end.

 

Derivative Financial Instruments as of Period End

Futures Contracts

 

Contracts
Short
       Issue      Expiration      Notional Value   Unrealized
Appreciation
      
  (8      5-Year U.S. Treasury Note      June 2016      $   967,313   $ 3,365     
  (30      10-Year U.S. Treasury Note      June 2016      $3,901,875     19,415     
  (9      Long U.S. Treasury Bond      June 2016      $1,469,813     21,097     
  (2      Ultra U.S. Treasury Bond      June 2016      $   342,687     5,660       
  Total                     $ 49,537     
                

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

Assets — Derivative Financial Instruments      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

       Net unrealized appreciation 1                                     $ 49,537               $ 49,537   

1    Includes cumulative appreciation (depreciation) on futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

        

For the year ended April 30, 2016, the effect of derivative financial instruments in the Statements of Operations was as follows:   
Net Realized Gain (Loss) from:      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

                                              $ (549,885            $ (549,885
                         
Net Change in Unrealized Appreciation (Depreciation) on:                                                          

Futures contracts

                                              $ 195,331               $    195,331   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments     

 

Futures contracts:

       

Average notional value of contracts — short

  $ 9,948,344   

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

                
52    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

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

            $ 301,499,517                   $  301,499,517   

Short-Term Securities

  $ 1,352,893                               1,352,893   
 

 

 

 

Total

  $ 1,352,893         $ 301,499,517                   $ 302,852,410   
 

 

 

 
                
Derivative Financial Instruments2                         

Assets:

                

Interest rate contracts

  $ 49,537                             $ 49,537   

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

      

2   Derivative financial instruments are futures contracts. Futures contracts 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 period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash

  $ 1,037,654                             $ 1,037,654   

Cash pledged for futures contracts

    119,150                               119,150   

Liabilities:

                

TOB Trust Certificates

            $ (24,428,564                  (24,428,564

VMTP Shares

              (87,000,000                  (87,000,000
 

 

 

 

Total

  $ 1,156,804         $ (111,428,564                $ (110,271,760
 

 

 

 

During the year ended April 30, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    53


Schedule of Investments April 30, 2016

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 2.8%

  

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/19 (a)

   $ 4,615      $ 5,323,219   

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

    

5.50%, 1/01/21

     5,500        5,533,000   

5.25%, 1/01/23

     6,500        6,539,000   
    

 

 

 
               17,395,219   

Arizona — 3.5%

  

Arizona Board of Regents, University of Arizona, RB, 5.00%, 8/01/28

     2,000        2,334,820   

Arizona Health Facilities Authority, Refunding RB, Phoenix Children’s Hospital, Series A, 5.00%, 2/01/30

     2,685        2,993,856   

Arizona State University, RB, Series D, 5.00%, 7/01/32

     1,350        1,649,821   

City of Phoenix Arizona IDA, RB, Facility, Legacy Traditional Schools Project, Series A, 5.75%, 7/01/24 (b)

     750        864,390   

City of Tucson Arizona, COP, Refunding (AGC), 4.00%, 7/01/20

     2,325        2,588,608   

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

     80        78,610   

County of Pinal Arizona Electric District No. 3, Refunding RB, 5.00%, 7/01/25

     1,600        1,863,792   

Glendale Union School District No. 205, GO, Series C:

    

5.00%, 7/01/24

     1,945        2,374,437   

5.00%, 7/01/27

     500        594,785   

Phoenix-Mesa Gateway Airport Authority, RB, Mesa Project, AMT:

    

5.00%, 7/01/27

     700        806,204   

5.00%, 7/01/32

     1,925        2,168,108   

Scottsdale IDA, Refunding RB, Scottsdale Healthcare, Series C (AGM), 5.00%, 9/01/35

     2,050        2,288,046   

State of Arizona, COP, Department of Administration, Series A (AGM), 4.25%, 10/01/23

     1,000        1,086,940   
    

 

 

 
               21,692,417   

Arkansas — 1.0%

  

Arkansas State University, RB, 5.00%, 12/01/33

     480        562,109   

City of Benton, RB, 5.00%, 6/01/29

     1,055        1,256,705   

University of Arkansas, Refunding RB:

    

5.00%, 3/01/31

     2,315        2,814,346   

5.00%, 3/01/34

     1,270        1,524,813   
    

 

 

 
               6,157,973   

California — 4.0%

  

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 5.00%, 8/15/22

     2,135        2,530,936   

California Health Facilities Financing Authority, Refunding RB, 5.00%, 11/15/29

     1,930        2,416,514   

California Infrastructure & Economic Development Bank, Refunding RB, 4.00%, 11/01/31

     1,335        1,481,877   

California Pollution Control Financing Authority, RB, Mandatory Put Bonds, Republic Services, Inc. Project, Series B, AMT, 5.25%, 6/01/23 (c)

     605        641,566   

California Pollution Control Financing Authority, Refunding RB, Pacific Gas, Series C, AMT (NPFGC), 4.75%, 12/01/23

     5,000        5,199,700   

City of San Jose California, Refunding ARB, Series A-1, AMT, 5.00%, 3/01/25

     2,000        2,277,400   
Municipal Bonds    Par  
(000)
    Value  

California (continued)

  

State of California, GO:

    

5.50%, 4/01/28

   $ 15      $ 15,065   

5.00%, 11/01/32

     2,000        2,127,640   

Various Purposes, 5.75%, 4/01/31

     7,000        7,994,420   
    

 

 

 
               24,685,118   

Colorado — 1.0%

  

Denver Urban Renewal Authority, Refunding, Tax Allocation Bond, Stapleton, Senior-Series A-1, 5.00%, 12/01/23

     2,500        3,009,975   

Park Creek Metropolitan District, Refunding, Tax Allocation Bonds, 5.00%, 12/01/34

     500        576,925   

University of Northern Colorado, Refunding RB, Series A, 5.00%, 6/01/31

     2,000        2,401,360   
    

 

 

 
               5,988,260   

Connecticut — 3.4%

  

Connecticut State Health & Educational Facility Authority, Refunding RB:

    

5.00%, 12/01/33

     4,015        4,865,217   

Lawrence & Memorial Hospital, Series F, 5.00%, 7/01/31

     4,530        5,036,590   

University of Connecticut, RB, Series A:

    

5.00%, 3/15/31

     5,025        6,113,465   

5.00%, 3/15/32

     4,000        4,843,080   
    

 

 

 
               20,858,352   

Florida — 6.8%

  

County of Broward Florida School Board, COP, Refunding, Series A (AGM), 5.00%, 7/01/24

     10,000        11,627,200   

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

    

5.50%, 10/01/23

     1,000        1,186,020   

(AGM), 5.00%, 10/01/27

     1,635        1,885,531   

County of Miami-Dade Florida, RB, AMT, Series B:

    

6.00%, 10/01/28

     3,470        4,337,986   

6.00%, 10/01/29

     3,480        4,337,750   

County of Miami-Dade Florida Transit System Sales Surtax Revenue, Refunding RB, 5.00%, 7/01/32

     1,500        1,761,960   

County of Miami-Dade Florida Water & Sewer System Revenue, Refunding RB, Series C (BHAC), 5.00%, 10/01/18 (a)

     8,000        8,814,560   

Miami-Dade County Educational Facilities Authority, Refunding RB, Series A, 5.00%, 4/01/32

     5,020        5,960,597   

Midtown Miami Community Development District, Refunding, Special Assessment Bonds, Series A, 4.25%, 5/01/24

     1,665        1,790,175   

Sterling Hill Community Development District, Refunding RB, Special Assessment Bonds, Series B, 5.50%, 11/01/10 (d)(e)

     150        107,100   
    

 

 

 
               41,808,879   

Georgia — 2.0%

  

City of Atlanta Georgia Water & Wastewater Revenue RB, Refunding, 5.00%, 11/01/32

     10,000        12,148,600   

Guam — 0.4%

    

Territory of Guam, RB, Section 30, Series A, 5.38%, 12/01/24

     2,100        2,366,700   

Hawaii — 0.9%

    

State of Hawaii Airports System, Refunding ARB, Series A, 5.25%, 7/01/29

     5,000        5,799,450   

Idaho — 0.4%

    

Boise State University, Refunding RB, Series A:

    

5.00%, 4/01/32

     1,300        1,592,968   

5.00%, 4/01/33

     1,000        1,219,440   
    

 

 

 
               2,812,408   
 

 

See Notes to Financial Statements.

 

                
54    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

Municipal Bonds    Par  
(000)
    Value  

Illinois — 17.5%

  

City of Chicago Illinois Midway International Airport, Refunding ARB, 2nd Lien, Series A, AMT, 5.50%, 1/01/32

   $ 6,500      $ 7,480,320   

City of Chicago Illinois O’Hare International Airport, Refunding GARB, AMT:

    

Senior Lien, Series A, 5.00%, 1/01/23

     13,000        15,406,430   

Series C, 5.25%, 1/01/28

     1,350        1,583,131   

Series C, 5.25%, 1/01/29

     3,020        3,525,337   

City of Chicago Illinois Transit Authority, RB, 5.25%, 12/01/31

     3,700        4,115,251   

City of Chicago O’Hare International Airport, RB, Refunding GARB, 5.00%, 1/01/32

     3,745        4,451,494   

Illinois State Toll Highway Authority, Refunding RB, Senior, Series A, 5.00%, 12/01/32

     5,690        6,872,666   

Madison-Macoupin Etc. Counties Community College District No. 536, GO, Refunding, Lewis & Clark Community College:

    

5.00%, 5/01/30

     475        535,320   

5.00%, 5/01/31

     500        563,495   

5.00%, 5/01/32

     500        561,160   

McHenry County Conservation District, GO, 5.13%, 2/01/17 (a)

     12,695        13,130,185   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     3,500        4,126,710   

6.25%, 6/01/24

     11,750        11,809,807   

State of Illinois, GO:

    

5.25%, 2/01/30

     5,000        5,500,100   

5.00%, 5/01/30

     10,000        10,855,200   

State of Illinois Toll Highway Authority, RB, Series A, 5.00%, 1/01/34

     9,140        10,511,640   

Village of Hodgkins Illinois, RB, MBM Project, AMT, 5.90%, 11/01/17

     6,000        6,011,820   

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

     1,210        1,210,787   
    

 

 

 
               108,250,853   

Indiana — 5.9%

  

City of Whiting Indiana, RB, BP Products North America, Inc. Project, 5.25%, 1/01/21

     4,800        5,538,768   

County of Jasper Indiana, Refunding RB, Northern Indiana Public Service Co., Series C (NPFGC), 5.85%, 4/01/19

     2,000        2,234,840   

Indiana Finance Authority, RB, Wastewater, 1st Lien, Series A, 5.25%, 10/01/31

     10,000        11,805,700   

Indiana Finance Authority, Refunding RB, US Steel Corp. Project, 6.00%, 12/01/19

     5,000        4,843,350   

Indiana Municipal Power Agency, Refunding RB, Series A, 5.00%, 1/01/33

     10,000        12,073,100   
    

 

 

 
               36,495,758   

Iowa — 1.3%

  

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

    

5.25%, 4/01/23

     695        822,651   

5.25%, 4/01/24

     730        862,364   

5.25%, 4/01/25

     520        613,137   

5.25%, 4/01/26

     360        423,072   

Iowa Higher Education Loan Authority, Refunding RB:

    

Drake University Project, 4.00%, 4/01/27

     620        711,549   

Drake University Project, 4.00%, 4/01/28

     750        852,367   

Private College Facility, 5.00%, 9/01/22

     2,315        2,451,631   

Private College Facility, Upper Iowa University Project, 5.00%, 9/01/20

     1,000        1,071,500   
    

 

 

 
               7,808,271   
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      $ 1,686,645   

Seward County Unified School District No. 480 Liberal, GO, Refunding, 5.00%, 9/01/33

     6,000        6,851,400   
    

 

 

 
               8,538,045   

Louisiana — 4.0%

  

City of Bossier City Louisiana Utilities, Refunding RB, 5.00%, 10/01/32

     2,000        2,379,240   

City of New Orleans Louisiana Aviation Board, Refunding GARB, Restructuring, Series A-2 (AGC), 6.00%, 1/01/23

     850        952,425   

Louisiana Local Government Environmental Facilities & Community Development Authority, Refunding RB, BRCC Facilities Corp. Project:

    

5.00%, 12/01/27

     3,445        4,016,629   

5.00%, 12/01/28

     3,715        4,331,430   

New Orleans Aviation Board, RB, Series A:

    

5.00%, 1/01/32

     1,000        1,171,670   

5.00%, 1/01/33

     1,000        1,167,480   

State of Louisiana Gasoline & Fuels Tax Revenue, Refunding RB, 4.00%, 5/01/34

     5,750        6,319,077   

Terrebonne Levee & Conservation District, RB, Sales Tax, 5.00%, 7/01/28

     3,660        4,218,333   
    

 

 

 
               24,556,284   

Maine — 0.3%

  

Portland Housing Development Corp., Refunding RB, Senior Living, Retirement Facilities, Series A, 6.00%, 2/01/34

     1,965        1,968,026   

Maryland — 0.8%

    

Maryland EDC, RB, Transportation Facilities Project, Series A, 5.13%, 6/01/20

     1,750        1,916,040   

Maryland Health & Higher Educational Facilities Authority, RB, Johns Hopkins Health System, Series B, 5.00%, 7/01/33

     1,140        1,326,823   

Maryland Health & Higher Educational Facilities Authority, Refunding RB, 5.00%, 7/01/33

     1,500        1,740,690   
    

 

 

 
               4,983,553   

Massachusetts — 0.5%

  

Massachusetts Development Finance Agency, Refunding RB, 5.00%, 1/01/31

     1,730        2,024,083   

Massachusetts Health & Educational Facilities Authority, Refunding RB, Winchester Hospital, 5.00%, 7/01/25

     1,060        1,190,963   
    

 

 

 
               3,215,046   

Michigan — 2.3%

  

Manistee Area Public Schools, GO, Refunding (Q-SBLF), 5.00%, 5/01/25

     1,000        1,159,270   

Michigan Finance Authority, Refunding RB, Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 7/01/31

     4,000        4,660,920   

Michigan State Building Authority, Refunding RB, Facilities Program, Series II-A, 5.00%, 10/15/24

     2,500        2,932,775   

Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health System, 5.25%, 11/15/24

     4,900        5,494,321   
    

 

 

 
               14,247,286   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    55


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

Municipal Bonds    Par  
(000)
    Value  

Minnesota — 1.2%

  

Minnesota Higher Education Facilities Authority, Refunding RB, University of St. Thomas, Series 8-L, 5.00%, 4/01/35

   $ 500      $ 591,855   

University of Minnesota, RB, Biomedical Science Research Facilities Funding Program:

    

Series B, 5.00%, 8/01/36

     1,000        1,157,850   

Series C, 5.00%, 8/01/27

     1,390        1,704,835   

Series C, 5.00%, 8/01/28

     740        903,088   

Series C, 5.00%, 8/01/29

     1,555        1,890,616   

Series C, 5.00%, 8/01/30

     835        1,010,275   
    

 

 

 
               7,258,519   

Montana — 0.5%

  

Gallatin County School District No 7 Bozeman, GO:

    

4.00%, 12/01/31

     340        391,112   

4.00%, 12/01/32

     305        348,490   

4.00%, 12/01/33

     255        289,405   

4.00%, 12/01/34

     360        406,854   

Montana State Board of Regents, RB, 5.00%, 11/15/30

     1,000        1,218,490   

Yellowstone County School District No. 2 Billings, GO, 5.00%, 6/15/30

     500        609,480   
    

 

 

 
               3,263,831   

Nebraska — 1.0%

  

Douglas County Hospital Authority No. 3, Refunding RB, 5.00%, 11/01/30

     800        931,472   

Lancaster County Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, 5.50%, 1/01/30

     1,000        1,137,760   

Nebraska Public Power District, Refunding RB:

    

Series A, 5.00%, 1/01/30

     1,000        1,175,920   

Series A, 5.00%, 1/01/32

     2,000        2,337,700   

Series A-1, 3.00%, 1/01/33

     900        926,361   
    

 

 

 
               6,509,213   

Nevada — 1.6%

    

Clark County Department of Aviation, Refunding RB, 5.00%, 7/01/33

     5,000        5,862,100   

County of Humboldt Nevada, Refunding RB, Idaho Power Co. Project, 5.15%, 12/01/24

     3,800        4,222,902   
    

 

 

 
               10,085,002   

New Jersey — 21.0%

    

County of Essex New Jersey Improvement Authority, LRB, Newark Project, Series A (AGM), 5.00%, 11/01/20

     2,000        2,222,580   

New Jersey EDA, RB, AMT:

    

Continental Airlines, Inc. Project, 5.13%, 9/15/23

     6,040        6,733,935   

Goethals Bridge Replacement Project, Private Activity Bond, 5.50%, 1/01/26

     1,500        1,760,850   

Goethals Bridge Replacement Project, Private Activity Bond, 5.50%, 1/01/27

     1,000        1,165,680   

New Jersey EDA, Refunding RB:

    

New Jersey American Water Co., Series E, AMT, 4.70%, 12/01/25

     3,000        3,299,190   

School Facilities Construction, Series AA, 4.25%, 12/15/24

     3,850        3,962,959   

School Facilities Construction, Series EE, 5.00%, 9/01/23

     3,465        3,783,537   

New Jersey Educational Facilities Authority, RB, Higher Education Facilities Trust Fund, 5.00%, 6/15/28

     10,000        10,899,600   

New Jersey Educational Facilities Authority, Refunding RB, 5.00%, 7/01/30

     5,000        5,921,950   
Municipal Bonds    Par  
(000)
    Value  

New Jersey (continued)

    

New Jersey Health Care Facilities Financing Authority, Refunding RB, Hackensack University Medical, Series B (AGM), 4.00%, 1/01/24

   $ 635      $ 686,060   

New Jersey Higher Education Student Assistance Authority, Refunding RB:

    

Series 1, AMT, 5.50%, 12/01/26

     1,515        1,712,117   

Student Loan, Series 1A, 4.75%, 12/01/21

     1,705        1,816,712   

New Jersey State Turnpike Authority, 5.00%, 1/01/32

     12,000        14,356,560   

New Jersey State Turnpike Authority, Refunding RB, Series B, 5.00%, 1/01/29

     10,000        11,837,400   

New Jersey Transportation Trust Fund Authority, RB:

    

Series B, 5.25%, 6/15/26

     3,500        3,844,155   

Transportation Program, Series AA, 5.25%, 6/15/31

     12,000        13,171,200   

Transportation Program, Series AA, 5.25%, 6/15/32

     2,250        2,495,880   

Transportation System, Series A, 5.25%, 6/15/24

     3,185        3,519,234   

Transportation System, Series B, 5.50%, 6/15/31

     13,970        15,561,742   

Transportation System, Series C, 5.25%, 6/15/32

     10,000        11,042,200   

Newark Housing Authority, RB, Series A:

    

5.00%, 12/01/23

     1,230        1,475,963   

5.00%, 12/01/25

     1,345        1,596,354   

South Jersey Port Corp., RB, Marine Terminal, Series O-1 (AGC), 4.63%, 1/01/23

     1,375        1,480,724   

State of New Jersey, GO, Various Purposes, 5.00%, 6/01/28

     5,000        5,894,400   
    

 

 

 
               130,240,982   

New Mexico — 1.3%

    

Albuquerque Bernalillo County Water Utility Authority, Refunding RB, 4.00%, 7/01/33

     4,510        5,033,882   

New Mexico Hospital Equipment Loan Council, Refunding RB, 5.00%, 8/01/31

     2,500        3,020,375   
    

 

 

 
               8,054,257   

New York — 18.3%

    

Build NYC Resource Corp., Refunding RB, 5.00%, 7/01/33

     3,085        3,568,697   

City of New York New York, GO, Refunding, Series A, 5.00%, 8/01/29

     6,125        7,534,669   

City of New York New York, GO:

    

Sub-Series B-1, 5.25%, 9/01/22

     4,250        4,693,572   

Sub-Series D-1, 5.13%, 12/01/17 (a)

     2,730        2,923,530   

Sub-Series D-1, 5.13%, 12/01/26

     1,885        2,018,081   

Sub-Series I-1, 5.50%, 4/01/21

     5,000        5,702,800   

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.00%, 1/15/23

     3,560        3,965,840   

County of Nassau New York, GO, Series A:

    

5.00%, 1/01/32

     1,000        1,201,200   

5.00%, 1/01/33

     3,110        3,721,053   

County of Westchester New York Healthcare Corp., Refunding RB, Senior Lien, Remarketing, Series A:

    

5.00%, 11/01/24

     5,470        6,328,626   

5.00%, 11/01/30

     655        738,080   

Long Island Power Authority, Refunding RB, Electric System, Series A, 5.50%, 4/01/19 (a)

     1,000        1,132,990   

Metropolitan Transportation Authority, RB:

    

Sub-Series B-1, 5.00%, 11/15/24

     2,300        2,770,350   

Sub-Series B-4, 5.00%, 11/15/24

     1,500        1,806,750   
 

 

See Notes to Financial Statements.

 

                
56    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

Municipal Bonds    Par  
(000)
    Value  

New York (continued)

    

Monroe County Industrial Development Corp., Refunding RB, Series A, 5.00%, 7/01/29

   $ 5,695      $ 6,818,510   

New York City Trust for Cultural Resources, Refunding RB, Carnegie Hall, Series A, 5.00%, 12/01/29

     2,750        3,108,627   

New York State Dormitory Authority, RB:

    

Education, Series D, 5.00%, 9/15/16 (a)

     5        5,085   

New York University Hospitals Center, Series A, 5.13%, 7/01/23

     1,670        1,917,945   

North Shore-Long Island Jewish Health System, Series A, 5.50%, 5/01/19 (a)

     1,495        1,702,626   

New York State Dormitory Authority, Refunding RB:

    

4.25%, 9/01/19 (a)

     480        530,645   

5.00%, 7/01/30

     1,555        1,902,527   

Port Authority of New York & New Jersey, ARB, JFK International Air Terminal LLC Project, 5.00%, 12/01/20

     2,475        2,814,694   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 152nd Series, AMT, 5.00%, 11/01/23

     1,000        1,070,540   

Port Authority of New York & New Jersey, Refunding RB, 5.00%, 11/01/28

     6,185        7,712,881   

State of New York Dormitory Authority, RB:

    

Fordham University, Series A, 5.25%, 7/01/25

     900        1,054,611   

Icahn School of Medicine at Mount Sinai, Series A, 5.00%, 7/01/32

     9,000        10,583,550   

Mental Health Services (AGM),
5.00%, 8/15/18 (a)

     10        10,979   

Mental Health Services (AGM),
5.00%, 8/15/18 (a)

     30        32,938   

Mental Health Services (AGM), 5.00%, 2/15/22

     3,950        4,331,254   

Mental Health Services, 2nd Series (AGM), 5.00%, 8/15/18 (a)

     10        10,979   

Municipal Health Facilities Lease, Sub-Series 2-4, 5.00%, 1/15/27

     6,900        7,386,381   

New York University Hospitals Center, Series A, 5.00%, 7/01/22

     1,725        1,975,056   

State of New York Dormitory Authority, Refunding RB, North Shore-Long Island Jewish Obligated Group, Series A, 5.00%, 5/01/32

     3,060        3,638,156   

State of New York Urban Development Corp., RB, Service Contract, Series B, 5.00%, 1/01/21

     7,000        7,643,720   

State of New York Urban Development Corp., Refunding RB, Series A, 4.00%, 3/15/37

     1,000        1,095,670   
    

 

 

 
               113,453,612   

North Carolina — 0.5%

    

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        1,107,155   

North Carolina Medical Care Commission, Refunding RB, WakeMed, Series A, 5.00%, 10/01/31

     1,500        1,748,040   
    

 

 

 
               2,855,195   

Ohio — 1.2%

    

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

     6,000        7,249,860   

Oklahoma — 0.7%

  

Oklahoma City Public Property Authority, Refunding RB:

    

5.00%, 10/01/27

     1,190        1,452,586   

5.00%, 10/01/28

     1,265        1,531,649   
Municipal Bonds    Par  
(000)
    Value  

Oklahoma (continued)

  

Oklahoma City Public Property Authority, Refunding RB (continued):

    

5.00%, 10/01/29

   $ 1,400      $ 1,684,354   
    

 

 

 
               4,668,589   

Oregon — 2.2%

    

Klamath County School District, GO:

    

5.00%, 6/15/30

     1,000        1,207,200   

5.00%, 6/15/31

     1,000        1,204,980   

Oregon Health & Science University, Refunding RB, Series B, 5.00%, 7/01/33

     2,500        3,065,775   

Oregon State Facilities Authority, Refunding RB, Series A:

    

Reed College Project, 5.00%, 7/01/29

     1,835        2,096,579   

5.00%, 11/15/29

     1,000        1,186,750   

State of Oregon, GO, Series H, 5.00%, 5/01/36

     2,000        2,349,080   

Umatilla County School District No. 16R Pendleton, GO, Series A, 5.00%, 6/15/32

     2,000        2,416,300   
    

 

 

 
               13,526,664   

Pennsylvania — 5.7%

    

City of Philadelphia Pennsylvania, ARB, Series A, AMT, 5.00%, 6/15/20

     2,895        3,028,054   

City of Pittsburgh Pennsylvania, GO, Refunding, Series B (AGM), 5.25%, 9/01/17

     9,630        9,790,821   

County of Allegheny Pennsylvania, GO, Refunding, Series C-68, 5.00%, 11/01/25

     2,515        2,965,386   

County of Allegheny Pennsylvania, GO, Series C-67:

    

5.00%, 11/01/25

     2,700        3,193,398   

5.00%, 11/01/26

     2,375        2,778,441   

Pennsylvania Turnpike Commission, RB:

    

Series B, 5.00%, 12/01/32

     1,500        1,792,515   

Sub-Series B, 5.25%, 12/01/31

     4,000        4,565,880   

South Fork Municipal Authority, Refunding RB, Conemaugh Valley Memorial Hospital, Series A (AGC), 6.00%, 7/01/20 (a)

     6,225        7,490,854   
    

 

 

 
               35,605,349   

Puerto Rico — 1.6%

    

Puerto Rico Housing Finance Authority, Refunding RB, M/F Housing, Subordinate, Capital Fund Modernization, 5.13%, 12/01/27

     9,000        9,766,620   

Rhode Island — 1.8%

    

Narragansett Bay Commission, Refunding RB, Series B, 5.00%, 9/01/32

     4,150        5,034,282   

Providence Redevelopment Agency, Refunding RB, Series A, 5.00%, 4/01/29

     1,000        1,138,730   

Rhode Island Health & Educational Building Corp., RB, City of Newport Issue Financing Program, Series C, 5.00%, 5/15/30

     2,305        2,677,788   

Rhode Island Health & Educational Building Corp., Refunding RB, 5.00%, 9/01/32

     2,000        2,398,540   
    

 

 

 
               11,249,340   

South Carolina — 1.9%

  

South Carolina State Public Service Authority, Refunding RB, Series A, 5.00%, 12/01/34

     10,000        11,980,100   

South Dakota — 0.2%

    

South Dakota Health & Educational Facilities Authority, Refunding RB, Regional Health, 5.00%, 9/01/25

     1,000        1,140,290   

Tennessee — 2.2%

    

County of Memphis-Shelby Tennessee Sports Authority, Inc., Refunding RB, Memphis Arena Project:

    

Series A, 5.00%, 11/01/23

     2,695        3,020,179   

Series B, 5.00%, 11/01/22

     1,000        1,123,580   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    57


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

Municipal Bonds    Par  
(000)
    Value  

Tennessee (continued)

    

Knox County Health Educational & Housing Facility Board Tennessee, Refunding RB, Eastowne Village Project, 4.00%, 6/01/31 (c)

   $ 3,350      $ 3,576,158   

Metropolitan Government Nashville & Davidson County Health & Educational Facs Bd, RB, Vanderbilt University Medical Center, Series A, 5.00%, 7/01/35

     5,000        5,875,700   
    

 

 

 
               13,595,617   

Texas — 6.7%

  

City of Grapevine Texas, GO, 5.00%, 2/15/33

     5,685        6,787,208   

City of Houston Texas, Refunding ARB, Subordinate Lien, Series A, AMT:

    

5.00%, 7/01/25

     1,500        1,717,680   

5.00%, 7/01/32

     1,010        1,133,897   

Dallas/Fort Worth International Airport, Refunding RB, AMT:

    

Series E, 5.00%, 11/01/26

     2,185        2,505,146   

Series E, 5.00%, 11/01/27

     4,960        5,678,605   

Series F, 5.00%, 11/01/31

     6,345        7,186,981   

Love Field Airport Modernization Corp., RB, Southwest Airlines Co. Project, AMT, 5.00%, 11/01/28

     1,000        1,136,380   

Red River Education Financing Corp., RB, 5.00%, 3/15/33

     1,340        1,596,141   

San Jacinto River Authority, RB, Special Project (AGM), 5.25%, 10/01/25

     2,910        3,260,248   

Socorro ISD, GO, Refunding, School Building (PSF-GTD), 5.00%, 8/15/32

     2,500        2,870,050   

Via Metropolitan Transit Authority, Refunding RB:

    

5.25%, 8/01/28

     1,585        1,894,487   

5.25%, 8/01/29

     1,720        2,040,900   

5.25%, 8/01/33

     3,000        3,537,660   
    

 

 

 
               41,345,383   

U.S. Virgin Islands — 1.0%

  

Virgin Islands Public Finance Authority, Refunding RB, Series A, 5.25%, 10/01/24

     5,000        6,253,700   

Vermont — 1.0%

    

University of Vermont & State Agricultural College, Refunding RB, 4.00%, 10/01/30

     5,565        6,241,370   

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        4,416,680   

West Virginia University, RB, West Virginia University Project, Series B, 5.00%, 10/01/30

     1,500        1,740,585   
    

 

 

 
               6,157,265   

Wisconsin — 1.3%

  

Public Finance Authority, Refunding RB, AMT:

    

National Gypsum Co., 5.25%, 4/01/30

     2,410        2,569,879   

Wisconsin Airport Facilities, Senior Obligated Group, Series B, 5.25%, 7/01/28

     4,765        5,260,227   
    

 

 

 
               7,830,106   
Total Municipal Bonds — 134.1%              830,107,362   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
              

Connecticut — 1.9%

    

Connecticut State Health & Educational Facility Authority, Refunding RB, 5.00%, 12/01/33

     10,000        12,117,580   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
   Par  
(000)
    Value  

Illinois — 1.5%

    

Du Page & Will Counties Community School District No. 204, GO, School Building, Series A (NPFGC), 5.25%, 12/30/22

   $ 8,650      $ 9,091,922   

Louisiana — 2.3%

    

State of Louisiana, GO, Series A, 5.00%, 8/01/24

     12,000        14,344,920   

Massachusetts — 1.9%

    

Massachusetts Development Finance Agency, Refunding RB, Partners Healthcare, Series L, 5.00%, 7/01/31

     10,175        11,901,998   

Minnesota — 1.9%

    

State of Minnesota, GO, State Various Purposes, Series A, 4.00%, 8/01/29

     10,525        11,599,479   

New York — 9.4%

    

City of New York New York, GO, Refunding, Series E, 5.00%, 8/01/27

     3,507        3,965,096   

City of New York New York, GO, Series I, 5.00%, 3/01/32

     7,009        8,392,892   

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, Series A, 4.75%, 6/15/30

     8,000        8,356,800   

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/19 (a)

     4,001        4,617,545   

Port Authority of New York & New Jersey, ARB, Consolidated, 169th Series, AMT, 5.00%, 10/15/26

     5,530        6,508,478   

Port Authority of New York & New Jersey, RB, 178th Series, AMT, 5.00%, 12/01/32

     4,009        4,676,709   

Sales Tax Asset Receivable Corp., Refunding RB, Fiscal 2015, Series A, 5.00%, 10/15/31

     5,010        6,205,336   

State of New York Dormitory Authority, Refunding RB, Series E, 5.25%, 3/15/33

     7,000        8,719,410   

State of New York Urban Development Corp., RB, Personal Income Tax, Series A-1, 5.00%, 3/15/32

     5,501        6,572,067   
    

 

 

 
               58,014,333   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts
— 18.9%
             117,070,232   
Total Long-Term Investments
(Cost — $876,124,519) — 153.0%
             947,177,594   
    
   
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, 0.19% (g)(h)

     12,303,103        12,303,103   

Total Short-Term Securities

(Cost — $12,303,103) — 2.0%

  

  

    12,303,103   
Total Investments (Cost — $888,427,622) — 155.0%        959,480,697   
Other Assets Less Liabilities — 1.7%        9,721,577   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (10.3)%

   

    (63,131,297
VMTP Shares, at Liquidation Value — (46.4)%        (287,100,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 618,970,977   
    

 

 

 
 

 

See Notes to Financial Statements.

 

                
58    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

 

Notes to Schedule of Investments

 

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

 

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

 

(c)   Variable rate security. Rate as of period end.

 

(d)   Non-income producing security.

 

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

 

(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 4 of the Notes to Financial Statements for details.

 

(g)   During the year ended April 30, 2016, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2015
       Net
Activity
    Shares Held
at April 30,
2016
    Income  

BlackRock Liquidity Funds, MuniCash

                 12,303,103        12,303,103      $ 2,826   

FFI Institutional Tax-Exempt Fund

       1,356,943           (1,356,943            1,732   

Total

              12,303,103      $      4,558   
           

 

 

 

 

(h)   Current yield as of period end.

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Contracts
Short
  Issue   Expiration     Notional Value     Unrealized
Appreciation
      
(23)   5-Year U.S. Treasury Note     June 2016      $ 2,781,023      $ 10,034     
(232)   10-Year U.S. Treasury Note     June 2016      $ 30,174,500        127,018     
(50)   Long U.S. Treasury Bond     June 2016      $ 8,165,625        117,585       
Total         $ 254,637     
       

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

Assets — Derivative Financial Instruments      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

       Net unrealized appreciation                                       $ 254,637               $ 254,637   
For the year ended April 30, 2016, the effect of derivative financial instruments in the Statements of Operations was as follows:   
Net Realized Gain (Loss) from:      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

                                              $ (1,555,950            $ (1,555,950
                         
Net Change in Unrealized Appreciation (Depreciation) on:                                                          

Futures contracts

                                              $ 942,920               $      942,920   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:

          

Average notional value of contracts — short

     $ 40,213,963   

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    59


Schedule of Investments (concluded)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

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

            $ 947,177,594              $ 947,177,594   

Short-Term Securities

  $ 12,303,103                          12,303,103   
 

 

 

 

Total

  $ 12,303,103         $ 947,177,594              $ 959,480,697   
 

 

 

 
 
Derivative Financial Instruments2                                     

Assets:

                

Interest rate contracts

  $ 254,637                        $ 254,637   

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

 

2    Derivative financial instruments are futures contracts. Futures contracts 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 period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

   

     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for futures contracts

  $ 491,900                        $ 491,900   

Liabilities:

                

Bank overdraft

            $ (329,693             (329,693

TOB Trust Certificates

              (63,101,848             (63,101,848

VMTP Shares

              (287,100,000             (287,100,000
 

 

 

 

Total

  $ 491,900         $ (350,531,541           $ (350,039,641
 

 

 

 

During the year ended April 30, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
60    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments April 30, 2016

  

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      $ 1,498,940   

County of Jefferson Alabama Sewer, Refunding RB:

    

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

     805        898,557   

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

     3,575        4,193,976   
    

 

 

 
               6,591,473   

Alaska — 0.3%

    

Northern Tobacco Securitization Corp., Refunding RB, Tobacco Settlement, Asset-Backed, Series A, 4.63%, 6/01/23

     1,005        1,010,628   

Arizona — 0.1%

    

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

     280        271,435   

California — 13.3%

    

California Health Facilities Financing Authority, RB:

    

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

     2,200        2,512,840   

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

     3,170        3,807,931   

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

     890        1,053,182   

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

    

5.25%, 8/15/39

     145        164,463   

5.25%, 8/15/49

     370        418,037   

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

     1,495        1,642,811   

California Statewide Communities Development Authority, RB, Loma Linda University Medical Center, Series A (a)(b):

    

5.00%, 12/01/41

     290        315,564   

5.00%, 12/01/46

     635        690,423   

5.25%, 12/01/56

     235        255,466   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A:

    

5.25%, 5/15/39

     800        896,696   

Senior, 5.00%, 5/15/40

     5,930        6,737,607   

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

     360        450,097   

Golden State Tobacco Securitization Corp., Refunding RB, Asset-Backed Bonds, Series A-1, 5.13%, 6/01/47

     2,165        2,111,005   

San Marcos Unified School District, GO, CAB, Election of 2010, Series B, 0.00%, 8/01/42 (c)

     2,000        732,960   

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     2,525        3,001,366   

6.50%, 4/01/33

     14,925        17,391,356   

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

    

Series I, 5.00%, 11/01/38

     775        924,381   

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

     1,185        1,417,236   

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

     720        720,252   
    

 

 

 
               45,243,673   
Municipal Bonds    Par  
(000)
    Value  

Colorado — 0.3%

    

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

   $ 1,060      $ 1,187,539   

Connecticut — 1.6%

    

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

     1,375        1,527,419   

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

     3,385        3,855,752   
    

 

 

 
               5,383,171   

Delaware — 2.0%

    

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

     1,125        1,230,278   

Delaware Transportation Authority, RB, 5.00%, 6/01/55

     1,165        1,331,187   

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

     4,065        4,269,185   
    

 

 

 
               6,830,650   

District of Columbia — 3.2%

    

District of Columbia, Refunding RB, Kipp Charter School, Series A, 6.00%, 7/01/43

     240        279,408   

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

    

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

     1,500        1,673,895   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/33 (c)

     6,590        3,455,862   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/34 (c)

     4,830        2,427,703   

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

     6,515        3,142,705   
    

 

 

 
               10,979,573   

Florida — 3.0%

    

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

     1,340        1,520,686   

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

     1,165        1,333,121   

Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/21 (d)

     3,015        3,950,283   

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

     1,085        939,849   

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

     2,340        2,610,059   
    

 

 

 
               10,353,998   

Georgia — 1.9%

    

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

     850        1,003,127   

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

     515        621,775   

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

     130        145,999   

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

     3,465        3,869,608   

Municipal Electric Authority of Georgia, RB, Plant Vogtle Units 3 & 4 Project, Series A, 5.00%, 7/01/60

     505        572,165   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    61


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

Municipal Bonds    Par  
(000)
    Value  

Georgia (continued)

    

Municipal Electric Authority of Georgia, Refunding RB, Series X, 6.50%, 1/01/20

   $ 150      $ 164,915   
    

 

 

 
               6,377,589   

Hawaii — 0.5%

    

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

     1,355        1,545,865   

Illinois — 20.8%

    

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

     5,865        7,112,368   

City of Chicago Illinois, GO, Project, Series A, 5.00%, 1/01/34

     1,815        1,754,905   

City of Chicago Illinois, GO, Refunding, Project, Series A, 5.25%, 1/01/32

     4,555        4,516,237   

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

     797        800,618   

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

     1,050        1,146,968   

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien:

    

Project, 5.00%, 11/01/42

     3,280        3,566,016   

(AGM), 5.25%, 11/01/33

     1,325        1,407,322   

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

     805        914,907   

Illinois Finance Authority, RB, Advocate Health Care Network, Series D, 6.50%, 11/01/18 (d)

     5,000        5,708,250   

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

     1,610        1,837,429   

Illinois State Toll Highway Authority, RB:

    

Senior, Series C, 5.00%, 1/01/36

     2,615        3,055,131   

Senior, Series C, 5.00%, 1/01/37

     2,800        3,259,564   

Series A, 5.00%, 1/01/38

     2,315        2,633,475   

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

    

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

     4,315        4,614,677   

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

     2,500        2,619,350   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     440        518,786   

6.00%, 6/01/28

     1,140        1,362,311   

Regional Transportation Authority, RB:

    

Series A (AMBAC), 7.20%, 11/01/20

     800        917,168   

Series A (NPFGC), 6.70%, 11/01/21

     4,690        5,434,537   

Series C (NPFGC), 7.75%, 6/01/20

     2,160        2,457,367   

State of Illinois, GO:

    

5.00%, 2/01/39

     1,540        1,624,900   

Series A, 5.00%, 4/01/35

     3,000        3,179,730   

Series A, 5.00%, 4/01/38

     3,640        3,826,623   

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

     630        698,891   

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

    

5.00%, 4/01/39

     810        911,898   

5.00%, 4/01/44

     985        1,102,333   

Village of Hodgkins Illinois, RB, Metropolitan Biosolids Management LLC Project, AMT, 6.00%, 11/01/23

     2,800        2,805,404   

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

     1,170        1,170,760   
    

 

 

 
               70,957,925   

Indiana — 4.5%

    

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

    

6.75%, 1/01/34

     790        968,556   
Municipal Bonds    Par  
(000)
    Value  

Indiana (continued)

    

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

    

7.00%, 1/01/44

   $ 1,905      $ 2,350,103   

Indiana Finance Authority, RB, Series A:

    

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

     3,280        3,872,270   

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

     450        488,601   

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

     1,430        1,546,102   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.25%, 1/01/51

     405        443,139   

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

     840        940,153   

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

     2,795        3,171,095   

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

     1,270        1,480,350   
    

 

 

 
               15,260,369   

Iowa — 1.6%

    

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

    

5.00%, 12/01/19

     960        991,766   

5.50%, 12/01/22

     2,340        2,435,355   

5.25%, 12/01/25

     460        495,116   

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

     1,290        1,371,322   
    

 

 

 
               5,293,559   

Kentucky — 0.6%

    

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

     995        1,126,211   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/43 (e)

     1,200        964,776   
    

 

 

 
               2,090,987   

Louisiana — 2.7%

    

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

     3,320        3,993,993   

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

    

5.50%, 5/15/30

     1,020        1,146,031   

5.25%, 5/15/31

     870        977,671   

5.25%, 5/15/32

     1,110        1,263,680   

5.25%, 5/15/33

     1,205        1,350,661   

5.25%, 5/15/35

     505        568,872   
    

 

 

 
               9,300,908   

Maryland — 1.1%

    

Maryland Community Development Administration, Refunding, HRB, Residential, Series D, AMT, 4.90%, 9/01/42

     1,500        1,513,665   

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

     435        476,086   

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

     750        723,082   
 

 

See Notes to Financial Statements.

 

                
62    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

Municipal Bonds    Par  
(000)
    Value  

Maryland (continued)

    

Maryland Health & Higher Educational Facilities Authority, RB, University of Maryland Medical System, Series B (NPFGC), 7.00%, 7/01/22

   $ 785      $ 939,449   
    

 

 

 
               3,652,282   

Massachusetts — 3.1%

    

Massachusetts Development Finance Agency, Refunding RB, Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42 (a)

     2,205        2,215,782   

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

     990        1,103,306   

Massachusetts HFA, RB, AMT:

    

M/F Housing, Series A, 5.20%, 12/01/37

     2,830        2,940,710   

S/F Housing, Series 130, 5.00%, 12/01/32

     2,290        2,317,022   

Massachusetts HFA, Refunding RB, Series F, AMT, 5.70%, 6/01/40

     1,975        2,079,576   
    

 

 

 
               10,656,396   

Michigan — 6.1%

    

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

     4,425        4,923,963   

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

     1,380        1,559,289   

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

     880        961,858   

Michigan State Hospital Finance Authority, Refunding RB, Series A:

    

Henry Ford Health System, 5.25%, 11/15/46

     5,080        5,199,177   

McLaren Health Care, 5.75%, 5/15/18 (d)

     7,560        8,322,275   
    

 

 

 
               20,966,562   

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        3,736,800   

University of Southern Mississippi, RB, Campus Facilities Improvements Project, 5.38%, 9/01/19 (d)

     1,065        1,222,279   
    

 

 

 
               4,959,079   

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        290,009   

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

     245        273,920   
    

 

 

 
               563,929   

Nebraska — 0.7%

    

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

    

5.25%, 9/01/37

     825        926,838   

5.00%, 9/01/42

     1,445        1,587,882   
    

 

 

 
               2,514,720   

New Jersey — 6.5%

    

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     1,025        1,061,972   

5.25%, 11/01/44

     1,525        1,571,390   

County of Essex New Jersey Improvement Authority, RB, AMT, 5.25%, 7/01/45 (a)

     1,085        1,106,928   
Municipal Bonds    Par  
(000)
    Value  

New Jersey (continued)

    

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT, 5.25%, 9/15/29

   $ 1,955      $ 2,163,931   

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

     2,240        2,624,451   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series AA, 6.38%, 10/01/28

     245        253,646   

New Jersey State Turnpike Authority, RB:

    

Series A, 5.00%, 1/01/43

     1,985        2,286,760   

Series E, 5.00%, 1/01/45

     2,615        3,020,299   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     3,495        3,707,915   

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

     1,635        1,785,600   

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

     2,460        2,648,411   
    

 

 

 
               22,231,303   

New York — 15.2%

    

City of New York New York Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series C-1, 6.50%, 7/01/17

     380        380,285   

City of New York New York Transitional Finance Authority, RB:

    

Fiscal 2009, Series S-3, 5.25%, 1/15/39

     6,700        7,416,699   

Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42

     2,460        2,872,493   

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

     1,800        1,896,318   

Erie Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed, Series A, 5.00%, 6/01/45

     1,960        1,950,984   

Metropolitan Transportation Authority, RB, Series C:

    

6.50%, 11/15/18 (d)

     7,015        8,031,614   

6.50%, 11/15/28

     2,390        2,735,690   

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

     10,735        12,752,858   

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        1,372,890   

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

     2,860        3,097,494   

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

     340        373,215   

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

     850        936,453   

New York State Dormitory Authority, Refunding RB, General Purpose, Series A, 5.00%, 6/15/31

     1,790        2,154,999   

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        1,368,887   

6.00%, 12/01/42

     1,250        1,467,087   

Westchester County Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series E-1, 6.50%, 7/01/17

     550        550,891   

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

     2,300        2,300,023   
    

 

 

 
               51,658,880   

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        1,678,266   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    63


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

Municipal Bonds    Par  
(000)
    Value  

North Carolina (continued)

    

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

   $ 1,400      $ 1,558,018   

North Carolina Medical Care Commission, Refunding RB:

    

1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

     595        681,531   

Carolina Village Project, 6.00%, 4/01/38

     2,000        2,090,280   
    

 

 

 
               6,008,095   

Ohio — 1.4%

    

Buckeye Tobacco Settlement Financing Authority, RB, Asset-Backed, Senior Turbo Term, Series A-2, 5.88%, 6/01/47

     4,000        3,870,120   

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

     660        730,673   

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

     275        301,623   
    

 

 

 
               4,902,416   

Pennsylvania — 1.8%

    

City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 7/01/42

     635        696,728   

Pennsylvania Economic Development Financing Authority, RB:

    

Aqua Pennsylvania, Inc. Project, Series B, 5.00%, 11/15/40

     1,890        2,108,409   

Pennsylvania Bridge Finco LP, AMT, 5.00%, 6/30/42

     850        953,624   

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

     1,035        1,086,584   

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     1,105        1,270,308   
    

 

 

 
               6,115,653   

Rhode Island — 1.7%

    

Tobacco Settlement Financing Corp., Refunding RB, Series B:

    

4.50%, 6/01/45

     2,645        2,742,812   

5.00%, 6/01/50

     2,945        3,123,673   
    

 

 

 
               5,866,485   

South Carolina — 4.7%

    

State of South Carolina Ports Authority, RB:

    

5.25%, 7/01/40

     3,280        3,706,006   

AMT, 5.25%, 7/01/55

     1,295        1,467,831   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     6,180        7,257,916   

State of South Carolina Public Service Authority, Refunding RB, Series E, 5.25%, 12/01/55

     3,135        3,676,132   
    

 

 

 
               16,107,885   

Tennessee — 0.6%

    

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     995        1,126,211   

Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board, RB, Vanderbilt University Medical Center, Series A, 5.00%, 7/01/46

     690        796,432   
    

 

 

 
               1,922,643   
Municipal Bonds    Par  
(000)
    Value  

Texas — 6.8%

    

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

   $ 1,500      $ 33,750   

Central Texas Regional Mobility Authority, Refunding RB, Senior Lien, 6.25%, 1/01/46

     2,140        2,555,289   

City of Dallas Texas Waterworks & Sewer System, Refunding RB, 5.00%, 10/01/35

     510        589,106   

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

     965        1,074,315   

Clifton Higher Education Finance Corp., RB, Idea Public Schools, 6.00%, 8/15/43

     745        890,953   

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        538,242   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (d)

     2,000        2,330,220   

Fort Bend County Industrial Development Corp., RB, NRG Energy Project, Series B, 4.75%, 11/01/42

     670        695,031   

North Texas Tollway Authority, Refunding RB, Series A:

    

1st Tier, 6.25%, 1/01/39

     7,000        7,885,290   

5.00%, 1/01/38

     925        1,066,830   

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

    

LBJ Infrastructure Group LLC, 7.00%, 6/30/40

     2,000        2,397,160   

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

     2,775        3,270,643   
    

 

 

 
               23,326,829   

Utah — 0.9%

    

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

     2,780        3,039,874   

Virginia — 2.6%

    

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc.:

    

5.13%, 10/01/37

     500        518,215   

5.13%, 10/01/42

     3,440        3,562,395   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

    

5.25%, 1/01/32

     1,615        1,820,218   

6.00%, 1/01/37

     2,365        2,799,522   
    

 

 

 
               8,700,350   

Washington — 2.3%

    

Port of Seattle Washington, RB, Series C, AMT, 5.00%, 4/01/40

     755        861,802   

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     2,290        2,730,711   

Washington Health Care Facilities Authority, Refunding RB, Catholic Health Initiatives, Series D, 6.38%, 10/01/36

     3,700        4,149,106   
    

 

 

 
               7,741,619   

Wisconsin — 3.8%

    

State of Wisconsin, Refunding RB, Series A, 6.00%, 5/01/36

     7,100        8,164,645   

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

     2,465        2,794,373   
 

 

See Notes to Financial Statements.

 

                
64    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

Municipal Bonds    Par  
(000)
    Value  

Wisconsin (continued)

    

State of Wisconsin Health & Educational Facilities Authority, Refunding RB, Medical College of Wisconsin, Inc., 4.00%, 12/01/46 (b)

   $ 1,810      $ 1,898,491   
    

 

 

 
               12,857,509   
Total Municipal Bonds — 121.1%              412,471,851   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (h)
 

California — 6.1%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/19 (d)

     3,271        3,722,446   

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

     2,610        2,883,058   

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/39

     9,480        10,700,739   

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

     2,290        2,416,225   

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

     1,077        1,224,293   
    

 

 

 
               20,946,761   

Colorado — 0.7%

    

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

     2,129        2,395,441   

Connecticut — 1.8%

    

Connecticut State Health & Educational Facility Authority, RB, Yale University, Series Z-3, 5.05%, 7/01/42

     6,000        6,290,700   

Florida — 1.9%

    

County of Miami-Dade Florida, RB, Water & Sewer System, 5.00%, 10/01/34

     5,679        6,497,000   

Illinois — 1.0%

    

State of Illinois Toll Highway Authority, RB, Senior Priority, Series B, 5.50%, 1/01/18 (d)

     2,999        3,237,375   

Maryland — 0.7%

    

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

     2,290        2,477,024   

Massachusetts — 0.8%

    

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

     2,266        2,660,940   

New Hampshire — 0.7%

    

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

     2,009        2,269,263   

New York — 6.3%

    

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        6,853,584   

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

     1,575        1,785,252   

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

     1,610        1,892,751   

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

     6,440        7,686,877   
Municipal Bonds Transferred to
Tender Option Bond Trusts (h)
 

Par  

(000)

    Value  

New York (continued)

   

Port Authority of New York & New Jersey, Refunding ARB, 194th Series, 5.25%, 10/15/55

  $ 2,595      $ 3,127,131   
   

 

 

 
              21,345,595   

North Carolina — 2.7%

  

North Carolina Capital Facilities Finance Agency, Refunding RB, Duke University Project:

   

Series A, 5.00%, 10/01/41

    6,239        6,348,061   

Series B, 5.00%, 10/01/55

    2,550        3,009,408   
   

 

 

 
              9,357,469   

Ohio — 5.3%

  

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

    2,400        2,577,432   

State of Ohio, Refunding RB, Cleveland Clinic Health System Obligated Group, Series A, 5.50%, 1/01/39

    13,843        15,524,205   
   

 

 

 
              18,101,637   

South Carolina — 1.7%

  

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

    4,995        5,617,227   

Texas — 2.9%

   

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

    2,520        2,929,676   

County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

    3,400        3,952,330   

Texas Department of Housing & Community Affairs, RB, S/F Mortgage, Series B, AMT, 5.25%, 9/01/32

    890        903,952   

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

    1,831        2,165,438   
   

 

 

 
              9,951,396   

Washington — 5.2%

  

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

   

5.00%, 11/01/17

    9,000        9,577,620   

(AGM), 5.00%, 11/01/17

    7,693        8,187,316   
   

 

 

 
              17,764,936   

Wisconsin — 0.8%

  

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

    2,499        2,711,533   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 38.6%
            131,624,297   
Total Long-Term Investments
(Cost — $489,113,923) — 159.7%
            544,096,148   
   
   
Short-Term Securities   Shares         

BlackRock Liquidity Funds, MuniCash, 0.19% (j)(k)

    1,981,652        1,981,652   

Total Short-Term Securities

(Cost — $1,981,652) — 0.6%

            1,981,652   
Total Investments (Cost — $491,095,575) — 160.3%        546,077,800   
Other Assets Less Liabilities — 1.1%        3,905,894   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (20.3)%

   

    (69,231,019
VMTP Shares, at Liquidation Value — (41.1)%       (140,000,000
   

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 340,752,675   
   

 

 

 
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    65


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

 

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)   When-issued security.

 

(c)   Zero-coupon bond.

 

(d)   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.

 

(e)   Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end.

 

(f)   Non-income producing security.

 

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

 

(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 4 of the Notes to Financial Statements for details.

 

(i)   All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between October 1, 2016 to November 15, 2019, is $13,391,278. See Note 4 of the Notes to Financial Statements for details.

 

(j)   Current yield as of period end.

 

(k)   During the year ended April 30, 2016, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at April 30,
2015
       Net
Activity
    Shares Held
at April 30,
2016
    Income  

BlackRock Liquidity Funds, MuniCash

                 1,981,652        1,981,652      $ 295   

FFI Institutional Tax-Exempt Fund

       783,716           (783,716            501   

Total

              1,981,652      $        796   
           

 

 

   

 

 

 

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Contracts
Short
     Issue      Expiration      Notional
Value
  Unrealized
Appreciation
      
  (20    5-Year U.S. Treasury Note      June 2016      $2,418,281   $ 7,789     
  (40    10-Year U.S. Treasury Note      June 2016      $5,202,500     36,175     
  (18    Long U.S. Treasury Bond      June 2016      $2,939,625     44,622     
  (4    Ultra U.S. Treasury Bond      June 2016      $   685,375     11,447       
  Total                   $ 100,033     
              

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

Assets — Derivative Financial Instruments      Commodity
Contracts
   Credit
Contracts
   Equity
Contracts
   Foreign
Currency
Exchange
Contracts
   Interest
Rate
Contracts
     Other
Contracts
   Total  

Futures contracts

       Net unrealized appreciation 1                 $ 100,033          $ 100,033   

1    Includes cumulative appreciation (depreciation) on futures contracts, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

        

For the year ended April 30, 2016, the effect of derivative financial instruments in the Statements of Operations was as follows:   
Net Realized Gain (Loss) from:      Commodity
Contracts
   Credit
Contracts
   Equity
Contracts
   Foreign
Currency
Exchange
Contracts
   Interest
Rate
Contracts
     Other
Contracts
   Total  

Futures contracts

                          $ (573,853       $ (573,853
                         
Net Change in Unrealized Appreciation (Depreciation) on:                                                

Futures contracts

                          $ 386,107          $      386,107   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:

          

Average notional value of contracts — short

     $ 10,790,963   

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

                
66    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (concluded)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

 

Fair Value Hierarchy as of Period Ended

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

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 Investments 1

            $ 544,096,148                   $ 544,096,148   

Short-Term Securities

  $ 1,981,652                               1,981,652   
 

 

 

 

Total

  $ 1,981,652         $ 544,096,148                   $ 546,077,800   
 

 

 

 
                
Derivative Financial Instruments 2                                         

Assets:

                

Interest rate contracts

  $ 100,033                             $ 100,033   

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

      

2   Derivative financial instruments are futures contracts. Future contracts 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 period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for futures contracts

  $ 150,050                             $ 150,050   

Liabilities:

                

Bank overdraft

            $ (160,770                  (160,770

TOB Trust Certificates

              (69,195,039                  (69,195,039

VMTP Shares

              (140,000,000                  (140,000,000
 

 

 

 

Total

  $ 150,050         $ (209,355,809                $ (209,205,759
 

 

 

 

During the year ended April 30, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    67


Statements of Assets and Liabilities     

 

April 30, 2016   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

  $ 579,574,952      $ 574,845,632      $ 394,236,046      $ 285,271,875   

Investments at value — affiliated2

    4,296,151        2,133,375        1,575,949        866,768   

Cash pledged for futures contracts

    243,950        200,900        192,550        90,200   

Receivables:

       

Interest

    9,890,264        7,346,105        5,602,909        4,027,178   

Investments sold

    1,081,582               145,699        221,165   

Dividends — affiliated

    235        237        192        81   

Deferred offering costs

           202,794                 

Prepaid expenses

    17,111        81,833        33,408        31,387   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

    595,104,245        584,810,876        401,786,753        290,508,654   
 

 

 

   

 

 

   

 

 

   

 

 

 
       
Accrued Liabilities                                

Bank overdraft

    68,716        175,432        96,118        63,159   
Payables:        

Investments purchased

    8,576,368        2,362,175        2,242,321        1,625,536   

Income dividends — Common Shares

    2,150,275        1,790,261        1,216,143        875,767   

Investment advisory fees

    262,353        237,474        179,076        129,499   

Interest expense and fees

    38,192        37,670        28,672        22,373   

Variation margin on futures contracts

    31,875        27,953        27,250        12,594   

Officer’s and Directors’ fees

    4,768        4,259        2,872        2,099   

Other accrued expenses

    187,752        173,928        141,625        121,213   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total accrued liabilities

    11,320,299        4,809,152        3,934,077        2,852,240   
 

 

 

 
       
Other Liabilities                                

TOB Trust Certificates

    66,086,523        67,159,660        60,288,863        46,103,103   

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

    66,086,523        209,659,660        143,988,863        101,103,103   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    77,406,822        214,468,812        147,922,940        103,955,343   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 517,697,423      $ 370,342,064      $ 253,863,813      $ 186,553,311   
 

 

 

 
       
Net Assets Applicable to Common Shareholders Consist of                                

Paid-in capital5,6,7

  $ 480,767,479      $ 313,946,823      $ 210,782,901      $ 155,395,939   

Undistributed net investment income

    461,571        5,704,770        2,021,938        2,403,212   

Accumulated net realized loss

    (5,699,207     (9,210,857     (2,635,055     (2,474,790

Net unrealized appreciation (depreciation)

    42,167,580        59,901,328        43,694,029        31,228,950   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 517,697,423      $ 370,342,064      $ 253,863,813      $ 186,553,311   
 

 

 

 

Net asset value, per Common Share

  $ 14.45      $ 12.52      $ 17.95      $ 16.51   
 

 

 

 

1    Investments at cost — unaffiliated

  $ 537,574,582      $ 515,055,654      $ 350,669,245      $ 254,101,213   

2    Investments at cost — affiliated

  $ 4,296,151      $ 2,133,375      $ 1,575,949      $ 866,768   

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

    35,837,923        29,591,196        14,141,202        11,300,218   

7    Common Shares authorized

    200,000,000        199,991,095        199,994,163        199,995,970   

 

 

See Notes to Financial Statements.      
                
68    ANNUAL REPORT    APRIL 30, 2016   


Statements of Assets and Liabilities     

 

April 30, 2016   BlackRock
MuniHoldings
Quality Fund, Inc.
(MUS)
    BlackRock Muni
Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Assets                        

Investments at value — unaffiliated1

  $ 301,499,517      $ 947,177,594      $ 544,096,148   

Investments at value — affiliated2

    1,352,893        12,303,103        1,981,652   

Cash

    1,037,654                 

Cash pledged for futures contracts

    119,150        491,900        150,050   
Receivables:      

Interest

    4,333,849        12,636,558        8,490,651   

Investments sold

           170,000        660,592   

Dividends — affiliated

    306        2,571        208   

Prepaid expenses

    29,602        41,240        36,567   
 

 

 

   

 

 

   

 

 

 

Total assets

    308,372,971        972,822,966        555,415,868   
 

 

 

 
     
Accrued Liabilities                        

Bank overdraft

           329,693        160,770   
Payables:      

Investments purchased

    2,675,772               3,104,634   

Income dividends — Common Shares

    878,156        2,316,924        1,749,565   

Investment advisory fees

    133,723        435,982        225,082   

Interest expense and fees

    14,108        29,449        35,980   

Variation margin on futures contracts

    8,445        55,655        20,000   

Officer’s and Directors’ fees

    2,227        257,677        4,021   

Other accrued expenses

    121,719        224,761        168,102   
 

 

 

   

 

 

   

 

 

 

Total accrued liabilities

    3,834,150        3,650,141        5,468,154   
 

 

 

 
     
Other Liabilities                        

TOB Trust Certificates

    24,428,564        63,101,848        69,195,039   

VMTP Shares, at liquidation value of $100,000 per share3,4

    87,000,000        287,100,000        140,000,000   
 

 

 

   

 

 

   

 

 

 

Total other liabilities

    111,428,564        350,201,848        209,195,039   
 

 

 

   

 

 

   

 

 

 

Total liabilities

    115,262,714        353,851,989        214,663,193   
 

 

 

   

 

 

   

 

 

 

Net Assets Applicable to Common Shareholders

  $ 193,110,257      $ 618,970,977      $ 340,752,675   
 

 

 

 
     
Net Assets Applicable to Common Shareholders Consist of                        

Paid-in capital5,6,7

  $ 175,117,812      $ 543,452,920      $ 285,919,776   

Undistributed net investment income

    2,569,798        3,400,756        2,759,073   

Undistributed net realized gain (accumulated net realized loss)

    (15,381,440     809,589        (3,008,432

Net unrealized appreciation (depreciation)

    30,804,087        71,307,712        55,082,258   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 193,110,257      $ 618,970,977      $ 340,752,675   
 

 

 

 

Net asset value, per Common Share

  $ 14.84      $ 16.16      $ 16.17   
 

 

 

 

1    Investments at cost — unaffiliated

  $ 270,744,967      $ 876,124,519      $ 489,113,923   

2    Investments at cost — affiliated

  $ 1,352,893      $ 12,303,103      $ 1,981,652   

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        21,079,096   

7    Common Shares authorized

    199,993,770        199,984,329        199,991,600   

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2016    69


Statements of Operations     

 

Year Ended April 30, 2016   BlackRock
MuniAssets
Fund, Inc.
(MUA)
    BlackRock
MuniEnhanced
Fund, Inc.
(MEN)
    BlackRock
MuniHoldings
Fund, Inc.
(MHD)
    BlackRock
MuniHoldings
Fund II, Inc.
(MUH)
 
       
Investment Income                                

Interest

  $ 29,814,011      $ 25,780,420      $ 17,984,589      $ 13,045,220   

Dividends — affiliated

    849        749        939        583   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total income

    29,814,860        25,781,169        17,985,528        13,045,803   
 

 

 

   

 

 

   

 

 

   

 

 

 
       
Expenses                                

Investment advisory

    3,149,884        2,866,384        2,140,973        1,550,188   

Professional

    89,469        93,119        78,376        67,211   

Accounting services

    83,107        83,838        58,524        45,723   

Transfer agent

    62,866        44,450        28,179        25,386   

Officer and Directors

    47,229        34,271        23,457        17,254   

Custodian

    28,140        27,366        19,467        14,525   

Printing

    13,384        13,091        11,091        9,800   

Registration

    11,305        9,277        7,607        7,608   

Rating agency

           36,014        35,937        35,900   

Miscellaneous

    55,266        53,424        45,812        40,759   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    3,540,650        3,261,234        2,449,423        1,814,354   

Interest expense, fees and amortization of offering costs1

    567,595        1,916,910        1,324,740        913,902   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    4,108,245        5,178,144        3,774,163        2,728,256   
 

 

 

   

 

 

   

 

 

   

 

 

 
Less:        

Fees waived by the Manager

    (108     (106     (120     (64

Fees paid indirectly

    (25     (7     (19     (32
 

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and paid indirectly

    4,108,112        5,178,031        3,774,024        2,728,160   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

    25,706,748        20,603,138        14,211,504        10,317,643   
 

 

 

   

 

 

   

 

 

   

 

 

 
       
Realized and Unrealized Gain (Loss)                                
Net realized gain (loss) from:        

Investments

    2,050,629        947,761        (107,197     278,981   

Futures contracts

    (891,260     (680,157     (681,621     (469,399
 

 

 

   

 

 

   

 

 

   

 

 

 
    1,159,369        267,604        (788,818     (190,418
 

 

 

   

 

 

   

 

 

   

 

 

 
Net change in unrealized appreciation (depreciation) on:        

Investments

    10,809,687        7,430,000        6,277,751        3,579,508   

Futures contracts

    521,509        485,622        353,450        216,523   
 

 

 

   

 

 

   

 

 

   

 

 

 
    11,331,196        7,915,622        6,631,201        3,796,031   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net realized and unrealized gain

    12,490,565        8,183,226        5,842,383        3,605,613   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 38,197,313      $ 28,786,364      $ 20,053,887      $ 13,923,256   
 

 

 

 

1    Related to TOB Trusts, VRDP Shares and/or VMTP Shares.

       

 

 

See Notes to Financial Statements.      
                
70    ANNUAL REPORT    APRIL 30, 2016   


Statements of Operations     

 

Year Ended April 30, 2016   BlackRock
MuniHoldings
Quality Fund, Inc.
(MUS)
    BlackRock Muni
Intermediate
Duration Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Investment Income                        

Interest

  $ 13,328,696      $ 37,349,292      $ 25,625,343   

Dividends — affiliated

    970        4,558        796   
 

 

 

   

 

 

   

 

 

 

Total income

    13,329,666        37,353,850        25,626,139   
 

 

 

   

 

 

   

 

 

 
     
Expenses                        

Investment advisory

    1,643,298        5,210,241        2,709,420   

Professional

    73,018        110,998        90,751   

Accounting services

    47,624        119,891        80,025   

Transfer agent

    23,513        50,013        35,060   

Officer and Directors

    17,902        46,225        31,748   

Custodian

    16,628        42,475        25,817   

Printing

    9,802        17,228        12,833   

Registration

    7,626        12,014        7,654   

Rating agency

    35,941        36,199        36,011   

Miscellaneous

    33,646        66,251        46,997   
 

 

 

   

 

 

   

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    1,908,998        5,711,535        3,076,316   

Interest expense, fees and amortization of offering costs1

    1,114,354        3,767,194        1,997,640   
 

 

 

   

 

 

   

 

 

 

Total expenses

    3,023,352        9,478,729        5,073,956   
 

 

 

   

 

 

   

 

 

 
Less:      

Fees waived by the Manager

    (47,443     (536     (123

Fees paid indirectly

    (2     (7     (106
 

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and paid indirectly

    2,975,907        9,478,186        5,073,727   
 

 

 

   

 

 

   

 

 

 

Net investment income

    10,353,759        27,875,664        20,552,412   
 

 

 

   

 

 

   

 

 

 
     
Realized and Unrealized Gain (Loss)                        
Net realized gain (loss) from:      

Investments

    380,240        8,188,250        1,093,334   

Futures contracts

    (549,885     (1,555,950     (573,853
 

 

 

   

 

 

   

 

 

 
    (169,645     6,632,300        519,481   
 

 

 

   

 

 

   

 

 

 
Net change in unrealized appreciation (depreciation) on:      

Investments

    3,674,915        12,841,940        2,928,767   

Futures contracts

    195,331        942,920        386,107   
 

 

 

   

 

 

   

 

 

 
    3,870,246        13,784,860        3,314,874   
 

 

 

   

 

 

   

 

 

 

Net realized and unrealized gain

    3,700,601        20,417,160        3,834,355   
 

 

 

   

 

 

   

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 14,054,360      $ 48,292,824      $ 24,386,767   
 

 

 

 

1    Related to TOB Trusts and/or VMTP Shares.

       

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2016    71


Statements of Changes in Net Assets     

 

    BlackRock MuniAssets
Fund, Inc. (MUA)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets:   2016     2015  
   
Operations                

Net investment income

  $ 25,706,748      $ 26,273,346   

Net realized gain

    1,159,369        5,836,192   

Net change in unrealized appreciation (depreciation)

    11,331,196        14,874,709   
 

 

 

 

Net increase in net assets resulting from operations

    38,197,313        46,984,247   
 

 

 

 
   
Distributions to Shareholders1                

From net investment income

    (26,444,665     (27,131,929
 

 

 

 
   
Capital Share Transactions                

Reinvestment of distributions

    603,849        169,233   
 

 

 

 
   
Net Assets                

Total increase in net assets

    12,356,497        20,021,551   

Beginning of year

    505,340,926        485,319,375   
 

 

 

 

End of year

  $ 517,697,423      $ 505,340,926   
 

 

 

 

Undistributed net investment income, end of year

  $ 461,571      $ 1,216,905   
 

 

 

 
    BlackRock MuniEnhanced
Fund, Inc. (MEN)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2016     2015  
   
Operations                

Net investment income

  $ 20,603,138      $ 20,952,473   

Net realized gain

    267,604        325,025   

Net change in unrealized appreciation (depreciation)

    7,915,622        10,026,252   
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    28,786,364        31,303,750   
 

 

 

 
   
Distributions to Common Shareholders1                

From net investment income

    (21,467,683     (21,479,266
 

 

 

 
 
Capital Share Transactions                

Reinvestment of distributions

    320,819          
 

 

 

 
 
Net Assets Applicable to Common Shareholders                

Total increase in net assets applicable to Common Shareholders

    7,639,500        9,824,484   

Beginning of year

    362,702,564        352,878,080   
 

 

 

 

End of year

  $ 370,342,064      $ 362,702,564   
 

 

 

 

Undistributed net investment income, end of year

  $ 5,704,770      $ 6,578,502   
 

 

 

 

1    Distributions for annual periods determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.      
                
72    ANNUAL REPORT    APRIL 30, 2016   


Statements of Changes in Net Assets     

 

    BlackRock MuniHoldings
Fund, Inc. (MHD)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2016     2015  
   
Operations                

Net investment income

  $ 14,211,504      $ 14,528,126   

Net realized gain (loss)

    (788,818     1,349,340   

Net change in unrealized appreciation (depreciation)

    6,631,201        9,664,433   
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    20,053,887        25,541,899   
 

 

 

 
   
Distributions to Common Shareholders1                

From net investment income

    (14,977,381     (15,009,484
 

 

 

 
 
Capital Share Transactions                

Reinvestment of common distributions

    141,585          
 

 

 

 
 
Net Assets Applicable to Common Shareholders                

Total increase in net assets applicable to Common Shareholders

    5,218,091        10,532,415   

Beginning of year

    248,645,722        238,113,307   
 

 

 

 

End of year

  $ 253,863,813      $ 248,645,722   
 

 

 

 

Undistributed net investment income, end of year

  $ 2,021,938      $ 2,787,827   
 

 

 

 
    BlackRock MuniHoldings
Fund II, Inc. (MUH)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2016     2015  
   
Operations                

Net investment income

  $ 10,317,643      $ 10,526,177   

Net realized gain (loss)

    (190,418     995,228   

Net change in unrealized appreciation (depreciation)

    3,796,031        6,304,142   
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    13,923,256        17,825,547   
 

 

 

 
   
Distributions to Common Shareholders1                

From net investment income

    (10,584,214     (11,006,412
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase in net assets applicable to Common Shareholders

    3,339,042        6,819,135   

Beginning of year

    183,214,269        176,395,134   
 

 

 

 

End of year

  $ 186,553,311      $ 183,214,269   
 

 

 

 

Undistributed net investment income, end of year

  $ 2,403,212      $ 2,664,406   
 

 

 

 

1    Distributions for annual periods determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2016    73


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:   2016     2015  
   
Operations                

Net investment income

  $ 10,353,759      $ 10,460,119   

Net realized gain (loss)

    (169,645     223,525   

Net change in unrealized appreciation (depreciation)

    3,870,246        4,969,206   
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    14,054,360        15,652,850   
 

 

 

 
   
Distributions to Common Shareholders1                

From net investment income

    (10,537,871     (10,537,871
 

 

 

 
 
Net Assets Applicable to Common Shareholders                

Total increase in net assets applicable to Common Shareholders

    3,516,489        5,114,979   

Beginning of year

    189,593,768        184,478,789   
 

 

 

 

End of year

  $ 193,110,257      $ 189,593,768   
 

 

 

 

Undistributed net investment income, end of year

  $ 2,569,798      $ 2,749,831   
 

 

 

 
    BlackRock Muni Intermediate
Duration Fund, Inc. (MUI)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2016     2015  
   
Operations                

Net investment income

  $ 27,875,664      $ 29,505,488   

Net realized gain

    6,632,300        5,704,800   

Net change in unrealized appreciation (depreciation)

    13,784,860        4,474,649   
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    48,292,824        39,684,937   
 

 

 

 
   
Distributions to Common Shareholders1                

From net investment income

    (29,717,903     (31,311,027

From net realized gain

    (7,044,253       
 

 

 

   

 

 

 

Decrease in net assets resulting from distributions to shareholders

    (36,762,156     (31,311,027
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase in net assets applicable to Common Shareholders

    11,530,668        8,373,910   

Beginning of year

    607,440,309        599,066,399   
 

 

 

 

End of year

  $ 618,970,977      $ 607,440,309   
 

 

 

 

Undistributed net investment income, end of year

  $ 3,400,756      $ 4,715,865   
 

 

 

 

1    Distributions for annual periods determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.      
                
74    ANNUAL REPORT    APRIL 30, 2016   


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:   2016     2015  
   
Operations                

Net investment income

  $ 20,552,412      $ 20,711,738   

Net realized gain

    519,481        2,369,918   

Net change in unrealized appreciation (depreciation)

    3,314,874        10,458,628   
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    24,386,767        33,540,284   
 

 

 

 
   
Distributions to Common Shareholders1                

From net investment income

    (21,039,048     (21,785,415
 

 

 

 
 
Capital Share Transactions                

Reinvestment of common distributions

    1,084,558        419,446   
 

 

 

 
 
Net Assets Applicable to Common Shareholders                

Total increase in net assets applicable to Common Shareholders

    4,432,277        12,174,315   

Beginning of year

    336,320,398        324,146,083   
 

 

 

 

End of year

  $ 340,752,675      $ 336,320,398   
 

 

 

 

Undistributed net investment income, end of year

  $ 2,759,073      $ 3,245,721   
 

 

 

 

1    Distributions for annual periods determined in accordance with federal income tax regulations.

       

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2016    75


Statements of Cash Flows     

 

Year Ended April 30, 2016

  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

  $ 38,197,313      $ 28,786,364      $ 20,053,887      $ 13,923,256   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

       

Proceeds from sales of long-term investments

    103,087,949        68,999,104        26,942,596        19,398,261   

Purchases of long-term investments

    (104,323,394     (58,611,664     (29,562,540     (21,248,228

Net proceeds from sales (purchases) of short-term securities

    (3,335,056     (556,190     (235,602     (185,288

Amortization of premium and accretion of discount on investments

    103,292        (905,642     119,523        (102,034

Net realized gain (loss) on investments

    (2,050,629     (959,630     84,393        (295,511

Net unrealized gain on investments

    (10,809,687     (7,430,000     (6,277,751     (3,579,508

(Increase) decrease in assets:

       

Receivables:

       

Dividend — affiliated

    (235     (237     (192     (81

Interest

    (204,693     204,855        50,952        2,534   

Variation margin on futures contracts

    27,704        44,041        18,704        12,938   

Prepaid expenses

    (386     (1,156     (4,269     (3,760

Cash pledged for futures contracts

    36,050        238,100        (3,550     40,800   

Increase (decrease) in liabilities:

       

Payables:

       

investment advisory fees

    4,914        (3,579     1,815        1,205   

Interest expense and fees

    22,163        19,915        18,238        13,783   

Other accrued expenses

    52,674        42,104        35,934        31,285   

Variation margin on futures contracts

    31,875        27,953        27,250        12,594   

Officer’s and Directors’ fees

    (1,109     (292     (226     (192
 

 

 

 

Net cash provided by operating activities

    20,838,745        29,894,046        11,269,162        8,022,054   
 

 

 

 
       
Cash Used for Financing Activities                                

Proceeds from TOB Trust Certificates

    9,367,834        8,552,335        3,506,675        2,536,134   

Repayments of TOB Trust Certificates

    (4,347,276     (17,486,500     (1,512     (1,090

Cash dividends paid to Common Shareholders

    (25,928,019     (21,145,310     (14,870,443     (10,584,214

Increase in bank overdraft

    68,716        175,432        96,118        27,116   

Amortization of deferred offering costs

           9,997                 
 

 

 

 

Net cash used for financing activities

    (20,838,745     (29,894,046     (11,269,162     (8,022,054
 

 

 

 
       
Cash                                

Net increase (decrease) 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

  $ 545,432      $ 1,886,998      $ 1,306,502      $ 900,119   
 

 

 

 
       
Non-Cash Financing Activities                                

Capital shares issued in reinvestment of distributions paid to Common Shareholders

  $ 603,849      $ 320,819      $ 141,585          
 

 

 

 

 

 

See Notes to Financial Statements.      
                
76    ANNUAL REPORT    APRIL 30, 2016   


Statements of Cash Flows     

 

Year Ended April 30, 2016   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

  $ 14,054,360      $ 48,292,824      $ 24,386,767   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

     

Proceeds from sales of long-term investments

    73,277,018        194,121,998        32,142,040   

Purchases of long-term investments

    (77,306,145     (189,696,228     (35,050,283

Net proceeds from sales (purchases) of short-term securities

    2,423,651        (10,946,160     (1,197,936

Amortization of premium and accretion of discount on investments

    737,320        5,075,145        579,941   

Net realized gain (loss) on investments

    (395,732     (8,196,872     (1,143,383

Net unrealized gain on investments

    (3,674,915     (12,841,940     (2,928,767

(Increase) decrease in assets:

     

Receivables:

     

Dividend — affiliated

    (306     (2,571     (208

Interest

    (156,378     40,710        51,272   

Variation margin on futures contracts

    18,141        85,644        23,345   

Prepaid expenses

    (1,682     (609     (5,242

Cash pledged for futures contracts

    63,850        372,100        85,950   

Increase (decrease) in liabilities:

     

Payables:

     

Investment advisory fees

    294        4,601        560   

Interest expense and fees

    8,490        21,825        22,645   

Other accrued expenses

    27,429        14,821        46,077   

Variation margin on futures contracts

    8,445        55,655        20,000   

Officer’s and Directors’ fees

    (161     2,260        (227
 

 

 

 

Net cash provided by operating activities

    9,083,679        26,403,203        17,032,551   
 

 

 

 
     
Cash Used for Financing Activities                        

Proceeds from TOB Trust Certificates

    2,691,259        10,170,000        3,005,799   

Repayments of TOB Trust Certificates

    (199,413            (250,252

Cash dividends paid to Common Shareholders

    (10,537,871     (36,953,637     (19,948,868

Increase in bank overdraft

           329,693        160,770   

Amortization of deferred offering costs

           50,741          
 

 

 

 

Net cash used for financing activities

    (8,046,025     (26,403,203     (17,032,551
 

 

 

 
     
Cash                        

Net increase in cash

    1,037,654                 

Cash at beginning of year

                    
 

 

 

 

Cash at end of year

  $ 1,037,654                 
 

 

 

 
     
Supplemental Disclosure of Cash Flow Information                        

Cash paid during the year for interest expense

  $ 1,105,864      $ 3,694,628      $ 1,974,995   
 

 

 

 
     
Non-Cash Financing Activities                        

Capital shares issued in reinvestment of distributions paid to Common Shareholders

                $ 1,084,558   
 

 

 

 

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2016    77


Financial Highlights    BlackRock MuniAssets Fund, Inc. (MUA)

 

    Year Ended April 30,  
    2016     2015     2014     2013     2012  
         
Per Share Operating Performance                   

Net asset value, beginning of year

  $ 14.12      $ 13.56      $ 14.36      $ 13.47      $ 12.14   
 

 

 

 

Net investment income1

    0.72        0.73        0.77        0.77        0.76   

Net realized and unrealized gain (loss)

    0.35        0.59        (0.82     0.90        1.32   
 

 

 

 

Net increase (decrease) from investment operations

    1.07        1.32        (0.05     1.67        2.08   
 

 

 

 

Distributions from net investment income2

    (0.74     (0.76     (0.75     (0.78     (0.75
 

 

 

 

Net asset value, end of year

  $ 14.45      $ 14.12      $ 13.56      $ 14.36      $ 13.47   
 

 

 

 

Market price, end of year

  $ 14.74      $ 14.22      $ 12.85      $ 13.96      $ 13.15   
 

 

 

 
         
Total Return3                    

Based on net asset value

    7.90%        10.11%        0.47%        12.70%        17.90%   
 

 

 

 

Based on market price

    9.30%        17.02%        (2.06)%        12.22%        23.99%   
 

 

 

 
         
Ratios to Average Net Assets                   

Total expenses

    0.81%        0.82%        0.82%        0.83%        0.77%   
 

 

 

 

Total expenses after fees waived and paid indirectly

    0.81%        0.82%        0.82%        0.83%        0.77%   
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense and fees4

    0.70%        0.71%        0.70%        0.71%        0.70%   
 

 

 

 

Net investment income

    5.09%        5.24%        5.84%        5.52%        6.00%   
 

 

 

 
         
Supplemental Data                   

Net assets, end of year (000)

  $  517,697      $  505,341      $  485,319      $  513,923      $  481,598   
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 66,087      $ 61,066      $ 71,145      $ 76,451      $ 61,510   
 

 

 

 

Portfolio turnover rate

    18%        22%        19%        19%        28%   
 

 

 

 

 

  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 4 of the Notes to Financial Statements for details.

 

 

See Notes to Financial Statements.      
                
78    ANNUAL REPORT    APRIL 30, 2016   


Financial Highlights    BlackRock MuniEnhanced Fund, Inc. (MEN)

 

    Year Ended April 30,  
    2016     2015     2014     2013     2012  
         
Per Share Operating Performance                   

Net asset value, beginning of year

  $ 12.27      $ 11.94      $ 12.63      $ 12.12      $ 10.30   
 

 

 

 

Net investment income1

    0.70        0.71        0.73        0.71        0.69   

Net realized and unrealized gain (loss)

    0.28        0.35        (0.70     0.50        1.82   

Distributions to AMPS Shareholders from net investment income

                                (0.00 )2 
 

 

 

 

Net increase from investment operations

    0.98        1.06        0.03        1.21        2.51   
 

 

 

 

Distributions to Common Shareholders from net investment income3

    (0.73     (0.73     (0.72     (0.70     (0.69
 

 

 

 

Net asset value, end of year

  $ 12.52      $ 12.27      $ 11.94      $ 12.63      $ 12.12   
 

 

 

 

Market price, end of year

  $ 12.55      $ 11.67      $ 11.27      $ 12.65      $ 11.66   
 

 

 

 
         
Total Return Applicable to Common Shareholders4                    

Based on net asset value

    8.50%        9.49%        1.06%        10.16%        25.12%   
 

 

 

 

Based on market price

    14.35%        10.33%        (4.76)%        14.69%        24.11%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                   

Total expenses

    1.44%        1.44%        1.50%        1.49% 5      1.70% 5 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.44%        1.43%        1.50%        1.49% 5      1.70% 5 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs6

    0.90%        0.91%        0.92%        0.96% 5,7      1.35% 5,7 
 

 

 

 

Net investment income

    5.71%        5.76%        6.37%        5.65% 5      6.12% 5 
 

 

 

 

Distributions to AMPS Shareholders

                                0.03%   
 

 

 

 

Net investment income to Common Shareholders

    5.71%        5.76%        6.37%        5.65%        6.09%   
 

 

 

 
         
Supplemental Data                   

Net assets applicable to Common Shareholders, end of year (000)

  $  370,342      $  362,703      $  352,878      $  373,259      $  357,017   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 142,500      $ 142,500      $ 142,500      $ 142,500      $ 142,500   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of year

  $ 359,889      $ 354,528      $ 347,633      $ 361,936      $ 350,538   
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 67,160      $ 76,094      $ 73,379      $ 81,244      $ 69,282   
 

 

 

 

Portfolio turnover rate

    10%        12%        16%        12%        22%   
 

 

 

 

 

  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 4 and Note 10 of the Notes to Financial Statements for details.

 

  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.      
                
   ANNUAL REPORT    APRIL 30, 2016    79


Financial Highlights    BlackRock MuniHoldings Fund, Inc. (MHD)

 

    Year Ended April 30,  
    2016     2015     2014     2013     2012  
         
Per Share Operating Performance                   

Net asset value, beginning of year

  $ 17.59      $ 16.85      $ 18.12      $ 17.36      $ 14.67   
 

 

 

 

Net investment income1

    1.00        1.03        1.04        1.07        1.12   

Net realized and unrealized gain (loss)

    0.42        0.77        (1.22     1.01        2.67   

Distributions to VMTP Shareholders from net realized gain

                         (0.01       

Distributions to AMPS Shareholders from net investment income

                                (0.01
 

 

 

 

Net increase (decrease) from investment operations

    1.42        1.80        (0.18     2.07        3.78   
 

 

 

 
Distributions to Common Shareholders:2          

From net investment income

    (1.06     (1.06     (1.08     (1.12     (1.09

From net realized gain

                  (0.01     (0.19       
 

 

 

 

Total distributions to Common Shareholders

    (1.06     (1.06     (1.09     (1.31     (1.09
 

 

 

 

Net asset value, end of year

  $ 17.95      $ 17.59      $ 16.85      $ 18.12      $ 17.36   
 

 

 

 

Market price, end of year

  $ 18.14      $ 17.25      $ 16.01      $ 18.20      $ 18.08   
 

 

 

 
         
Total Return Applicable to Common Shareholders3                    

Based on net asset value

    8.65%        11.22%        (0.15)%        12.20%        26.57%   
 

 

 

 

Based on market price

    11.91%        14.80%        (5.55)%        8.21%        33.28%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                   

Total expenses

    1.53%        1.50%        1.64%        1.60%        1.41% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.53%        1.50%        1.64%        1.60%        1.41% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs5

    0.99%        0.99%        1.04%        1.02%        1.09% 4,6 
 

 

 

 

Net investment income

    5.75%        5.86%        6.48%        5.92%        6.95% 4 
 

 

 

 

Distributions to AMPS Shareholders

                                0.09%   
 

 

 

 

Net investment income to Common Shareholders

    5.75%        5.86%        6.48%        5.92%        6.86%   
 

 

 

 
         
Supplemental Data                   

Net assets applicable to Common Shareholders, end of year (000)

  $ 253,864      $ 248,646      $ 238,113      $ 255,911      $ 243,989   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 83,700      $ 83,700      $ 83,700      $ 83,700      $ 83,700   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $  403,302      $  397,068      $  384,484      $  405,748      $  391,505   
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 60,289      $ 56,784      $ 60,238      $ 69,753      $ 61,758   
 

 

 

 

Portfolio turnover rate

    7%        11%        20%        16%        19%   
 

 

 

 

 

  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 4 and Note 10 of the Notes to Financial Statements for details.

 

  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 1.05%.

 

 

See Notes to Financial Statements.      
                
80    ANNUAL REPORT    APRIL 30, 2016   


Financial Highlights    BlackRock MuniHoldings Fund II, Inc. (MUH)

 

    Year Ended April 30,  
    2016     2015     2014     2013     2012  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 16.21      $ 15.61      $ 16.93      $ 16.23      $ 13.74   
 

 

 

 

Net investment income1

    0.91        0.93        0.95        0.98        1.03   

Net realized and unrealized gain (loss)

    0.33        0.64        (1.17     0.93        2.45   

Distributions to VMTP Shareholders from net realized gain

                         (0.01       

Distributions to AMPS Shareholders from net investment income

                                (0.01
 

 

 

 

Net increase (decrease) from investment operations

    1.24        1.57        (0.22     1.90        3.47   
 

 

 

 
Distributions to Common Shareholders:2          

From net investment income

    (0.94     (0.97     (1.00     (1.04     (0.98

From net realized gain

                  (0.10     (0.16       
 

 

 

 

Total distributions to Common Shareholders

    (0.94     (0.97     (1.10     (1.20     (0.98
 

 

 

 

Net asset value, end of year

  $ 16.51      $ 16.21      $ 15.61      $ 16.93      $ 16.23   
 

 

 

 

Market price, end of year

  $ 16.23      $ 15.28      $ 14.84      $ 16.75      $ 16.46   
 

 

 

 
         
Total Return Applicable to Common Shareholders3                                        

Based on net asset value

    8.25%        10.64%        (0.40)%        11.99%        26.08%   
 

 

 

 

Based on market price

    12.90%        9.71%        (4.30)%        9.25%        31.60%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.50%        1.48%        1.61%        1.59%        1.37% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.50%        1.48%        1.61%        1.59%        1.37% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs5

    1.00%        1.00%        1.04%        1.03%        1.07% 4,6 
 

 

 

 

Net investment income

    5.66%        5.76%        6.36%        5.81%        6.81% 4 
 

 

 

 

Distributions to AMPS Shareholders

                                0.05%   
 

 

 

 

Net investment income to Common Shareholders

    5.66%        5.76%        6.36%        5.81%        6.76%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $  186,553      $  183,214      $  176,395      $  191,366      $  182,624   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 55,000      $ 55,000      $ 55,000      $ 55,000      $ 55,000   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 439,188      $ 433,117      $ 420,718      $ 447,938      $ 432,044   
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 46,103      $ 43,568      $ 48,497      $ 56,354      $ 48,273   
 

 

 

 

Portfolio turnover rate

    7%        11%        18%        16%        18%   
 

 

 

 

 

  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 4 and Note 10 of the Notes to Financial Statements for details.

 

  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 1.03%.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2016    81


Financial Highlights    BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

    Year Ended April 30,  
    2016     2015     2014     2013     2012  
         
Per Share Operating Performance                           

Net asset value, beginning of year

  $ 14.57      $ 14.18      $ 15.31      $ 14.61      $ 12.48   
 

 

 

 

Net investment income1

    0.80        0.80        0.82        0.83        0.89   

Net realized and unrealized gain (loss)

    0.28        0.40        (1.13     0.76        2.14   

Distributions to AMPS Shareholders from net investment income

                                (0.01
 

 

 

 

Net increase (decrease) from investment operations

    1.08        1.20        (0.31     1.59        3.02   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (0.81     (0.81     (0.82     (0.89     (0.89
 

 

 

 

Net asset value, end of year

  $ 14.84      $ 14.57      $ 14.18      $ 15.31      $ 14.61   
 

 

 

 

Market price, end of year

  $ 14.31      $ 13.32      $ 12.88      $ 14.92      $ 14.52   
 

 

 

 
         
Total Return Applicable to Common Shareholders3                            

Based on net asset value

    8.24%        9.20%        (1.07)%        11.06%        24.96%   
 

 

 

 

Based on market price

    14.09%        9.91%        (7.78)%        8.90%        25.90%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                           

Total expenses

    1.60%        1.59%        1.75%        1.80%        1.49% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.58%        1.57%        1.67%        1.72%        1.41% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs5

    0.99%        0.99%        0.99%        1.00%        1.06% 4,6 
 

 

 

 

Net investment income

    5.49%        5.49%        6.00%        5.48%        6.50% 4 
 

 

 

 

Distributions to AMPS Shareholders

                                0.08%   
 

 

 

 

Net investment income to Common Shareholders

    5.49%        5.49%        6.00%        5.48%        6.42%   
 

 

 

 
         
Supplemental Data                           

Net assets applicable to Common Shareholders, end of year (000)

  $  193,110      $  189,594      $ 184,479      $ 199,236      $  189,567   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 87,000      $ 87,000      $ 87,000      $ 87,000      $ 87,000   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 321,966      $ 317,924      $  312,045      $  329,007      $ 317,893   
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 24,429      $ 21,937      $ 25,187      $ 48,934      $ 41,631   
 

 

 

 

Portfolio turnover rate

    25%        11%        46%        34%        30%   
 

 

 

 

 

  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 4 and Note 10 of the Notes to Financial Statements for details.

 

  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.      
                
82    ANNUAL REPORT    APRIL 30, 2016   


Financial Highlights    BlackRock Muni Intermediate Duration Fund, Inc.  (MUI)

 

    Year Ended April 30,  
    2016     2015     2014     2013     2012  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 15.86      $ 15.64      $ 16.60      $ 16.21      $ 14.45   
 

 

 

 

Net investment income1

    0.73        0.77        0.80        0.82        0.86   

Net realized and unrealized gain (loss)

    0.53        0.27        (0.85     0.58        1.76   

Distributions to VRDP Shareholders from net realized gain

                         (0.01       
 

 

 

 

Net increase (decrease) from investment operations

    1.26        1.04        (0.05     1.39        2.62   
 

 

 

 
Distributions to Common Shareholders:2          

From net investment income

    (0.78     (0.82     (0.86     (0.87     (0.86

From net realized gain

    (0.18            (0.05     (0.13       
 

 

 

 

Total distributions to Common Shareholders

    (0.96     (0.82     (0.91     (1.00     (0.86
 

 

 

 

Net asset value, end of year

  $ 16.16      $ 15.86      $ 15.64      $ 16.60      $ 16.21   
 

 

 

 

Market price, end of year

  $ 15.19      $ 14.47      $ 14.55      $ 16.12      $ 16.45   
 

 

 

 
         
Total Return Applicable to Common Shareholders3                                        

Based on net asset value

    9.04%        7.27%        0.50%        8.78%        18.74%   
 

 

 

 

Based on market price

    12.27%        5.20%        (3.73)%        4.09%        27.56%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.57%        1.52%        1.65%        1.91%        1.88%   
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.57%        1.52%        1.65%        1.91%        1.88%   
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs4

    0.94%        0.96%        1.00%        1.35% 5      1.65% 5 
 

 

 

 

Net investment income to Common Shareholders

    4.61%        4.82%        5.28%        4.93%        5.58%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $ 618,971      $ 607,440      $ 599,066      $ 635,652      $ 617,437   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of period (000)

                              $ 287,100   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of period

                              $  315,060   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $  287,100      $  287,100      $  287,100      $  287,100          
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 315,594      $ 311,578      $ 308,661      $ 321,405          
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 63,102      $ 52,932      $ 69,070      $ 105,939      $ 81,430   
 

 

 

 

Portfolio turnover rate

    20%        18%        22%        16%        27%   
 

 

 

 

 

  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   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details.

 

  5   

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 0.98% and 0.99%, respectively.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2016    83


Financial Highlights    BlackRock MuniVest Fund II, Inc. (MVT)

 

    Year Ended April 30,  
    2016     2015     2014     2013     2012  
         
Per Share Operating Performance                           

Net asset value, beginning of year

  $ 16.01      $ 15.45      $ 16.69      $ 15.91      $ 13.47   
 

 

 

 

Net investment income1

    0.98        0.99        1.03        1.06        1.12   

Net realized and unrealized gain (loss)

    0.18        0.61        (1.19     0.82        2.41   

Distributions to AMPS Shareholders from net investment income

                                (0.02
 

 

 

 

Net increase (decrease) from investment operations

    1.16        1.60        (0.16     1.88        3.51   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (1.00     (1.04     (1.08     (1.10     (1.07
 

 

 

 

Net asset value, end of year

  $ 16.17      $ 16.01      $ 15.45      $ 16.69      $ 15.91   
 

 

 

 

Market price, end of year

  $ 17.38      $ 16.26      $ 15.16      $ 17.31      $ 16.75   
 

 

 

 
         
Total Return Applicable to Common Shareholders3                            

Based on net asset value

    7.61%        10.65%        (0.37)%        11.95%        26.86%   
 

 

 

 

Based on market price

    13.88%        14.52%        (5.74)%        10.28%        31.13%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                           

Total expenses

    1.52%        1.50%        1.63%        1.66%        1.41% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.52%        1.50%        1.63%        1.66%        1.41% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs5

    0.92%        0.92%        0.96%        0.96%        1.04% 4,6 
 

 

 

 

Net investment income

    6.15%        6.17%        6.93%        6.43%        7.57% 4 
 

 

 

 

Distributions to AMPS Shareholders

                                0.15%   
 

 

 

 

Net investment income to Common Shareholders

    6.15%        6.17%        6.93%        6.43%        7.42%   
 

 

 

 
         
Supplemental Data                           

Net assets applicable to Common Shareholders, end of year (000)

  $  340,753      $  336,320      $  324,146      $  348,998      $  330,941   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 140,000      $ 140,000      $ 140,000      $ 140,000      $ 140,000   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 343,395      $ 340,229      $ 331,533      $ 349,284      $ 336,386   
 

 

 

 

Borrowings outstanding, end of year (000)

  $ 69,195      $ 66,439      $ 66,715      $ 99,386      $ 88,540   
 

 

 

 

Portfolio turnover rate

    6%        10%        17%        15%        13%   
 

 

 

 

 

  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 4 and Note 10 of the Notes to Financial Statements for details.

 

  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.      
                
84    ANNUAL REPORT    APRIL 30, 2016   


Notes to Financial Statements     

 

1. Organization:

The following are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as closed-end management investment companies and are referred to herein collectively as the “Funds,” or individually, a “Fund”:

 

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.

The Funds, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, are included in a complex of closed-end funds referred to as the Closed-End Complex.

2. Significant Accounting Policies:

The 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, disclosure of contingent assets and liabilities at the date of 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. Below is a summary of significant accounting policies:

Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., futures contracts) or certain borrowings (e.g., TOB transactions) that would be treated as “senior securities” for 1940 Act purposes, a Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its 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. Dividend income is recorded on the ex-dividend date. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.

Distributions: Distributions from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. 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 10.

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, if applicable. 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. Although the Manager is still evaluating the potential impacts of this new guidance, the Funds’ adoption will be limited to the reclassification of any unamortized debt issuance costs on the Statements of Assets and Liabilities and modification to disclosures in the Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    85


Notes to Financial Statements (continued)     

 

Indemnifications: In the normal course of business, a Fund enters into contracts that contain a variety of representations that provide general indemnification. A Fund’s maximum exposure under these arrangements is unknown because it involves future potential claims against a Fund, which cannot be predicted with any certainty.

Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.

The Funds have an arrangement with their 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. Effective October 2015, the custodian is imposing fees on certain uninvested cash balances.

3. Investment Valuation and Fair Value Measurements:

Investment Valuation Policies: The Funds’ investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time) (or if the reporting date falls on a day the NYSE is closed, investments are valued at fair value as of the report date). U.S. GAAP defines fair value as the price the 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 using various 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 oversee the pricing function for all financial instruments.

Fair Value Inputs and Methodologies: The following methods (or “techniques”) and inputs are used to establish the fair value of each Fund’s assets and liabilities:

 

 

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.

 

 

Investments in open-end U.S. mutual funds are valued at NAV each business day.

 

 

Futures contracts traded on exchanges are valued at their last sale price.

If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such instruments, or 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 Valued Investments”). When determining the price for Fair Valued 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 Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

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

 

 

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

 

 

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

 

 

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments are typically categorized as Level 3. The fair value hierarchy for each Fund’s investments and derivative financial instruments have been included in the Schedules of Investments.

 

                
86    ANNUAL REPORT    APRIL 30, 2016   


Notes to Financial Statements (continued)     

 

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with each Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.

4. Securities and Other Investments:

Zero-Coupon Bonds: Zero-coupon bonds are normally issued at a significant discount from face value and do not provide for periodic interest payments. These 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: Certain 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. A Fund 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, a Fund may be required to pay more at settlement than the security is worth. In addition, a Fund is not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, a Fund assumes 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, a Fund’s maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions.

Municipal Bonds Transferred to TOB Trusts: Certain 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 generally 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. 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. 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. The Funds may withdraw a corresponding share of the municipal bonds from the TOB Trust. Other funds managed by the investment advisor may also contribute municipal bonds to a TOB Trust into which each Fund has contributed bonds. If multiple BlackRock advised funds participate in the same TOB Trust, the economic rights and obligations under the TOB Residuals will be shared among the funds ratably in proportion to their participation in the TOB Trust.

TOB Trusts are generally 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. The tendered TOB Trust Certificates may be purchased by the Liquidity Provider and are usually remarketed by a Remarketing Agent, which is typically an affiliated entity of the Liquidity Provider. The Remarketing Agent may also purchase the tendered TOB Trust Certificates for its own account in the event of a failed remarketing.

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/or 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. In the case of an MTE, after the payment of fees, the TOB Trust Certificates holders would be paid before the TOB Residuals holders (i.e., the Funds). In contrast, in the case of a TOTE, after payment of fees, the TOB Trust Certificates holders and the TOB Residuals holders would be paid pro rata in proportion to the respective face values of their certificates. During the year ended April 30, 2016, no TOB Trusts in which a Fund participated were terminated without the consent of a Fund.

While a Fund’s investment policies and restrictions expressly permit investments in inverse floating rate securities, such as TOB Residuals, they generally do not allow a Fund to borrow money for purposes of making investments. The Funds’ management believes that a Fund’s 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. A Fund typically invests the cash received in additional municipal bonds. The municipal bonds deposited into a TOB Trust are presented in a Fund’s Schedule of Investments and the TOB Trust Certificates are shown in Other Liabilities in the Statements of Assets and Liabilities. Any loans drawn by the TOB Trust to purchase tendered TOB Trust Certificates would be shown as Loan for TOB Trust Certificates.

Volcker Rule Impact: 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 precludes banking entities and their affiliates from sponsoring and investing in TOB Trusts. Banking

 

                
   ANNUAL REPORT    APRIL 30, 2016    87


Notes to Financial Statements (continued)     

 

entities subject to the Volcker Rule were required to fully comply by July 21, 2015, with respect to investments in and relationships with TOB Trusts established after December 31, 2013 (“Non-Legacy TOB Trusts”), and by July 21, 2016, with respect to investments in and relationships with TOB Trusts established prior to December 31, 2013 (“Legacy TOB Trusts”).

As a result, a new structure for TOB Trusts has been designed to ensure that no banking entity is sponsoring the TOB Trust. 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 a third party bank will be performed by, or on behalf of, the Funds. The Funds have restructured any Non-Legacy TOB Trusts and are in the process of restructuring Legacy TOB Trusts in conformity with regulatory guidelines. Until all restructurings are completed, a Fund may, for a period of time, hold TOB Residuals in both Legacy TOB Trusts and non-bank sponsored restructured TOB Trusts.

Under the new TOB Trust structure, the Liquidity Provider or Remarketing Agent will no longer purchase the tendered TOB Trust Certificates even in the event of failed remarketing. This 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 TOB Trust may draw upon a loan from the Liquidity Provider to purchase the tendered TOB Trust Certificates. Any loans made by the Liquidity Provider will be secured by the purchased TOB Trust Certificates held by the TOB Trust and will be subject to an increased interest rate based on the number of days the loan is outstanding.

Accounting for TOB Trusts: The municipal bonds deposited into a TOB Trust are presented in a Fund’s Schedule of Investments and the TOB Trust Certificates are shown in Other Liabilities in the Statements of Assets and Liabilities. Any loans drawn by the TOB Trust to purchase tendered TOB Trust Certificates are shown as Loan for TOB Trust Certificates. The carrying amount of a Fund’s payable to the holder of the TOB Trust Certificates, as reported in the Statements of Assets and Liabilities as TOB Trust Certificates, approximates its fair value.

Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by a Fund 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, a Fund incurred non-recurring, legal and restructuring fees, which are recorded as interest expense, fees and amortization of deferred offering costs in the Statements of Operations.

For the year ended April 30, 2016, the following table is a summary of the Funds’ TOB Trusts:

 

     Underlying
Municipal
Bonds
Transferred to
TOB Trusts1
     Liability for
TOB Trust
Certificates2
     Range of
Interest Rates
     Average TOB
Trust
Certificates
Outstanding
     Daily
Weighted
Average
Interest Rate
 

MUA

  $ 123,632,226       $ 66,086,523         0.43% - 0.76%       $ 67,454,450         0.80%   

MEN

  $ 127,040,330       $ 67,159,660         0.43% - 0.88%       $ 69,769,238         0.69%   

MHD

  $ 109,917,517       $ 60,288,863         0.31% - 0.61%       $ 58,393,208         0.68%   

MUH

  $ 83,245,505       $ 46,103,103         0.31% - 0.61%       $ 44,732,425         0.68%   

MUS

  $ 48,910,003       $ 24,428,564         0.43% - 0.66%       $ 23,196,943         0.74%   

MUI

  $ 117,070,232       $ 63,101,848         0.41% - 0.49%       $ 55,841,711         0.68%   

MVT

  $ 131,624,297       $ 69,195,039         0.31% - 0.58%       $ 67,842,354         0.68%   

 

  1   

The municipal bonds transferred to a TOB Trust are generally high grade municipal bonds. In certain cases, when municipal bonds transferred are lower grade municipal bonds, the TOB transaction may include 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 Residuals 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.

 

  2   

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 usually enter into a reimbursement agreement with the Liquidity Provider where a Fund is required to reimburse the Liquidity Provider the amount of any Liquidation Shortfall. As a result, if a Fund invests in a recourse TOB Trust, a Fund 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 a Fund at April 30, 2016, in proportion to its participation in the TOB Trust. The recourse TOB Trusts are identified in the Schedules of Investments including the maximum potential amounts owed by a Fund at April 30, 2016.

5. 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 manage their exposure to certain risks such as interest rate risk. Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange or over-the-counter (“OTC”).

 

                
88    ANNUAL REPORT    APRIL 30, 2016   


Notes to Financial Statements (continued)     

 

Futures Contracts: Certain Funds invest in long and/or short positions in futures and options on futures contracts to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk). 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 on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, 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 in the Schedules of Investments and cash deposited, if any, is shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. 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 market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations 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 futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest, foreign currency exchange rates or underlying assets.

6. 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.

Investment Advisory

Each Fund entered into an Investment Advisory Agreement with 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 personnel, facilities, equipment and certain other services necessary to the operations of each Fund. For such services, each Fund, except MUI pays the Manager a monthly fee, which is determined by calculating a percentage of each Fund’s average daily net assets, based on the following annual rates:

 

     MUA        MEN        MHD        MUH        MUS        MVT  

Investment Advisory Fee

    0.55%           0.50%           0.55%           0.55%           0.55%           0.50%   

MUI pays the Manager a monthly fee of 0.55% of (i) the average daily value of MUI’s net assets and (ii) the proceeds of any outstanding debt securities and borrowings used for leverage.

Average daily net assets are the average daily value of each Fund’s total assets minus its total accrued liabilities (which does not include liabilities represented by TOB Trusts and the liquidation preference of preferred shares (other than accumulated dividends)).

Waivers

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. These amounts are included in fees waived by the Manager in the Statements of Operations. 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. For the year ended April 30, 2016, the amounts waived were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Amount waived

  $ 108       $ 106       $ 120       $ 64       $ 127       $ 536       $ 123   

The Manager, for MUS, voluntarily agreed to waive its investment advisory fee on the proceeds of the Preferred Shares and TOB Trusts that exceed 35% of total assets minus the sum of its accrued liabilities (which does not include liabilities represented by TOB Trusts and the liquidation preference of preferred shares). This amount is included in fees waived by the Manager in the Statements of Operations. For the year ended April 30, 2016, the waiver was $47,316.

Officers and Directors

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.

Other Transactions

The Fund 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 directors. For the year ended April 30, 2016, the purchase and sale transactions with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act were as follows:

 

     Purchases      Sales  

MUI

          $ 13,750,208   

 

                
   ANNUAL REPORT    APRIL 30, 2016    89


Notes to Financial Statements (continued)     

 

7. Purchases and Sales:

For the year ended April 30, 2016, purchases and sales of investments, excluding short-term securities, were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Purchases

  $ 112,899,762       $ 54,638,634       $ 31,804,861       $ 22,873,764       $ 79,981,917       $ 189,696,228       $ 38,154,917   

Sales

  $ 103,295,869       $ 67,743,118       $ 27,053,295       $ 19,544,426       $ 72,705,013       $ 193,205,844       $ 32,262,632   

8. 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 their taxable income to their shareholders. Therefore, no federal income tax provision is required.

Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Fund’s U.S. federal tax returns remains open for each of the four years ended April 30, 2016. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Funds as of April 30, 2016, 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 period end, the following permanent differences attributable to amortization methods on fixed income securities, non-deductible expenses, the reclassification of distributions, the expiration of capital loss carryforwards, distributions received from a regulated investment company and the sale of bonds received from tender option bond trusts were reclassified to the following accounts:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Paid-in capital

          $ (2,460,147                            $ (26,130    $ (2,741,816

Undistributed net investment income

  $ (17,417    $ (9,187    $ (12    $ 5,377       $ 4,079       $ 527,130       $ (12

Undistributed net realized gain (accumulated net realized loss)

  $ 17,417       $ 2,469,334       $ 12       $ (5,377    $ (4,079    $ (501,000    $ 2,741,828   

The tax character of distributions paid was as follows:

 

            MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Tax-exempt income1

    4/30/2016      $ 26,226,794       $ 22,859,540       $ 15,654,116       $ 11,096,405       $ 11,470,423       $ 32,354,972       $ 22,451,090   
    4/30/2015        26,838,857         22,880,735         15,882,185         11,579,652         11,444,657         34,245,623         22,951,698   

Ordinary income2

    4/30/2016        217,871         3,578         226,494         79,078                 81,393         91,205   
    4/30/2015        293,072         13,467         25         237         348         64,307         312,815   

Long-term capital gains3

    4/30/2016                                                7,641,316           
    4/30/2015                                                          
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

    4/30/2016      $ 26,444,665       $ 22,863,118       $ 15,880,610       $ 11,175,483       $ 11,470,423       $ 40,077,681       $ 22,542,295   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
    4/30/2015      $ 27,131,929       $ 22,894,202       $ 15,882,210       $ 11,579,889       $ 11,445,005       $ 34,309,930       $ 23,264,513   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  1   

The Funds designate these amounts paid during the fiscal year ended April 30, 2016, 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.

 

  3   

The Funds designate these amounts paid during the fiscal year ended April 30, 2016 as capital gain dividends.

As of period end, the tax components of accumulated net earnings were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Undistributed tax-exempt income

          $ 4,365,755       $ 1,734,493       $ 1,477,751       $ 2,344,056       $ 1,691,747       $ 1,932,257   

Undistributed ordinary income

  $ 98,467                                         1,303,644         34,454   

Undistributed long-term capital gains

                                            3,345,521           

Capital loss carryforwards

    (5,436,917      (6,965,141      (1,509,608      (1,290,302      (14,742,659              (1,387,597

Net unrealized gains1

    42,268,394         58,994,627         42,856,027         31,030,748         30,460,448         69,177,145         54,313,515   

Qualified late-year losses2

                            (60,825      (69,400              (59,730
 

 

 

 

Total

  $ 36,929,944       $ 56,395,241       $ 43,080,912       $ 31,157,372       $ 17,992,445       $ 75,518,057       $ 54,832,899   
 

 

 

 

 

  1   

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 tender option bond trusts.

 

  2   

The Fund has elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

 

                
90    ANNUAL REPORT    APRIL 30, 2016   


Notes to Financial Statements (continued)     

 

As of April 30, 2016, 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  

No expiration date1

          $ 1,466,810       $ 1,509,608       $ 1,290,302       $ 7,633,567       $ 1,387,597   

2017

  $ 2,846,397         3,540,378                         494,294           

2018

    396,366         1,225,298                         6,614,798           

2019

    2,194,154         732,655                                   
 

 

 

 

Total

  $ 5,436,917       $ 6,965,141       $ 1,509,608       $ 1,290,302       $ 14,742,659       $ 1,387,597   
 

 

 

 

 

  1   

Must be utilized prior to losses subject to expiration.

During the year ended April 30, 2016, the Fund listed below utilized the following amounts of their respective capital loss carryforward:

 

MUA

  $ 1,698,273   

MEN

  $ 775,460   

MUH

  $ 99,424   

MUS

  $ 108,631   

MVT

  $ 851,237   

As of April 30, 2016, 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

  $
475,360,872
  
   $ 450,747,695       $ 292,667,105       $ 209,004,792       $ 247,963,400       $ 826,950,699       $
422,091,702
  
 

 

 

 

Gross unrealized appreciation

  $ 59,223,316       $ 59,926,167       $ 43,936,069       $ 31,405,614       $ 30,762,558       $ 71,389,066       $ 56,946,386   

Gross unrealized depreciation

    (16,799,608      (854,515      (1,080,042      (374,866      (302,112      (1,960,916      (2,155,327
 

 

 

 

Net unrealized appreciation

  $ 42,423,708       $ 59,071,652       $ 42,856,027       $ 31,030,748       $ 30,460,446       $ 69,428,150       $ 54,791,059   
 

 

 

 

9. Principal Risks:

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.

Inventories of municipal bonds held by brokers and dealers may decrease, which would lessen their ability to make a market in these securities. Such a reduction in market making capacity could potentially decrease a Fund’s ability to buy or sell bonds. As a result, a Fund may sell a security at a lower price, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative impact on performance. If a Fund needed to sell large blocks of bonds, those sales could further reduce the bonds’ prices and impact performance.

In the normal course of business, certain Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer to meet all its obligations, including the ability to pay principal and interest when due (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers of securities owned by the Funds. Changes arising from the general economy, the overall market and local, regional or global political and/or social instability, as well as currency, interest rate and price fluctuations, may also affect the securities’ value.

Each Fund may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force each Fund to reinvest in lower yielding securities. Each Fund may also be exposed to reinvestment risk, which is the risk that income from each Fund’s portfolio will decline if each Fund invests the proceeds from matured, traded or called fixed income securities at market interest rates that are below each Fund portfolio’s current earnings rate.

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 new TOB Trust structure resulting from the compliance with Volcker Rule 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.

There can be no assurance that the Funds can successfully enter into restructured TOB Trust transactions in order to refinance their existing TOB Residuals 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.

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’ NAV per share.

 

                
   ANNUAL REPORT    APRIL 30, 2016    91


Notes to Financial Statements (continued)     

 

The SEC and various federal banking and housing agencies have 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.

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.

Counterparty Credit Risk: Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions. The Funds manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes 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 approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.

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). 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.

Concentration Risk: As of period end, MUS invested a significant portion of their assets in securities in the transportation and the county, city, special district, school district sectors. 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.

Certain 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.

10. 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 Fund’s Preferred Shares outstanding is $0.10. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without approval of Common Shareholders.

Common Shares

For the periods shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

 

Year Ended April 30,   MUA      MEN      MHD      MVT  

2016

    42,352         25,792         7,978         67,729   

2015

    11,892                         26,032   

For the years ended April 30, 2016 and April 30, 2015 for MUH, MUS and MUI shares issued and outstanding remained constant.

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 a Fund. The 1940 Act prohibits the declaration of any dividend on a Fund’s Common Shares or the repurchase of a Fund’s Common Shares if a Fund fails to maintain asset coverage of at least 200% of the Fund’s liquidation preference of the outstanding Preferred Shares. In addition, pursuant to the Preferred Shares’ governing instruments, a Fund is restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with the Fund’s Preferred Shares or repurchasing such shares if a 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 ratings agencies rating the Preferred Shares.

 

                
92    ANNUAL REPORT    APRIL 30, 2016   


Notes to Financial Statements (continued)     

 

The holders of Preferred Shares have voting rights equal to the voting rights of 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 on certain matters. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Directors for each Fund. The holders of Preferred Shares are also entitled to elect the full Board of Directors if dividends on the Preferred Shares are not paid for a period of two years. The holders of Preferred Shares are also generally entitled to a separate class vote to amend the Preferred Share governing documents. In addition, the 1940 Act requires the approval of the holders of a majority of any outstanding Preferred Shares, voting as a separate class, 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”). The VRDP Shares include a liquidity feature and are currently in a special rate period, each as described below.

As of the period end, 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   

Redemption Terms: 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 also 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.

Liquidity Feature: MEN entered into a fee agreement with the liquidity provider that requires an initial commitment and a per annum liquidity fee payable to the liquidity provider. These fees, if applicable, are shown as liquidity fees in the Statements of Operations.

The fee agreement between the MEN and the liquidity provider was scheduled to expire on July 7, 2016. MEN renewed the fee agreement, which is scheduled to expire on July 6, 2017 unless renewed or terminated in advance.

In the event the fee agreement is not renewed or is terminated in advance, and MEN 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. In the event of such mandatory purchase, MEN is required to redeem the VRDP Shares six months after the purchase date. Immediately after such mandatory purchase, MEN is required to begin to segregate liquid assets with its custodian to fund the redemption. There is no assurance MEN will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.

Remarketing: MEN may incur remarketing fees of 0.10% on the aggregate principal amount of all the Fund’s VRDP Shares, which, if any, are included in remarketing fees on Preferred Shares in the Statements of Operations. During a special rate period (as described below) the fund may incur no remarketing fees.

Dividends: Dividends on the VRDP Shares are payable monthly at a variable rate set weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum rate. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the length of time that the VRDP Shares fail to be remarketed. At the date of issuance, the VRDP Shares were assigned long-term ratings 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 period end, 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 the year ended April 30, 2016, the average annualized dividend rate for the VRDP Shares was 0.98%.

Special Rate Period: On June 20, 2012, MEN announced a special rate period for an approximate three-year term ending June 24, 2015 with respect to its VRDP Shares, during which the VRDP Shares will not be subject to any remarketing and the dividend rate will be based on a predetermined methodology. 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 short-term ratings on the VRDP Shares for MEN were withdrawn by Moody’s, Fitch and/or S&P at the commencement of the special rate period. In May 2015, the special rate period was extended to June 22, 2016. In May 2016, the special rate period was extended to June 21, 2017.

During the special rate period, the liquidity and fee agreements remain in effect and the VRDP Shares remain subject to mandatory redemption by MEN on the maturity date. The VRDP Shares will not be remarketed or subject to optional or mandatory tender events during the special rate period. During the

 

                
   ANNUAL REPORT    APRIL 30, 2016    93


Notes to Financial Statements (continued)     

 

special rate period, MEN is required to comply with the same asset coverage, basic maintenance amount and leverage requirements for the VRDP Shares as is required when the VRDP Shares are not in a special rate period. MEN does not pay any fees to the liquidity provider and remarketing agent during the special rate period. MEN also pays dividends monthly based on the sum of the Securities Industry and Financial Markets Association (“SIFMA”) Municipal Swap Index rate and a percentage per annum based on the long-term ratings assigned to the VRDP Shares.

If MEN redeems the VRDP Shares prior to the end of the special rate period and the VRDP Shares have long-term ratings above A1/A+ and its equivalent by all rating agencies then rating the VRDP Shares, then such redemption may be 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 comply with minimum asset coverage requirements. After June 21, 2017, the holder of the VRDP Shares and MEN may mutually agree to extend the special rate period. 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, 2016, 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 preference per share, in a privately negotiated offering and sale of VMTP Shares exempt from registration under the Securities Act. The VMTP Shares are subject to certain restrictions on transfer, and the VMTP Funds 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 documents generally require the consent of the holders of VMTP Shares.

As of period end, the VMTP Shares outstanding of each Fund were as follows:

 

     Issue Date      Shares Issued      Aggregate Principal      Term Redemption
Date
 

MHD

    12/16/11         837       $ 83,700,000         1/02/19   

MUH

    12/16/11         550       $ 55,000,000         1/02/19   

MUS

    12/16/11         870       $ 87,000,000         1/02/19   

MUI

    12/07/12         2,871       $ 287,100,000         1/02/19   

MVT

    12/16/11         1,400       $ 140,000,000         1/02/19   

Redemption Terms: Each VMTP Fund is required to redeem its VMTP Shares on the term redemption date, unless earlier redeemed or repurchased or unless extended. In June 2015, the term dates for MHD, MUH, MUS, MUI and MVT were extended until January 2, 2019. 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 redemption 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 preference per share plus any outstanding unpaid dividends and applicable redemption premium. If the Fund redeems the VMTP Shares prior to the term redemption date and the VMTP Shares have long-term ratings above A1/A+ by or its equivalent by the rating agencies then rating the VMTP Shares then such redemption may be 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 until the term redemption date, subject to certain exceptions for redemptions that are required to comply with minimum asset coverage requirements.

Dividends: 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 the rating agencies then rating the VMTP Shares. 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 period end, 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 comply with certain asset coverage and leverage requirements.

For the year ended April 30, 2016, the average annualized dividend rates for the VMTP Shares were as follows:

 

     MHD      MUH      MUS      MUI      MVT  

Rate

    1.08%         1.08%         1.07%         1.15%         1.07%   

For year ended April 30, 2016, VMTP Shares issued and outstanding of each Fund remained constant.

 

                
94    ANNUAL REPORT    APRIL 30, 2016   


Notes to Financial Statements (concluded)     

 

Offering Costs: The Funds 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.

Financial Reporting: The VRDP and VMTP Shares are considered debt of the issuer; therefore, the liquidation value, which approximates fair value, of the VRDP and 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 VRDP and VMTP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VRDP and VMTP Shares are treated as equity for tax purposes. Dividends paid to holders of the VRDP and VMTP Shares are generally classified as tax-exempt income for tax-reporting purposes.

11. 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, 2016 to shareholders of record on May 16, 2016:

 

    

Common

Dividend

Per Share

 

MUA

  $ 0.0600   

MEN

  $ 0.0605   

MHD

  $ 0.0860   

MUH

  $ 0.0775   

MUS

  $ 0.0675   

MUI

  $ 0.0605   

MVT

  $ 0.0830   

Additionally, the Funds declared a net investment income dividend on June 1, 2016 payable to Common Shareholders of record on June 15, 2016 as follows:

 

    

Common

Dividend

Per Share

 

MUA

  $ 0.0575   

MEN

  $ 0.0565   

MHD

  $ 0.0810   

MUH

  $ 0.0745   

MUS

  $ 0.0675   

MUI

  $ 0.0555   

MVT

  $ 0.0790   

The dividends declared on Preferred Shares for the period May 1, 2016 to May 31, 2016 for the Funds were as follows:

 

     Preferred
Shares
     Series      Dividend
Declared
 

MEN

    VRDP Shares         W-7       $ 156,516   

MHD

    VMTP Shares         W-7       $ 99,022   

MUH

    VMTP Shares         W-7       $ 65,068   

MUS

    VMTP Shares         W-7       $ 102,926   

MUI

    VMTP Shares         W-7       $ 339,657   

MVT

    VMTP Shares         W-7       $ 165,628   

 

                
   ANNUAL REPORT    APRIL 30, 2016    95


Report of Independent Registered Public Accounting Firm

 

To the Board of Directors and Shareholders 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, 2016, 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, 2016, by correspondence with the custodians and brokers; when 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, 2016, 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 23, 2016

 

                
96    ANNUAL REPORT    APRIL 30, 2016   


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, 2016    97


Officers and Directors     

 

Name, Address1
and Year of Birth
 

Position(s)

Held with
the 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”) Overseen4
 

Public Company and
Investment Company
Directorships During
Past Five Years

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.  

75 RICs consisting of

75 Portfolios

  None

Karen P. Robards

 

1950

  Vice Chair of the Board, Chair of the Audit Committee and Director  

Since

2007

  Principal of Robards & Company, LLC (consulting and private investing 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.  

75 RICs consisting of

75 Portfolios

  AtriCure, Inc. (medical devices); Greenhill & Co., Inc.

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.  

75 RICs consisting of

75 Portfolios

  None

Cynthia L. Egan

 

1955

  Director  

Since

2016

  Advisor, U.S. Department of the Treasury from 2014 to 2015; a President at T. Rowe Price Group, Inc. from 2007 to 2012.  

74 RICs consisting of

74 Portfolios

  Unum (insurance); The Hanover Insurance Group (insurance); Envestnet (investment platform) from 2013 until 2016

Frank J. Fabozzi

 

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.  

75 RICs consisting of

75 Portfolios

  None

Jerrold B. Harris

 

1942

  Director  

Since

2007

  Trustee, Ursinus College from 2000 to 2012; Director, Ducks Unlimited — Canada (conservation) since 2015; Director, Waterfowl Chesapeake (conservation) since 2014; Director, Ducks Unlimited, Inc. 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.  

75 RICs consisting of

75 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.  

75 RICs consisting of

75 Portfolios

  ADP (data and information services); Metropolitan Life Insurance Company (insurance)

 

                
98    ANNUAL REPORT    APRIL 30, 2016   


Officers and Directors (continued)     

 

Name, Address1
and Year of Birth
 

Position(s)

Held with
the 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”) Overseen4
  Public Company and
Investment Company
Directorships During
Past Five Years
Independent Directors2               

Catherine A. Lynch

 

1961

  Director and Member of the Audit Committee  

Since

2016

  Chief Executive Officer, Chief Investment Officer and various other positions, National Railroad Retirement Investment Trust from 2003 to 2016; Associate Vice President for Treasury Management, The George Washington University from 1999 to 2003; Assistant Treasurer, Episcopal Church of America from 1995 to 1999.  

75 RICs consisting of

75 Portfolios

  None

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.  

75 RICs consisting of

75 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, retirement, removal or death, or until December 31 of the year in which they turn 75. 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.

 

3    Date shown is the earliest date a person has served on this board. 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 Fund’s 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; 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 75 RICs. Mr. Perlowski and Ms. Novick are also board members of certain complexes of BlackRock registered open-end funds. Mr. Perlowski is also a board member of the BlackRock Equity-Bond Complex and the Equity-Liquidity Complex, and Ms. Novick is also a board member 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 from 1988 to 2008.   108 RICs consisting of 228 Portfolios   None

John M. Perlowski

 

1964

  Director, President and Chief Executive Officer   Since 2014 (Director); Since 2011 (President and Chief Executive Officer)   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.   136 RICs consisting of 326 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 affiliates. Mr. Perlowski and Ms. Novick are also board members of certain complexes of BlackRock registered open-end funds. Mr. Perlowski is also a board member of the BlackRock Equity-Bond Complex and the BlackRock Equity-Liquidity 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, 2016    99


Officers and Directors (concluded)     

 

Name, Address1
and Year of Birth
  Position(s)
Held with
the Funds
 

Length

of Time

Served as

an officer

  Principal Occupation(s) During Past Five Years
Officers2               

John M. Perlowski

 

1964

  Director, President and Chief Executive Officer   Since 2014 (Director); Since 2011 (President and Chief Executive Officer)   See Principal Occupations During Past Five Years under Interested Directors for details.

Jonathan Diorio

 

1980

  Vice President   Since
2015
  Managing Director of BlackRock since 2015; Director of BlackRock, Inc. from 2011 to 2015; Director of Deutsche Asset & Wealth Management from 2009 to 2011.

Neal J. 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 M. 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 in the Closed-End Complex 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 Fund serve at the pleasure of the Board.

  Further information about the Corporation’s Officers and Directors is available in the Funds’ Statement of Additional Information, which can be obtained without charge by calling (800) 441-7762.

 

Effective December 31, 2015, Kathleen F. Feldstein and James T. Flynn retired as Directors of the Funds.

Effective March 1, 2016, Catherine A. Lynch was appointed to serve as a Director and a Member of the Audit Committee of the Funds.

Effective April 1, 2016, Cynthia L. Egan was appointed to serve as a Director of the Funds.

Effective April 6, 2016, Philip Soccio became a portfolio manager of MUS. The other portfolio managers are Ted Jaeckel and Walter O’Connor.

 

         

Investment Advisor

BlackRock Advisors, LLC

Wilmington, DE 19809

 

Transfer Agent

Computershare Trust

Company, N.A.

Canton, MA 02021

 

VRDP Remarketing Agent

Citigroup Global Markets Inc.1

New York, NY 10179

 

Accounting Agent and Custodian 

State Street Bank and

Trust Company

Boston, MA 02110

 

Legal Counsel

Skadden, Arps, Slate,

Meagher & Flom LLP

Boston, MA 02116

 

VRDP Tender and Paying

Agent and VMTP Redemption
and Paying Agent

The Bank of New York Mellon

New York, NY 10289

 

VRDP Liquidity Provider

Citibank, N.A.1

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

 

  1   

For MEN.

 

                
100    ANNUAL REPORT    APRIL 30, 2016   


Additional Information     

 

Fund Certification      

Certain 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. The Funds 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, 2016    101


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 shareholder 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 the operation of the Public Reference Room or 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.

 

                
102    ANNUAL REPORT    APRIL 30, 2016   


Additional Information (concluded)     

 

Section 19(a) Notices

MUA’s amounts and sources of distributions reported are estimates and are being provided to you pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the remainder of the fiscal year and may be subject to changes based on tax regulations. Each Fund will provide a Form 1099-DIV each calendar year that will tell you how to report these distributions for federal income tax purposes.

 

April 30, 2016

   

 

 

 

 

 

   

 

   

 

   

 

 

 

 

 

   

 

 

 

  Total Fiscal Year to Date Cumulative Distributions by Character     Percentage of Fiscal Year to Date Cumulative Distributions by Character  
     Net Investment
Income
    Net Realized
Capital Gains
Short Term
  Net Realized
Capital Gains
Long Term
  Return of
Capital
    Total Per
Common Share
    Net Investment
Income
    Net Realized
Capital Gains
Short Term
  Net Realized
Capital Gains
Long Term
  Return of
Capital
    Total Per
Common Share
 

MUA

  $ 0.729849          $ 0.008738      $ 0.738587        99         1     100

Section 19(a) notices for the Funds, as applicable, are available on the BlackRock website http://www.blackrock.com.

 

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, 2016    103


This report is intended for current holders. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The 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

 

CEMUNI7-4/16-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. The registrant undertakes to provide a copy of the code of ethics to any person upon request, without charge, by calling 1-800-882-0052, option 4.

 

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

W. Carl Kester

Catherine A. Lynch

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 MuniAssets Fund, Inc.    $30,463    $30,463    $0    $0    $12,444    $12,444    $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

   $2,129,000    $2,391,000

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 MuniAssets

Fund, Inc.

   $12,444    $12,444

Additionally, SSAE 16 Review (Formerly, SAS No. 70) fees for the current and previous fiscal years of $2,129,000 and $2,391,000, 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

W. Carl Kester

Catherine A. Lynch

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, 2016.

 

  (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, 2016:

 

     

(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.

   61    0    0    0    0    0
     $32.75 Billion    $0    $0    $0    $0    $0

Walter O’Connor

   57    0    0    0    0    0
     $24.74 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 flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.

 

6


(a)(3) As of April 30, 2016:

Portfolio Manager Compensation Overview

The discussion below describes the portfolio managers’ compensation as of April 30, 2016.

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

 

7


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 2016). 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, 2016.

 

Portfolio Manager   

Dollar Range of Equity Securities

of the Fund Beneficially Owned

Theodore R. Jaeckel, Jr.

   $50,001-$100,000

Walter O’Connor

   None

(b) Not Applicable

 

8


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

 

 

9


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 MuniAssets Fund, Inc.   
By:   

/s/ John M. Perlowski

     
   John M. Perlowski      
   Chief Executive Officer (principal executive officer) of   
   BlackRock MuniAssets Fund, Inc.   
Date: July 1, 2016      
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 MuniAssets Fund, Inc.   
Date: July 1, 2016      
By:   

/s/ Neal J. Andrews

     
   Neal J. Andrews      
   Chief Financial Officer (principal financial officer) of   
   BlackRock MuniAssets Fund, Inc.   
Date: July 1, 2016      

 

10