BLACKROCK MUNIHOLDINGS FUND, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-08081

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

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

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

Fund, Inc., 55 East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 04/30/2017

Date of reporting period: 10/31/2016


Item 1 – Report to Stockholders


OCTOBER 31, 2016

 

 

SEMI-ANNUAL REPORT (UNAUDITED)

 

    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   

Semi-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

    69   

Statements of Operations

    71   

Statements of Changes in Net Assets

    73   

Statements of Cash Flows

    75   

Financial Highlights

    77   

Notes to Financial Statements

    84   

Disclosure of Investment Advisory Agreements

    95   

Officers and Directors

    99   

Additional Information

    100   

 

                
2    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


The Markets in Review

 

Dear Shareholder,

Central bank policy decisions have continued to provide support to financial markets, while changing economic outlooks and geopolitical risks have been major drivers of investor sentiment. After ending its near-zero interest rate policy at the end of 2015, the Federal Reserve (the “Fed”) remained in focus as investors considered the anticipated pace of future rate hikes. With the European Central Bank and the Bank of Japan having moved into stimulus mode, the divergence in global monetary policies drove heightened market volatility at the beginning of 2016 and caused the U.S. dollar to strengthen considerably.

Financial markets had a rough start to the year as the strong dollar challenged U.S. companies that generate revenues overseas and pressured emerging market currencies and commodities prices. Low and volatile oil prices and signs of slowing growth in China were also meaningful factors behind the decline in risk assets early in the year. However, as the first quarter wore on, these pressures abated and a more tempered outlook for U.S. rate hikes helped the markets rebound.

Volatility spiked in late June when the United Kingdom shocked investors with its vote to leave the European Union. Uncertainty around how the British exit might affect the global economy and political landscape drove investors to high-quality assets, pushing already low global yields to even lower levels. However, risk assets recovered swiftly in July as economic data suggested that the consequences had thus far been contained to the United Kingdom.

In a second episode of surprise vote results, equities fell sharply after the news of Donald Trump’s victory in the U.S. presidential election, but quickly recovered, and the yield curve steepened due to expectations for rising inflation. Broadly, a reflation theme has been building amid signs of rising price pressures, central banks signaling a greater tolerance to let inflation run hotter, and policy emphasis shifting from monetary to fiscal stimulus.

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 October 31, 2016  
    6-month     12-month  

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

    4.06     4.51

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

    6.13        4.11   

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

    (0.16     (3.23

Emerging market equities
(MSCI Emerging Markets Index)

    9.41        9.27   

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

    0.17        0.31   

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

    0.46        4.24   

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

    1.51        4.37   

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

    0.98        4.53   

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

    7.59        10.16   
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 October 31, 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 late 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. Investors favored the relative yield and stability of municipal bonds amid bouts of volatility resulting from uneven U.S. economic data, volatile oil prices, global growth concerns, geopolitical risks (particularly the United Kingdom’s decision to leave the European Union and the contentious U.S. election), 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 October 31, 2016, municipal bond funds garnered net inflows of approximately $61 billion (based on data from the Investment Company Institute).

For the same 12-month period, total new issuance remained robust from a historical perspective at $439 billion (significantly above the $420 billion issued in the prior 12-month period). A noteworthy portion of new supply during this period was attributable to refinancing activity (roughly 60%) as issuers continued to take advantage of low interest rates and a flatter yield curve to reduce their borrowing costs.

S&P Municipal Bond Index

Total Returns as of October 31, 2016

  6 months:  0.98%

12 months:  4.53%

A Closer Look at Yields

 

LOGO

 

From October 31, 2015 to October 31, 2016, yields on AAA-rated 30-year municipal bonds decreased by 51 basis points (“bps”) from 3.07% to 2.56%, while 10-year rates fell by 31 bps from 2.04% to 1.73% and 5-year rates decreased 4 bps from 1.17% to 1.13% (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 81 bps and the spread between 2- and 10-year maturities flattening by 61 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 muni 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 October 31, 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 US municipal bond market. All bonds in the index are exempt from US federal income taxes or subject to the alternative minimum tax. 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    SEMI-ANNUAL REPORT    OCTOBER 31, 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.

The use of leverage also generally causes greater changes in each Fund’s NAV, market price 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 Fund were not leveraged. In addition, each Fund may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause the 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. Each Fund incurs expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares. Moreover, to the extent the calculation of the Funds’ investment advisory fees includes assets purchased with the proceeds of leverage, the investment advisory fees payable to the Funds’ investment adviser 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 adviser’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.

 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    5


Fund Summary as of October 31, 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 securities which are deemed by the investment adviser to be 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 October 31, 2016 ($14.34)1

   4.81%

Tax Equivalent Yield2

   8.50%

Current Monthly Distribution per Common Share3

   $0.0575

Current Annualized Distribution per Common Share3

   $0.6900

Economic Leverage as of October 31, 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 distribution rate is not constant and is subject to change.

 

  4   

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

 

Performance      

Returns for the six months ended October 31, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MUA1,2

    (0.39 )%      2.53

Lipper High Yield Municipal Debt Funds3

    (2.96 )%      1.95

 

1   

All returns reflect reinvestment of dividends and/or distributions.

 

2  

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

 

3   

Average return.

 

    Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

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

 

 

The U.S. municipal bond market delivered modest gains in the period, with the bulk of the positive return occurring in May and June. During these two months, bond yields fell sharply (as prices rose) in reaction to the highly accommodative policies of the world’s central banks and the prospect of the Fed maintaining a gradual, data-dependent approach to raising rates. In the latter part of the period, however, the market gave back some ground as accelerating growth indicated an increased likelihood that the Fed would in fact start to raise rates before year end. Despite this headwind, the tax-exempt market closed in positive territory due to the combination of its attractive yields, a favorable supply-and-demand picture, and the continued health of state and local finances.

 

 

The Fund’s positions in lower-rated investment-grade securities generally made the largest contributions to performance, as elevated investor risk appetites led to robust demand for higher-yielding issues. Holdings in bonds with maturities of 20 years in longer also aided performance given that longer-term debt benefited from both stronger price performance and higher income relative to shorter-dated securities. At the sector level, the Fund was helped by its positions in health care, transportation and tobacco issues.

 

 

The Fund’s more-seasoned holdings, while producing generous yields compared to current market rates, detracted from performance. The prices of many of these investments declined due to the premium amortization that occurred as the bonds approached their first call dates. (A call is when an issuer redeems a bond prior to its maturity date; premium is amount by which a bond trades above its $100 par value.)

 

 

The Fund utilized U.S. Treasury futures contracts to manage exposure to a potential rise in interest rates, and its tactical shifts in this area contributed to the Fund’s six-month results.

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    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


     BlackRock MuniAssets Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

     

10/31/16

     4/30/16      Change      High      Low  

Market Price

   $ 14.34       $ 14.74         (2.71 )%     $ 15.87       $ 13.96   

Net Asset Value

   $ 14.47       $ 14.45         0.14    $ 14.80       $ 14.45   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   10/31/16     4/30/16  

Health

    23     22

Transportation

    18        19   

Tobacco

    15        14   

County/City/Special District/School District

    13        14   

Education

    9        9   

Utilities

    8        8   

Corporate

    7        7   

State

    4        3   

Housing

    3        4   

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 adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Credit Quality Allocation1  

10/31/16

    4/30/16  

AA/Aa

    19     19

A

    7        7   

BBB/Baa

    21        24   

BB/Ba

    8        10   

B/B

    13        9   

CCC/Caa

    1        2 

N/R3

    31        31   

 

  1   

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

 

  2   

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

 

  3   

The investment adviser 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 adviser has deemed certain of these unrated securities as investment grade quality. As of October 31, 2016 and April 30, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade each represents 6% and 5%, respectively, of the Fund’s total investments.

 
 
Call/Maturity Schedule4  

Calendar Year Ended December 31,

 

2016

    7

2017

    8   

2018

    5   

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.
 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    7


Fund Summary as of October 31, 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, or are deemed to be of comparable quality by the investment adviser, 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 October 31, 2016 ($11.86)1

   5.72%

Tax Equivalent Yield2

   10.11%

Current Monthly Distribution per Common Share3

   $0.0565

Current Annualized Distribution per Common Share3

   $0.6780

Economic Leverage as of October 31, 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 distribution rate is not constant and is subject to change.

 

  4   

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

 

Performance      

Returns for the six months ended October 31, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MEN1,2

    (2.89 )%      1.20

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    (3.09 )%      1.30

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2  

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

 

  3   

Average return.

 

      Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

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

 

 

The U.S. municipal bond market delivered modest gains in the period, with the bulk of the positive return occurring in May and June. During these two months, bond yields fell sharply (as prices rose) in reaction to the highly accommodative policies of the world’s central banks and the prospect of the Fed maintaining a gradual, data-dependent approach to raising rates. In the latter part of the period, however, the market gave back some ground as accelerating growth indicated an increased likelihood that the Fed would in fact start to raise rates before year end. Despite this headwind, the tax-exempt market closed in positive territory due to the combination of its attractive yields, a favorable supply-and-demand picture, and the continued health of state and local finances.

 

 

The Fund’s exposure to the longer end of the municipal yield curve made a positive contribution to performance. The yield curve flattened during the reporting period, with long-end yields decreasing slightly even as short-term yields rose. The Fund also benefited from high advance-refunding activity in the municipal market. Refunding increased the value of certain holdings when they were paid off with high-quality collateral prior to their original maturity date. The Fund also benefited from its positions in the tax-backed (local) sector. The Fund’s exposure to lower-rated investment-grade credits aided performance, as yield spreads for higher-yielding issues generally tightened.

 

 

Duration positioning detracted from absolute performance given that municipal yields rose slightly. The Fund’s exposure to the front end of the municipal yield curve also detracted from results, as yields on two- to five-year bonds increased more than they did for longer-term issues.

 

 

The Fund’s yield declined during the period. Many older, higher-yielding bonds matured or were called, and the proceeds were reinvested at much lower prevailing rates.

 

 

During the period, the use of leverage helped augment the Fund’s returns. While the Fund can still generate additional income through the use of leverage due to the positively sloped yield curve, the benefit has become less pronounced due to rising short-term borrowing costs.

 

 

The Fund utilized U.S. Treasury futures contracts to manage exposure to a potential rise in interest rates, and its tactical shifts in this area contributed to the Fund’s six-month results.

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    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


     BlackRock MuniEnhanced Fund, inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

      10/31/16      4/30/16      Change      High      Low  

Market Price

   $ 11.86       $ 12.55         (5.50 )%     $ 13.21       $ 11.67   

Net Asset Value

   $ 12.33       $ 12.52         (1.52 )%     $ 12.91       $ 12.30   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation  

10/31/16

    4/30/16  

Transportation

    23     21

County/City/Special District/School District

    19        21   

Utilities

    18        16   

State

    14        15   

Health

    10        11   

Education

    10        10   

Corporate

    4        4   

Housing

    1        1   

Tobacco

    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 adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Credit Quality Allocation1  

10/31/16

    4/30/16  

AAA/Aaa

    9     9

AA/Aa

    57        58   

A

    24        25   

BBB/Baa

    8        7   

N/R2

    2        1   

 

  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 adviser 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 adviser has deemed certain of these unrated securities as investment grade quality. As of October 31, 2016 and April 30, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade each represents less than 1% of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    6

2017

    10   

2018

    10   

2019

    15   

2020

    3   

 

  3   

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

 

  *   Excludes short-term securities.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    9


Fund Summary as of October 31, 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, or are deemed to be of comparable quality by the investment adviser, at the time of investment 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 October 31, 2016 ($16.75)1

   5.80%

Tax Equivalent Yield2

   10.25%

Current Monthly Distribution per Common Share3

   $0.0810

Current Annualized Distribution per Common Share3

   $0.9720

Economic Leverage as of October 31, 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 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 utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

Performance

Returns for the six months ended October 31, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MHD1,2

    (5.12 )%      1.26

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    (3.09 )%      1.30

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2  

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

 

  3   

Average return.

 

      Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

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

 

 

The U.S. municipal bond market delivered modest gains in the period, with the bulk of the positive return occurring in May and June. During these two months, bond yields fell sharply (as prices rose) in reaction to the highly accommodative policies of the world’s central banks and the prospect of the Fed maintaining a gradual, data-dependent approach to raising rates. In the latter part of the period, however, the market gave back some ground as accelerating growth indicated an increased likelihood that the Fed would in fact start to raise rates before year end. Despite this headwind, the tax-exempt market closed in positive territory due to the combination of its attractive yields, a favorable supply-and-demand picture, and the continued health of state and local finances.

 

 

The Fund’s positions in lower-rated investment-grade securities generally made the largest contributions to performance, as elevated investor risk appetites led to robust demand for higher-yielding issues. Holdings in bonds with maturities of 20 years in longer also aided performance given that longer-term debt benefited from both stronger price performance and higher income relative to shorter-dated securities. At the sector level, the Fund was helped by its positions in transportation, utilities and local tax-backed issues.

 

 

The Fund’s more-seasoned holdings, while producing generous yields compared to current market rates, detracted from performance. The prices of many of these investments declined due to the premium amortization that occurred as the bonds approached their first call dates. (A call is when an issuer redeems a bond prior to its maturity date; premium is amount by which a bond trades above its $100 par value.)

 

 

The Fund utilized U.S. Treasury futures contracts to manage exposure to a potential rise in interest rates, and its tactical shifts in this area contributed to the Fund’s six-month results.

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    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


     BlackRock MuniHoldings Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

     

10/31/16

     4/30/16      Change      High      Low  

Market Price

   $ 16.75       $ 18.14         (7.66 )%     $ 19.22       $ 16.70   

Net Asset Value

   $ 17.69       $ 17.96 1        (1.50 )%     $ 18.52       $ 17.65   

 

  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 amount reported in 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  

10/31/16

    4/30/16  

Transportation

    22     24

Health

    20        19   

Utilities

    12        12   

County/City/Special District/School District

    12        12   

State

    12        12   

Education

    11        10   

Corporate

    6        6   

Tobacco

    5        5   

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 adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Credit Quality Allocation1  

10/31/16

    4/30/16  

AAA/Aaa

    4     5

AA/Aa

    47        48   

A

    21        22   

BBB/Baa

    14        13   

BB/Ba

    3        4   

B

    2        1   

N/R2

    9        7   

 

  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 adviser 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 adviser has deemed certain of these unrated securities as investment grade quality. As of October 31, 2016 and April 30, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade each represents 2% of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    4

2017

    5   

2018

    5   

2019

    24   

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.
 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    11


Fund Summary as of October 31, 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, or are deemed to be of comparable quality by the investment adviser, at the time of investment 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 October 31, 2016 ($15.41)1

   5.80%

Tax Equivalent Yield2

   10.25%

Current Monthly Distribution per Common Share3

   $0.0745

Current Annualized Distribution per Common Share3

   $0.8940

Economic Leverage as of October 31, 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 utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

Performance      

Returns for the six months ended October 31, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MUH1,2

    (2.44 )%      1.26

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    (3.09 )%      1.30

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2  

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

 

  3   

Average return.

 

      Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

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

 

 

The U.S. municipal bond market delivered modest gains in the period, with the bulk of the positive return occurring in May and June. During these two months, bond yields fell sharply (as prices rose) in reaction to the highly accommodative policies of the world’s central banks and the prospect of the Fed maintaining a gradual, data-dependent approach to raising rates. In the latter part of the period, however, the market gave back some ground as accelerating growth indicated an increased likelihood that the Fed would in fact start to raise rates before year end. Despite this headwind, the tax-exempt market closed in positive territory due to the combination of its attractive yields, a favorable supply-and-demand picture, and the continued health of state and local finances.

 

 

The Fund’s positions in lower-rated investment-grade securities generally made the largest contributions to performance, as elevated investor risk appetites led to robust demand for higher-yielding issues. Holdings in bonds with maturities of 20 years in longer also aided performance given that longer-term debt benefited from both stronger price performance and higher income relative to shorter-dated securities. At the sector level, the Fund was helped by its positions in transportation, utilities and corporate-related issues.

 

 

The Fund’s more-seasoned holdings, while producing generous yields compared to current market rates, detracted from performance. The prices of many of these investments declined due to the premium amortization that occurred as the bonds approached their first call dates. (A call is when an issuer redeems a bond prior to its maturity date; premium is amount by which a bond trades above its $100 par value.)

 

 

The Fund utilized U.S. Treasury futures contracts to manage exposure to a potential rise in interest rates, and its tactical shifts in this area contributed to the Fund’s six-month results.

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    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


     BlackRock MuniHoldings Fund II, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                         

 

     

10/31/16

     4/30/16      Change      High      Low  

Market Price

   $ 15.41       $ 16.23         (5.05 )%     $ 17.28       $ 15.40   

Net Asset Value

   $ 16.27       $ 16.51         (1.45 )%     $ 17.00       $ 16.24   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation  

10/31/16

    4/30/16  

Transportation

    22     22

Health

    20        19   

State

    13        14   

Utilities

    12        12   

County/City/Special District/School District

    12        12   

Education

    9        9   

Corporate

    6        6   

Tobacco

    5        5   

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 adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Credit Quality Allocation1  

10/31/16

    4/30/16  

AAA/Aaa

    3     4

AA/Aa

    49        50   

A

    20        23   

BBB/Baa

    13        11   

BB/Ba

    3        4   

B

    2        1   

N/R2

    10        7   

 

  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 adviser 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 adviser has deemed certain of these unrated securities as investment grade quality. As of October 31, 2016 and April 30, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade each represents 3% of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    5

2017

    5   

2018

    5   

2019

    25   

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.
 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    13


Fund Summary as of October 31, 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, and obligations deemed to be of comparable quality by the investment adviser, at the time of investment 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 October 31, 2016 ($13.56)1

   5.97%

Tax Equivalent Yield2

   10.55%

Current Monthly Distribution per Common Share3

   $0.0675

Current Annualized Distribution per Common Share3

   $0.8100

Economic Leverage as of October 31, 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 utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

Performance      

Returns for the six months ended October 31, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MUS1,2

    (2.58 )%      0.87

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    (3.09 )%      1.30

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2  

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

 

  3   

Average return.

 

      Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

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

 

 

The U.S. municipal bond market delivered modest gains in the period, with the bulk of the positive return occurring in May and June. During these two months, bond yields fell sharply (as prices rose) in reaction to the highly accommodative policies of the world’s central banks and the prospect of the Fed maintaining a gradual, data-dependent approach to raising rates. In the latter part of the period, however, the market gave back some ground as accelerating growth indicated an increased likelihood that the Fed would in fact start to raise rates before year end. Despite this headwind, the tax-exempt market closed in positive territory due to the combination of its attractive yields, a favorable supply-and-demand picture, and the continued health of state and local finances.

 

 

The Fund’s position in longer-dated bonds aided performance given the stronger relative returns in this area. Conversely, its positions in short- and intermediate-term issues—where yields generally rose—dampened its overall results.

 

 

The Fund’s exposure to lower-rated credits aided performance as yield spreads for higher-yielding issues generally tightened over the period. At the sector level, positions in transportation, tax-backed and utilities issues made the largest positive contributions.

 

 

During the period, the use of leverage helped augment the Fund’s returns. The Trust utilized U.S. Treasury futures contracts to manage exposure to a potential rise in interest rates, which had a slightly positive impact on results.

 

 

The Fund’s more-seasoned holdings, while producing generous yields compared to current market rates, detracted from performance. The prices of many of these investments declined due to the premium amortization that occurred as the bonds approached their first call dates. (A call is when an issuer redeems a bond prior to its maturity date; premium is amount by which a bond trades above its $100 par value).

 

 

Reinvestment was an additional drag on performance, as the proceeds of mature or called bonds were reinvested at much lower prevailing rates.

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    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


     BlackRock MuniHoldings Quality Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

      10/31/16      4/30/16      Change      High      Low  

Market Price

   $ 13.56       $ 14.31         (5.24 )%     $ 15.59       $ 13.54   

Net Asset Value

   $ 14.56       $ 14.85 1        (1.95 )%     $ 15.17       $ 14.54   

 

  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 amount reported in 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  

10/31/16

    4/30/16  

Transportation

    38     40

County/City/Special District/School District

    25        25   

Utilities

    13        14   

Health

    12        10   

State

    5        5   

Education

    3        3   

Housing

    2        1   

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 adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Credit Quality Allocation1  

10/31/16

    4/30/16  

AAA/Aaa

    4     6

AA/Aa

    55        56   

A

    32        32   

BBB/Baa

    6        3   

N/R

    3        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

    2

2017

    3 

2018

    25   

2019

    12   

2020

    4   

 

  2   

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

 

  3   

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

 

  *   Excludes short-term securities.
 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    15


Fund Summary as of October 31, 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, or are deemed to be of comparable quality by the investment adviser, at the time of investment 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 October 31, 2016 ($14.48)1

   4.60%

Tax Equivalent Yield2

   8.13%

Current Monthly Distribution per Common Share3

   $0.0555

Current Annualized Distribution per Common Share3

   $0.6660

Economic Leverage as of October 31, 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 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 utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

Performance      

Returns for the six months ended October 31, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MUI1,2

    (2.53 )%      1.05

Lipper Intermediate Municipal Debt Funds3

    (1.81 )%      0.78

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2  

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

 

  3   

Average return.

 

      Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

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

 

 

The U.S. municipal bond market delivered modest gains in the period, with the bulk of the positive return occurring in May and June. During these two months, bond yields fell sharply (as prices rose) in reaction to the highly accommodative policies of the world’s central banks and the prospect of the Fed maintaining a gradual, data-dependent approach to raising rates. In the latter part of the period, however, the market gave back some ground as accelerating growth indicated an increased likelihood that the Fed would in fact start to raise rates before year end. Despite this headwind, the tax-exempt market closed in positive territory due to the combination of its attractive yields, a favorable supply-and-demand picture, and the continued health of state and local finances.

 

 

The tax-exempt yield curve flattened, with short-term yields rising and longer-term yields moving lower. In this environment, the Fund’s longer-dated and longer-duration bonds provided the largest positive returns. (Duration is a measure of interest-rate sensitivity.)

 

 

At a time in which investors continued to search for yield, many of the largest contributors to Fund performance were its investments in lower-rated, higher-yielding sectors and securities. At the sector level, positions in tax-backed (school districts), transportation, education and health care sectors made positive contributions to performance.

 

 

The Fund’s exposure to lower-coupon issues and bonds with longer call dates also benefited returns, as both segments outpaced the broader market.

 

 

During the period, the use of leverage helped augment the Fund’s returns. However, its use of U.S. Treasury futures contracts to manage exposure to a potential interest rates had a slightly negative impact on performance given that Treasury yields fell during the period.

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

 

                
16    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


     BlackRock Muni Intermediate Duration Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

       

10/31/16

       4/30/16        Change      High        Low  

Market Price

     $ 14.48         $ 15.19           (4.67 )%     $ 15.62         $ 14.41   

Net Asset Value

     $ 15.97         $ 16.17 1          (1.24 )%     $ 16.59         $ 15.93   

 

  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 amount reported in 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  

10/31/16

    4/30/16  

Transportation

    26     24

County/City/Special District/School District

    18        18   

State

    13        14   

Education

    13        13   

Health

    11        11   

Utilities

    11        11   

Corporate

    4        5   

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 adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Credit Quality Allocation1  

10/31/16

    4/30/16  

AAA/Aaa

    3     3

AA/Aa

    44        47   

A

    38        40   

BBB/Baa

    7        5   

BB/Ba

    1        1   

B

    1        1   

N/R2

    6        3   

 

  1   

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

 

  2   

The investment adviser 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 adviser has deemed certain of these unrated securities as investment grade quality. As of October 31, 2016 and April 30, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade represents 2% and 1%, respectively, of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    3

2017

    3   

2018

    5   

2019

    7   

2020

    7   

 

  3  

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

 

  *   Excludes short-term securities.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    17


Fund Summary as of October 31, 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, or are deemed to be of comparable quality by the investment adviser, at the time of investment 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 October 31, 2016 ($16.13)1

   5.88%

Tax Equivalent Yield2

   10.39%

Current Monthly Distribution per Common Share3

   $0.0790

Current Annualized Distribution per Common Share3

   $0.9480

Economic Leverage as of October 31, 20164

   39%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

Represents VMTP Shares and 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 utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

Performance

Returns for the six months ended October 31, 2016 were as follows:

 

    Returns Based On  
     Market Price     NAV  

MVT1,2

    (4.48 )%      1.14

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    (3.09 )%      1.30

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2  

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

 

  3   

Average return.

 

      Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

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

 

 

The U.S. municipal bond market delivered modest gains in the period, with the bulk of the positive return occurring in May and June. During these two months, bond yields fell sharply (as prices rose) in reaction to the highly accommodative policies of the world’s central banks and the prospect of the Fed maintaining a gradual, data-dependent approach to raising rates. In the latter part of the period, however, the market gave back some ground as accelerating growth indicated an increased likelihood that the Fed would in fact start to raise rates before year end. Despite this headwind, the tax-exempt market closed in positive territory due to the combination of its attractive yields, a favorable supply-and-demand picture, and the continued health of state and local finances.

 

 

The Fund’s positions in lower-rated investment-grade securities generally made the largest contributions to performance, as elevated investor risk appetites led to robust demand for higher-yielding issues. Holdings in bonds with maturities of 20 years in longer also aided performance given that longer-term debt benefited from both stronger price performance and higher income relative to shorter-dated securities. At the sector level, the Fund was helped by its positions in utilities, pre-refunded and corporate-related issues.

 

 

The Fund’s more-seasoned holdings, while producing generous yields compared to current market rates, detracted from performance. The prices of many of these investments declined due to the premium amortization that occurred as the bonds approached their first call dates. (A call is when an issuer redeems a bond prior to its maturity date; premium is amount by which a bond trades above its $100 par value.)

 

 

The Fund utilized U.S. Treasury futures contracts to manage exposure to a potential rise in interest rates, and its tactical shifts in this area contributed to the Fund’s six-month results.

 

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    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


     BlackRock MuniVest Fund II, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

     

10/31/16

     4/30/16      Change      High      Low  

Market Price

   $ 16.13       $ 17.38         (7.19 )%     $ 18.64       $ 15.85   

Net Asset Value

   $ 15.89       $ 16.17         (1.73 )%     $ 16.55       $ 15.87   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation  

10/31/16

    4/30/16  

Transportation

    26     24

Health

    17        18   

State

    14        13   

County/City/Special District/School District

    11        11   

Utilities

    10        13   

Education

    8        7   

Corporate

    7        7   

Tobacco

    5        5   

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 adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Credit Quality Allocation1  

10/31/16

    4/30/16  

AAA/Aaa

    6     6

AA/Aa

    49        49   

A

    17        21   

BBB/Baa

    12        10   

BB/Ba

    3        4   

B

    2        2   

N/R2

    11        8   

 

  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 adviser 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 adviser has deemed certain of these unrated securities as investment grade quality. As of October 31, 2016 and April 30, 2016 the market value of unrated securities deemed by the investment adviser to be investment grade represents less than 2% and 3%, respectively, of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    4

2017

    8   

2018

    11   

2019

    22   

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.
 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    19


Schedule of Investments October 31, 2016 (Unaudited)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 2.1%

    

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

    

5.25%, 1/01/17

   $ 895      $ 899,922   

5.25%, 1/01/19

     2,000        2,011,020   

5.50%, 1/01/21

     1,215        1,221,695   

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

     3,745        4,451,307   

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

     2,165        2,528,590   
    

 

 

 
               11,112,534   

Alaska — 0.5%

    

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

    

4.63%, 6/01/23

     1,080        1,096,945   

5.00%, 6/01/32

     1,500        1,464,255   
    

 

 

 
               2,561,200   

Arizona — 1.5%

    

City of Phoenix Arizona IDA, RB:

    

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

     500        550,760   

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

     425        469,162   

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

     570        655,135   

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

     1,000        1,162,040   

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

    

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

     305        325,984   

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

     855        904,214   

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

     260        277,888   

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

     290        306,692   

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

     320        330,429   

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

     255        260,562   

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

     1,650        1,978,284   

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

     500        570,895   
    

 

 

 
               7,792,045   

California — 7.8%

    

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

    

5.50%, 8/01/34

     315        332,861   

6.00%, 8/01/44

     665        708,990   

6.13%, 8/01/49

     580        618,982   
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      $ 1,870,419   

Value Schools, 6.65%, 7/01/33

     435        499,458   

Value Schools, 6.90%, 7/01/43

     975        1,131,410   

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

    

5.00%, 12/01/46

     920        1,014,171   

5.25%, 12/01/56

     2,500        2,789,025   

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

     2,175        2,444,809   

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

     1,650        1,662,375   

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

    

6.50%, 5/01/36

     900        1,079,334   

6.50%, 5/01/42

     2,220        2,657,051   

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

     375        466,024   

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

    

5.70%, 6/01/46

     3,600        3,693,204   

5.60%, 6/01/36

     1,285        1,318,256   

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

     2,885        3,338,897   

County of San Francisco California City & Redevelopment Agency, Tax Allocation Bonds, Mission Bay South Redevelopment Project (a)(c):

    

0.00%, 8/01/26

     1,250        767,563   

0.00%, 8/01/43

     1,500        356,355   

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

    

Senior, 5.75%, 6/01/47

     3,980        3,918,390   

5.13%, 6/01/47

     3,850        3,703,892   

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

    

4.75%, 6/01/25

     1,375        1,407,312   

5.00%, 6/01/37

     4,580        4,525,864   
    

 

 

 
               40,304,642   

Colorado — 1.5%

    

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

     500        532,050   

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

    

6.13%, 12/01/45

     335        364,778   
 

 

Portfolio Abbreviations

 

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

 

See Notes to Financial Statements.

 

                
20    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Colorado (continued)

    

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

    

6.25%, 12/01/50

   $ 1,115      $ 1,215,361   

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

     720        759,125   

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

     3,000        3,266,790   

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

     1,500        1,707,450   
    

 

 

 
               7,845,554   

Connecticut — 0.9%

    

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

     1,430        1,501,157   

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

     1,420        1,472,782   

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

     1,835        1,896,197   
    

 

 

 
               4,870,136   

Delaware — 0.7%

    

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

     1,000        1,103,830   

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

     2,280        2,458,592   
    

 

 

 
               3,562,422   

Florida — 8.2%

    

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

     1,535        1,606,777   

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

    

1st Mortgage, 8.25%, 1/01/44

     515        444,991   

1st Mortgage, 8.25%, 1/01/49

     1,105        954,864   

5.75%, 1/01/50

     655        651,286   

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

     2,510        2,976,082   

County of Palm Beach Florida Health Facilities Authority, RB, Acts Retirement Life Community, 5.50%, 11/15/20 (b)

     3,500        4,097,275   

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

    

5.75%, 6/15/29

     690        714,902   

6.00%, 6/15/34

     835        866,964   

6.13%, 6/15/44

     3,220        3,329,512   

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

     1,940        2,030,714   

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

     410        410,455   

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

     295        306,057   

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

     1,485        1,802,849   

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

    

4.00%, 5/01/21

     200        203,972   

4.25%, 5/01/26

     160        163,250   

5.00%, 5/01/36

     460        474,320   

5.13%, 5/01/46

     915        948,004   

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

     4,550        5,836,512   
Municipal Bonds   

Par  

(000)

    Value  

Florida (continued)

    

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

    

Series A, 5.00%, 5/01/37

   $ 845      $ 897,314   

Series B, 5.00%, 5/01/37

     495        525,645   

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

     500        603,305   

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

     4,264        2,823,451   

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

     575        575,834   

Tolomato Community Development District, Refunding, Special Assessment Bonds:

    

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

     250        202,045   

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

     585        353,662   

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

     305        136,759   

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

     805        426,392   

Series A1, 6.65%, 5/01/40

     875        878,290   

Tolomato Community Development District:

    

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

     1,305        815,847   

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

     50        50,739   

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

     1,575        1,881,038   

7.00%, 5/01/41

     2,575        3,087,734   

5.50%, 5/01/42

     1,210        1,378,444   
    

 

 

 
               42,455,301   

Georgia — 1.6%

    

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

     2,575        2,645,349   

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

     3,365        4,068,823   

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

    

6.38%, 11/15/19

     700        810,852   

6.63%, 11/15/19

     880        1,025,922   
    

 

 

 
               8,550,946   

Guam — 0.4%

    

Territory of Guam, GO, Series A:

    

6.00%, 11/15/19

     505        550,601   

7.00%, 11/15/19 (b)

     1,115        1,312,723   
    

 

 

 
               1,863,324   

Illinois — 4.7%

    

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

     3,600        3,793,212   

Illinois Finance Authority, Refunding RB:

    

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

     4,000        4,274,400   

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

     2,395        2,563,895   

Presence Health Network, Series C, 4.00%, 2/15/41

     1,525        1,456,375   

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

     990        992,525   

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

     365        390,597   

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

     860        918,695   

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

     4,170        4,519,863   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    21


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (continued)

    

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

   $ 2,370      $ 2,691,514   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     180        208,678   

6.00%, 6/01/28

     710        833,718   

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

     1,730        1,720,225   
    

 

 

 
               24,363,697   

Indiana — 1.6%

    

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

    

6.75%, 1/01/34

     825        1,012,976   

7.00%, 1/01/44

     2,000        2,480,280   

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

     2,510        2,496,220   

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

    

5.00%, 7/01/44

     470        516,854   

5.00%, 7/01/48

     1,555        1,700,284   
    

 

 

 
               8,206,614   

Iowa — 2.7%

    

Iowa Finance Authority, Refunding RB:

    

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

     2,090        2,118,758   

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

     2,190        2,284,148   

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

     1,355        1,397,615   

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

     2,115        2,195,286   

Iowa Tobacco Settlement Authority, Refunding RB:

    

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

     1,200        1,205,556   

Series C, 5.38%, 6/01/38

     4,900        4,879,910   
    

 

 

 
               14,081,273   

Kentucky — 1.1%

    

Kentucky Economic Development Finance Authority, Refunding RB, Baptist Life Communities Project, Series S:

    

6.25%, 11/15/46

     635        644,334   

6.38%, 11/15/51

     620        629,759   

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

     4,000        4,631,200   
    

 

 

 
               5,905,293   

Louisiana — 2.8%

    

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

     1,055        1,117,498   

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

     5,000        5,252,650   

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

     1,855        2,134,827   

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

     5,570        6,277,334   
    

 

 

 
               14,782,309   

Maine — 0.6%

    

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

     2,955        3,301,740   
Municipal Bonds   

Par  

(000)

    Value  

Maryland — 2.0%

    

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

   $ 2,840      $ 3,205,423   

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

     3,615        3,981,272   

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

     3,085        3,130,318   
    

 

 

 
               10,317,013   

Massachusetts — 1.4%

    

Massachusetts Development Finance Agency, RB:

    

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

     1,905        2,103,444   

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

     1,025        1,156,036   

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

     2,020        2,196,892   

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

     1,490        1,741,601   
    

 

 

 
               7,197,973   

Michigan — 0.9%

    

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

     2,785        3,110,733   

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

     415        446,287   

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

     920        1,010,666   
    

 

 

 
               4,567,686   

Minnesota — 0.3%

    

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

     1,335        1,409,787   

Missouri — 1.0%

    

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

     2,315        2,637,665   

Lees Summit IDA, RB, John Knox Obligated Group, 5.25%, 8/15/39

     2,235        2,421,801   
    

 

 

 
               5,059,466   

New Jersey — 5.5%

    

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     1,065        1,097,238   

5.25%, 11/01/44

     770        790,220   

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

     1,150        1,188,007   

New Jersey EDA, RB:

    

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

     2,250        2,692,057   

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

     2,155        2,448,533   

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

     1,530        1,748,882   

New Jersey EDA, Refunding RB:

    

Bancroft Neurohealth Project, 5.00%, 6/01/41

     365        371,946   

Bancroft Neurohealth Project, Series A, 5.00%, 6/01/36

     850        870,120   

Greater Brunswick Charter School, Inc. Project, Series A, 6.00%, 8/01/49 (a)

     500        525,390   

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

    

St. Barnabas Health Care System, Series A, 5.63%, 7/01/21

     2,650        3,184,584   

St. Joseph’s Healthcare System, 6.63%, 7/01/18

     4,090        4,481,454   
 

 

See Notes to Financial Statements.

 

                
22    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

New Jersey (continued)

    

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

   $ 1,140      $ 1,270,268   

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

    

5.00%, 6/01/29

     3,735        3,725,513   

5.00%, 6/01/41

     4,550        4,256,752   
    

 

 

 
               28,650,964   

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        3,250,398   

New York — 8.2%

    

Counties of New York Tobacco Trust IV, Refunding RB, Settlement Pass-Through:

    

5.00%, 6/01/51

     445        483,257   

Turbo, Series A, 6.25%, 6/01/41 (a)

     5,300        5,562,085   

Turbo, Series A, 5.00%, 6/01/42

     3,155        3,060,949   

Turbo, Series A, 5.00%, 6/01/45

     1,185        1,152,626   

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

     3,315        3,059,712   

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

     750        719,348   

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

     1,333        1,487,836   

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

     2,890        2,887,688   

Metropolitan Transportation Authority, RB, Series C:

    

6.50%, 11/15/18 (b)

     1,490        1,659,964   

6.50%, 11/15/28

     510        567,074   

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        1,418,552   

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

     4,705        5,292,560   

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

     455        517,271   

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

     1,080        1,247,562   

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

     1,565        2,021,917   

New York Transportation Development Corp., Refunding RB, American Airlines, Inc., AMT, 5.00%, 8/01/31

     1,195        1,275,615   

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

     1,335        1,355,586   

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        1,556,450   

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

     2,305        2,284,693   

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

     4,800        4,800,000   
    

 

 

 
               42,410,745   

North Carolina — 1.5%

    

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

    

Deerfield Project, 6.13%, 11/01/18 (b)

     4,565        5,037,341   

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

     1,000        1,140,290   

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

     1,420        1,617,408   
    

 

 

 
               7,795,039   
Municipal Bonds   

Par  

(000)

    Value  

Ohio — 3.2%

    

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

    

Senior Turbo Term, 5.88%, 6/01/47

   $ 6,390      $ 6,006,792   

5.75%, 6/01/34

     6,745        6,288,498   

6.00%, 6/01/42

     3,040        2,898,002   

County of Hamilton Ohio, Refunding RB, Improvement-Life Enriching Communities:

    

5.00%, 1/01/46

     525        570,386   

5.00%, 1/01/51

     875        948,535   
    

 

 

 
               16,712,213   

Oklahoma — 0.3%

    

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

     1,305        1,396,115   

Oregon — 0.8%

    

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

     1,765        1,937,052   

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

    

5.13%, 7/01/35

     620        640,101   

5.38%, 7/01/45

     1,435        1,491,295   
    

 

 

 
               4,068,448   

Pennsylvania — 3.8%

    

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

     2,140        2,281,689   

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

     2,000        2,216,740   

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

    

6.38%, 1/01/19 (b)

     5,550        6,185,198   

6.38%, 1/01/39

     615        680,473   

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

     1,160        1,181,541   

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

     1,800        1,940,922   

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

     2,110        2,308,804   

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

     2,710        2,978,182   
    

 

 

 
               19,773,549   

Puerto Rico — 1.0%

    

Children’s Trust Fund, Refunding RB, Tobacco Settlement, Asset-Backed Bonds:

    

5.50%, 5/15/39

     635        638,048   

Series A, 0.00%, 5/15/50 (c)

     3,450        299,633   

Commonwealth of Puerto Rico, GO, Refunding, Series A, 8.00%, 7/01/35 (d)(e)

     1,765        1,202,406   

Commonwealth of Puerto Rico, GO (d)(e):

    

Series A, 6.00%, 7/01/38

     750        480,938   

Refunding Public Improvement, Series A, 5.50%, 7/01/39

     665        428,094   

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

     1,060        817,578   

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

    

6.13%, 7/01/24

     365        291,927   

6.00%, 7/01/38

     1,150        893,009   
    

 

 

 
               5,051,633   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    23


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Rhode Island — 2.3%

    

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

   $ 4,190      $ 1,039,581   

Tobacco Settlement Financing Corp., Refunding RB:

    

Series A, 5.00%, 6/01/35

     1,000        1,083,350   

Series A, 5.00%, 6/01/40

     980        1,055,744   

Series B, 4.50%, 6/01/45

     5,055        5,236,929   

Series B, 5.00%, 6/01/50

     3,330        3,456,940   
    

 

 

 
               11,872,544   

Texas — 10.6%

    

Central Texas Regional Mobility Authority, Refunding RB:

    

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

     1,000        676,550   

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

     2,000        1,291,060   

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

     1,170        722,943   

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

     3,690        1,994,445   

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

     4,000        2,039,680   

Senior Lien, 6.25%, 1/01/21 (b)

     2,210        2,657,216   

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

    

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

     2,890        3,323,818   

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

     910        1,016,934   

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

    

5.50%, 8/15/31

     955        1,071,128   

5.75%, 8/15/41

     720        804,953   

County of Bexar Texas Health Facilities Development Corp., RB, Army Retirement Residence Project, 6.20%, 7/01/20 (b)

     5,040        5,953,147   

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        623,471   

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

     2,090        2,336,641   

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

    

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

     1,745        1,937,090   

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

     4,200        4,508,112   

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

     865        958,481   

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

     3,080        3,462,782   

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

     810        874,516   

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

     1,325        1,399,703   

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

    

5.88%, 4/01/36

     1,210        1,395,614   

6.00%, 4/01/45

     1,845        2,137,838   

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

    

5.50%, 8/15/35

     290        303,125   

5.75%, 8/15/45

     580        612,271   

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

     1,600        1,751,024   

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

    

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

     2,895        2,566,331   

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

     900        956,502   
Municipal Bonds   

Par  

(000)

    Value  

Texas (continued)

    

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

    

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

   $ 3,775      $ 4,453,632   

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

     3,000        3,485,640   
    

 

 

 
               55,314,647   

Utah — 0.6%

    

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

     2,950        3,088,326   

Vermont — 0.2%

    

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

     770        829,683   

Virginia — 3.0%

    

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc., 5.13%, 10/01/17 (b)

     1,500        1,560,105   

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

    

5.00%, 3/01/35

     510        535,046   

5.00%, 3/01/45

     520        541,060   

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

    

6.63%, 3/01/26

     1,485        1,690,747   

6.88%, 3/01/36

     1,300        1,476,592   

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

     2,280        2,127,035   

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

     535        579,127   

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

    

5.00%, 7/01/35

     130        141,722   

5.00%, 7/01/45

     375        405,930   

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

     5,410        6,298,159   
    

 

 

 
               15,355,523   

Washington — 0.8%

  

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

     1,455        1,603,308   

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

     1,495        1,571,634   

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

    

5.75%, 1/01/35

     315        322,595   

6.00%, 1/01/45

     850        870,289   
    

 

 

 
               4,367,826   

Wisconsin — 1.0%

  

Public Finance Authority, RB, Series A:

    

4.75%, 12/01/35

     775        808,077   

5.00%, 12/01/45

     1,605        1,689,920   

5.15%, 12/01/50

     1,170        1,232,923   

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

    

7.25%, 9/15/19

     425        499,243   

7.63%, 9/15/19

     855        1,013,406   
    

 

 

 
               5,243,569   
Total Municipal Bonds — 87.7%              455,292,177   
 

 

See Notes to Financial Statements.

 

                
24    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  

Colorado — 2.4%

    

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

   $ 11,468      $ 12,529,637   

Florida — 3.1%

  

County of Miami-Dade Florida Aviation Revenue, RB, Miami International, Series A, AGC:

    

5.25%, 10/01/18 (b)

     3,345        3,580,756   

5.25%, 10/01/33

     11,655        12,476,444   
    

 

 

 
               16,057,200   

Illinois — 2.7%

  

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

     7,180        8,416,970   

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

     5,056        5,838,962   
    

 

 

 
               14,255,932   

New York — 13.5%

  

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        9,376,800   

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        16,425,797   

Series HH, 5.00%, 6/15/31 (b)(h)

     8,610        10,043,737   

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

     4,520        5,280,657   

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

     18,104        21,128,088   
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  

New York (continued)

  

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

   $ 6,600      $ 7,743,051   
    

 

 

 
               69,998,130   

Washington — 1.8%

    

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

     7,966        9,124,327   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 23.5%
             121,965,226   
Total Long-Term Investments
(Cost — $527,633,426) — 111.2%
             577,257,403   
    
                  
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.44% (i)(j)

     165,095        165,111   
Total Short-Term Securities
(Cost $165,101) — 0.0%
             165,111   
Total Investments (Cost — $527,798,527) — 111.2%        577,422,514   
Other Assets Less Liabilities — 1.6%        8,160,454   

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

   

    (66,220,961
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

  

  $ 519,362,007   
    

 

 

 
 
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)   Zero-coupon bond.

 

(d)   Non-income producing security.

 

(e)   Issuer filed for bankruptcy and/or is in default.

 

(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)   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.

 

(h)   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 February 15, 2019 to November 15, 2019, is $11,849,809. See Note 4 of the Notes to Financial Statements for details.

 

(i)   During the six months ended October 31, 2016, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   

Shares Held
at April 30,

2016

     Net
Activity
     Shares Held
at October 31,
2016
     Value at
October 31,
2016
     Income      Realized
Gain/Capital
Gain
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     4,296,151         (4,131,056      165,095       $ 165,111       $ 2,151       $ 1,192   

 

(j)   Current yield as of period end.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    25


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts              
Contracts
Short
       Issue   Expiration   Notional
Value
    Unrealized
Appreciation
        
  (3      5-Year U.S. Treasury Note   December 2016   $ 362,391      $ 2,716     
  (27      10-Year U.S. Treasury Note   December 2016   $ 3,499,875        49,681     
  (22      Long U.S. Treasury Bond   December 2016   $ 3,579,813        136,011     
  (5      Ultra U.S. Treasury Bond   December 2016   $ 879,687        44,337           

 

Total

  

  $ 232,745     
          

 

 

 

 

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 appreciation1           $ 232,745        $ 232,745           

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 six months ended October 31, 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

          $ 306,265        $ 306,265           

Net Change in Unrealized Appreciation (Depreciation) on:

  

Futures contracts

          $ 65,535        $ 65,535           

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:  

Average notional value of contracts — short

  $ 10,474,445   

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

            $ 577,257,403                   $ 577,257,403   

Short-Term Securities

  $ 165,111                               165,111   
 

 

 

 

Total

  $ 165,111         $ 577,257,403                   $ 577,422,514   
 

 

 

 
                
Derivative Financial Instruments2                                         

Assets:

                

Interest rate contracts

  $ 232,745                             $ 232,745   

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

       

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

       

 

See Notes to Financial Statements.

 

                
26    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (concluded)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

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

  $ 144,950                             $ 144,950   

Liabilities:

                

TOB Trust Certificates

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

 

 

 

Total

  $ 144,950         $ (66,086,523                $ (65,941,573
 

 

 

 

During the six months ended October 31, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    27


Schedule of Investments October 31, 2016 (Unaudited)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 1.4%

    

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

    

5.50%, 1/01/22

   $ 2,750      $ 2,765,153   

4.75%, 1/01/25

     2,200        2,212,122   
    

 

 

 
               4,977,275   

Alaska — 0.7%

    

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

     990        1,127,075   

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

    

6.00%, 9/01/19

     765        870,272   

6.00%, 9/01/19

     435        494,860   
    

 

 

 
               2,492,207   

Arizona — 1.8%

    

County of Maricopa Arizona IDA, Refunding RB, Banner Health Obligation Group (b):

    

3.25%, 1/01/37

     920        877,974   

5.00%, 1/01/38

     725        845,923   

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

     1,500        1,567,785   

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

    

5.00%, 10/01/27

     2,700        2,978,235   

5.00%, 10/01/29

     400        440,736   
    

 

 

 
               6,710,653   

California — 19.1%

    

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

    

5.40%, 10/01/17

     10,185        10,618,677   

5.45%, 10/01/17

     3,700        3,859,248   

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

     5,000        6,204,750   

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

     2,400        907,584   

California Health Facilities Financing Authority, RB:

    

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

     550        611,479   

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

     1,200        1,400,364   

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

     1,090        1,252,737   

California State University, Refunding RB:

    

(AGM), 5.00%, 5/01/17 (a)

     550        561,869   

(AGM), 5.00%, 11/01/37

     600        612,204   

Series A, 5.00%, 5/01/17 (a)

     850        868,301   

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

     1,480        1,683,204   

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

     1,420        1,500,542   

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

     850        990,633   

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

     1,500        1,516,260   

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

     2,175        2,608,760   

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

     12,740        8,719,511   
Municipal Bonds   

Par  

(000)

    Value  

California (continued)

    

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

   $ 1,300      $ 1,342,133   

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

     2,500        2,062,875   

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

     3,750        1,867,950   

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

     5,000        2,355,850   

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

    

Series C, 0.00%, 7/01/38

     1,600        744,864   

Series G, 0.00%, 7/01/34

     650        300,723   

Series G, 0.00%, 7/01/35

     690        300,426   

Series G, 0.00%, 7/01/36

     1,035        424,122   

Series G, 0.00%, 7/01/37

     690        265,070   

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

    

0.00%, 7/01/30

     5,000        3,279,450   

0.00%, 7/01/31

     1,280        803,520   

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

    

0.00%, 8/01/31

     2,145        1,145,216   

0.00%, 8/01/32

     2,680        1,341,956   

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

    

5.00%, 8/01/34

     700        807,275   

5.00%, 8/01/38

     600        690,762   

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

     5,500        2,756,160   

West Basin Municipal Water District California, COP, Refunding, Series B (AGC), 5.00%, 8/01/18 (a)

     5,035        5,397,721   
    

 

 

 
               69,802,196   

Colorado — 0.6%

    

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

     2,000        2,251,400   

District of Columbia — 1.5%

    

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

     5,360        5,378,760   

Florida — 14.9%

    

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

    

5.00%, 10/01/32

     4,000        4,145,880   

5.00%, 10/01/37

     7,500        7,765,800   

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

     1,600        1,810,192   

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

     850        920,099   

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

     2,625        2,700,101   

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

     1,450        1,639,428   

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

     4,050        4,329,855   

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

    

5.63%, 10/01/26

     960        1,107,773   

5.38%, 10/01/32

     3,160        3,611,248   

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

     1,400        1,513,022   
 

 

See Notes to Financial Statements.

 

                
28    SEMI-ANNUAL REPORT    OCTOBER 31, 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      $ 2,461,084   

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

     640        781,113   

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

     415        512,089   

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

     660        787,829   

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

     190        216,167   

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

     2,995        3,466,503   

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

     10,000        10,615,700   

County of Palm Beach Florida Solid Waste Authority, Refunding RB:

    

5.00%, 10/01/21 (a)

     30        35,356   

5.00%, 10/01/31

     1,970        2,283,447   

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

     275        300,528   

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

    

5.13%, 6/01/27

     2,000        2,310,760   

5.38%, 10/01/29

     1,050        1,220,352   
    

 

 

 
               54,534,326   

Georgia — 3.5%

    

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

     1,150        1,205,545   

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

     500        601,240   

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

     7,475        10,271,098   

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

    

5.00%, 4/01/33

     140        159,690   

5.00%, 4/01/44

     380        426,432   
    

 

 

 
               12,664,005   

Illinois — 16.0%

    

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

     5,110        5,894,385   

City of Chicago Illinois, GO, Refunding, Series A, Project, 5.25%, 1/01/33

     1,185        1,233,703   

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

     400        411,716   

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

     715        737,744   

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

     2,220        2,308,911   

City of Chicago Illinois Transit Authority, RB:

    

5.25%, 12/01/49

     900        1,023,624   

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

     595        658,558   

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

     45        49,185   

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

    

5.75%, 8/15/34

     650        752,388   

6.00%, 8/15/41

     1,000        1,169,310   

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

    

4.13%, 8/15/37

     700        728,252   

5.00%, 8/15/44

     350        388,846   

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

     1,000        1,011,360   
Municipal Bonds   

Par  

(000)

    Value  

Illinois (continued)

    

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

   $ 12,490      $ 12,536,088   

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

     9,145        10,522,877   

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

    

0.00%, 12/15/26

     5,000        3,366,000   

0.00%, 12/15/33

     9,950        4,691,027   

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

     3,450        998,361   

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

     675        792,619   

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

     4,595        5,141,300   

State of Illinois, GO:

    

5.25%, 2/01/33

     830        894,682   

5.50%, 7/01/33

     820        900,360   

5.25%, 2/01/34

     830        894,682   

5.50%, 7/01/38

     445        486,421   

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

     905        1,009,871   
    

 

 

 
               58,602,270   

Indiana — 0.9%

    

Indiana Finance Authority, RB, Series A:

    

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

     1,100        1,281,170   

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

     515        566,340   

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

     890        987,144   

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

     600        652,890   
    

 

 

 
               3,487,544   

Iowa — 3.1%

    

Iowa Finance Authority, RB, Iowa Health Care Facilities, Series A (AGC), 5.63%, 8/15/19 (a)

     5,725        6,443,774   

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

    

5.60%, 12/01/26

     2,270        2,444,790   

5.70%, 12/01/27

     1,025        1,097,519   

5.80%, 12/01/29

     695        742,364   

5.85%, 12/01/30

     730        780,333   
    

 

 

 
               11,508,780   

Louisiana — 1.3%

    

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

     2,795        3,143,257   

Louisiana Public Facilities Authority, RB, Provident Group-Flagship Properties LLC, Series A, 5.00%, 7/01/56

     275        304,909   

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

     1,250        1,376,788   
    

 

 

 
               4,824,954   

Maine — 0.3%

    

Maine Health & Higher Educational Facilities Authority, RB, Series A, 5.00%, 7/01/46

     1,035        1,136,399   

Massachusetts — 1.5%

    

Massachusetts DFA, Refunding RB, Emmanuel College Issue, Series A, 5.00%, 10/01/43

     370        417,478   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    29


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

Municipal Bonds   

Par  

(000)

    Value  

Massachusetts (continued)

    

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

   $ 950      $ 1,014,857   

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

     1,280        1,487,846   

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

     2,530        2,606,533   
    

 

 

 
               5,526,714   

Michigan — 2.8%

    

City of Detroit Michigan Sewage Disposal System, Refunding RB, 2nd Lien, Series E (BHAC), 5.75%, 7/01/18 (a)

     2,500        2,688,825   

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

     400        441,720   

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

     1,700        1,989,442   

Michigan Finance Authority, Refunding RB:

    

Henry Ford Health System, 3.25%, 11/15/42

     875        790,484   

Trinity Health Credit Group, 5.00%, 12/01/21 (a)

     20        23,731   

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

     1,040        1,173,775   

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

    

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

     145        166,711   

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

     700        803,747   

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

     900        1,031,769   

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

     580        615,879   

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

     380        432,029   
    

 

 

 
               10,158,112   

Minnesota — 0.7%

    

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

    

6.50%, 11/15/18 (a)

     385        428,170   

6.50%, 11/15/38

     2,115        2,324,872   
    

 

 

 
               2,753,042   

Nebraska — 1.8%

    

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

     750        853,852   

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

     5,000        5,654,100   
    

 

 

 
               6,507,952   

Nevada — 1.6%

    

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

     850        951,550   

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

    

5.25%, 7/01/42

     500        552,365   

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

     3,800        4,200,444   
    

 

 

 
               5,704,359   

New Jersey — 9.1%

    

New Jersey EDA, RB:

    

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

     3,125        3,210,906   

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

     7,800        8,014,422   

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

     685        779,160   

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

     895        1,016,908   
Municipal Bonds   

Par  

(000)

    Value  

New Jersey (continued)

    

New Jersey EDA, RB (continued):

    

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

   $ 1,975      $ 2,185,436   

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

     25        27,487   

Series WW, 5.25%, 6/15/33

     155        174,174   

Series WW, 5.00%, 6/15/34

     205        224,830   

Series WW, 5.00%, 6/15/36

     925        1,010,183   

Series WW, 5.25%, 6/15/40

     265        294,662   

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

    

5.50%, 12/01/26

     480        536,712   

5.75%, 12/01/27

     3,115        3,502,849   

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

     970        1,012,670   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     1,460        1,620,731   

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

     1,760        1,902,190   

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

     2,000        2,204,240   

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

     1,150        1,290,634   

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

     1,000        1,121,800   

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

     2,500        2,656,475   

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

     625        687,050   
    

 

 

 
               33,473,519   

New York — 6.5%

    

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        1,682,996   

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

     1,600        1,759,120   

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

     2,750        3,023,488   

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

     1,480        1,756,538   

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        1,537,665   

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

     700        817,873   

Metropolitan Transportation Authority, RB, Series C:

    

6.50%, 11/15/18 (a)

     2,985        3,325,499   

6.50%, 11/15/28

     1,015        1,128,589   

Metropolitan Transportation Authority Hudson Rail Yards Trust Obligations, Refunding RB, Series A, 5.00%, 11/15/56

     1,465        1,655,347   

New York Transportation Development Corp., RB, Laguardia Airport Terminal B Redevelopment Project, Series A, AMT, 5.00%, 7/01/46

     2,915        3,177,379   

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

     1,200        1,332,204   

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

     2,500        2,539,400   
    

 

 

 
               23,736,098   

Ohio — 1.5%

    

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

     530        646,616   
 

 

See Notes to Financial Statements.

 

                
30    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

Municipal Bonds   

Par  

(000)

    Value  

Ohio (continued)

    

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

   $ 10,000      $ 4,724,600   
    

 

 

 
               5,371,216   

Pennsylvania — 5.9%

    

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

     1,600        1,789,504   

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

    

5.00%, 12/31/34

     7,290        8,192,648   

5.00%, 12/31/38

     1,305        1,456,367   

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

     2,480        2,864,896   

Pennsylvania Turnpike Commission, RB:

    

Series A, 5.00%, 12/01/38

     620        716,106   

Series A-1, 5.00%, 12/01/46

     3,320        3,797,980   

Series C, 5.50%, 12/01/33

     555        667,249   

Subordinate, Special Motor License Fund, 6.00%, 12/01/20 (a)

     575        686,303   

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

     765        871,312   

Philadelphia School District, GO, Series E (a):

    

2016, 6.00%, 9/01/18

     395        413,944   

6.00%, 9/01/18

     5        5,464   
    

 

 

 
               21,461,773   

Rhode Island — 1.1%

    

Rhode Island Commerce Corp., RB, Airport Corporation, 5.00%, 7/01/41

     215        246,373   

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

    

4.50%, 6/01/45

     1,055        1,092,969   

5.00%, 6/01/50

     2,630        2,730,256   
    

 

 

 
               4,069,598   

South Carolina — 6.0%

    

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

     115        138,045   

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

     2,330        2,641,777   

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

     3,000        3,304,470   

State of South Carolina Public Service Authority, 5.50%, 1/01/19 (a)

     80        87,587   

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

    

Series A, 5.50%, 12/01/54

     8,725        10,278,574   

Series E, 5.50%, 12/01/53

     745        872,902   

State of South Carolina Public Service Authority, Refunding RB:

    

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

     2,080        2,402,462   

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

     920        1,007,253   

Series E, 5.25%, 12/01/55

     1,050        1,237,509   
    

 

 

 
               21,970,579   

Tennessee — 1.5%

  

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

     5,000        5,640,500   

Texas — 14.7%

  

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

     890        392,392   
Municipal Bonds   

Par  

(000)

    Value  

Texas (continued)

  

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

    

5.38%, 5/15/19 (a)

   $ 1,280      $ 1,420,979   

6.00%, 5/15/19 (a)

     1,990        2,240,302   

6.00%, 11/15/35

     110        123,992   

5.38%, 11/15/38

     70        76,843   

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

     575        666,695   

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

     2,130        984,720   

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

    

Cook Children’s Medical Center, 5.25%, 12/01/39

     750        870,960   

Texas Health Resources System , Series A, 5.00%, 2/15/41 (b)

     3,445        4,007,327   

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

    

Series D, 5.00%, 11/01/38

     1,975        2,199,814   

Series D, 5.00%, 11/01/42

     1,500        1,667,025   

Series H, 5.00%, 11/01/32

     3,000        3,397,200   

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

     975        1,162,073   

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

     3,420        1,435,682   

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

     1,725        1,746,045   

North Texas Tollway Authority, Refunding RB:

    

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

     600        634,122   

1st Tier System (NPFGC), 5.75%, 1/01/40

     195        204,777   

1st Tier System, Series A, 6.00%, 1/01/19 (a)

     2,270        2,514,184   

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

     525        578,965   

1st Tier System, Series K-2 (AGC), 6.00%, 1/01/19 (a)

     4,015        4,446,894   

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

     805        850,780   

1st Tier, Series K-1 (AGC), 5.75%, 1/01/19 (a)

     3,800        4,188,474   

Series B, 5.00%, 1/01/40

     495        566,518   

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

    

0.00%, 9/15/35

     4,990        2,194,203   

0.00%, 9/15/36

     11,525        4,779,418   

0.00%, 9/15/37

     8,245        3,218,518   

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

    

5.00%, 12/15/32

     705        785,807   

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

     1,190        1,333,478   

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

    

5.00%, 12/31/45

     820        909,930   

5.00%, 12/31/50

     455        501,538   

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

     3,080        3,487,145   
    

 

 

 
               53,586,800   

Utah — 1.5%

    

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

     5,000        5,333,150   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    31


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

Municipal Bonds   

Par  

(000)

    Value  

Washington — 1.1%

  

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

   $ 1,600      $ 1,668,384   

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

     1,015        1,151,720   

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

    

5.00%, 10/01/39

     525        570,948   

5.25%, 10/01/39

     625        686,969   
    

 

 

 
               4,078,021   

Wisconsin — 0.8%

    

Public Finance Authority, RB, KU Campus Development Corp., Central District Development Project, 5.00%, 3/01/46

     1,100        1,266,287   

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

     1,375        1,524,421   
    

 

 

 
               2,790,708   
Total Municipal Bonds — 123.2%        450,532,910   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
        

Arizona — 0.4%

    

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

     1,200        1,313,664   

California — 1.9%

    

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

    

5.00%, 5/01/18

     466        495,315   

5.00%, 5/01/18

     2,344        2,490,310   

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

     2,500        2,581,025   

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/19 (a)

     404        450,853   

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

     840        940,841   
    

 

 

 
               6,958,344   

Colorado — 2.4%

    

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

    

5.50%, 7/01/34 (f)

     900        991,467   

5.00%, 2/01/41

     7,000        7,598,080   
    

 

 

 
               8,589,547   

Connecticut — 0.4%

    

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

     1,381        1,597,822   

District of Columbia — 1.6%

    

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

     1,005        1,138,992   

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

     1,779        1,951,296   

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

     2,530        2,896,774   
    

 

 

 
               5,987,062   

Florida — 4.3%

    

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

     4,480        5,139,501   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

Florida (continued)

    

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

   $ 4,621      $ 5,197,356   

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

     3,544        3,974,807   

State of Florida Board of Education, GO, Refunding, Series C, 5.00%, 6/01/18 (f)

     1,349        1,396,541   
    

 

 

 
               15,708,205   

Illinois — 3.8%

    

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

     260        275,504   

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/19 (a)(f)

     4,399        4,880,366   

State of Illinois Toll Highway Authority, RB:

    

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

     2,730        3,153,386   

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

     1,880        1,981,811   

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

     1,050        1,207,653   

Series A, 5.00%, 1/01/38

     2,138        2,440,800   
    

 

 

 
               13,939,520   

Massachusetts — 0.5%

    

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

     1,461        1,695,034   

Michigan — 3.3%

    

Michigan Finance Authority, RB, Beaumont Health Credit Group, 5.00%, 11/01/44

     1,970        2,209,830   

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

     7,510        8,672,323   

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

     870        1,003,536   
    

 

 

 
               11,885,689   

Nevada — 4.2%

    

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

     3,778        4,228,986   

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

    

Limited Tax, 5.75%, 7/01/19

     1,829        2,056,393   

5.50%, 7/01/19

     4,499        5,027,375   

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

     3,460        4,060,898   
    

 

 

 
               15,373,652   

New Jersey — 0.8%

    

County of Hudson New Jersey Improvement Authority, RB, Hudson County Vocational-Technical Schools Project, 5.25%, 5/01/51

     800        953,664   

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

     1,840        2,017,009   
    

 

 

 
               2,970,673   

New York — 4.7%

    

City of New York New York Municipal Water Finance Authority, RB, Water & Sewer System, Fiscal 2009, Series A:

    

5.75%, 6/15/18 (a)

     290        311,667   

5.75%, 6/15/40

     969        1,042,353   

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        6,579,585   

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

     1,665        1,981,466   
 

 

See Notes to Financial Statements.

 

                
32    SEMI-ANNUAL REPORT    OCTOBER 31, 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      $ 4,175,000   

Metropolitan Transportation Authority, Refunding RB, Series C-1, 5.25%, 11/15/56

     1,500        1,803,323   

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

     1,300        1,408,550   
    

 

 

 
               17,301,944   

Ohio — 0.2%

    

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

     580        632,386   

Pennsylvania — 0.3%

    

County of Westmoreland Pennsylvania Municipal Authority, RB, (BAM), 5.00%, 8/15/42

     900        1,030,635   

South Carolina — 0.4%

    

South Carolina Public Service Authority, Refunding RB, Series A (a)(f):

    

5.50%, 1/01/19

     102        111,462   

5.50%, 1/01/19

     1,175        1,288,814   
    

 

 

 
               1,400,276   

Texas — 0.6%

  

Clear Creek Independent School District, GO, Refunding, Schoolbuilding (PSF-GTD):

    

5.00%, 2/15/17 (a)

     1,812        1,833,386   

5.00%, 2/15/33

     388        392,948   
    

 

 

 
               2,226,334   

Virginia — 0.1%

  

County of Fairfax Virginia IDA, Refunding RB, Health Care, Inova Health System:

    

5.50%, 5/15/19 (a)

     122        135,596   

5.50%, 5/15/35

     227        251,919   
    

 

 

 
               387,515   

Washington — 2.1%

  

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

     4,004        4,175,327   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

Washington (continued)

  

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

   $ 2,880      $ 3,584,535   
    

 

 

 
               7,759,862   

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        2,199,978   

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

     1,430        1,531,241   
    

 

 

 
               3,731,219   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 33.0%
        120,489,383   
Total Long-Term Investments
(Cost — $517,779,728) — 156.2%
        571,022,293   
    
                  
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.44% (g)(h)

     1,191,332        1,191,451   
Total Short-Term Securities
(Cost $1,191,332) — 0.3%
        1,191,451   
Total Investments (Cost — $518,971,060) — 156.5%        572,213,744   

Other Assets Less Liabilities — 0.2%

  

    884,759   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (17.8)%

   

    (65,238,623

VRDP Shares, at Liquidation Value, Net of Deferred Offering Costs — (38.9)%

   

    (142,302,234
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

  

  $ 365,557,646   
    

 

 

 
 
Notes to Schedule of Investments

 

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

 

(b)   When-issued security.

 

(c)   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.

 

(d)   Zero-coupon bond.

 

(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 January 1, 2017 to December 1, 2029, is $12,169,536. See Note 4 of the Notes to Financial Statements for details.

 

(g)   During the six months ended October 31, 2016, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   

Shares Held

at April 30,

2016

     Net
Activity
    

Shares Held

at October 31,

2016

     Value at
October 31,
2016
     Income      Realized
Gain/Capital
Gain
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     2,133,375         (942,043      1,191,332       $ 1,191,451       $ 3,339       $ 705   

 

(h)   Current yield as of period end.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    33


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts                        
Contracts
Short
       Issue   Expiration     Notional
Value
    Unrealized
Appreciation
        
  (1      5-Year U.S. Treasury Note     December 2016      $ 120,797      $ 905     
  (63      10-Year U.S. Treasury Note     December 2016      $ 8,166,375        100,150     
  (68      Long U.S. Treasury Bond     December 2016      $ 11,064,875        447,196     
  (11      Ultra U.S. Treasury Bond     December 2016      $ 1,935,312        104,370           
  Total               $ 652,621     
          

 

 

 

 

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 appreciation1                               $ 652,621             $ 652,621   

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 six months ended October 31, 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

                              $ 79,817             $ 79,817   

Net Change in Unrealized Appreciation (Depreciation) on:

                                                       

Futures contracts

                              $ 541,271             $ 541,271   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:  

Average notional value of contracts — short

  $ 19,252,883   

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

            $ 571,022,293                   $ 571,022,293   

Short-Term Securities

  $ 1,191,451                               1,191,451   
 

 

 

 

Total

  $ 1,191,451         $ 571,022,293                   $ 572,213,744   
 

 

 

 
                                          
Derivative Financial Instruments2                 

Assets:

                

Interest rate contracts

  $ 652,621                             $ 652,621   

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

      

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

      

 

See Notes to Financial Statements.

 

                
34    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (concluded)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

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

  $ 391,900                             $ 391,900   

Liabilities:

                

TOB Trust Certificates

            $ (65,110,308                  (65,110,308

VRDP Shares at Liquidation Value

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

 

 

 

Total

  $ 391,900         $ (207,610,308                $ (207,218,408
 

 

 

 

During the six months ended October 31, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    35


Schedule of Investments October 31, 2016 (Unaudited)

  

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      $ 4,575,070   

County of Jefferson Alabama Sewer, Refunding RB:

    

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

     570        649,612   

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

     1,090        1,253,217   

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

     1,000        1,188,600   

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

     1,545        1,937,554   
    

 

 

 
               9,604,053   

Alaska — 0.6%

    

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

     1,660        1,567,057   

Arizona — 2.6%

    

City of Phoenix Arizona IDA, RB, Legacy Traditional Schools Projects, Series A, 5.00%, 7/01/46 (a)

     1,230        1,258,474   

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     2,000        2,410,480   

5.00%, 12/01/37

     2,360        2,829,546   
    

 

 

 
               6,498,500   

California — 11.6%

    

California Health Facilities Financing Authority, RB:

    

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

     1,530        1,701,023   

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

     2,200        2,566,806   

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

     875        1,011,439   

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

    

5.25%, 8/15/39

     105        121,533   

5.25%, 8/15/49

     265        304,739   

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

     1,025        1,128,535   

California Statewide Communities Development Authority, RB, Series A:

    

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

     1,510        1,648,799   

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

     380        422,784   

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

     460        507,086   

California Statewide Communities Development Authority, Refunding RB, John Muir Health, Series A, 4.00%, 8/15/51

     1,650        1,704,929   

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

     555        610,606   

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

     255        316,896   

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

     2,405        2,131,672   

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

     3,475        2,384,649   

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

     8,370        9,453,497   

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

    

Series I, 5.00%, 11/01/38

     550        648,236   

Sub-Series I-1, 6.38%, 11/01/19 (d)

     820        950,642   
Municipal Bonds   

Par  

(000)

    Value  

California (continued)

    

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

   $ 1,400      $ 1,432,900   
    

 

 

 
               29,046,771   

Colorado — 2.4%

    

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

     1,455        1,556,835   

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

     545        587,592   

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

     710        799,247   

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

     1,425        1,622,078   

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

     1,250        1,388,600   
    

 

 

 
               5,954,352   

Connecticut — 1.1%

    

Connecticut State Health & Educational Facility Authority, Refunding RB, Wesleyan University, Series G, 5.00%, 7/01/20 (d)

     2,515        2,863,579   

Delaware — 1.8%

    

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

     790        872,026   

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

     840        952,677   

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

     2,430        2,620,342   
    

 

 

 
               4,445,045   

District of Columbia — 4.1%

    

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

     1,520        1,720,138   

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

    

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

     505        552,672   

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

     1,470        1,614,222   

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

     13,485        6,519,728   
    

 

 

 
               10,406,760   

Florida — 4.9%

    

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

     2,375        2,629,956   

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

     750        811,852   

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

     960        1,088,477   

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

     2,620        2,957,535   

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

     2,095        2,687,361   

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

     590        550,016   

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

     1,455        1,611,776   
    

 

 

 
               12,336,973   

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        444,918   

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

     585        646,618   
 

 

See Notes to Financial Statements.

 

                
36    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Municipal Bonds   

Par  

(000)

    Value  

Georgia (continued)

    

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

   $ 2,410      $ 2,643,601   
    

 

 

 
               3,735,137   

Hawaii — 0.4%

    

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

     945        1,057,842   

Illinois — 15.5%

    

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

     2,000        2,307,000   

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

     1,265        1,284,468   

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

    

Project, 5.25%, 1/01/32

     2,195        2,285,215   

5.00%, 1/01/35

     2,000        2,031,160   

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

     897        894,228   

City of Chicago Illinois O’Hare International Airport, GARB, 3rd Lien, Series C, 6.50%, 1/01/21 (d)

     4,055        4,850,875   

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

     730        805,803   

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

     1,000        1,094,130   

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

     560        634,211   

Illinois Finance Authority, Refunding RB:

    

Central Dupage Health, Series B, 5.50%, 11/01/39

     1,115        1,257,977   

Presence Health Network, Series C, 4.00%, 2/15/41

     1,035        988,425   

Illinois State Toll Highway Authority, RB:

    

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

     1,870        2,153,660   

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

     2,000        2,301,820   

Series A, 5.00%, 1/01/38

     415        473,681   

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

    

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

     13,220        3,313,593   

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

     3,070        3,269,366   

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

     1,740        1,818,352   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     315        365,186   

6.00%, 6/01/28

     800        939,400   

State of Illinois, GO:

    

5.00%, 2/01/39

     1,100        1,138,445   

Series A, 5.00%, 4/01/38

     2,625        2,710,654   

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/19 (d)

     440        488,184   

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

    

5.00%, 4/01/39

     580        647,210   

5.00%, 4/01/44

     705        783,749   
    

 

 

 
               38,836,792   

Indiana — 4.3%

    

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

    

6.75%, 1/01/34

     560        687,596   

7.00%, 1/01/44

     1,355        1,680,390   

Indiana Finance Authority, RB, Series A:

    

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

     2,275        2,649,693   

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

     310        340,904   

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

     1,030        1,126,233   
Municipal Bonds   

Par  

(000)

    Value  

Indiana (continued)

    

Indiana Finance Authority, RB, Series A (continued):

    

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

   $ 290      $ 321,018   

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

     585        644,588   

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

     1,300        1,442,181   

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

     775        858,018   

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

     880        1,013,346   
    

 

 

 
               10,763,967   

Iowa — 2.1%

    

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

    

5.00%, 12/01/19

     615        631,826   

5.50%, 12/01/22

     1,630        1,652,429   

5.25%, 12/01/25

     320        333,757   

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

     800        849,432   

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

     1,730        1,699,327   
    

 

 

 
               5,166,771   

Kansas — 0.7%

    

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

     1,520        1,713,618   

Kentucky — 0.6%

    

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

     705        785,687   

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

     865        736,401   
    

 

 

 
               1,522,088   

Louisiana — 3.4%

    

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

     570        624,087   

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

     3,500        3,676,855   

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

     430        467,277   

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

    

5.50%, 5/15/30

     700        789,873   

5.25%, 5/15/31

     600        671,634   

5.25%, 5/15/32

     765        869,361   

5.25%, 5/15/33

     830        936,829   

5.25%, 5/15/35

     350        394,447   
    

 

 

 
               8,430,363   

Maine — 0.1%

    

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

     210        228,276   

Maryland — 1.0%

    

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

     300        330,396   

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

     530        537,786   

Maryland Health & Higher Educational Facilities Authority, Refunding RB, Charlestown Community Project, 6.25%, 1/01/21 (d)

     1,520        1,755,235   
    

 

 

 
               2,623,417   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    37


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Municipal Bonds   

Par  

(000)

    Value  

Massachusetts — 2.1%

    

Commonwealth of Massachusetts, GO, Series E, 3.00%, 4/01/44

   $ 2,060      $ 1,925,667   

Massachusetts Development Finance Agency, Refunding RB:

    

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

     1,165        1,439,824   

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

     1,575        1,593,884   

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

     255        279,225   
    

 

 

 
               5,238,600   

Michigan — 3.4%

    

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

     3,085        3,445,822   

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

     955        1,062,409   

Michigan Finance Authority, Refunding RB:

    

Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 7/01/44

     630        692,086   

Henry Ford Health System, 4.00%, 11/15/46

     1,040        1,047,696   

Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health System, 5.75%, 11/15/19 (d)

     2,105        2,399,111   
    

 

 

 
               8,647,124   

Minnesota — 0.9%

    

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

     2,135        2,385,137   

Mississippi — 0.3%

    

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

     675        757,147   

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        200,162   

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

     175        194,761   
    

 

 

 
               394,923   

Nebraska — 0.3%

    

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

     575        654,620   

New Hampshire — 1.4%

    

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

     3,035        3,408,517   

New Jersey — 6.6%

    

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     735        757,248   

5.25%, 11/01/44

     1,095        1,123,755   

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

     775        800,614   

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

    

5.13%, 9/15/23

     1,410        1,568,724   

5.25%, 9/15/29

     1,365        1,517,661   

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

     1,550        1,799,379   

New Jersey State Turnpike Authority, RB:

    

Series A, 5.00%, 1/01/43

     1,925        2,193,018   

Series E, 5.00%, 1/01/45

     1,875        2,163,844   
Municipal Bonds   

Par  

(000)

    Value  

New Jersey (continued)

    

New Jersey Transportation Trust Fund Authority, RB:

    

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

   $ 895      $ 964,846   

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

     1,575        1,735,839   

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

     1,705        1,868,595   
    

 

 

 
               16,493,523   

New York — 7.9%

    

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

     310        356,788   

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

     1,300        1,364,285   

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

     1,800        1,661,382   

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

     237        265,105   

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

     1,405        1,403,876   

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

     1,450        1,589,084   

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

     1,715        2,047,607   

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

     1,740        1,940,048   

Metropolitan Transportation Authority Hudson Rail Yards Trust Obligations, Refunding RB, Series A, 5.00%, 11/15/56

     765        864,396   

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        949,425   

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

     2,275        2,559,102   

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

     245        278,531   

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

     605        698,866   

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

    

6.00%, 12/01/36

     900        1,045,377   

6.00%, 12/01/42

     875        1,013,617   

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

     1,700        1,700,000   
    

 

 

 
               19,737,489   

North Carolina — 0.6%

    

North Carolina Medical Care Commission, RB, Health Care Facilities, Duke University Health System, Series A, 5.00%, 6/01/19 (d)

     970        1,067,999   

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

     415        472,693   
    

 

 

 
               1,540,692   

Ohio — 0.5%

    

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

     470        534,705   

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

     580        635,442   
    

 

 

 
               1,170,147   
 

 

See Notes to Financial Statements.

 

                
38    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Municipal Bonds   

Par  

(000)

    Value  

Oklahoma — 0.4%

    

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

   $ 975      $ 1,009,651   

Pennsylvania — 3.1%

    

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

     460        508,111   

Pennsylvania Economic Development Financing Authority, RB:

    

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

     2,520        2,795,587   

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

     2,015        2,229,618   

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

     1,105        1,214,351   

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

     795        913,280   
    

 

 

 
               7,660,947   

Rhode Island — 2.1%

    

Tobacco Settlement Financing Corp., Refunding RB:

    

Series A, 5.00%, 6/01/35

     580        628,343   

Series B, 4.50%, 6/01/45

     1,900        1,968,381   

Series B, 5.00%, 6/01/50

     2,605        2,704,303   
    

 

 

 
               5,301,027   

South Carolina — 3.6%

    

State of South Carolina Ports Authority, RB:

    

5.25%, 7/01/40

     2,285        2,548,392   

AMT, 5.25%, 7/01/55

     925        1,044,843   

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

     2,385        2,809,673   

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

     2,260        2,663,591   
    

 

 

 
               9,066,499   

Tennessee — 0.9%

  

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

     980        1,092,161   

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

     525        524,963   

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

     495        571,230   
    

 

 

 
               2,188,354   

Texas — 6.0%

  

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/21 (d)

     1,480        1,779,493   

Sub-Lien, 5.00%, 1/01/33

     250        277,205   

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

     425        481,109   

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

     440        497,072   

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

     1,500        1,708,065   

City of Dallas Texas Waterworks & Sewer System Revenue, Refunding RB:

    

5.00%, 10/01/20 (d)

     485        557,207   

5.00%, 10/01/35

     565        642,885   

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

     1,070        1,146,601   

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        426,585   
Municipal Bonds   

Par  

(000)

    Value  

Texas (continued)

  

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

   $ 1,910      $ 2,159,465   

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

     450        515,079   

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

     1,400        615,874   

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

    

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

     2,000        2,359,540   

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

     1,700        1,975,196   
    

 

 

 
               15,141,376   

Vermont — 0.0%

  

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

     10        9,952   

Virginia — 2.4%

  

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc., 5.13%, 10/01/17 (d)

     1,000        1,040,070   

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

    

5.00%, 7/01/42

     625        660,269   

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

     970        1,020,120   

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

    

5.25%, 1/01/32

     550        617,985   

6.00%, 1/01/37

     2,230        2,596,099   
    

 

 

 
               5,934,543   

Washington — 2.4%

  

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

    

5.00%, 1/01/41

     1,355        1,575,445   

5.00%, 1/01/43

     1,555        1,806,630   

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

     540        612,738   

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

     1,625        1,906,759   
    

 

 

 
               5,901,572   

Wisconsin — 3.5%

  

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

     4,980        5,553,098   

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

     1,710        1,895,826   

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

     1,305        1,373,173   
    

 

 

 
               8,822,097   

Wyoming — 0.1%

  

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

     210        224,165   
Total Municipal Bonds — 111.2%              278,489,463   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
              

Alabama — 0.5%

  

Auburn University, Refunding RB, Series A, 4.00%, 6/01/41

     1,220        1,314,611   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    39


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
  

Par  

(000)

    Value  

California — 7.6%

  

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

   $ 2,270      $ 2,525,439   

California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/18 (d)(g)

     1,845        1,999,740   

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/19 (d)

     6,600        7,381,704   

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

     4,121        4,635,935   

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

     1,620        1,672,504   

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/19 (d)

     748        834,913   
    

 

 

 
               19,050,235   

Colorado — 3.6%

  

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

    

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

     2,580        2,743,314   

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

     1,650        1,752,366   

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

     1,490        1,641,429   

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

     2,700        2,877,822   
    

 

 

 
               9,014,931   

Connecticut — 2.6%

  

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

    

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

     3,179        3,259,859   

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

     3,262        3,346,494   
    

 

 

 
               6,606,353   

Florida — 1.8%

  

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

     3,939        4,445,474   

Georgia — 1.0%

  

Private Colleges & Universities Authority, Refunding RB, Emory University, Series C, 5.00%, 9/01/18 (d)

     2,259        2,429,117   

Massachusetts — 2.1%

  

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

     4,502        5,234,511   

Nebraska — 1.3%

  

County of Sarpy Hospital Authority No. 1, Refunding RB, Nebraska Medicine, 4.00%, 5/15/51

     3,106        3,217,863   

New Hampshire — 0.6%

    

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/19 (d)(g)

     1,410        1,562,221   

New York — 9.0%

    

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        1,234,165   

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

     1,110        1,296,799   

Metropolitan Transportation Authority, Refunding RB, Series C-1, 5.25%, 11/15/56

     3,240        3,895,177   

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

     7,440        8,682,296   

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

     4,460        5,232,425   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
  

Par  

(000)

    Value  

New York (continued)

    

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

   $ 1,860      $ 2,226,699   
    

 

 

 
               22,567,561   

North Carolina — 1.3%

    

North Carolina Capital Facilities Finance Agency, Refunding RB:

    

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

     1,830        2,145,693   

Wake Forest University, 5.00%, 1/01/19 (d)

     1,080        1,173,323   
    

 

 

 
               3,319,016   

Ohio — 4.2%

    

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

     9,644        10,503,688   

Texas — 6.0%

    

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

     1,720        1,987,770   

County of Harris Texas, Refunding RB, Toll Road, Senior Lien, Series A (g):

    

5.00%, 8/15/19 (d)

     2,620        2,867,817   

5.00%, 8/15/38

     2,004        2,193,632   

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

     2,350        2,707,623   

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

     2,041        2,403,316   

University of Texas, Permanent University Fund, Refunding RB, Series B, 4.00%, 7/01/41

     2,720        2,956,205   
    

 

 

 
               15,116,363   

Utah — 1.1%

    

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

     2,519        2,722,555   

Virginia — 2.5%

    

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

     3,749        3,986,430   

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

     2,095        2,318,689   
    

 

 

 
               6,305,119   

Washington — 0.8%

    

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

     1,860        1,939,103   

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        4,240,360   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 47.7%
             119,589,081   
Total Long-Term Investments
(Cost — $358,940,950) — 158.9%
             398,078,544   
 

 

See Notes to Financial Statements.

 

                
40    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

Short-Term Securities    Shares     Value  

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.44% (h)(i)

     864,675      $ 864,761   
Total Short-Term Securities
(Cost — $864,675) — 0.3%
        864,761   
Total Investments (Cost — $359,805,625) — 159.2%        398,943,305   
Other Assets Less Liabilities — 1.2%        3,148,310   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (27.0)%

   

    (67,863,606

VMTP Shares, at Liquidation Value — (33.4)%

  

    (83,700,000
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

  

  $ 250,528,009   
    

 

 

 
 
Notes to Schedule of Investments

 

(a)   When-issued security.

 

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

 

(c)   Zero-coupon bond.

 

(d)   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 April 1, 2017 to February 15, 2031, is $11,675,108. See Note 4 of the Notes to Financial Statements for details.

 

(h)   During the six months ended October 31, 2016, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   

Shares Held
at April 30,

2016

     Net
Activity
     Shares Held
at October 31,
2016
     Value at
October 31,
2016
     Income      Realized
Gain/Capital
Gain
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     1,575,949         (711,274      864,675       $ 864,761       $ 2,798       $ 609   

 

(i)   Current yield as of period end.

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts              
Contracts
Short
       Issue   Expiration   Notional
Value
    Unrealized
Appreciation
        
  (7      5-Year U.S. Treasury Note   December 2016   $ 845,578      $ 6,260     
  (27      10-Year U.S. Treasury Note   December 2016   $ 3,499,875        49,227     
  (30      Long U.S. Treasury Bond   December 2016   $ 4,881,563        183,866     
  (10      Ultra U.S. Treasury Bond   December 2016   $ 1,759,375        92,505           

 

Total

  

  $ 331,858     
          

 

 

 

 

Derivative Financial Instruments Outstanding as of Period End

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 appreciation1                               $ 331,858             $ 331,858   

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.

       

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    41


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

For the six months ended October 31, 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

                                              $ 315,342               $ 315,342   
Net Change in Unrealized Appreciation (Depreciation) on:                                                          

Futures contracts

                                              $ 204,630               $ 204,630   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:  

Average notional value of contracts — short

  $ 11,001,883   

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 Investments

            $ 398,078,544                   $ 398,078,544   

Short-Term Securities

  $ 864,761                               864,761   
 

 

 

 

Total

  $ 864,761         $ 398,078,544                   $ 398,943,305   
 

 

 

 
                
Derivative Financial Instruments2                                         

Assets:

  

Interest rate contracts

  $ 331,858                             $ 331,858   

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

       

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of 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

  $ 201,550                             $ 201,550   

Liabilities:

  

TOB Trust Certificates

            $ (67,744,850                  (67,744,850

VMTP Shares at Liquidation Value

              (83,700,000                  (83,700,000
 

 

 

 

Total

  $ 201,550         $ (151,444,850                $ (151,243,300
 

 

 

 

During the six months ended October 31, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
42    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments October 31, 2016 (Unaudited)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 3.1%

    

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

   $ 3,450      $ 3,469,009   

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

     1,875        2,228,625   
    

 

 

 
               5,697,634   

Alaska — 0.8%

    

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

     1,660        1,567,057   

Arizona — 1.0%

    

City of Phoenix Arizona IDA, RB, Legacy Traditional Schools Projects, Series A, 5.00%, 7/01/46

     890        910,603   

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

     810        971,158   
    

 

 

 
               1,881,761   

California — 14.2%

    

Benicia Unified School District, GO, CAB, Series A (NPFGC), 0.00%, 8/01/20 (a)

     2,000        1,885,680   

California Health Facilities Financing Authority, RB:

    

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

     1,110        1,234,076   

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

     1,585        1,849,267   

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

     445        514,389   

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

    

5.25%, 8/15/39

     80        92,597   

5.25%, 8/15/49

     195        224,242   

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

     730        803,737   

California Statewide Communities Development Authority, RB, Series A:

    

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

     1,090        1,190,193   

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

     275        305,962   

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

     335        369,291   

California Statewide Communities Development Authority, Refunding RB, John Muir Health, Series A, 4.00%, 8/15/51

     1,195        1,234,782   

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

     400        440,076   

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

     185        229,905   

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

     2,525        1,732,731   

San Marino Unified School District, GO, Series A (NPFGC), 0.00%, 7/01/19 (a)

     2,070        1,998,626   

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     1,265        1,468,298   

6.50%, 4/01/33

     7,325        8,273,221   

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

    

Series I, 5.00%, 11/01/38

     405        477,337   

Sub-Series I-1, 6.38%, 11/01/19 (c)

     600        695,592   

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

     1,045        1,069,557   
    

 

 

 
               26,089,559   
Municipal Bonds   

Par  

(000)

    Value  

Colorado — 1.7%

    

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

   $ 1,055      $ 1,128,839   

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

     400        431,260   

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

     510        574,107   

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

     920        1,022,010   
    

 

 

 
               3,156,216   

Delaware — 1.9%

    

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

     570        629,183   

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

     605        686,155   

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

     2,050        2,210,576   
    

 

 

 
               3,525,914   

District of Columbia — 3.6%

    

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

    

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

     255        279,072   

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

     1,000        1,098,110   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/34 (a)

     10,170        5,200,023   
    

 

 

 
               6,577,205   

Florida — 3.8%

    

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

     1,725        1,910,179   

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

     545        589,946   

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

     700        793,681   

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

     1,525        1,956,194   

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

     450        419,504   

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

     1,170        1,296,067   
    

 

 

 
               6,965,571   

Georgia — 0.9%

    

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

     270        324,670   

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

     420        464,238   

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

     740        811,728   
    

 

 

 
               1,600,636   

Hawaii — 0.4%

    

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

     680        761,199   

Idaho — 1.1%

    

County of Power Idaho Industrial Development Corp., RB, FMC Corp. Project, AMT, 6.45%, 8/01/32

     2,000        2,004,280   

Illinois — 16.5%

    

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

     2,500        2,883,750   

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

     915        929,082   

City of Chicago Illinois, GO, Refunding, Project, Series A, 5.25%, 1/01/32

     2,290        2,384,119   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    43


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (continued)

    

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

   $ 598      $ 596,152   

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

     2,935        3,511,052   

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

     530        585,035   

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

     1,845        2,018,670   

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

     410        464,333   

Illinois Finance Authority, Refunding RB:

    

Central Dupage Health, Series B, 5.50%, 11/01/39

     800        902,584   

Presence Health Network, Series C, 4.00%, 2/15/41

     745        711,475   

Illinois State Toll Highway Authority, RB:

    

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

     1,355        1,560,540   

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

     1,450        1,668,819   

Series A, 5.00%, 1/01/38

     915        1,044,381   

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

    

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

     9,555        2,394,961   

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

     2,230        2,374,816   

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

     1,260        1,316,738   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     230        266,644   

6.00%, 6/01/28

     500        587,125   

State of Illinois, GO:

    

5.00%, 2/01/39

     810        838,309   

Series A, 5.00%, 4/01/38

     1,920        1,982,650   

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/19 (c)

     315        349,496   

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

    

5.00%, 4/01/39

     425        474,249   

5.00%, 4/01/44

     520        578,084   
    

 

 

 
               30,423,064   

Indiana — 4.7%

    

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

    

6.75%, 1/01/34

     415        509,558   

7.00%, 1/01/44

     1,000        1,240,140   

Indiana Finance Authority, RB, Series A:

    

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

     1,660        1,933,402   

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

     225        247,430   

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

     740        809,138   

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

     210        232,462   

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

     420        462,781   

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

     1,660        1,841,554   

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

     565        625,523   

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

     640        736,979   
    

 

 

 
               8,638,967   

Iowa — 1.5%

    

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

    

5.00%, 12/01/19

     450        462,312   

5.25%, 12/01/25

     230        239,887   
Municipal Bonds   

Par  

(000)

    Value  

Iowa (continued)

    

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

   $ 710      $ 753,871   

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

     1,270        1,247,483   
    

 

 

 
               2,703,553   

Kansas — 0.7%

    

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

     1,105        1,245,755   

Kentucky — 0.6%

    

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

     520        579,514   

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

     635        540,595   
    

 

 

 
               1,120,109   

Louisiana — 3.3%

    

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

     420        459,854   

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

     2,500        2,626,325   

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

     310        336,874   

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

    

5.50%, 5/15/30

     510        575,479   

5.25%, 5/15/31

     435        486,935   

5.25%, 5/15/32

     555        630,713   

5.25%, 5/15/33

     600        677,226   

5.25%, 5/15/35

     255        287,382   
    

 

 

 
               6,080,788   

Maine — 0.1%

    

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

     150        163,055   

Maryland — 1.0%

    

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

     220        242,291   

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

     390        395,729   

Maryland Health & Higher Educational Facilities Authority, Refunding RB, Charlestown Community Project, 6.25%, 1/01/21 (c)

     1,095        1,264,462   
    

 

 

 
               1,902,482   

Massachusetts — 2.7%

    

Commonwealth of Massachusetts, GO, Series E, 3.00%, 4/01/44

     1,505        1,406,859   

Massachusetts Development Finance Agency, Refunding RB:

    

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

     845        1,044,336   

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

     1,155        1,168,848   

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

     360        394,200   

Massachusetts HFA, Refunding RB, Series F, AMT, 5.70%, 6/01/40

     950        989,862   
    

 

 

 
               5,004,105   

Michigan — 3.4%

    

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

     2,235        2,496,406   
 

 

See Notes to Financial Statements.

 

                
44    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

Municipal Bonds   

Par  

(000)

    Value  

Michigan (continued)

    

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

   $ 690      $ 767,604   

Michigan Finance Authority, Refunding RB:

    

Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 7/01/44

     455        499,840   

Henry Ford Health System, 4.00%, 11/15/46

     750        755,550   

Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health System, 5.75%, 11/15/19 (c)

     1,520        1,732,375   
    

 

 

 
               6,251,775   

Minnesota — 0.9%

    

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

     1,540        1,720,426   

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        142,972   

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

     130        144,680   
    

 

 

 
               287,652   

New Hampshire — 0.9%

    

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

     1,530        1,718,297   

New Jersey — 5.6%

    

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     530        546,043   

5.25%, 11/01/44

     790        810,745   

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

     560        578,508   

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

    

5.13%, 9/15/23

     1,040        1,157,073   

5.25%, 9/15/29

     990        1,100,722   

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

     1,125        1,306,001   

New Jersey State Turnpike Authority, RB, Series E, 5.00%, 1/01/45

     1,355        1,563,738   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     645        695,336   

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

     1,025        1,129,673   

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

     1,235        1,353,498   
    

 

 

 
               10,241,337   

New York — 8.1%

    

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

     740        851,688   

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

     1,000        1,049,450   

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

     1,355        1,250,651   

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

     267        297,567   

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

     1,020        1,019,184   

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

     1,050        1,150,716   

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

     1,255        1,498,395   

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

     1,270        1,416,012   
Municipal Bonds   

Par  

(000)

    Value  

New York (continued)

    

Metropolitan Transportation Authority Hudson Rail Yards Trust Obligations, Refunding RB, Series A, 5.00%, 11/15/56

   $ 555      $ 627,111   

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        686,937   

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

     1,495        1,681,696   

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

     175        198,950   

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

     440        508,266   

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

    

6.00%, 12/01/36

     650        754,994   

6.00%, 12/01/42

     630        729,805   

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

     1,200        1,200,000   
    

 

 

 
               14,921,422   

North Carolina — 0.6%

    

North Carolina Medical Care Commission, RB, Health Care Facilities, Duke University Health System, Series A, 5.00%, 6/01/19 (c)

     705        776,226   

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

     305        347,401   
    

 

 

 
               1,123,627   

Ohio — 0.5%

    

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

     350        398,184   

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

     420        460,148   
    

 

 

 
               858,332   

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        370,038   

Pennsylvania Economic Development Financing Authority, RB:

    

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

     1,830        2,030,129   

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

     440        486,864   

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

     800        879,168   

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

     585        672,036   
    

 

 

 
               4,438,235   

Rhode Island — 2.1%

    

Tobacco Settlement Financing Corp., Refunding RB:

    

Series A, 5.00%, 6/01/35

     420        455,007   

Series B, 4.50%, 6/01/45

     1,375        1,424,486   

Series B, 5.00%, 6/01/50

     1,895        1,967,238   
    

 

 

 
               3,846,731   

South Carolina — 3.8%

    

State of South Carolina Ports Authority, RB:

    

5.25%, 7/01/40

     1,650        1,840,196   

AMT, 5.25%, 7/01/55

     670        756,805   

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

     2,040        2,403,242   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    45


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

Municipal Bonds   

Par  

(000)

    Value  

South Carolina (continued)

    

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

   $ 1,635      $ 1,926,978   
    

 

 

 
               6,927,221   

Tennessee — 0.9%

    

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

     720        802,404   

County of Hardeman Tennessee Correctional Facilities Corp., RB, Series B, 7.38%, 8/01/17

     435        436,066   

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

     360        415,440   
    

 

 

 
               1,653,910   

Texas — 5.4%

    

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/21 (c)

     1,070        1,286,525   

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

     180        199,588   

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

     310        350,926   

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

     320        361,507   

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

     535        573,301   

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        315,017   

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

     1,380        1,560,242   

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        943,163   

0.00%, 9/15/41

     1,395        494,039   

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

     320        366,278   

New Hope Cultural Education Facilities Corp., RB, Collegiate Housing Tarleton State University Project, 5.00%, 4/01/35

     145        157,756   

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

     1,015        446,509   

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

    

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

     1,165        1,374,432   

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

     1,300        1,510,444   
    

 

 

 
               9,939,727   

Vermont — 0.0%

    

Vermont Educational & Health Buildings Financing Agency, RB, Development & Mental Health, 6.50%, 6/15/32

     80        80,148   

Virginia — 2.7%

    

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc., 5.13%, 10/01/17 (c)

     2,500        2,600,175   

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

    

5.25%, 1/01/32

     400        449,444   

6.00%, 1/01/37

     1,640        1,909,239   
    

 

 

 
               4,958,858   

Washington — 2.3%

    

County of Grant Washington Public Utility District No 2, Refunding RB, Series A, 5.00%, 1/01/41

     985        1,145,250   

Grant County Public Utility District No 2, Refunding RB, Series A, 5.00%, 1/01/43

     1,125        1,307,047   
Municipal Bonds   

Par  

(000)

    Value  

Washington (continued)

    

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

   $ 390      $ 442,533   

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

     1,195        1,402,201   
    

 

 

 
               4,297,031   

Wisconsin — 3.5%

    

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

     3,620        4,036,590   

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

     1,235        1,369,207   

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

     945        994,367   
    

 

 

 
               6,400,164   
Total Municipal Bonds — 106.9%              196,773,803   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
              

Alabama — 0.5%

    

Auburn University, Refunding RB, Series A, 4.00%, 6/01/41

     880        948,244   

California — 7.5%

    

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

     1,640        1,824,546   

California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/18 (c)(f)

     1,335        1,446,966   

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/19 (c)

     4,770        5,334,959   

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

     2,967        3,337,873   

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

     1,170        1,207,920   

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/19 (c)

     553        617,836   
    

 

 

 
               13,770,100   

Colorado — 3.6%

    

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

    

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

     1,870        1,988,371   

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

     1,200        1,274,448   

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

     1,080        1,189,761   

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

     1,950        2,078,427   
    

 

 

 
               6,531,007   

Connecticut — 2.6%

    

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

    

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

     2,299        2,357,760   

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

     2,362        2,422,615   
    

 

 

 
               4,780,375   

Florida — 1.7%

    

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

     2,840        3,204,352   
 

 

See Notes to Financial Statements.

 

                
46    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

Georgia — 1.0%

    

Private Colleges & Universities Authority, Refunding RB, Emory University, Series C, 5.00%, 9/01/18 (c)

   $ 1,649      $ 1,773,470   

Massachusetts — 2.0%

    

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

     3,211        3,733,951   

Nebraska — 1.8%

    

County of Sarpy Nebraska Hospital Authority No. 1, Refunding RB, Nebraska Medicine, 4.00%, 5/15/51

     3,241        3,357,770   

New Hampshire — 0.6%

    

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/19 (c)(f)

     1,020        1,130,117   

New York — 10.9%

    

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        900,607   

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

     3,299        3,580,705   

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

     810        946,312   

Metropolitan Transportation Authority, Refunding RB, Series C-1, 5.25%, 11/15/56

     2,340        2,813,184   

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

     5,400        6,301,667   

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

     3,250        3,812,866   

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

     1,350        1,616,152   
    

 

 

 
               19,971,493   

North Carolina — 1.3%

    

North Carolina Capital Facilities Finance Agency, Refunding RB:

    

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

     1,320        1,547,713   

Wake Forest University, 5.00%, 1/01/19 (c)

     800        869,128   
    

 

 

 
               2,416,841   

Ohio — 4.1%

    

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

     6,974        7,595,980   

Texas — 6.2%

    

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

     1,260        1,456,157   

County of Harris Texas, Refunding RB, Toll Road, Senior Lien, Series A (f):

    

5.00%, 8/15/19 (c)

     1,905        2,085,685   

5.00%, 8/15/38

     1,458        1,595,369   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

Texas (continued)

    

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

   $ 1,710      $ 1,970,228   

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

     1,801        2,120,573   

University of Texas, Permanent University Fund, Refunding RB, Series B, 4.00%, 7/01/41

     1,980        2,151,943   
    

 

 

 
               11,379,955   

Utah — 0.8%

    

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

     1,395        1,507,129   

Virginia — 2.5%

    

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

     2,729        2,902,121   

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

     1,553        1,718,829   
    

 

 

 
               4,620,950   

Washington — 0.8%

    

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

     1,365        1,423,052   

Wisconsin — 1.7%

    

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

     2,859        3,062,482   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 49.6%
             91,207,268   
Total Long-Term Investments
(Cost — $259,953,117) — 156.5%
             287,981,071   
    
                  
Short-Term Securities — 0.6%    Shares         

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.44% (g)(h)

     1,171,042        1,171,159   
Total Short-Term Securities
(Cost — $1,171,042) — 0.6%
        1,171,159   
Total Investments (Cost — $261,124,159) — 157.1%        289,152,230   
Other Assets Less Liabilities — 1.2%        2,211,263   

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (28.4)%

   

    (52,256,364

VMTP Shares, at Liquidation Value — (29.9)%

       (55,000,000
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

  

  $ 184,107,129   
    

 

 

 
 
Notes to Schedule of Investments

 

(a)   Zero-coupon bond.

 

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

 

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

 

(d)   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.

 

(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 April 1, 2017 to February 15, 2031, is $8,452,555. See Note 4 of the Notes to Financial Statements for details.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    47


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

 

(g)   During the six months ended October 31, 2016, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   Shares Held
at April 30,
2016
    Net
Activity
    Shares Held
at October 31,
2016
    Value at
October 31,
2016
    Income     Realized
Gain/Capital
Gain
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

    866,768        304,274        1,171,042      $ 1,171,159      $ 3,119      $ 1,500   

 

(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
               
  (5      5-Year U.S. Treasury Note     December 2016      $ 603,984      $ 4,526       
  (21      10-Year U.S. Treasury Note     December 2016      $ 2,722,125        38,177       
  (20      Long U.S. Treasury Bond     December 2016      $ 3,254,375        123,269       
  (7      Ultra U.S. Treasury Bond     December 2016      $ 1,231,563        62,996                   
  Total               $ 228,968       
          

 

 

   

 

 

 

 

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                                $ 228,968             $ 228,968   

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 six months ended October 31, 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

  

                              $ 276,618             $ 276,618   
Net Change in Unrealized Appreciation (Depreciation) on:                                                   

Futures contracts

  

                              $ 170,680             $ 170,680   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:  

Average notional value of contracts — short

  $ 8,046,125   

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

            $ 287,981,071                   $ 287,981,071   

Short-Term Securities

  $ 1,171,159                               1,171,159   
 

 

 

 

Total

  $ 1,171,159         $ 287,981,071                   $ 289,152,230   
 

 

 

 

 

See Notes to Financial Statements.

 

                
48    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

     Level 1        Level 2        Level 3        Total  
Derivative Financial Instruments2                 

Assets:

                

Interest rate contracts

  $ 228,968                             $ 228,968   

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

 

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

       

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of 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

  $ 140,200                     $ 140,200   

Liabilities:

        

TOB Trust Certificates

         $ (52,164,040             (52,164,040

VMTP Shares at Liquidation Value

           (55,000,000             (55,000,000
 

 

 

 

Total

  $ 140,200      $ (107,164,040           $ (107,023,840
 

 

 

 

During the six months ended October 31, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    49


Schedule of Investments October 31, 2016 (Unaudited)

  

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      $ 2,625,398   

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

     565        647,682   
    

 

 

 
               3,273,080   

California — 26.2%

    

California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/18 (a)

     2,895        3,137,804   

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

     1,730        2,018,443   

Central Unified School District, GO, Election of 2008, Series A (AGC), 5.63%, 8/01/19 (a)

     1,325        1,492,785   

City & County of San Francisco California Airports Commission, Refunding ARB, AMT, Series A:

    

2nd, 5.50%, 5/01/28

     1,085        1,298,832   

2nd, 5.25%, 5/01/33

     850        982,260   

5.00%, 5/01/44

     1,090        1,233,095   

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

     1,575        1,681,816   

City of San Jose California, Refunding ARB, Series A-1, AMT:

    

5.50%, 3/01/30

     2,400        2,772,144   

5.75%, 3/01/34

     2,180        2,540,681   

City of Sunnyvale California, Refunding RB, 5.25%, 4/01/40

     1,605        1,805,994   

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

     2,100        2,251,431   

County of Ventura California Community College District, GO, Election of 2002, Series C, 5.50%, 8/01/18 (a)

     1,850        1,999,979   

Golden Empire Schools Financing Authority, Refunding RB, Kern High School District Projects, 1.06%, 5/01/17 (b)

     1,140        1,139,795   

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

     1,420        1,752,535   

Los Angeles Community College District California, GO, Election of 2008, Series C, 5.25%, 8/01/20 (a)

     1,000        1,153,820   

Oceanside Unified School District, GO, Series A (AGC), 5.25%, 8/01/33

     1,825        1,948,370   

Redondo Beach Unified School District, GO, Election of 2008, Series E, 5.50%, 8/01/21 (a)

     1,335        1,605,404   

Riverside County Public Financing Authority, RB, Capital Facilities Project, 5.25%, 11/01/40

     2,500        2,993,100   

San Pablo Joint Powers Financing Authority, RB, (NPFGC) (c):

    

0.00%, 12/01/16 (a)

     1,695        1,105,513   

0.00%, 12/01/16 (a)

     1,515        934,467   

0.00%, 12/01/16 (a)

     1,515        883,730   

0.00%, 12/01/24

     940        611,273   

0.00%, 12/01/25

     840        516,541   

0.00%, 12/01/26

     840        488,477   

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

    

5.50%, 11/01/30

     1,500        1,835,865   

5.50%, 11/01/31

     2,465        3,004,367   

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

     725        872,204   

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

     540        645,489   

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

     4,070        4,876,104   
    

 

 

 
               49,582,318   
Municipal Bonds    Par  
(000)
    Value  

Colorado — 2.2%

    

City & County of Denver Colorado Airport System, ARB, Series A, AMT:

    

5.50%, 11/15/28

   $ 1,000      $ 1,182,090   

5.50%, 11/15/30

     340        399,017   

5.50%, 11/15/31

     405        473,571   

Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM), 6.00%, 5/15/19 (a)

     1,900        2,136,930   
    

 

 

 
               4,191,608   

District of Columbia — 1.1%

    

District of Columbia Water & Sewer Authority, Refunding RB, Series A, 5.50%, 10/01/18 (a)

     2,000        2,175,220   

Florida — 15.8%

    

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

     400        477,872   

County of Broward Florida Airport System Revenue, ARB, Series A, AMT, 5.00%, 10/01/45

     2,845        3,225,291   

County of Hillsborough Florida Aviation Authority, Refunding ARB, Tampa International Airport, Series A, AMT, 5.50%, 10/01/29

     1,735        2,038,695   

County of Lee Florida, Refunding ARB, Series A, AMT, 5.38%, 10/01/32

     1,500        1,714,200   

County of Lee Florida HFA, RB, S/F Housing, Multi-County Program, Series A-2, AMT (Ginnie Mae), 6.00%, 9/01/40

     190        192,785   

County of Miami-Dade Florida, RB, Seaport:

    

Series A, 5.38%, 10/01/33

     1,015        1,163,515   

Series A, 6.00%, 10/01/38

     1,000        1,215,350   

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

     460        567,617   

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

     615        734,113   

County of Miami-Dade Florida Aviation Revenue, Refunding ARB, Series A, AMT, 5.00%, 10/01/31

     2,900        3,342,917   

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

     3,465        4,010,495   

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

     4,645        5,210,064   

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

     1,040        1,228,511   

Tohopekaliga Water Authority, Refunding RB, Series A, 5.25%, 10/01/21 (a)

     3,995        4,755,728   
    

 

 

 
               29,877,153   

Hawaii — 1.5%

    

State of Hawaii, Department of Transportation, COP, AMT:

    

5.25%, 8/01/25

     425        504,641   

5.25%, 8/01/26

     460        544,433   

State of Hawaii, Department of Transportation, RB, Series A, AMT, 5.00%, 7/01/45

     1,500        1,706,535   
    

 

 

 
               2,755,609   

Illinois — 16.7%

    

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

     1,145        1,320,757   

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

     1,000        1,110,360   

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

     5,225        6,250,511   

City of Chicago Illinois Transit Authority, RB:

    

Federal Transit Administration, Section 5309, Series A (AGC), 6.00%, 12/01/18 (a)

     2,000        2,209,300   

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

     1,000        1,106,820   

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

     1,790        1,975,874   

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

     2,050        2,212,196   
 

 

See Notes to Financial Statements.

 

                
50    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

Municipal Bonds    Par  
(000)
    Value  

Illinois (continued)

    

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

    

5.50%, 12/01/38

   $ 2,250      $ 2,548,170   

5.25%, 12/01/43

     4,015        4,470,943   

Illinois Finance Authority, Refunding RB, Presence Health Network, Series C:

    

4.00%, 2/15/41

     665        635,075   

5.00%, 2/15/41

     555        604,828   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,405        1,628,845   

6.00%, 6/01/28

     400        469,700   

State of Illinois, GO:

    

5.25%, 2/01/31

     875        950,075   

5.25%, 2/01/32

     1,355        1,465,920   

5.50%, 7/01/33

     2,000        2,196,000   

5.50%, 7/01/38

     425        464,559   
    

 

 

 
               31,619,933   

Indiana — 3.8%

    

Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges, Series A, AMT, 5.00%, 7/01/40

     565        626,670   

Indianapolis Local Public Improvement Bond Bank, RB, Series F, 5.25%, 2/01/36

     3,055        3,486,518   

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

     2,780        3,051,217   
    

 

 

 
               7,164,405   

Louisiana — 1.6%

    

Lake Charles Harbor & Terminal District, RB, Series B, AMT (AGM), 5.50%, 1/01/29

     1,500        1,782,705   

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

     1,215        1,322,904   
    

 

 

 
               3,105,609   

Massachusetts — 1.0%

    

Massachusetts Development Finance Agency, Refunding RB, Emmanuel College Issue, Series A, 4.00%, 10/01/46

     520        525,938   

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

     1,235        1,319,314   
    

 

 

 
               1,845,252   

Michigan — 1.1%

    

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

     1,910        2,165,902   

Minnesota — 0.8%

    

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

    

6.50%, 11/15/18 (a)

     205        227,987   

6.50%, 11/15/38

     1,120        1,231,137   
    

 

 

 
               1,459,124   

Mississippi — 2.4%

    

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

     2,595        3,456,384   

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

     1,000        1,186,180   
    

 

 

 
               4,642,564   

Nevada — 3.7%

    

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

     1,410        1,558,586   

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

     3,500        3,704,435   
Municipal Bonds    Par  
(000)
    Value  

Nevada (continued)

    

County of Clark Nevada Water Reclamation District, GO, Series A, 5.25%, 7/01/19 (a)

   $ 1,500      $ 1,666,485   
    

 

 

 
               6,929,506   

New Jersey — 8.6%

    

New Jersey EDA, RB, Private Activity Bond, Goethals Bridge Replacement Project, AMT:

    

5.38%, 1/01/43

     3,000        3,408,630   

The (AGM), 5.00%, 1/01/31

     790        899,368   

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

    

RWJ Barnabas Health Obligated Group, 5.00%, 7/01/43 (d)

     930        1,067,333   

Virtua Health (AGC), 5.50%, 7/01/38

     2,100        2,316,993   

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

    

Series A, 5.50%, 6/15/41

     1,780        1,961,774   

Series A (AGC), 5.63%, 12/15/28

     3,170        3,472,988   

Series AA, 5.50%, 6/15/39

     1,890        2,121,128   

Series B, 5.25%, 6/15/36

     1,000        1,095,950   
    

 

 

 
               16,344,164   

New York — 5.6%

  

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        3,766,686   

Water & Sewer System, 5.38%, 6/15/43

     1,305        1,512,325   

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

     2,510        2,932,659   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 166th Series, 5.25%, 7/15/36

     2,000        2,309,700   
    

 

 

 
               10,521,370   

Ohio — 1.3%

  

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

     2,000        2,373,160   

Oklahoma — 1.4%

  

Norman Regional Hospital Authority, Refunding RB, 4.00%, 9/01/37 (d)

     2,555        2,588,036   

Pennsylvania — 4.1%

  

Pennsylvania Housing Finance Agency, Refunding RB, Series 121, 3.10%, 10/01/36

     1,000        979,550   

Pennsylvania Turnpike Commission, RB, Series B, 5.00%, 12/01/45

     4,990        5,697,233   

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

     1,000        1,143,760   
    

 

 

 
               7,820,543   

South Carolina — 5.8%

  

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

     2,180        2,604,402   

County of Charleston South Carolina Airport District, ARB, Series A, AMT:

    

5.50%, 7/01/38

     1,000        1,143,500   

6.00%, 7/01/38

     1,695        1,993,388   

5.50%, 7/01/41

     1,000        1,145,450   

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

     1,095        1,241,522   

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

     2,500        2,946,450   
    

 

 

 
               11,074,712   

Tennessee — 1.5%

  

Metropolitan Nashville Airport Authority, ARB, Series B, AMT, 5.00%, 7/01/40

     2,500        2,856,450   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    51


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

Municipal Bonds    Par  
(000)
    Value  

Texas — 22.1%

  

Austin Community College District Public Facility Corp., RB, Educational Facilities Project, Round Rock Campus, 5.25%, 8/01/18 (a)

   $ 2,500      $ 2,689,575   

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

     1,360        1,601,291   

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

    

6.00%, 5/15/19 (a)

     3,790        4,266,706   

6.00%, 11/15/35

     210        236,712   

Dallas Area Rapid Transit, Refunding RB, Senior Lien (a):

    

5.25%, 12/01/18

     1,490        1,623,891   

5.25%, 12/01/18

     1,110        1,209,745   

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

    

Series A, 5.00%, 11/01/38

     2,965        3,261,500   

Series H, 5.00%, 11/01/37

     2,200        2,468,004   

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

     1,240        1,472,984   

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

     3,150        3,710,039   

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

    

(NPFGC), 5.75%, 1/01/18 (a)

     1,835        1,939,356   

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

     590        619,583   

Series A, 5.63%, 1/01/18 (a)

     2,940        3,102,935   

Series A, 5.63%, 1/01/33

     3,645        3,822,949   

Series S, 5.75%, 1/01/18 (a)

     5,360        5,664,823   

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

     2,460        2,599,900   

Series SE, 5.75%, 1/01/40

     915        962,525   

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

     620        729,424   
    

 

 

 
               41,981,942   

Virginia — 1.1%

  

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

     570        650,216   

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

     1,300        1,450,865   
    

 

 

 
               2,101,081   

Washington — 1.5%

  

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

     1,375        1,582,611   

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

     1,075        1,244,033   
    

 

 

 
               2,826,644   
Total Municipal Bonds — 132.6%              251,275,385   
    
                  

Municipal Bonds Transferred to

Tender Option Bond Trusts (f)

              

Colorado — 3.2%

    

Colorado Health Facilities Authority, RB, Catholic Health, Series C-3 (AGM), 5.10%, 4/29/18 (a)

     5,610        5,965,113   

Connecticut — 1.1%

  

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

     1,771        2,049,381   

District of Columbia — 0.6%

  

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

     1,039        1,140,083   

Florida — 4.3%

  

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1, 6.00%, 7/01/18 (a)

     7,500        8,136,450   

Municipal Bonds Transferred to

Tender Option Bond Trusts (f)

   Par  
(000)
    Value  

Illinois — 1.4%

  

City of Chicago Illinois, Refunding RB, Waterworks, 2nd Lien (AGM), 5.25%, 11/01/33

   $ 2,508      $ 2,645,824   

Kentucky — 0.8%

  

Kentucky State Property & Building Commision, Refunding RB, (AGC):

    

5.25%, 2/01/19 (a)

     1,246        1,354,337   

5.25%, 2/01/27

     160        173,829   
    

 

 

 
               1,528,166   

Michigan — 1.8%

  

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

     3,020        3,483,540   

Nevada — 5.1%

  

County of Clark Nevada Water Reclamation District, GO (a):

    

Limited Tax, 6.00%, 7/01/18

     5,000        5,422,550   

Series B, 5.50%, 7/01/19

     3,749        4,189,479   
    

 

 

 
               9,612,029   

New Jersey — 1.3%

  

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

     2,289        2,409,391   

New York — 5.2%

  

City of New York New York Transitional Finance Authority, RB, Fiscal 2009, Series S-3, 17.38%, 1/15/39 (b)(e)

     4,530        5,286,398   

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

     1,400        1,519,087   

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

     2,660        3,120,684   
    

 

 

 
               9,926,169   

Pennsylvania — 0.7%

    

County of Westmoreland Pennsylvania Municipal Authority, Refunding RB, 5.00%, 8/15/38

     1,180        1,354,215   

Utah — 0.6%

    

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

     1,005        1,085,781   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 26.1%
             49,336,142   
Total Long-Term Investments
(Cost — $273,558,784) — 158.7%
             300,611,527   
    
                  
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.44% (h)(i)

     1,556,554        1,556,710   

Total Short-Term Securities

(Cost — $1,556,554) — 0.8%

             1,556,710   
Total Investments (Cost — $275,115,338) — 159.5%        302,168,237   
Other Assets Less Liabilities — (0.1)%        (258,269

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (13.4)%

   

    (25,356,328

VMTP Shares, at Liquidation Value — (45.9)%

       (87,000,000
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

  

  $ 189,553,640   
    

 

 

 
 

 

See Notes to Financial Statements.

 

                
52    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


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

 

(f)   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 May 7, 2018 to November 15, 2019, is $2,230,645. See Note 4 of the Notes to Financial Statements for details.

 

(h)   During the six months ended October 31, 2016, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares Held
at April 30,
2016
       Net
Activity
       Shares Held
at October 31,
2016
       Value at
October 31,
2016
       Income        Realized
Gain
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     1,352,893           203,661           1,556,554         $ 1,556,710         $ 1,083         $ 20   

 

(i)   Current yield as of period end.

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts              
Contracts
Short
       Issue   Expiration     Notional Value     Unrealized
Appreciation
        
  (2      5-Year U.S. Treasury Note     December 2016      $ 241,594      $ 1,811     
  (29      10-Year U.S. Treasury Note     December 2016      $ 3,759,125        50,275     
  (19      Long U.S. Treasury Bond     December 2016      $ 3,091,656        107,371     
  (3      Ultra U.S. Treasury Bond     December 2016      $ 527,813        22,731           
  Total               $ 182,188     
          

 

 

 

 

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 appreciation1                                    $ 182,188               $ 182,188   

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 six months ended October 31, 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

                                   $ 93,428               $ 93,428   
Net Change in Unrealized Appreciation (Depreciation) on:                                                        

Futures contracts

                                   $ 132,651               $ 132,651   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments     

 

Futures contracts:  

Average notional value of contracts – short

  $ 8,022,148   

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.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    53


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

            $ 300,611,527                   $ 300,611,527   

Short-Term Securities

  $ 1,556,710                               1,556,710   
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 1,556,710         $ 300,611,527                   $ 302,168,237   
 

 

 

      

 

 

      

 

 

      

 

 

 
                

Derivative Financial Instruments 2

                                        

Assets:

                

Interest rate contracts

  $ 182,188                             $ 182,188   

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

       

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of 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

  $ 126,150                             $ 126,150   

Liabilities:

                

TOB Trust Certificates

            $ (25,313,395                  (25,313,395

VMTP Shares at Liquidation Value

              (87,000,000                  (87,000,000
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 126,150         $ (112,313,395                $ (112,187,245
 

 

 

      

 

 

      

 

 

      

 

 

 

During the six months ended October 31, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
54    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments October 31, 2016 (Unaudited)

  

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      $ 5,200,090   

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

    

5.50%, 1/01/21

     5,500        5,530,305   

5.25%, 1/01/23

     6,500        6,535,815   
    

 

 

 
               17,266,210   

Arizona — 3.5%

  

Arizona Board of Regents, University of Arizona, RB, 5.00%, 8/01/28

     2,000        2,293,600   

Arizona Health Facilities Authority, Refunding RB, Phoenix Children’s Hospital, Series A, 5.00%, 2/01/30

     2,685        2,972,805   

Arizona State University, RB, Series D, 5.00%, 7/01/32

     1,350        1,616,126   

City of Phoenix Arizona IDA, RB, Facility, Legacy Traditional Schools Project, Series A, 5.75%, 7/01/24 (b)

     750        851,775   

City of Tucson Arizona, COP, Refunding, (AGC), 4.00%, 7/01/20

     2,325        2,543,782   

County of Pinal Arizona Electric District No. 3, Refunding RB, 5.00%, 7/01/21 (a)

     1,600        1,875,104   

Glendale Union School District No. 205, GO, Series C:

    

5.00%, 7/01/24

     1,945        2,335,692   

5.00%, 7/01/27

     500        587,210   

Phoenix-Mesa Gateway Airport Authority, RB, Mesa Project, AMT:

    

5.00%, 7/01/27

     700        796,075   

5.00%, 7/01/32

     1,925        2,139,022   

Scottsdale IDA, Refunding RB, Scottsdale Healthcare, Series C (AGM), 5.00%, 9/01/35

     2,050        2,254,282   

State of Arizona, COP, Department of Administration, Series A (AGM), 4.25%, 10/01/23

     1,000        1,072,910   
    

 

 

 
               21,338,383   

Arkansas — 1.0%

  

Arkansas State University, RB, 5.00%, 12/01/33

     480        554,078   

City of Benton, RB, 5.00%, 6/01/29

     1,055        1,248,877   

University of Arkansas, Refunding RB:

    

5.00%, 3/01/31

     2,315        2,765,476   

5.00%, 3/01/34

     1,270        1,499,083   
    

 

 

 
               6,067,514   

California — 3.9%

  

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 5.00%, 8/15/22

     2,135        2,474,935   

California Health Facilities Financing Authority, Refunding RB, 5.00%, 11/15/29

     1,930        2,354,195   

California Infrastructure & Economic Development Bank, Refunding RB, 4.00%, 11/01/31

     1,335        1,464,522   

California Pollution Control Financing Authority, RB, Mandatory Put Bonds, Republic Services, Inc. Project, Series B, AMT, 5.25%, 6/01/23 (c)

     605        629,714   

California Pollution Control Financing Authority, Refunding RB, Pacific Gas, Series C, AMT (NPFGC), 4.75%, 12/01/23

     5,000        5,105,600   

City of San Jose California, Refunding ARB, Series A-1, AMT, 5.00%, 3/01/25

     2,000        2,246,240   

State of California, GO:

    

5.50%, 4/01/28

     15        15,061   

Various Purposes, 5.00%, 11/01/17 (a)

     1,235        1,287,574   

Various Purposes, 5.75%, 4/01/31

     7,000        7,772,800   

Various Purposes, 5.00%, 11/01/32

     765        794,605   
    

 

 

 
               24,145,246   
Municipal Bonds   

Par  

(000)

    Value  

Colorado — 1.0%

  

Denver Urban Renewal Authority, Refunding, Tax Allocation Bond, Stapleton, Senior-Series A-1, 5.00%, 12/01/23

   $ 2,500      $ 2,963,325   

Park Creek Metropolitan District, Refunding, Tax Allocation Bonds, 5.00%, 12/01/34

     500        570,020   

University of Northern Colorado, Refunding RB, Series A, 5.00%, 6/01/31

     2,000        2,350,960   
    

 

 

 
               5,884,305   

Connecticut — 3.4%

  

Connecticut State Health & Educational Facility Authority, Refunding RB:

    

5.00%, 12/01/33

     4,015        4,775,160   

Lawrence & Memorial Hospital, Series F, 5.00%, 7/01/31

     4,530        5,004,744   

University of Connecticut, RB, Series A:

    

5.00%, 3/15/31

     5,025        6,022,261   

5.00%, 3/15/32

     4,000        4,768,160   
    

 

 

 
               20,570,325   

Florida — 6.7%

  

County of Broward Florida School Board, COP, Refunding, Series A (AGM), 5.00%, 7/01/24

     10,000        11,440,500   

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

    

5.50%, 10/01/23

     1,000        1,164,600   

(AGM), 5.00%, 10/01/27

     1,635        1,852,422   

County of Miami-Dade Florida, RB, AMT, Series B:

    

6.00%, 10/01/28

     3,470        4,268,482   

6.00%, 10/01/29

     3,480        4,264,636   

County of Miami-Dade Florida Educational Facilities Authority, Refunding RB, Series A, 5.00%, 4/01/32

     5,020        5,888,108   

County of Miami-Dade Florida Transit System Sales Surtax Revenue, Refunding RB, 5.00%, 7/01/32

     1,500        1,746,915   

County of Miami-Dade Florida Water & Sewer System Revenue, Refunding RB, Series C (BHAC), 5.00%, 10/01/18 (a)

     8,000        8,621,840   

Midtown Miami Community Development District, Refunding, Special Assessment Bonds, Series A, 4.25%, 5/01/24

     1,665        1,784,947   

Sterling Hill Community Development District, Refunding RB, Special Assessment Bonds, Series B, 5.50%, 11/01/15 (d)(e)

     150        104,976   
    

 

 

 
               41,137,426   

Georgia — 1.9%

  

City of Atlanta Georgia Water & Wastewater Revenue RB, Refunding RB, 5.00%, 11/01/32

     10,000        11,903,700   

Hawaii — 0.9%

  

State of Hawaii Airports System, Refunding ARB, Series A, 5.25%, 7/01/29

     5,000        5,686,550   

Idaho — 0.4%

  

Boise State University, Refunding RB, Series A:

    

5.00%, 4/01/32

     1,300        1,565,109   

5.00%, 4/01/33

     1,000        1,198,370   
    

 

 

 
               2,763,479   

Illinois — 16.8%

  

City of Chicago Illinois Midway International Airport, Refunding ARB, 2nd Lien, Series A:

    

5.00%, 1/01/32

     5,000        5,647,250   

AMT, 5.50%, 1/01/32

     1,500        1,734,285   

City of Chicago Illinois O’Hare International Airport, Refunding GARB, AMT, Series C:

    

5.25%, 1/01/28

     1,350        1,579,392   

5.25%, 1/01/29

     3,020        3,512,411   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    55


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (continued)

  

City of Chicago Illinois O’Hare International Airport, RB, Refunding GARB, 5.00%, 1/01/32

   $ 3,745      $ 4,381,350   

City of Chicago Illinois O’Hare International Airport, Refunding GARB, Senior Lien, Series A, AMT, 5.00%, 1/01/23

     13,000        15,292,940   

City of Chicago Illinois Transit Authority, RB, 5.25%, 12/01/31

     3,700        4,132,234   

Illinois State Toll Highway Authority, Refunding RB, Senior, Series A, 5.00%, 12/01/32

     5,690        6,736,107   

Madison-Macoupin Etc. Counties Community College District No. 536, GO, Refunding, Lewis & Clark Community College:

    

5.00%, 5/01/30

     475        526,566   

5.00%, 5/01/31

     500        554,280   

5.00%, 5/01/32

     500        553,560   

McHenry County Conservation District, GO, 5.13%, 2/01/17 (a)

     12,695        12,834,899   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     3,500        4,057,620   

6.25%, 6/01/24

     11,750        11,884,067   

State of Illinois, GO:

    

5.25%, 2/01/30

     5,000        5,445,450   

5.00%, 5/01/30

     10,000        10,595,900   

State of Illinois Toll Highway Authority, RB, Series A, 5.00%, 1/01/34

     9,140        10,466,123   

Village of Hodgkins Illinois, RB, MBM Project, AMT, 5.90%, 11/01/17

     3,085        3,090,892   
    

 

 

 
               103,025,326   

Indiana — 5.9%

    

City of Whiting Indiana, RB, BP Products North America, Inc. Project, 5.25%, 1/01/21

     4,800        5,482,512   

County of Jasper Indiana, Refunding RB, Northern Indiana Public Service Co., Series C (NPFGC), 5.85%, 4/01/19

     2,000        2,187,800   

Indiana Finance Authority, RB, Wastewater, 1st Lien, Series A, 5.25%, 10/01/31

     10,000        11,744,900   

Indiana Finance Authority, Refunding RB, US Steel Corp. Project, 6.00%, 12/01/19

     5,000        5,021,400   

Indiana Municipal Power Agency, Refunding RB, Series A, 5.00%, 1/01/33

     10,000        11,842,200   
    

 

 

 
               36,278,812   

Iowa — 1.3%

    

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

    

5.25%, 4/01/23

     695        808,000   

5.25%, 4/01/24

     730        847,333   

5.25%, 4/01/25

     520        602,612   

5.25%, 4/01/26

     360        416,023   

Iowa Higher Education Loan Authority, Refunding RB:

    

Drake University Project, 4.00%, 4/01/27

     620        706,112   

Drake University Project, 4.00%, 4/01/28

     750        845,040   

Private College Facility, 5.00%, 9/01/20 (a)

     2,315        2,645,119   

Private College Facility, Upper Iowa University Project, 5.00%, 9/01/20 (f)

     1,000        1,137,760   
    

 

 

 
               8,007,999   

Kansas — 1.4%

    

Kansas Development Finance Authority, Refunding RB, Adventist Health System/Sunbelt Obligated Group, Series C, 5.00%, 11/15/23

     1,500        1,657,920   

Seward County Unified School District No. 480 Liberal, GO, Refunding, 5.00%, 9/01/22 (a)

     6,000        6,872,400   
    

 

 

 
               8,530,320   
Municipal Bonds   

Par  

(000)

    Value  

Louisiana — 4.0%

    

City of Bossier City Louisiana Utilities, Refunding RB, 5.00%, 10/01/32

   $ 2,000      $ 2,363,360   

City of New Orleans Louisiana Aviation Board, Refunding GARB, Restructuring, Series A-2 (AGC), 6.00%, 1/01/23

     850        931,609   

Louisiana Local Government Environmental Facilities & Community Development Authority, Refunding RB, BRCC Facilities Corp. Project:

    

5.00%, 12/01/27

     3,445        3,941,941   

5.00%, 12/01/28

     3,715        4,250,889   

New Orleans Aviation Board, RB, Series A:

    

5.00%, 1/01/32

     1,000        1,155,620   

5.00%, 1/01/33

     1,000        1,151,690   

State of Louisiana Gasoline & Fuels Tax Revenue, Refunding RB, 4.00%, 5/01/34

     5,750        6,199,822   

Terrebonne Levee & Conservation District, RB, Sales Tax, 5.00%, 7/01/28

     3,660        4,179,940   
    

 

 

 
               24,174,871   

Maine — 0.3%

    

Portland Housing Development Corp., Refunding RB, Senior Living, Retirement Facilities, Series A, 6.00%, 2/01/34

     1,965        1,968,085   

Maryland — 0.8%

    

Maryland EDC, RB, Transportation Facilities Project, Series A, 5.13%, 6/01/20

     1,615        1,746,719   

Maryland Health & Higher Educational Facilities Authority, RB, Johns Hopkins Health System, Series B, 5.00%, 7/01/33

     1,140        1,303,271   

Maryland Health & Higher Educational Facilities Authority, Refunding RB, 5.00%, 7/01/33

     1,500        1,747,590   
    

 

 

 
               4,797,580   

Massachusetts — 0.8%

    

Massachusetts Development Finance Agency, RB, Dana-Farber Cancer Institute Issue, Series N, 5.00%, 12/01/33

     1,300        1,548,443   

Massachusetts Development Finance Agency, Refunding RB, 5.00%, 1/01/31

     1,730        1,992,424   

Massachusetts Health & Educational Facilities Authority, Refunding RB, Winchester Hospital, 5.00%, 7/01/25

     1,060        1,178,423   
    

 

 

 
               4,719,290   

Michigan — 3.1%

    

Manistee Area Public Schools, GO, Refunding, (Q-SBLF), 5.00%, 5/01/25

     1,000        1,142,090   

Michigan Finance Authority, Refunding RB, Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 7/01/31

     4,000        4,630,120   

Michigan State Building Authority, Refunding RB, Facilities Program, Series II-A, 5.00%, 10/15/24

     2,500        2,883,175   

Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health System, 5.25%, 11/15/19 (a)

     4,900        5,511,569   

State of Michigan, Refunding RB, 5.00%, 3/15/27

     3,750        4,677,112   
    

 

 

 
               18,844,066   

Minnesota — 1.3%

    

City of Minneapolis, RB, YMCA of the Greater Twin Cities Project:

    

4.00%, 6/01/30

     150        163,454   

4.00%, 6/01/31

     50        54,050   

Minnesota Higher Education Facilities Authority, Refunding RB:

    

St. Olaf College, Series 8-N, 4.00%, 10/01/33

     750        827,445   

University of St. Thomas, Series 8-L, 5.00%, 4/01/35

     500        584,175   
 

 

See Notes to Financial Statements.

 

                
56    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

Municipal Bonds   

Par  

(000)

    Value  

Minnesota (continued)

    

University of Minnesota, RB, Biomedical Science Research Facilities Funding Program:

    

Series B, 5.00%, 8/01/36

   $ 1,000      $ 1,149,790   

Series C, 5.00%, 8/01/27

     1,390        1,671,739   

Series C, 5.00%, 8/01/28

     740        889,162   

Series C, 5.00%, 8/01/29

     1,555        1,858,629   

Series C, 5.00%, 8/01/30

     835        992,414   
    

 

 

 
               8,190,858   

Montana — 0.4%

    

County of Gallatin Montana School District No 7 Bozeman, GO, 4.00%, 12/01/31

     340        381,983   

County of Yellowstone Montana School District No. 2 Billings, GO, 5.00%, 6/15/30

     500        595,805   

Montana State Board of Regents, RB, 5.00%, 11/15/30

     1,000        1,196,780   
    

 

 

 
               2,174,568   

Nebraska — 1.1%

    

County of Douglas Nebraska Hospital Authority No. 3, Refunding RB, 5.00%, 11/01/30

     800        930,176   

County of Lancaster Nebraska Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, 5.50%, 1/01/30

     1,000        1,115,000   

Nebraska Public Power District, Refunding RB:

    

Series A, 5.00%, 1/01/30

     1,000        1,167,940   

Series A, 5.00%, 1/01/32

     2,000        2,319,720   

Series A-1, 3.00%, 1/01/33

     900        920,313   
    

 

 

 
               6,453,149   

Nevada — 1.6%

  

County of Clark Nevada Department of Aviation, Refunding RB, 5.00%, 7/01/33

     5,000        5,791,400   

County of Humboldt Nevada, Refunding RB, Idaho Power Co. Project, 5.15%, 12/01/24

     3,800        4,150,094   
    

 

 

 
               9,941,494   

New Jersey — 21.6%

  

County of Essex New Jersey Improvement Authority, LRB, Newark Project, Series A (AGM), 5.00%, 11/01/20

     2,000        2,195,840   

New Jersey EDA, RB, AMT:

    

Continental Airlines, Inc. Project, 5.13%, 9/15/23

     6,040        6,719,923   

Goethals Bridge Replacement Project, Private Activity Bond, 5.50%, 1/01/26

     1,500        1,758,075   

Goethals Bridge Replacement Project, Private Activity Bond, 5.50%, 1/01/27

     1,000        1,170,640   

New Jersey EDA, Refunding RB:

    

New Jersey American Water Co., Series E, AMT, 4.70%, 12/01/25

     3,000        3,260,610   

School Facilities Construction, Series AA, 4.25%, 12/15/24

     3,850        3,975,857   

School Facilities Construction, Series EE, 5.00%, 9/01/23

     3,465        3,762,574   

New Jersey Educational Facilities Authority, RB, Higher Education Facilities Trust Fund, 5.00%, 6/15/28

     10,000        11,219,000   

New Jersey Educational Facilities Authority, Refunding RB, 5.00%, 7/01/30

     5,000        5,857,900   

New Jersey Higher Education Student Assistance Authority, Refunding RB:

    

Series 1, AMT, 5.50%, 12/01/26

     1,340        1,498,321   

Student Loan, Series 1A, 4.75%, 12/01/21

     1,555        1,654,691   

New Jersey State Turnpike Authority, 5.00%, 1/01/32

     12,000        14,106,360   

New Jersey State Turnpike Authority, Refunding RB, Series B, 5.00%, 1/01/29

     10,000        11,738,400   
Municipal Bonds   

Par  

(000)

    Value  

New Jersey (continued)

  

New Jersey Transportation Trust Fund Authority, RB:

    

5.00%, 6/15/30 (g)

   $ 2,000      $ 2,219,000   

Series B, 5.25%, 6/15/26

     3,500        3,894,940   

Transportation Program, Series AA, 5.25%, 6/15/31

     12,000        13,404,000   

Transportation Program, Series AA, 5.25%, 6/15/32

     2,250        2,531,880   

Transportation System, Series A, 5.25%, 6/15/24

     3,185        3,582,775   

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

     13,970        15,671,546   

Transportation System, Series C, 5.25%, 6/15/32

     10,000        11,190,000   

Newark Housing Authority, RB, Series A:

    

5.00%, 12/01/23

     1,230        1,457,156   

5.00%, 12/01/25

     1,345        1,576,138   

South Jersey Port Corp., RB, Marine Terminal, Series O-1 (AGC), 4.63%, 1/01/19 (a)

     1,375        1,481,865   

State of New Jersey, GO, Various Purposes, 5.00%, 6/01/28

     5,000        5,952,700   
    

 

 

 
               131,880,191   

New Mexico — 1.3%

  

County of Albuquerque Bernalillo New Mexico Water Utility Authority, Refunding RB, 4.00%, 7/01/33

     4,510        4,927,400   

New Mexico Hospital Equipment Loan Council, Refunding RB, 5.00%, 8/01/31

     2,500        2,975,375   
    

 

 

 
               7,902,775   

New York — 19.3%

  

Build NYC Resource Corp., Refunding RB, 5.00%, 7/01/33

     3,085        3,568,142   

City of New York New York, GO, Refunding, Series A, 5.00%, 8/01/29

     6,125        7,440,037   

City of New York New York, GO:

    

Sub-Series B-1, 5.25%, 9/01/22

     4,250        4,588,045   

Sub-Series I-1, 5.50%, 4/01/21

     5,000        5,524,800   

Sub-Series-D- 1, 5.13%, 12/01/17 (a)

     2,730        2,858,665   

Sub-Series-D- 1, 5.13%, 12/01/26

     1,885        1,971,993   

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.00%, 1/15/23

     3,560        3,873,814   

County of Monroe New York Industrial Development Corp., Refunding RB, Series A, 5.00%, 7/01/29

     5,695        6,809,284   

County of Nassau New York, GO, Series A:

    

5.00%, 1/01/32

     1,000        1,182,070   

5.00%, 1/01/33

     3,110        3,662,429   

County of Westchester New York Healthcare Corp., Refunding RB, Senior Lien, Remarketing, Series A:

    

5.00%, 11/01/24

     5,470        6,266,213   

5.00%, 11/01/30

     655        732,552   

Long Island Power Authority, Refunding RB, Electric System, Series A, 5.50%, 4/01/19 (a)

     1,000        1,107,050   

Metropolitan Transportation Authority, RB:

    

Sub-Series B-1, 5.00%, 11/15/24

     2,300        2,713,011   

Sub-Series B-4, 5.00%, 11/15/24

     1,500        1,769,355   

New York City Trust for Cultural Resources, Refunding RB, Carnegie Hall, Series A, 5.00%, 12/01/29

     2,750        3,050,575   

New York State Dormitory Authority, RB:

    

Mental Health Services (AGM), 5.00%, 8/15/18 (a)

     3,625        3,890,459   

Mental Health Services (AGM), 5.00%, 2/15/22

     325        348,501   

North Shore-Long Island Jewish Health System, Series A, 5.50%, 5/01/19 (a)

     1,495        1,662,275   

New York State Dormitory Authority, Refunding RB:

    

4.25%, 9/01/19 (a)

     480        520,843   

5.00%, 7/01/30

     1,555        1,899,541   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    57


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

Municipal Bonds   

Par  

(000)

    Value  

New York (continued)

  

New York State Thruway Authority, RB, Junior Lien, Series A:

    

5.00%, 1/01/33

   $ 4,500      $ 5,343,390   

5.00%, 1/01/34

     2,000        2,365,920   

Port Authority of New York & New Jersey, ARB, JFK International Air Terminal LLC Project, 5.00%, 12/01/20

     2,475        2,788,533   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 152nd Series, AMT, 5.00%, 11/01/23

     1,000        1,058,430   

Port Authority of New York & New Jersey, Refunding RB, 5.00%, 11/01/28

     6,185        7,605,138   

State of New York Dormitory Authority, RB:

    

Fordham University, Series A, 5.25%, 7/01/25

     900        1,038,159   

Icahn School of Medicine at Mount Sinai, Series A, 5.00%, 7/01/32

     9,000        10,483,830   

Mental Health Services (AGM), 5.00%, 8/15/18 (a)

     10        10,736   

Mental Health Services (AGM), 5.00%, 8/15/18 (a)

     30        32,208   

Mental Health Services, 2nd Series (AGM), 5.00%, 8/15/18 (a)

     10        10,736   

Municipal Health Facilities Lease, Sub-Series 2-4, 5.00%, 1/15/27

     6,900        7,232,235   

New York University Hospitals Center, Series A, 5.00%, 7/01/20 (a)

     1,725        1,968,760   

New York University Hospitals Center, Series A, 5.13%, 7/01/20 (a)

     1,670        1,913,486   

State of New York Dormitory Authority, Refunding RB, North Shore-Long Island Jewish Obligated Group, Series A, 5.00%, 5/01/32

     3,060        3,619,399   

State of New York Urban Development Corp., RB, Service Contract, Series B, 5.00%, 1/01/21

     6,500        6,943,170   
    

 

 

 
               117,853,784   

North Carolina — 0.3%

    

North Carolina Medical Care Commission, Refunding RB, WakeMed, Series A, 5.00%, 10/01/31

     1,500        1,712,775   

Ohio — 1.2%

    

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

     6,000        7,119,480   

Oklahoma — 0.8%

    

Oklahoma City Public Property Authority, Refunding RB:

    

5.00%, 10/01/27

     1,190        1,433,831   

5.00%, 10/01/28

     1,265        1,511,030   

5.00%, 10/01/29

     1,400        1,661,254   
    

 

 

 
               4,606,115   

Oregon — 2.5%

  

County of Klamath Oregon School District, GO:

    

5.00%, 6/15/30

     1,000        1,185,870   

5.00%, 6/15/31

     1,000        1,182,460   

County of Umatilla Oregon School District No. 16R Pendleton, GO, Series A, 5.00%, 6/15/32

     2,000        2,367,840   

County of Yamhill Oregon School District No. 40 McMinnville, GO, 4.00%, 6/15/33

     1,380        1,533,566   

Klamath Falls Intercommunity Hospital Authority, Refunding RB, Sky Lakes Medical Center Project:

    

5.00%, 9/01/30

     400        477,448   

5.00%, 9/01/31

     300        354,963   

5.00%, 9/01/32

     540        635,888   

Oregon Health & Science University, Refunding RB, Series B, 5.00%, 7/01/33

     2,500        3,019,350   

Oregon State Facilities Authority, Refunding RB, Reed College Project, Series A, 5.00%, 7/01/29

     1,835        2,059,421   

State of Oregon, GO, Series H, 5.00%, 5/01/36

     2,000        2,331,440   
    

 

 

 
               15,148,246   
Municipal Bonds   

Par  

(000)

    Value  

Pennsylvania — 4.1%

  

City of Philadelphia Pennsylvania, ARB, Series A, AMT, 5.00%, 6/15/20

   $ 2,895      $ 2,967,578   

County of Allegheny Pennsylvania, GO, Refunding, Series C-68, 5.00%, 11/01/25

     2,515        2,909,654   

County of Allegheny Pennsylvania, GO, Series C-67:

    

5.00%, 11/01/25

     2,700        3,133,539   

5.00%, 11/01/26

     2,375        2,728,044   

Pennsylvania Turnpike Commission, RB:

    

Series B, 5.00%, 12/01/32

     1,500        1,757,760   

Sub-Series B, 5.25%, 12/01/31

     4,000        4,544,440   

South Fork Municipal Authority, Refunding RB, Conemaugh Valley Memorial Hospital, Series A (AGC), 6.00%, 7/01/20 (a)

     6,225        7,308,274   
    

 

 

 
               25,349,289   

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        9,615,330   

Rhode Island — 1.8%

  

Narragansett Bay Commission, Refunding RB, Series B, 5.00%, 9/01/32

     4,150        4,965,309   

Providence Redevelopment Agency, Refunding RB, Series A, 5.00%, 4/01/29

     1,000        1,128,530   

Rhode Island Health & Educational Building Corp., RB, City of Newport Issue Financing Program, Series C, 5.00%, 5/15/30

     2,305        2,641,092   

Rhode Island Health & Educational Building Corp., Refunding RB, 5.00%, 9/01/32

     2,000        2,375,760   
    

 

 

 
               11,110,691   

South Carolina — 1.9%

  

South Carolina State Public Service Authority, Refunding RB, Series A, 5.00%, 12/01/34

     10,000        11,856,200   

South Dakota — 0.2%

  

South Dakota Health & Educational Facilities Authority, Refunding RB, Regional Health, 5.00%, 9/01/25

     1,000        1,120,360   

Tennessee — 2.0%

  

County of Memphis-Shelby Tennessee Sports Authority, Inc., Refunding RB, Memphis Arena Project:

    

Series A, 5.00%, 11/01/23

     2,695        2,971,103   

Series B, 5.00%, 11/01/22

     1,000        1,104,310   

Knox County Health Educational & Housing Facility Board Tennessee, Refunding RB, Eastowne Village Project, 4.00%, 6/01/31 (c)

     3,275        3,455,911   

Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board, RB, Vanderbilt University Medical Center, Series A, 5.00%, 7/01/35

     4,000        4,692,480   
    

 

 

 
               12,223,804   

Texas — 7.1%

    

City of Grapevine Texas, GO, 5.00%, 2/15/33

     5,685        6,655,032   

City of Houston Texas, Refunding ARB, Subordinate Lien, Series A, AMT:

    

5.00%, 7/01/25

     1,500        1,688,835   

5.00%, 7/01/32

     1,010        1,118,949   

Dallas/Fort Worth International Airport, Refunding RB, AMT:

    

Series E, 5.00%, 11/01/26

     2,185        2,462,539   

Series E, 5.00%, 11/01/27

     4,960        5,583,869   

Series F, 5.00%, 11/01/31

     6,345        7,083,177   

Love Field Airport Modernization Corp., RB, Southwest Airlines Co. Project, AMT, 5.00%, 11/01/28

     1,000        1,132,240   

North Texas Tollway Authority, Refunding RB, Series A, 5.00%, 1/01/33

     2,500        2,959,625   
 

 

See Notes to Financial Statements.

 

                
58    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

Municipal Bonds   

Par  

(000)

    Value  

Texas (continued)

    

Red River Education Financing Corp., RB, 5.00%, 3/15/33

   $ 1,340      $ 1,565,388   

San Jacinto River Authority, RB, Special Project (AGM), 5.25%, 10/01/25

     2,910        3,204,230   

Socorro ISD, GO, Refunding, School Building (PSF-GTD), 5.00%, 8/15/32

     2,500        2,828,125   

Via Metropolitan Transit Authority, Refunding RB:

    

5.25%, 8/01/28

     1,585        1,873,105   

5.25%, 8/01/29

     1,720        2,003,628   

5.25%, 8/01/33

     3,000        3,483,090   
    

 

 

 
               43,641,832   

U.S. Virgin Islands — 0.9%

    

Virgin Islands Public Finance Authority, Refunding RB, Series A, 5.25%, 10/01/24

     5,000        5,681,750   

Vermont — 1.0%

    

University of Vermont & State Agricultural College, Refunding RB, 4.00%, 10/01/30

     5,565        6,165,297   

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        4,363,360   

West Virginia University, RB, West Virginia University Project, Series B, 5.00%, 10/01/30

     1,500        1,731,750   
    

 

 

 
               6,095,110   

Wisconsin — 1.6%

    

Public Finance Authority, Refunding RB, AMT:

    

National Gypsum Co., 5.25%, 4/01/30

     2,410        2,638,685   

Wisconsin Airport Facilities, Senior Obligated Group, Series B, 5.25%, 7/01/28

     4,765        5,266,087   

Wisconsin Health & Educational Facilities Authority, Refunding RB, The Monroe Clinic, Inc.:

    

4.00%, 2/15/31

     450        481,649   

4.00%, 2/15/33

     1,100        1,167,782   
    

 

 

 
               9,554,203   
Total Municipal Bonds — 134.5%        822,506,788   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (h)
              

Connecticut — 1.9%

    

Connecticut State Health & Educational Facility Authority, Refunding RB, 5.00%, 12/01/33

     10,000        11,893,272   

Illinois — 1.5%

    

Du Page & Will Counties Community School District No. 204, GO, School Building, Series A (NPFGC), 5.25%, 12/30/17 (a)

     8,650        8,913,542   

Louisiana — 2.3%

    

State of Louisiana, GO, Series A, 5.00%, 8/01/24

     12,000        14,096,160   
Municipal Bonds Transferred to
Tender Option Bond Trusts (h)
  

Par  

(000)

    Value  

Massachusetts — 1.9%

    

Massachusetts Development Finance Agency, Refunding RB, Partners Healthcare, Series L, 5.00%, 7/01/31

   $ 10,175      $ 11,674,970   

Minnesota — 1.9%

    

State of Minnesota, GO, State Various Purposes, Series A, 4.00%, 8/01/29

     10,525        11,469,065   

New York — 9.3%

    

City of New York New York, GO, Refunding, Series E, 5.00%, 8/01/27

     3,507        3,864,172   

City of New York New York, GO, Series I, 5.00%, 3/01/32

     7,009        8,197,102   

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, Series A:

    

4.75%, 6/15/17 (a)

     1,508        1,544,496   

4.75%, 6/15/30

     6,492        6,650,064   

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/19 (a)

     4,001        4,512,961   

Port Authority of New York & New Jersey, ARB, Consolidated, 169th Series, AMT, 5.00%, 10/15/26

     5,530        6,361,601   

Port Authority of New York & New Jersey, RB, 178th Series, AMT, 5.00%, 12/01/32

     4,009        4,619,291   

Sales Tax Asset Receivable Corp., Refunding RB, Fiscal 2015, Series A, 5.00%, 10/15/31

     5,010        6,159,995   

State of New York Dormitory Authority, Refunding RB, Series E, 5.25%, 3/15/33

     7,000        8,585,500   

State of New York Urban Development Corp., RB, Personal Income Tax, Series A-1, 5.00%, 3/15/32

     5,501        6,530,743   
    

 

 

 
               57,025,925   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 18.8%
        115,072,934   

Total Long-Term Investments

(Cost — $875,399,329) — 153.3%

  

  

    937,579,722   
    
                  
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.44% (i)(j)

     12,881,521        12,882,809   

Total Short-Term Securities

(Cost — $12,881,708) — 2.1%

  

  

    12,882,809   
Total Investments (Cost — $888,281,037) — 155.4%        950,462,531   
Other Assets Less Liabilities — 1.9%        11,286,294   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (10.3)%

   

    (63,213,962

VMTP Shares, at Liquidation Value — (47.0)%

       (287,100,000
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

  

  $ 611,434,863   
 

 

 

 
 
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.

 

(f)   Security is collateralized by municipal bonds or U.S. Treasury obligations.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    59


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

 

(g)   When-issued security.

 

(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)   Current yield as of period end.

 

(j)   During the six months ended October 31, 2016, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares Held
at April 30,
2016
    Net
Activity
    Shares Held
at October 31,
2016
   

Value at
October 31,

2016

    Income     Realized
Gain/Capital
Gain
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     12,303,103        578,418        12,881,521      $ 12,882,809      $ 13,236      $ 10,490   

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts        
Contracts
Short
       Issue   Expiration   Notional
Value
    Unrealized
Appreciation
        
  (3      5-Year U.S. Treasury Note   December 2016   $ 362,391      $ 2,715     
  (151      10-Year U.S. Treasury Note   December 2016   $ 19,573,375        275,392     
  (63      Long U.S. Treasury Bond   December 2016   $ 10,251,281        395,401           

 

Total

  

  $ 673,508     
          

 

 

 

 

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 appreciation1           $ 673,508        $ 673,508           

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 six months ended October 31, 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

          $ 485,825        $ 485,825           

Net Change in Unrealized Appreciation (Depreciation) on:

  

Futures contracts

          $ 418,871        $ 418,871           

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:  

Average notional value of contracts — long

  $ 546,060 1 

Average notional value of contracts — short

  $ 41,177,672   

1    Actual amounts for the period are shown due to limited outstanding derivative financial instruments as of each quarter end.

       

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.

 

                
60    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


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

            $ 937,579,722                   $ 937,579,722   

Short-Term Securities

  $ 12,882,809                               12,882,809   
 

 

 

 

Total

  $ 12,882,809         $ 937,579,722                   $ 950,462,531   
 

 

 

 
Derivative Financial Instruments2                                         

Assets:

                

Interest rate contracts

  $ 673,508                             $ 673,508   

1    See above Schedule of Investments for values in each state or political subdivision.

       

2    Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.

       

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of 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

  $ 442,900                             $ 442,900   

Liabilities:

                

TOB Trust Certificates

            $ (63,101,848                  (63,101,848

VMTP Shares at Liquidation Value

              (287,100,000                  (287,100,000
 

 

 

 

Total

  $ 442,900         $ (350,201,848                $ (349,758,948
 

 

 

 

During the six months ended October 31, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    61


Schedule of Investments October 31, 2016 (Unaudited)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  
(000)

    Value  

Alabama — 2.0%

      

County of Jefferson Alabama, RB, Limited Obligation School, Series A, 5.25%, 1/01/19

     $ 1,490      $ 1,498,211   

County of Jefferson Alabama Sewer, Refunding RB:

      

Senior Lien, Series A (AGM), 5.00%, 10/01/44

       805        917,434   

Sub-Lien, Series D, 6.00%, 10/01/42

       3,575        4,249,245   
      

 

 

 
                       6,664,890   

Alaska — 0.3%

      

Northern Tobacco Securitization Corp., Refunding RB, Tobacco Settlement, Asset-Backed, Series A, 4.63%, 6/01/23

             1,045        1,061,396   

Arizona — 0.5%

      

City of Phoenix Arizona IDA, RB, Legacy Traditional Schools Projects, Series A, 5.00%, 7/01/46

             1,685        1,724,008   

California — 13.1%

      

California Health Facilities Financing Authority, RB:

      

St. Joseph Health System, Series A, 5.75%, 7/01/39

       2,200        2,445,916   

Sutter Health, Series B, 6.00%, 8/15/42

       3,170        3,698,534   

California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 7/01/33

       890        1,028,778   

California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F Housing, Series A:

      

5.25%, 8/15/39

       145        167,832   

5.25%, 8/15/49

       370        425,485   

California Pollution Control Financing Authority, RB, Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45 (a)

       1,495        1,646,010   

California Statewide Communities Development Authority, RB, Loma Linda University Medical Center, Series A (a):

      

5.00%, 12/01/41

       290        322,651   

5.00%, 12/01/46

       635        699,999   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A:

      

Senior, 5.00%, 5/15/40

       5,930        6,670,953   

5.25%, 5/15/39

       800        880,152   

City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/40

       360        447,383   

Golden State Tobacco Securitization Corp., Refunding RB, Asset-Backed, Series A-1, 5.13%, 6/01/47

       2,165        2,082,838   

San Marcos Unified School District, GO, CAB, Election of 2010, Series B, 0.00%, 8/01/42 (b)

       2,000        737,880   

State of California, GO, Various Purposes:

      

6.00%, 3/01/33

       2,525        2,930,793   

6.50%, 4/01/33

       14,925        16,857,041   

State of California Public Works Board, LRB, Various Capital Projects:

      

Series I, 5.00%, 11/01/38

       775        913,423   

Sub-Series I-1, 6.38%, 11/01/19 (c)

       1,185        1,373,794   

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1, 4.75%, 6/01/25

       665        680,627   
      

 

 

 
                       44,010,089   

Colorado — 0.3%

      

Colorado Health Facilities Authority, RB, Catholic Health Initiatives, Series D, 6.25%, 10/01/33

             1,060        1,155,612   

Connecticut — 1.6%

      

Connecticut State Health & Educational Facility Authority, RB, Ascension Health Senior Credit, Series A, 5.00%, 11/15/40

       1,375        1,504,112   
Municipal Bonds   

Par  
(000)

    Value  

Connecticut (continued)

      

Connecticut State Health & Educational Facility Authority, Refunding RB, Wesleyan University, Series G, 5.00%, 7/01/20 (c)

     $ 3,385      $ 3,854,161   
      

 

 

 
                       5,358,273   

Delaware — 2.1%

      

County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40

       1,125        1,241,809   

Delaware Transportation Authority, RB, 5.00%, 6/01/55

       1,165        1,321,273   

State of Delaware EDA, RB, Exempt Facilities, Indian River Power LLC Project, 5.38%, 10/01/45

       4,065        4,383,411   
      

 

 

 
                       6,946,493   

District of Columbia — 3.3%

      

District of Columbia, Refunding RB, Kipp Charter School, Series A, 6.00%, 7/01/43

       240        285,756   

Metropolitan Washington Airports Authority, Refunding RB, Dulles Toll Road:

      

1st Senior Lien, Series A, 5.25%, 10/01/44

       1,500        1,647,165   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/33 (b)

       6,590        3,503,706   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/34 (b)

       4,830        2,469,627   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/35 (b)

       6,515        3,149,872   
      

 

 

 
                       11,056,126   

Florida — 3.1%

      

County of Collier Florida Health Facilities Authority, Refunding RB, Series A, 5.00%, 5/01/45

       1,340        1,519,332   

County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport, Series A-1, 5.38%, 10/01/41

       1,165        1,315,087   

Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/21 (c)

       3,015        3,867,491   

Palm Coast Park Community Development District, Special Assessment Bonds, 5.70%, 5/01/37

       1,085        1,011,470   

Village Community Development District No.10, Special Assessment Bonds, 5.13%, 5/01/43

       2,305        2,553,364   
      

 

 

 
                       10,266,744   

Georgia — 1.6%

      

City of Atlanta Georgia Water & Wastewater, Refunding RB, 5.00%, 11/01/40

       600        700,716   

County of Gainesville Georgia & Hall Hospital Authority, Refunding RB, Northeast Georgia Health System, Inc. Project, Series A, 5.50%, 8/15/54

       515        619,277   

DeKalb Private Hospital Authority, Refunding RB, Children’s Healthcare, 5.25%, 11/15/39

       130        143,693   

Metropolitan Atlanta Rapid Transit Authority, RB, Sales Tax, 3rd Indenture, Series A, 5.00%, 7/01/39

       3,465        3,800,863   

Municipal Electric Authority of Georgia, Refunding RB, Series X, 6.50%, 1/01/20

       150        161,412   
      

 

 

 
                       5,425,961   

Hawaii — 0.5%

      

State of Hawaii Harbor System, RB, Series A, 5.25%, 7/01/30

             1,355        1,516,801   

Illinois — 19.8%

      

City of Chicago Illinois, GO, Project, Series A, 5.00%, 1/01/34

       1,815        1,842,933   

City of Chicago Illinois, GO, Refunding, Project, Series A, 5.25%, 1/01/32

       4,555        4,742,211   

City of Chicago Illinois, Special Assessment Bonds, Lake Shore East, 6.75%, 12/01/32

       797        794,537   

City of Chicago Illinois O’Hare International Airport, GARB, 3rd Lien, Series C, 6.50%, 1/01/41

       5,865        7,016,124   
 

 

See Notes to Financial Statements.

 

                
62    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

Municipal Bonds   

Par  
(000)

    Value  

Illinois (continued)

      

City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40

     $ 1,050      $ 1,159,032   

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien:

      

Project, 5.00%, 11/01/42

       915        1,001,129   

(AGM), 5.25%, 11/01/33

       1,325        1,397,782   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38

       805        911,679   

Illinois Finance Authority, RB, Advocate Health Care Network, Series D, 6.50%, 11/01/18 (c)

       5,000        5,551,300   

Illinois Finance Authority, Refunding RB:

      

Central Dupage Health, Series B, 5.50%, 11/01/39

       1,610        1,816,450   

Presence Health Network, Series C, 4.00%, 2/15/41

       1,425        1,360,875   

Illinois State Toll Highway Authority, RB:

      

Senior, Series C, 5.00%, 1/01/36

       2,615        3,011,669   

Senior, Series C, 5.00%, 1/01/37

       2,800        3,222,548   

Series A, 5.00%, 1/01/38

       1,980        2,259,972   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project:

      

Series B (AGM), 5.00%, 6/15/50

       4,315        4,595,216   

Series B-2, 5.00%, 6/15/50

       2,500        2,612,575   

Railsplitter Tobacco Settlement Authority, RB:

      

5.50%, 6/01/23

       440        510,101   

6.00%, 6/01/28

       1,140        1,338,645   

Regional Transportation Authority, RB:

      

Series A (AMBAC), 7.20%, 11/01/20

       660        738,467   

Series A (NPFGC), 6.70%, 11/01/21

       4,030        4,569,657   

Series C (NPFGC), 7.75%, 6/01/20

       1,795        2,032,209   

State of Illinois, GO:

      

5.00%, 2/01/39

       1,540        1,593,823   

Series A, 5.00%, 4/01/35

       3,000        3,113,160   

Series A, 5.00%, 4/01/38

       3,640        3,758,773   

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/19 (c)

       630        698,991   

University of Illinois, RB, Auxiliary Facilities System, Series A:

      

5.00%, 4/01/39

       810        903,863   

5.00%, 4/01/44

       985        1,095,025   

Village of Hodgkins Illinois, RB, Metropolitan Biosolids Management LLC Project, AMT, 6.00%, 11/01/23

       2,800        2,805,236   
      

 

 

 
                       66,453,982   

Indiana — 4.5%

      

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

      

6.75%, 1/01/34

       790        970,001   

7.00%, 1/01/44

       1,905        2,362,467   

Indiana Finance Authority, RB, Series A:

      

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

       3,280        3,820,216   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

       450        494,861   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/48

       1,430        1,563,605   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.25%, 1/01/51

       405        448,319   

Sisters of St. Francis Health Services, 5.25%, 11/01/39

       840        925,562   
Municipal Bonds   

Par  
(000)

    Value  

Indiana (continued)

      

Indiana Finance Authority, Refunding RB, Parkview Health System, Series A, 5.75%, 5/01/31

     $ 2,795      $ 3,100,689   

Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 1/15/40

       1,270        1,462,443   
      

 

 

 
                       15,148,163   

Iowa — 1.5%

      

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project:

      

5.00%, 12/01/19

       890        914,350   

5.50%, 12/01/22

       2,340        2,372,199   

5.25%, 12/01/25

       460        479,775   

Iowa Student Loan Liquidity Corp., Refunding RB, Student Loan, Senior Series A-1, AMT, 5.15%, 12/01/22

       1,190        1,263,530   
      

 

 

 
                       5,029,854   

Kentucky — 0.6%

      

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

       995        1,108,878   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/43 (d)

       1,200        1,021,596   
      

 

 

 
                       2,130,474   

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        3,841,705   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A:

      

5.50%, 5/15/30

       1,020        1,150,958   

5.25%, 5/15/31

       870        973,869   

5.25%, 5/15/32

       1,110        1,261,426   

5.25%, 5/15/33

       1,205        1,360,096   

5.25%, 5/15/35

       505        569,130   
      

 

 

 
                       9,157,184   

Maryland — 1.1%

      

Maryland Community Development Administration, Refunding, HRB, Residential, Series D, AMT, 4.90%, 9/01/42

       1,500        1,518,780   

Maryland EDC, RB, Transportation Facilities Project, Series A, 5.75%, 6/01/35

       435        479,074   

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25

       750        761,018   

Maryland Health & Higher Educational Facilities Authority, RB, University of Maryland Medical System, Series B (NPFGC), 7.00%, 7/01/22

       725        860,698   
      

 

 

 
                       3,619,570   

Massachusetts — 3.5%

      

Commonwealth of Massachusetts, GO, Series E, 3.00%, 4/01/44

       1,370        1,280,662   

Massachusetts Development Finance Agency, Refunding RB, Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42 (a)

       2,205        2,231,438   

Massachusetts Health & Educational Facilities Authority, Refunding RB, Partners Healthcare System, Series J1, 5.00%, 7/01/39

       990        1,084,050   

Massachusetts HFA, RB, AMT:

      

M/F Housing, Series A, 5.20%, 12/01/37

       2,830        2,888,043   

S/F Housing, Series 130, 5.00%, 12/01/32

       2,240        2,243,450   

Massachusetts HFA, Refunding RB, Series F, AMT, 5.70%, 6/01/40

       1,955        2,037,032   
      

 

 

 
                       11,764,675   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    63


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

Municipal Bonds   

Par  
(000)

    Value  

Michigan — 6.6%

      

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39

     $ 4,425      $ 4,942,548   

Kalamazoo Hospital Finance Authority, Refunding RB, Bronson Methodist Hospital, 5.50%, 5/15/36

       1,380        1,535,209   

Michigan Finance Authority, Refunding RB:

      

Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 7/01/44

       880        966,724   

Henry Ford Health System, 4.00%, 11/15/46

       1,420        1,430,508   

Michigan State Hospital Finance Authority, Refunding RB, Series A:

      

Henry Ford Health System, 5.25%, 11/15/46

       5,080        5,088,839   

McLaren Health Care, 5.75%, 5/15/18 (c)

       7,560        8,122,161   
      

 

 

 
                       22,085,989   

Mississippi — 1.4%

      

County of Lowndes Mississippi, Refunding RB, Solid Waste Disposal & Pollution Control, Weyerhaeuser Co. Project, Series A, 6.80%, 4/01/22

       3,000        3,665,790   

University of Southern Mississippi, RB, Campus Facilities Improvements Project, 5.38%, 9/01/19 (c)

       1,065        1,194,610   
      

 

 

 
                       4,860,400   

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        291,664   

State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 5/01/43

       245        272,665   
      

 

 

 
                       564,329   

Nebraska — 0.8%

      

Central Plains Energy Project Nebraska, RB, Gas Project No. 3:

      

5.25%, 9/01/37

       825        939,238   

5.00%, 9/01/42

       1,445        1,616,594   
      

 

 

 
                       2,555,832   

New Jersey — 6.1%

      

Casino Reinvestment Development Authority, Refunding RB:

      

5.25%, 11/01/39

       1,675        1,725,702   

5.25%, 11/01/44

       1,525        1,565,046   

County of Essex New Jersey Improvement Authority, RB, AMT, 5.25%, 7/01/45 (a)

       1,085        1,120,859   

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT, 5.25%, 9/15/29

       1,955        2,173,647   

New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 4/01/31

       2,240        2,600,394   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series AA, 6.38%, 10/01/28

       150        154,872   

New Jersey State Turnpike Authority, RB:

      

Series A, 5.00%, 1/01/43

       1,985        2,261,372   

Series E, 5.00%, 1/01/45

       2,615        3,017,841   

New Jersey Transportation Trust Fund Authority, RB:

      

Transportation Program, Series AA, 5.00%, 6/15/44

       1,270        1,369,111   

Transportation System, Series A, 5.50%, 6/15/41

       1,635        1,801,966   

Transportation System, Series B, 5.25%, 6/15/36

       2,460        2,696,037   
      

 

 

 
                       20,486,847   

New York — 16.0%

      

Brooklyn Arena Local Development Corp., Refunding RB, Barclays Center Project, Series A, 3.00%, 7/15/43

       2,655        2,502,523   

City of New York New York Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series C-1, 6.50%, 7/01/17

       255        255,173   
Municipal Bonds   

Par  
(000)

    Value  

New York (continued)

      

City of New York New York Transitional Finance Authority, RB:

      

Fiscal 2009, Series S-3, 5.25%, 1/15/39

     $ 6,700      $ 7,271,443   

Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42

       1,960        2,255,823   

Counties of New York Tobacco Trust IV, Refunding RB, Settlement Pass-Through Turbo, Series A, 6.25%, 6/01/41 (a)

       1,800        1,889,010   

County of Westchester New York Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series E-1, 6.50%, 7/01/17

       400        400,568   

Erie Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed, Series A, 5.00%, 6/01/45

       1,960        1,958,432   

Metropolitan Transportation Authority, RB, Series C:

      

6.50%, 11/15/18 (c)

       7,015        7,815,201   

6.50%, 11/15/28

       2,390        2,657,465   

Metropolitan Transportation Authority Hudson Rail Yards Trust Obligations, Refunding RB, Series A, 5.00%, 11/15/56

       1,045        1,180,777   

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Consolidated, 5.25%, 12/15/43

       10,735        12,527,852   

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        1,362,703   

3 World Trade Center Project, Class 1, 5.00%, 11/15/44 (a)

       2,860        3,217,157   

3 World Trade Center Project, Class 2, 5.15%, 11/15/34 (a)

       340        386,532   

3 World Trade Center Project, Class 2, 5.38%, 11/15/40 (a)

       850        981,878   

New York State Dormitory Authority, Refunding RB, General Purpose, Series A, 5.00%, 6/15/31

       1,790        2,117,194   

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        1,353,183   

6.00%, 12/01/42

       1,250        1,448,025   

Westchester Tobacco Asset Securitization, Refunding RB, 5.13%, 6/01/45

       2,300        2,300,000   
      

 

 

 
                       53,880,939   

North Carolina — 0.8%

      

North Carolina Medical Care Commission, Refunding RB:

      

1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

       595        677,717   

Carolina Village Project, 6.00%, 4/01/38

       2,000        2,068,620   
      

 

 

 
                       2,746,337   

Ohio — 1.4%

      

Buckeye Tobacco Settlement Financing Authority, RB, Asset-Backed, Senior Turbo Term, Series A-2, 5.88%, 6/01/47

       4,000        3,760,120   

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

       660        750,862   

State of Ohio, RB, Portsmouth Bypass Project, AMT, 5.00%, 6/30/53

       275        301,287   
      

 

 

 
                       4,812,269   

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        701,415   
 

 

See Notes to Financial Statements.

 

                
64    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

Municipal Bonds   

Par  
(000)

    Value  

Pennsylvania (continued)

      

Pennsylvania Economic Development Financing Authority, RB:

      

Aqua Pennsylvania, Inc. Project, Series B, 5.00%, 11/15/40

     $ 1,890      $ 2,076,316   

Pennsylvania Bridge Finco LP, AMT, 5.00%, 6/30/42

       850        940,533   

Pennsylvania Economic Development Financing Authority, Refunding RB, National Gypsum Co., AMT, 5.50%, 11/01/44

       1,035        1,137,424   

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

       1,105        1,269,402   
      

 

 

 
                       6,125,090   

Rhode Island — 2.0%

      

Tobacco Settlement Financing Corp., Refunding RB:

      

Series A, 5.00%, 6/01/40

       820        883,378   

Series B, 4.50%, 6/01/45

       2,645        2,740,194   

Series B, 5.00%, 6/01/50

       2,945        3,057,263   
      

 

 

 
                       6,680,835   

South Carolina — 4.8%

      

State of South Carolina Ports Authority, RB:

      

5.25%, 7/01/40

       3,280        3,658,086   

AMT, 5.25%, 7/01/55

       1,295        1,462,780   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

       6,180        7,280,411   

State of South Carolina Public Service Authority, Refunding RB, Series E, 5.25%, 12/01/55

       3,135        3,694,848   
      

 

 

 
                       16,096,125   

Tennessee — 0.6%

      

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

       995        1,108,878   

Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board, RB, Vanderbilt University Medical Center, Series A, 5.00%, 7/01/46

       690        796,260   
      

 

 

 
                       1,905,138   

Texas — 6.9%

      

Central Texas Regional Mobility Authority, Refunding RB, Senior Lien, 6.25%, 1/01/21 (c)

       2,140        2,573,050   

City of Dallas Texas Waterworks & Sewer System Revenue, Refunding RB:

      

5.00%, 10/01/20 (c)

       235        269,987   

5.00%, 10/01/35

       275        312,909   

City of Houston Texas Airport System, Refunding ARB, United Airlines, Inc. Terminal E Project, AMT, 5.00%, 7/01/29

       965        1,078,397   

Clifton Higher Education Finance Corp., RB, Idea Public Schools, 6.00%, 8/15/43

       745        891,430   

County of Fort Bend Texas Industrial Development Corp., RB, NRG Energy Project, Series B, 4.75%, 11/01/42

       670        711,466   

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        597,219   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (c)

       2,000        2,261,220   

North Texas Tollway Authority, Refunding RB, Series A:

      

1st Tier System, 6.25%, 1/01/19 (c)

       5,690        6,332,515   

1st Tier System, 6.25%, 1/01/39

       1,310        1,440,659   

5.00%, 1/01/38

       925        1,063,140   
Municipal Bonds   

Par  
(000)

    Value  

Texas (continued)

      

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien:

      

LBJ Infrastructure Group LLC, 7.00%, 6/30/40

     $ 2,000      $ 2,359,540   

NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39

       2,775        3,224,217   
      

 

 

 
                       23,115,749   

Utah — 0.9%

      

City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 8/15/41

             2,780        3,004,263   

Virginia — 2.6%

      

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc. (c):

      

5.13%, 10/01/17

       500        520,035   

5.13%, 10/01/17

       3,440        3,577,841   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

      

5.25%, 1/01/32

       1,615        1,814,630   

6.00%, 1/01/37

       2,365        2,753,262   
      

 

 

 
                       8,665,768   

Washington — 2.3%

      

Port of Seattle Washington, RB, Series C, AMT, 5.00%, 4/01/40

       755        856,699   

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

       2,290        2,687,063   

Washington Health Care Facilities Authority, Refunding RB, Catholic Health Initiatives, Series D, 6.38%, 10/01/36

       3,700        4,031,372   
      

 

 

 
                       7,575,134   

Wisconsin — 3.7%

  

State of Wisconsin, Refunding RB, Series A, 6.00%, 5/01/36

       7,100        7,917,068   

State of Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Credit Group, Series E, 5.00%, 11/15/33

       2,465        2,732,872   

Wisconsin Health & Educational Facilities Authority, Refunding RB, Medical College of Wisconsin, Inc., 4.00%, 12/01/46

       1,810        1,904,554   
      

 

 

 
                       12,554,494   
Total Municipal Bonds — 121.0%        406,205,833   
      
                          
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
 

Alabama — 0.5%

      

Auburn University, Refunding RB, Series A, 4.00%, 6/01/41

             1,680        1,810,284   

California — 6.2%

      

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/19 (c)

       3,271        3,637,966   

California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/18 (c)(f)

       2,610        2,828,901   

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/19 (c)

       9,480        10,602,811   

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/17 (c)

       2,290        2,364,219   

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/19 (c)

       1,077        1,202,275   
      

 

 

 
                       20,636,172   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    65


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
   Par  
(000)
    Value  

Colorado — 0.7%

      

Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A, 5.50%, 7/01/34 (f)

           $ 2,129      $ 2,346,472   

Connecticut — 1.8%

      

Connecticut State Health & Educational Facility Authority, RB, Yale University, Series Z-3, 5.05%, 7/01/42

             6,000        6,163,620   

Florida — 1.9%

      

County of Miami-Dade Florida, RB, Water & Sewer System, 5.00%, 10/01/34

             5,679        6,408,704   

Illinois — 0.9%

      

State of Illinois Toll Highway Authority, RB, Senior Priority, Series B, 5.50%, 1/01/18 (c)

             2,999        3,162,465   

Maryland — 0.7%

      

State of Maryland Transportation Authority, RB, Transportation Facilities Project (AGM), 5.00%, 7/01/41

             2,290        2,431,179   

Massachusetts — 0.8%

      

Massachusetts School Building Authority, RB, Senior, Series B, 5.00%, 10/15/41

             2,266        2,634,704   

New Hampshire — 0.7%

      

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/19 (c)(f)

             2,009        2,226,996   

New York — 8.0%

      

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series DD:

      

5.00%, 6/15/18 (c)

       927        986,294   

5.00%, 6/15/37

       5,372        5,714,074   

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

       1,575        1,751,180   

Hudson Yards Infrastructure Corp., RB, Fiscal 2012, Series A, 5.75%, 2/15/47 (f)

       1,610        1,880,942   

Metropolitan Transportation Authority, Refunding RB, Series C-1, 5.25%, 11/15/56

       4,720        5,674,456   

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51 (f)

       6,440        7,555,340   

Port Authority of New York & New Jersey, Refunding ARB, 194th Series, 5.25%, 10/15/55

       2,595        3,106,604   
      

 

 

 
                       26,668,890   

North Carolina — 2.8%

      

North Carolina Capital Facilities Finance Agency, Refunding RB, Duke University Project:

      

Series A, 5.00%, 10/01/41

       6,239        6,240,640   

Series B, 5.00%, 10/01/55

       2,550        2,989,900   
      

 

 

 
                       9,230,540   

Ohio — 5.2%

      

Ohio Higher Educational Facility Commission, RB, Cleveland Clinic Health, Series A, 5.25%, 1/01/33

       2,400        2,515,680   

State of Ohio, Refunding RB, Cleveland Clinic Health System Obligated Group, Series A, 5.50%, 1/01/39

       13,843        15,077,611   
      

 

 

 
                       17,593,291   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
   Par  
(000)
    Value  

South Carolina — 1.6%

      

South Carolina Public Service Authority, Refunding RB, Series A (c):

      

5.50%, 1/01/19 (f)

     $ 398      $ 436,668   

5.50%, 1/01/19

       4,603        5,049,117   
      

 

 

 
                       5,485,785   

Texas — 2.8%

      

City of San Antonio Texas Public Service Board, RB, Electric & Gas Systems, Junior Lien, 5.00%, 2/01/43

       2,520        2,912,314   

County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

       3,400        3,917,412   

Texas Department of Housing & Community Affairs, RB, S/F Housing Mortgage, Series B, AMT, 5.25%, 9/01/32

       516        519,047   

University of Texas, Refunding RB, Financing System, Series B, 5.00%, 8/15/43

       1,831        2,155,916   
      

 

 

 
                       9,504,689   

Washington — 5.2%

      

Central Puget Sound Regional Transit Authority, RB, Series A (c):

      

5.00%, 11/01/17

       4,500        4,692,330   

5.00%, 11/01/17

       4,500        4,692,330   

(AGM), 5.00%, 11/01/17

       7,693        8,022,258   
      

 

 

 
                       17,406,918   

Wisconsin — 0.8%

      

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health, Inc., Obligated Group, Series C, 5.25%, 4/01/39 (f)

             2,499        2,676,995   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 40.6%
                     136,387,704   
Total Long-Term Investments
(Cost — $492,717,659) — 161.6%
                     542,593,537   
      
                          
Short-Term Securities           Shares         

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.44% (g)(h)

             1,381,488        1,381,626   
Total Short-Term Securities
(Cost — $1,381,488) — 0.4%
        1,381,626   
Total Investments
(Cost — $494,099,147) — 162.0%
        543,975,163   

Other Assets Less Liabilities — 1.7%

  

    5,783,507   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (22.0)%

   

    (73,950,825

VMTP Shares, at Liquidation Value — (41.7)%

  

    (140,000,000
      

 

 

 

Net Assets Applicable to Common Shares — 100.0%

  

  $ 335,807,845   
      

 

 

 
 
Notes to Schedule of Investments

 

(a)   Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

(b)   Zero-coupon bond.

 

(c)   U.S. Government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

See Notes to Financial Statements.

 

                
66    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

 

(d)   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.

 

(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 January 1, 2017 to November 15, 2019, is $13,391,469. See Note 4 of the Notes to Financial Statements for details.

 

(g)   Current yield as of period end.

 

(h)   During the six months ended October 31, 2016, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   

Shares Held
at April 30,

2016

     Net
Activity
     Shares Held
at October 31,
2016
     Value at
October 31,
2016
     Income      Realized
Gain/Capital
Gain
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     1,981,652         (600,164      1,381,488       $ 1,381,626       $ 2,919       $ 1,038   

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts              
Contracts
Short
       Issue   Expiration   Notional
Value
    Unrealized
Appreciation
        
  (6      5-Year U.S. Treasury Note   December 2016   $ 724,781      $ 5,431     
  (35      10-Year U.S. Treasury Note   December 2016   $ 4,536,875        62,589     
  (35      Long U.S. Treasury Bond   December 2016   $ 5,695,156        243,476     
  (7      Ultra U.S. Treasury Bond   December 2016   $ 1,231,563        71,384           

 

Total

  

  $ 382,880     
          

 

 

 

 

Derivative Financial Instruments Outstanding as of Period End

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 appreciation1                               $ 382,880             $ 382,880   

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 six months ended October 31, 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

                              $ 278,670             $ 278,670   

Net Change in Unrealized Appreciation (Depreciation) on:

                                                       

Futures contracts

                              $ 282,847             $ 282,847   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:   

Average notional value of contracts — short

     $ 12,856,039   

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.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    67


Schedule of Investments (concluded)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

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

            $ 542,593,537                   $ 542,593,537   

Short-Term Securities

  $ 1,381,626                               1,381,626   
 

 

 

 

Total

  $ 1,381,626         $ 542,593,537                   $ 543,975,163   
 

 

 

 
                
Derivative Financial Instruments2                                         

Assets:

                

Interest rate contracts

  $ 382,880                             $ 382,880   

1    See above Schedule of Investments for values in each state.

       

2    Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.

       

                
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of 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

  $ 216,050                             $ 216,050   

Liabilities:

                

TOB Trust Certificates

            $ (73,814,588                  (73,814,588

VMTP Shares at Liquidation Value

              (140,000,000                  (140,000,000
 

 

 

 

Total

  $ 216,050         $ (213,814,588                $ (213,598,538
 

 

 

 

During the six months ended October 31, 2016, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
68    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Statements of Assets and Liabilities     

 

October 31, 2016 (Unaudited)   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

  $ 577,257,403      $ 571,022,293      $ 398,078,544      $ 287,981,071   

Investments at value — affiliated2

    165,111        1,191,451        864,761        1,171,159   

Cash pledged for futures contracts

    144,950        391,900        201,550        140,200   
Receivables:   

Interest — unaffiliated

    10,030,530        7,396,312        5,656,212        4,047,307   

Investments sold — unaffiliated

    1,175,450        960,000        23,861        24,336   

Dividends — affiliated

    216        511        475        618   

Prepaid expenses

    3,412        63,621        15,365        15,174   
 

 

 

 

Total assets

    588,777,072        581,026,088        404,840,768        293,379,865   
 

 

 

 
       
Accrued Liabilities   
Payables:   

Income dividends — Common Shares

    2,064,337        1,675,110        1,147,213        842,893   

Investments purchased — unaffiliated

    651,104        5,791,094        1,258,229        910,426   

Investment advisory fees

    274,552        244,235        188,451        136,486   

Interest expense and fees

    134,438        128,315        118,756        92,324   

Variation margin on futures contracts

    18,672        51,422        27,859        19,141   

Officer’s and Directors’ fees

    5,153        5,410        3,300        2,380   

Other accrued expenses

    180,286        160,314        124,101        105,046   
 

 

 

 

Total accrued liabilities

    3,328,542        8,055,900        2,867,909        2,108,696   
 

 

 

 
       
Other Liabilities   

TOB Trust Certificates

    66,086,523        65,110,308        67,744,850        52,164,040   

VRDP Shares, at liquidation value of $100,000 per share, net of deferred offering costs3,4

           142,302,234                 

VMTP Shares, at liquidation value of $100,000 per share3,4

                  83,700,000        55,000,000   
 

 

 

 

Total other liabilities

    66,086,523        207,412,542        151,444,850        107,164,040   
 

 

 

 

Total liabilities

    69,415,065        215,468,442        154,312,759        109,272,736   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 519,362,007      $ 365,557,646      $ 250,528,009      $ 184,107,129   
 

 

 

 
       
Net Assets Applicable to Common Shareholders Consist of   

Paid-in capital5,6,7

  $ 481,580,077      $ 314,616,217      $ 211,180,033      $ 155,626,665   

Undistributed net investment income

    786,107        5,164,007        1,827,130        2,238,856   

Accumulated net realized loss

    (12,860,909     (8,117,883     (1,948,692     (2,015,431

Net unrealized appreciation (depreciation)

    49,856,732        53,895,305        39,469,538        28,257,039   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 519,362,007      $ 365,557,646      $ 250,528,009      $ 184,107,129   
 

 

 

 

Net asset value per Common Share

  $ 14.47      $ 12.33      $ 17.69      $ 16.27   
 

 

 

 

1    Investments at cost — unaffiliated

  $ 527,633,426      $ 517,779,728      $ 358,940,950      $ 259,953,117   

2   Investments at cost — affiliated

  $ 165,101      $ 1,191,332      $ 864,675      $ 1,171,042   

3   Preferred Shares outstanding, par value $0.10 per share

           1,425        837        550   

4   Preferred Shares authorized, including Auction Market 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

    35,893,267        29,644,041        14,163,045        11,313,998   

7   Common Shares authorized

    200,000,000        199,991,095        199,994,163        199,995,970   

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    69


Statements of Assets and Liabilities     

 

October 31, 2016 (Unaudited)   BlackRock
MuniHoldings
Quality Fund, Inc.
(MUS)
    BlackRock Muni
Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Assets   

Investments at value — unaffiliated1

  $ 300,611,527      $ 937,579,722      $ 542,593,537   

Investments at value — affiliated2

    1,556,710        12,882,809        1,381,626   

Cash pledged for futures contracts

    126,150        442,900        216,050   
Receivables:   

Interest — unaffiliated

    4,374,194        13,189,812        8,501,399   

Investments sold — unaffiliated

    465,538        2,915,000        863,422   

Dividends — affiliated

    478        4,804        668   

Prepaid expenses

    15,235        17,419        15,686   
 

 

 

 

Total assets

    307,149,832        967,032,466        553,572,388   
 

 

 

 
     
Accrued Liabilities   
Payables:   

Investments purchased — unaffiliated

    4,100,720        2,169,940        1,723,671   

Income dividends — Common Shares

    878,538        2,125,443        1,669,409   

Investment advisory fees

    136,794        450,194        234,095   

Interest expense and fees

    42,933        112,114        136,237   

Variation margin on futures contracts

    15,297        45,452        28,265   

Officer’s and Directors’ fees

    2,572        276,312        4,595   

Other accrued expenses

    105,943        216,300        153,683   
 

 

 

 

Total accrued liabilities

    5,282,797        5,395,755        3,949,955   
 

 

 

 
     
Other Liabilities   

TOB Trust Certificates

    25,313,395        63,101,848        73,814,588   

VMTP Shares, at liquidation value of $100,000 per share3,4

    87,000,000        287,100,000        140,000,000   
 

 

 

 

Total other liabilities

    112,313,395        350,201,848        213,814,588   
 

 

 

 

Total liabilities

    117,596,192        355,597,603        217,764,543   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 189,553,640      $ 611,434,863      $ 335,807,845   
 

 

 

 
     
Net Assets Applicable to Common Shareholders Consist of   

Paid-in capital5,6,7

  $ 175,203,065      $ 543,452,920      $ 286,796,232   

Undistributed net investment income

    2,223,512        3,202,832        2,393,519   

Undistributed net realized gain (accumulated net realized loss)

    (15,108,024     1,924,109        (3,640,802

Net unrealized appreciation (depreciation)

    27,235,087        62,855,002        50,258,896   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 189,553,640      $ 611,434,863      $ 335,807,845   
 

 

 

 

Net asset value per Common Share

  $ 14.56      $ 15.97      $ 15.89   
 

 

 

 

1    Investments at cost — unaffiliated

  $ 273,558,784      $ 875,399,329      $ 492,717,659   

2   Investments at cost — affiliated

  $ 1,556,554      $ 12,881,708      $ 1,381,488   

3   Preferred Shares outstanding, par value $0.10 per share

    870        2,871        1,400   

4   Preferred Shares authorized, including Auction Market 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

    13,015,375        38,296,266        21,131,656   

7   Common Shares authorized

    199,993,770        199,984,329        199,991,600   

 

 

See Notes to Financial Statements.      
                
70    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Statements of Operations     

 

Six Months Ended October 31, 2016 (Unaudited)   BlackRock
MuniAssets
Fund, Inc.
(MUA)
    BlackRock
MuniEnhanced
Fund, Inc.
(MEN)
    BlackRock
MuniHoldings
Fund, Inc.
(MHD)
    BlackRock
MuniHoldings
Fund II, Inc.
(MUH)
 
       
Investment Income   

Interest — unaffiliated

  $ 15,056,159      $ 12,709,648      $ 9,060,231      $ 6,584,954   

Dividends — affiliated

    2,151        3,339        2,798        3,119   
 

 

 

 

Total income

    15,058,310        12,712,987        9,063,029        6,588,073   
 

 

 

 
       
Expenses   

Investment advisory

    1,638,764        1,466,141        1,119,490        809,690   

Professional

    44,357        46,742        39,025        33,808   

Accounting services

    36,617        36,392        24,322        18,933   

Transfer agent

    32,155        20,775        13,793        12,480   

Officer and Directors

    27,277        20,392        13,619        9,962   

Custodian

    13,520        13,809        9,395        6,950   

Registration

    7,805        6,445        5,318        5,318   

Printing

    6,108        6,047        4,966        4,391   

Rating agency

           19,150        19,121        19,107   

Miscellaneous

    29,489        26,001        24,081        21,790   
 

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    1,836,092        1,661,894        1,273,130        942,429   

Interest expense, fees and amortization of offering costs1

    433,277        1,432,355        1,035,841        722,603   
 

 

 

 

Total expenses

    2,269,369        3,094,249        2,308,971        1,665,032   
Less:        

Fees waived by the Manager

    (627     (930     (828     (820

Fees paid indirectly

    (60     (2     (30       
 

 

 

 

Total expenses after fees waived and paid indirecly

    2,268,682        3,093,317        2,308,113        1,664,212   
 

 

 

 

Net investment income

    12,789,628        9,619,670        6,754,916        4,923,861   
 

 

 

 
       
Realized and Unrealized Gain (Loss)   
Net realized gain (loss) from:   

Investments — unaffiliated

    (7,469,159     1,012,452        370,412        181,241   

Investments — affiliated

    25        20        20        14   

Futures contracts

    306,265        79,817        315,342        276,618   

Capital gain distributions from investment companies — affiliated

    1,167        685        589        1,486   
 

 

 

 
    (7,161,702     1,092,974        686,363        459,359   
 

 

 

 
Net change in unrealized appreciation (depreciation) on:        

Investments — unaffiliated

    7,623,607        (6,547,413     (4,429,207     (3,142,708

Investments — affiliated

    10        119        86        117   

Futures contracts

    65,535        541,271        204,630        170,680   
 

 

 

 
    7,689,152        (6,006,023     (4,224,491     (2,971,911
 

 

 

 

Net realized and unrealized gain (loss)

    527,450        (4,913,049     (3,538,128     (2,512,552
 

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 13,317,078      $ 4,706,621      $ 3,216,788      $ 2,411,309   
 

 

 

 

1   Related to TOB Trusts, VRDP Shares and/or VMTP Shares.

      

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    71


Statements of Operations     

 

Six Months Ended October 31, 2016 (Unaudited)   BlackRock
MuniHoldings
Quality Fund, Inc.
(MUS)
    BlackRock Muni
Intermediate
Duration Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Investment Income   

Interest — unaffiliated

  $ 6,716,043      $ 18,286,489      $ 12,827,298   

Dividends — affiliated

    1,083        13,236        2,919   
 

 

 

 

Total income

    6,717,126        18,299,725        12,830,217   
 

 

 

 
     
Expenses   

Investment advisory

    847,571        2,701,209        1,398,041   

Professional

    36,134        60,395        45,263   

Accounting services

    21,911        56,116        31,857   

Transfer agent

    11,923        25,193        17,069   

Officer and Directors

    10,295        40,513        18,202   

Custodian

    8,153        22,051        12,833   

Registration

    5,318        8,348        5,435   

Printing

    4,418        8,123        5,863   

Rating agency

    19,123        19,222        19,149   

Miscellaneous

    18,122        29,778        23,437   
 

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    982,968        2,970,948        1,577,149   

Interest expense, fees and amortization of offering costs1

    831,047        2,585,501        1,529,019   
 

 

 

 

Total expenses

    1,814,015        5,556,449        3,106,168   
Less:      

Fees waived by the Manager

    (20,871     (2,921     (811

Fees paid indirectly

    (19     (17     (166
 

 

 

 

Total expenses after fees waived and paid indirectly

    1,793,125        5,553,511        3,105,191   
 

 

 

 

Net investment income

    4,924,001        12,746,214        9,725,026   
 

 

 

 
     
Realized and Unrealized Gain (Loss)   
Net realized gain (loss) from:   

Investments — unaffiliated

    179,968        618,205        (912,078

Investments — affiliated

    20        36        32   

Futures contracts

    93,428        485,825        278,670   

Capital gain distributions from investment companies — affiliated

           10,454        1,006   
 

 

 

 
    273,416        1,114,520        (632,370
 

 

 

 
Net change in unrealized appreciation (depreciation) on:      

Investments — unaffiliated

    (3,701,807     (8,872,682     (5,106,347

Investments — affiliated

    156        1,101        138   

Futures contracts

    132,651        418,871        282,847   
 

 

 

 
    (3,569,000     (8,452,710     (4,823,362
 

 

 

 

Net realized and unrealized loss

    (3,295,584     (7,338,190     (5,455,732
 

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 1,628,417      $ 5,408,024      $ 4,269,294   
 

 

 

 

1   Related to TOB Trusts and/or VMTP Shares.

      

 

 

See Notes to Financial Statements.      
                
72    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Statements of Changes in Net Assets     

 

    BlackRock MuniAssets
Fund, Inc. (MUA)
 
Increase (Decrease) in Net Assets:   Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended
April 30,
2016
 
   
Operations   

Net investment income

  $ 12,789,628      $ 25,706,748   

Net realized gain (loss)

    (7,161,702     1,159,369   

Net change in unrealized appreciation (depreciation)

    7,689,152        11,331,196   
 

 

 

 

Net increase in net assets resulting from operations

    13,317,078        38,197,313   
 

 

 

 
   
Distributions to Shareholders1    

From net investment income

    (12,465,092     (26,444,665
 

 

 

 
   
Capital Share Transactions   

Reinvestment of distributions

    812,598        603,849   
 

 

 

 
   
Net Assets   

Total increase in net assets

    1,664,584        12,356,497   

Beginning of period

    517,697,423        505,340,926   
 

 

 

 

End of period

  $ 519,362,007      $ 517,697,423   
 

 

 

 

Undistributed net investment income, end of period

  $ 786,107      $ 461,571   
 

 

 

 

 

    BlackRock MuniEnhanced
Fund, Inc. (MEN)
    BlackRock MuniHoldings
Fund, Inc. (MHD)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended
April 30,
2016
    Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended
April 30,
2016
 
       
Operations                   

Net investment income

  $ 9,619,670      $ 20,603,138      $ 6,754,916      $ 14,211,504   

Net realized gain (loss)

    1,092,974        267,604        686,363        (788,818

Net change in unrealized appreciation (depreciation)

    (6,006,023     7,915,622        (4,224,491     6,631,201   
 

 

 

   

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    4,706,621        28,786,364        3,216,788        20,053,887   
 

 

 

   

 

 

 
       
Distributions to Common Shareholders1                    

From net investment income

    (10,160,433     (21,467,683     (6,949,724     (14,977,381
 

 

 

   

 

 

 
       
Capital Share Transactions                   

Reinvestment of common distributions

    669,394        320,819        397,132        141,585   
 

 

 

   

 

 

 
       
Net Assets Applicable to Common Shareholders                   

Total increase (decrease) in net assets applicable to Common Shareholders

    (4,784,418     7,639,500        (3,335,804     5,218,091   

Beginning of period

    370,342,064        362,702,564        253,863,813        248,645,722   
 

 

 

   

 

 

 

End of period

  $ 365,557,646      $ 370,342,064      $ 250,528,009      $ 253,863,813   
 

 

 

   

 

 

 

Undistributed net investment income, end of period

  $ 5,164,007      $ 5,704,770      $ 1,827,130      $ 2,021,938   
 

 

 

   

 

 

 

1   Distributions for annual periods determined in accordance with federal income tax regulations.

      

   

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    73


Statements of Changes in Net Assets     

 

 

    BlackRock MuniHoldings
Fund II, Inc. (MUH)
          BlackRock MuniHoldings
Fund, Inc. (MUS)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended
April 30,
2016
          Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended
April 30,
2016
 
         
Operations                                        

Net investment income

  $ 4,923,861      $ 10,317,643        $ 4,924,001      $ 10,353,759   

Net realized gain (loss)

    459,359        (190,418       273,416        (169,645

Net change in unrealized appreciation (depreciation)

    (2,971,911     3,796,031          (3,569,000     3,870,246   
 

 

 

     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    2,411,309        13,923,256          1,628,417        14,054,360   
 

 

 

     

 

 

 
         
Distributions to Common Shareholders1                                        

From net investment income

    (5,088,217     (10,584,214       (5,270,287     (10,537,871
 

 

 

     

 

 

 
         
Capital Share Transactions                                        

Reinvestment of common distributions

    230,726                 85,253          
 

 

 

     

 

 

 
         
Net Assets Applicable to Common Shareholders                                        

Total increase (decrease) in net assets applicable to Common Shareholders

    (2,446,182     3,339,042          (3,556,617     3,516,489   

Beginning of period

    186,553,311        183,214,269          193,110,257        189,593,768   
 

 

 

     

 

 

 

End of period

  $ 184,107,129      $ 186,553,311        $ 189,553,640      $ 193,110,257   
 

 

 

     

 

 

 

Undistributed net investment income, end of period

  $ 2,238,856      $ 2,403,212        $ 2,223,512      $ 2,569,798   
 

 

 

     

 

 

 
    BlackRock Muni Intermediate
Duration Fund, Inc. (MUI)
          BlackRock MuniVest
Fund II, Inc. (MVT)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended
April 30,
2016
          Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended
April 30,
2016
 
         
Operations                                        

Net investment income

  $ 12,746,214      $ 27,875,664        $ 9,725,026      $ 20,552,412   

Net realized gain (loss)

    1,114,520        6,632,300          (632,370     519,481   

Net change in unrealized appreciation (depreciation)

    (8,452,710     13,784,860          (4,823,362     3,314,874   
 

 

 

     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    5,408,024        48,292,824          4,269,294        24,386,767   
 

 

 

     

 

 

 
         
Distributions to Common Shareholders1                                        

From net investment income

    (12,944,138     (29,717,903       (10,090,580     (21,039,048

From net realized gain

           (7,044,253                
 

 

 

     

 

 

 

Decrease in net assets resulting from distributions to shareholders

    (12,944,138     (36,762,156       (10,090,580     (21,039,048
 

 

 

     

 

 

 
         
Capital Share Transactions                                        

Reinvestment of common distributions

                    876,456        1,084,558   
 

 

 

     

 

 

 
         
Net Assets Applicable to Common Shareholders                                        

Total increase (decrease) in net assets applicable to Common Shareholders

    (7,536,114     11,530,668          (4,944,830     4,432,277   

Beginning of period

    618,970,977        607,440,309          340,752,675        336,320,398   
 

 

 

     

 

 

 

End of period

  $ 611,434,863      $ 618,970,977        $ 335,807,845      $ 340,752,675   
 

 

 

     

 

 

 

Undistributed net investment income, end of period

  $ 3,202,832      $ 3,400,756        $ 2,393,519      $ 2,759,073   
 

 

 

     

 

 

 

1   Distributions for annual periods determined in accordance with federal income tax regulations.

      

     

 

 

See Notes to Financial Statements.      
                
74    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Statements of Cash Flows     

 

Six Months Ended October 31, 2016 (Unaudited)   BlackRock
MuniAssets
Fund, Inc.
(MUA)
    BlackRock
MuniEnhanced
Fund, Inc.
(MEN)
    BlackRock
MuniHoldings
Fund, Inc.
(MHD)
    BlackRock
MuniHoldings
Fund II, Inc.
(MUH)
 
       
Cash Provided by (Used for) Operating Activities   

Net increase in net assets resulting from operations

  $ 13,317,078      $ 4,706,621      $ 3,216,788      $ 2,411,309   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used for) operating activities:

       

Proceeds from sales of long-term investments

    30,214,327        24,721,772        14,441,333        11,754,080   

Purchases of long-term investments

    (35,798,774     (23,630,273     (23,316,683     (17,935,003

Net proceeds from sales (purchases) of short-term securities

    4,131,040        942,043        711,188        (304,391

Amortization of premium and accretion of discount on investments and other fees

    37,131        (334,693     111,909        (7,891

Net realized (gain) loss on investments

    7,469,134        (1,012,472     (370,432     (181,255

Net unrealized (gain) loss on investments

    (7,623,617     6,547,294        4,429,121        3,142,591   

(Increase) Decrease in Assets:

  

Cash pledged for futures contracts

    99,000        (191,000     (9,000     (50,000

Receivables:

  

Interest — unaffiliated

    (140,266     (50,207     (53,303     34,563   

Dividends — affiliated

    235        237        (283     (538

Prepaid expenses

    13,699        18,212        18,043        (38,478

Increase (Decrease) in Liabilities:

  

Payables:

  

Investment advisory fees

    12,199        6,761        9,375        6,987   

Interest expense and fees

    96,246        90,645        90,084        69,951   

Officer’s and Directors’ fees

    385        1,151        428        281   

Variation margin on futures contracts

    (13,203     23,469        609        6,547   

Other accrued expenses

    (7,466     (13,614     (17,524     (16,167
 

 

 

 

Net cash provided by (used for) operating activities

    11,807,148        11,825,946        (738,347     (1,107,414
 

 

 

 
       
Cash Provided by (Used for) Financing Activities   

Proceeds from TOB Trust Certificates

           4,296,503        7,477,032        6,076,172   

Repayments of TOB Trust Certificates

           (6,345,855     (21,045     (15,235

Proceeds from Loan for TOB Trust Certificates

           1,894,812        21,045        15,235   

Repayments of Loan for TOB Trust Certificates

           (1,894,812     (21,045     (15,235

Cash dividends paid to Common Shareholders

    (11,738,432     (9,606,190     (6,621,522     (4,890,364

Increase (decrease) in bank overdraft

    (68,716     (175,432     (96,118     (63,159

Amortization of deferred offering costs

           5,028                 
 

 

 

 

Net cash provided by (used for) financing activities

    (11,807,148     (11,825,946     738,347        1,107,414   
 

 

 

 
       
Cash   

Net increase in cash

                           

Cash at beginning of period

                           
 

 

 

 

Cash at end of period

                           
 

 

 

 
       
Supplemental Disclosure of Cash Flow Information   

Cash paid during the period for interest expense

  $ 337,031      $ 1,336,682      $ 945,757      $ 652,652   
 

 

 

 
       
Non-Cash Financing Activities   

Capital shares issued in reinvestment of distributions paid to Common Shareholders

    812,598        669,394        397,132        230,727   
 

 

 

 

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    75


Statements of Cash Flows     

 

Six Months Ended October 31, 2016 (Unaudited)   BlackRock
MuniHoldings
Quality
Fund, Inc.
(MUS)
    BlackRock
Muni Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Cash Provided by (Used for) Operating Activities                        

Net increase in net assets resulting from operations

  $ 1,628,417      $ 5,408,024      $ 4,269,294   

Adjustments to reconcile net increase in net assets
resulting from operations to net cash provided by (used for) operating activities:

   

Proceeds from sales of long-term investments

    16,475,766        20,931,339        17,787,446   

Purchases of long-term investments

    (18,536,311     (23,106,685     (24,435,521

Net proceeds from sales (purchases) of short-term securities

    (203,817     (579,706     600,026   

Amortization of premium and accretion of discount on investments and other fees

    386,282        2,940,014        547,970   

Net realized (gain) loss on investments

    (179,988     (618,241     912,046   

Net unrealized (gain) loss on investments

    3,701,651        8,871,581        5,106,209   

(Increase) Decrease in Assets:

  

Cash pledged for futures contracts

    (7,000     49,000        (66,000

Receivables:

  

Interest — unaffiliated

    (4,557     (553,254     (10,748

Dividends — affiliated

    (172     2,571        208   

Prepaid expenses

    (21,421     23,821        20,881   

Increase (Decrease) in Liabilities:

  

Payables:

  

Investment advisory fees

    3,071        14,212        9,013   

Interest expense and fees

    28,825        82,665        100,257   

Officer’s and Directors’ fees

    345        18,635        574   

Variation margin on futures contracts

    6,852        (10,203     8,265   

Other accrued expenses

    (15,776     (8,461     (14,419
 

 

 

 

Net cash provided by (used for) operating activities

    3,262,167        13,465,312        4,835,501   
 

 

 

 
     
Cash Provided by (Used for) Financing Activities                        

Proceeds from TOB Trust Certificates

    1,387,678               4,806,687   

Repayments of TOB Trust Certificates

    (502,847            (187,138

Proceeds from Loan for TOB Trust Certificates

    502,679                 

Repayments of Loan for TOB Trust Certificates

    (502,679              

Cash dividends paid to Common Shareholders

    (5,184,652     (13,135,619     (9,294,280

Decrease in bank overdraft

           (329,693     (160,770

Amortization of deferred offering costs

                    
 

 

 

 

Net cash provided by (used for) financing activities

    (4,299,821     (13,465,312     (4,835,501
 

 

 

 
     
Cash                        

Net decrease in cash

    (1,037,654              

Cash at beginning of period

    1,037,654                 
 

 

 

 

Cash at end of period

                    
 

 

 

 
     
Supplemental Disclosure of Cash Flow Information                        

Cash paid during the period for interest expense

  $ 802,222      $ 2,502,836      $ 1,428,762   
 

 

 

 
     
Non-Cash Financing Activities                        

Capital shares issued in reinvestment of distributions paid to Common Shareholders

    85,253               876,456   
 

 

 

 

 

 

See Notes to Financial Statements.      
                
76    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Financial Highlights    BlackRock MuniAssets Fund, Inc. (MUA)

 

    Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended April 30,  
      2016     2015     2014     2013     2012  
           
Per Share Operating Performance   

Net asset value, beginning of period

  $ 14.45      $ 14.12      $ 13.56      $ 14.36      $ 13.47      $ 12.14   
 

 

 

 

Net investment income1

    0.36        0.72        0.73        0.77        0.77        0.76   

Net realized and unrealized gain (loss)

    0.01        0.35        0.59        (0.82     0.90        1.32   
 

 

 

 

Net increase (decrease) from investment operations

    0.37        1.07        1.32        (0.05     1.67        2.08   
 

 

 

 

Distributions from net investment income2

    (0.35     (0.74     (0.76     (0.75     (0.78     (0.75
 

 

 

 

Net asset value, end of period

  $ 14.47      $ 14.45      $ 14.12      $ 13.56      $ 14.36      $ 13.47   
 

 

 

 

Market price, end of period

  $ 14.34      $ 14.74      $ 14.22      $ 12.85      $ 13.96      $ 13.15   
 

 

 

 
           
Total Return3    

Based on net asset value

    2.53% 4      7.90%        10.11%        0.47%        12.70%        17.90%   
 

 

 

 

Based on market price

    (0.39)% 4      9.30%        17.02%        (2.06)%        12.22%        23.99%   
 

 

 

 
           
Ratios to Average Net Assets   

Total expenses

    0.86% 5      0.81%        0.82%        0.82%        0.83%        0.77%   
 

 

 

 

Total expenses after fees waived and paid indirectly

    0.86% 5      0.81%        0.82%        0.82%        0.83%        0.77%   
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense and fees6

    0.69% 5      0.70%        0.71%        0.70%        0.71%        0.70%   
 

 

 

 

Net investment income

    4.83% 5      5.09%        5.24%        5.84%        5.52%        6.00%   
 

 

 

 
           
Supplemental Data   

Net assets, end of period (000)

  $  519,362      $  517,697      $  505,341      $  485,319      $  513,923      $  481,598   
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 66,087      $ 66,087      $ 61,066      $ 71,145      $ 76,451      $ 61,510   
 

 

 

 

Portfolio turnover rate

    5%        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   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Interest expense and fees relate to TOB Trusts. See Note 4 of the Notes to Financial Statements for details.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    77


Financial Highlights    BlackRock MuniEnhanced Fund, Inc. (MEN)

 

    Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended April 30,  
      2016     2015     2014     2013     2012  
           
Per Share Operating Performance   

Net asset value, beginning of period

  $ 12.52      $ 12.27      $ 11.94      $ 12.63      $ 12.12      $ 10.30   
 

 

 

 

Net investment income1

    0.32        0.70        0.71        0.73        0.71        0.69   

Net realized and unrealized gain (loss)

    (0.17     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

    0.15        0.98        1.06        0.03        1.21        2.51   
 

 

 

 

Distributions to Common Shareholders from net investment income3

    (0.34     (0.73     (0.73     (0.72     (0.70     (0.69
 

 

 

 

Net asset value, end of period

  $ 12.33      $ 12.52      $ 12.27      $ 11.94      $ 12.63      $ 12.12   
 

 

 

 

Market price, end of period

  $ 11.86      $ 12.55      $ 11.67      $ 11.27      $ 12.65      $ 11.66   
 

 

 

 
           
Total Return Applicable to Common Shareholders4    

Based on net asset value

    1.20% 5      8.50%        9.49%        1.06%        10.16%        25.12%   
 

 

 

 

Based on market price

    (2.89)% 5      14.35%        10.33%        (4.76)%        14.69%        24.11%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders   

Total expenses

    1.64% 6      1.44%        1.44%        1.50%        1.49% 7      1.70% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.64% 6      1.44%        1.43%        1.50%        1.49% 7      1.70% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs8

    0.88% 6      0.90%        0.91%        0.92%        0.96% 7,9      1.35% 7,9 
 

 

 

 

Net investment income

    5.10% 6      5.71%        5.76%        6.37%        5.65% 7      6.12% 7 
 

 

 

 

Distributions to AMPS Shareholders

                                       0.03%   
 

 

 

 

Net investment income to Common Shareholders

    5.10% 6      5.71%        5.76%        6.37%        5.65%        6.09%   
 

 

 

 
           
Supplemental Data   

Net assets applicable to Common Shareholders, end of period (000)

  $  365,558      $  370,342      $  362,703      $  352,878      $  373,259      $  357,017   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 142,500      $ 142,500      $ 142,500      $ 142,500      $ 142,500      $ 142,500   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of period

  $ 356,532      $ 359,889      $ 354,528      $ 347,633      $ 361,936      $ 350,538   
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 65,110      $ 67,160      $ 76,094      $ 73,379      $ 81,244      $ 69,282   
 

 

 

 

Portfolio turnover rate

    4%        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   

Aggregate total return.

 

  6   

Annualized.

 

  7   

Does not reflect the effect of dividends to AMPS Shareholders.

 

  8   

Interest expense, fees and amortization of offering costs related to TOBs and/or VRDP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details.

 

  9   

For the year ended April 30, 2013 and April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity, and remarketing fees were 0.91% and 0.98%, respectively.

 

 

See Notes to Financial Statements.      
                
78    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Financial Highlights    BlackRock MuniHoldings Fund, Inc. (MHD)

 

    Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended April 30,  
      2016     2015     2014     2013     2012  
           
Per Share Operating Performance   

Net asset value, beginning of period

  $ 17.95      $ 17.59      $ 16.85      $ 18.12      $ 17.36      $ 14.67   
 

 

 

 

Net investment income1

    0.48        1.00        1.03        1.04        1.07        1.12   

Net realized and unrealized gain (loss)

    (0.25     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

    0.23        1.42        1.80        (0.18     2.07        3.78   
 

 

 

 
Distributions to Common Shareholders:2            

From net investment income

    (0.49     (1.06     (1.06     (1.08     (1.12     (1.09

From net realized gain

                         (0.01     (0.19       
 

 

 

 

Total distributions to Common Shareholders

    (0.49     (1.06     (1.06     (1.09     (1.31     (1.09
 

 

 

 

Net asset value, end of period

  $ 17.69      $ 17.95      $ 17.59      $ 16.85      $ 18.12      $ 17.36   
 

 

 

 

Market price, end of period

  $ 16.75      $ 18.14      $ 17.25      $ 16.01      $ 18.20      $ 18.08   
 

 

 

 
           
Total Return Applicable to Common Shareholders3    

Based on net asset value

    1.26% 4      8.65%        11.22%        (0.15)%        12.20%        26.57%   
 

 

 

 

Based on market price

    (5.12)% 4      11.91%        14.80%        (5.55)%        8.21%        33.28%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders   

Total expenses

    1.78% 5      1.53%        1.50%        1.64%        1.60%        1.41% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.78% 5      1.53%        1.50%        1.64%        1.60%        1.41% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    0.98% 5      0.99%        0.99%        1.04%        1.02%        1.09% 6,8 
 

 

 

 

Net investment income

    5.22% 5      5.75%        5.86%        6.48%        5.92%        6.95% 6 
 

 

 

 

Distributions to AMPS Shareholders

                                       0.09%   
 

 

 

 

Net investment income to Common Shareholders

    5.22% 5      5.75%        5.86%        6.48%        5.92%        6.86%   
 

 

 

 
           
Supplemental Data   

Net assets applicable to Common Shareholders, end of period (000)

  $  250,528      $  253,864      $  248,646      $  238,113      $  255,911      $  243,989   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 83,700      $ 83,700      $ 83,700      $ 83,700      $ 83,700      $ 83,700   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 399,317      $ 403,302      $ 397,068      $ 384,484      $ 405,748      $ 391,505   
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 67,745      $ 60,289      $ 56,784      $ 60,238      $ 69,753      $ 61,758   
 

 

 

 

Portfolio turnover rate

    4%        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   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Does not reflect the effect of dividends to AMPS Shareholders.

 

  7   

Interest expense, fees and amortization of offering costs related to TOBs and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details.

 

  8   

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.05%.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    79


Financial Highlights    BlackRock MuniHoldings Fund II, Inc. (MUH)

 

    Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended April 30,  
      2016     2015     2014     2013     2012  
           
Per Share Operating Performance   

Net asset value, beginning of period

  $ 16.51      $ 16.21      $ 15.61      $ 16.93      $ 16.23      $ 13.74   
 

 

 

 

Net investment income1

    0.44        0.91        0.93        0.95        0.98        1.03   

Net realized and unrealized gain (loss)

    (0.23     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

    0.21        1.24        1.57        (0.22     1.90        3.47   
 

 

 

 
Distributions to Common Shareholders:2            

From net investment income

    (0.45     (0.94     (0.97     (1.00     (1.04     (0.98

From net realized gain

                         (0.10     (0.16       
 

 

 

 

Total distributions to Common Shareholders

    (0.45     (0.94     (0.97     (1.10     (1.20     (0.98
 

 

 

 

Net asset value, end of period

  $ 16.27      $ 16.51      $ 16.21      $ 15.61      $ 16.93      $ 16.23   
 

 

 

 

Market price, end of period

  $ 15.41      $ 16.23      $ 15.28      $ 14.84      $ 16.75      $ 16.46   
 

 

 

 
           
Total Return Applicable to Common Shareholders3    

Based on net asset value

    1.26% 4      8.25%        10.64%        (0.40)%        11.99%        26.08%   
 

 

 

 

Based on market price

    (2.44)% 4      12.90%        9.71%        (4.30)%        9.25%        31.60%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders   

Total expenses

    1.75% 5      1.50%        1.48%        1.61%        1.59%        1.37% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.75% 5      1.50%        1.48%        1.61%        1.59%        1.37% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    0.99% 5      1.00%        1.00%        1.04%        1.03%        1.07% 6,8 
 

 

 

 

Net investment income

    5.18% 5      5.66%        5.76%        6.36%        5.81%        6.81% 6 
 

 

 

 

Distributions to AMPS Shareholders

                                       0.05%   
 

 

 

 

Net investment income to Common Shareholders

    5.18% 5      5.66%        5.76%        6.36%        5.81%        6.76%   
 

 

 

 
           
Supplemental Data   

Net assets applicable to Common Shareholders, end of period (000)

  $  184,107      $  186,553      $  183,214      $  176,395      $  191,366      $  182,624   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 55,000      $ 55,000      $ 55,000      $ 55,000      $ 55,000      $ 55,000   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 434,740      $ 439,188      $ 433,117      $ 420,718      $ 447,938      $ 432,044   
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 52,164      $ 46,103      $ 43,568      $ 48,497      $ 56,354      $ 48,273   
 

 

 

 

Portfolio turnover rate

    4%        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   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Does not reflect the effect of dividends to AMPS Shareholders.

 

  7   

Interest expense, fees and amortization of offering costs related to TOBs and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details.

 

  8   

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.03%.

 

 

See Notes to Financial Statements.      
                
80    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Financial Highlights    BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

    Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended April 30,  
      2016     2015     2014     2013     2012  
           
Per Share Operating Performance   

Net asset value, beginning of period

  $ 14.84      $ 14.57      $ 14.18      $ 15.31      $ 14.61      $ 12.48   
 

 

 

 

Net investment income1

    0.38        0.80        0.80        0.82        0.83        0.89   

Net realized and unrealized gain (loss)

    (0.25     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

    0.13        1.08        1.20        (0.31     1.59        3.02   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (0.41     (0.81     (0.81     (0.82     (0.89     (0.89
 

 

 

 

Net asset value, end of period

  $ 14.56      $ 14.84      $ 14.57      $ 14.18      $ 15.31      $ 14.61   
 

 

 

 

Market price, end of period

  $ 13.56      $ 14.31      $ 13.32      $ 12.88      $ 14.92      $ 14.52   
 

 

 

 
           
Total Return Applicable to Common Shareholders3    

Based on net asset value

    0.87% 4      8.24%        9.20%        (1.07)%        11.06%        24.96%   
 

 

 

 

Based on market price

    (2.58)% 4      14.09%        9.91%        (7.78)%        8.90%        25.90%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders   

Total expenses

    1.86% 5      1.60%        1.59%        1.75%        1.80%        1.49% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.83% 5      1.58%        1.57%        1.67%        1.72%        1.41% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    0.98% 5      0.99%        0.99%        0.99%        1.00%        1.06% 6,8 
 

 

 

 

Net investment income

    5.04% 5      5.49%        5.49%        6.00%        5.48%        6.50% 6 
 

 

 

 

Distributions to AMPS Shareholders

                                       0.08%   
 

 

 

 

Net investment income to Common Shareholders

    5.04% 5      5.49%        5.49%        6.00%        5.48%        6.42%   
 

 

 

 
           
Supplemental Data   

Net assets applicable to Common Shareholders, end of period (000)

  $ 189,554      $ 193,110      $ 189,594      $ 184,479      $ 199,236      $ 189,567   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 87,000      $ 87,000      $ 87,000      $ 87,000      $ 87,000      $ 87,000   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $  317,878      $  321,966      $  317,924      $  312,045      $  329,007      $  317,893   
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 25,313      $ 24,429      $ 21,937      $ 25,187      $ 48,934      $ 41,631   
 

 

 

 

Portfolio turnover rate

    6%        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  

Aggregate total return.

 

  5  

Annualized.

 

  6  

Does not reflect the effect of dividends to AMPS Shareholders.

 

  7  

Interest expense, fees and amortization of offering costs related to TOBs and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details.

 

  8  

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.01%.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    81


Financial Highlights    BlackRock Muni Intermediate Duration Fund, Inc.  (MUI)

 

    Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended April 30,  
      2016     2015     2014     2013     2012  
           
Per Share Operating Performance   

Net asset value, beginning of period

  $ 16.16      $ 15.86      $ 15.64      $ 16.60      $ 16.21      $ 14.45   
 

 

 

 

Net investment income1

    0.33        0.73        0.77        0.80        0.82        0.86   

Net realized and unrealized gain (loss)

    (0.18     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

    0.15        1.26        1.04        (0.05     1.39        2.62   
 

 

 

 
Distributions to Common Shareholders:2            

From net investment income

    (0.34     (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

    (0.34     (0.96     (0.82     (0.91     (1.00     (0.86
 

 

 

 

Net asset value, end of period

  $ 15.97      $ 16.16      $ 15.86      $ 15.64      $ 16.60      $ 16.21   
 

 

 

 

Market price, end of period

  $ 14.48      $ 15.19      $ 14.47      $ 14.55      $ 16.12      $ 16.45   
 

 

 

 
           
Total Return Applicable to Common Shareholders3    

Based on net asset value

    1.05% 4      9.04%        7.27%        0.50%        8.78%        18.74%   
 

 

 

 

Based on market price

    (2.53)% 4      12.27%        5.20%        (3.73)%        4.09%        27.56%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders   

Total expenses

    1.77% 5      1.57%        1.52%        1.65%        1.91%        1.88%   
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.77% 5      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 costs6

    0.94% 5      0.94%        0.96%        1.00%        1.35% 7      1.65% 7 
 

 

 

 

Net investment income to Common Shareholders

    4.05% 5      4.61%        4.82%        5.28%        4.93%        5.58%   
 

 

 

 
           
Supplemental Data   

Net assets applicable to Common Shareholders, end of period (000)

  $  611,435      $  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 period (000)

  $ 287,100      $ 287,100      $ 287,100      $ 287,100      $ 287,100          
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 312,969      $ 315,594      $ 311,578      $ 308,661      $ 321,405          
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 63,102      $ 63,102      $ 52,932      $ 69,070      $ 105,939      $ 81,430   
 

 

 

 

Portfolio turnover rate

    2%        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   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Interest expense, fees and amortization of offering costs related to TOBs and/or VMTP 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 0.98% and 0.99%, respectively.

 

 

See Notes to Financial Statements.      
                
82    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Financial Highlights    BlackRock MuniVest Fund II, Inc. (MVT)

 

    Six Months Ended
October 31,
2016
(Unaudited)
    Year Ended April 30,  
      2016     2015     2014     2013     2012  
           
Per Share Operating Performance   

Net asset value, beginning of period

  $ 16.17      $ 16.01      $ 15.45      $ 16.69      $ 15.91      $ 13.47   
 

 

 

 

Net investment income1

    0.46        0.98        0.99        1.03        1.06        1.12   

Net realized and unrealized gain (loss)

    (0.26     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

    0.20        1.16        1.60        (0.16     1.88        3.51   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (0.48     (1.00     (1.04     (1.08     (1.10     (1.07
 

 

 

 

Net asset value, end of period

  $ 15.89      $ 16.17      $ 16.01      $ 15.45      $ 16.69      $ 15.91   
 

 

 

 

Market price, end of period

  $ 16.13      $ 17.38      $ 16.26      $ 15.16      $ 17.31      $ 16.75   
 

 

 

 
           
Total Return Applicable to Common Shareholders3    

Based on net asset value

    1.14% 4      7.61%        10.65%        (0.37)%        11.95%        26.86%   
 

 

 

 

Based on market price

    (4.48)% 4      13.88%        14.52%        (5.74)%        10.28%        31.13%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders   

Total expenses

    1.79% 5      1.52%        1.50%        1.63%        1.66%        1.41% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.79% 5      1.52%        1.50%        1.63%        1.66%        1.41% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    0.91% 5      0.92%        0.92%        0.96%        0.96%        1.04% 6,8 
 

 

 

 

Net investment income

    5.62% 5      6.15%        6.17%        6.93%        6.43%        7.57% 6 
 

 

 

 

Distributions to AMPS Shareholders

                                       0.15%   
 

 

 

 

Net investment income to Common Shareholders

    5.62% 5      6.15%        6.17%        6.93%        6.43%        7.42%   
 

 

 

 
           
Supplemental Data   

Net assets applicable to Common Shareholders, end of period (000)

  $  335,808      $  340,753      $  336,320      $  324,146      $  348,998      $  330,941   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 140,000      $ 140,000      $ 140,000      $ 140,000      $ 140,000      $ 140,000   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 339,863      $ 343,395      $ 340,229      $ 331,533      $ 349,284      $ 336,386   
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 73,815      $ 69,195      $ 66,439      $ 66,715      $ 99,386      $ 88,540   
 

 

 

 

Portfolio turnover rate

    3%        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   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Does not reflect the effect of dividends to AMPS Shareholders.

 

  7   

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.

 

  8   

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.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    83


Notes to Financial Statements (Unaudited)     

 

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 Boards 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 Trust 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. 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: The Funds have adopted the Financial Accounting Standards Board Accounting Standards Updates, “Simplifying the Presentation of Debt Issuance Costs.” Under the new standard, 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. This change in accounting policy had no impact on the net assets of the Funds.

 

                
84    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Notes to Financial Statements (continued)     

 

The deferred offering costs that are now presented as a deduction from the VRDP Shares at liquidation value in the Statements of Assets and Liabilities and amortization included in interest expense, fees and amortization of offering costs in the Statements of Operations were as follows:

 

     MEN  

Deferred offering costs

  $ 197,766   

Amortization of deferred offering costs

  $ 5,028   

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.

Through May 31, 2016, the Funds had an arrangement with their custodian whereby credits were earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. Credits previously earned may be utilized until December 31, 2016. Under current arrangements effective June 1, 2016, the Funds no longer earn credits on uninvested cash, and may incur charges on uninvested cash balances and overdrafts, subject to certain conditions.

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). 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 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 investments, 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 and 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 methodologies 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

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    85


Notes to Financial Statements (continued)     

 

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. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 Investments include equity or debt issued by privately-held companies. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

Changes in valuation methodologies 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 Trust” 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 adviser 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 six months ended October 31, 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 restrict the ability of a Fund to borrow money for purposes of making investments. MUA, MEN and MVT management believes that a Fund’s restrictions on

 

                
86    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Notes to Financial Statements (continued)     

 

borrowings do not apply to the Funds’ TOB Trust transactions. 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 pursuant to the liquidity facility 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 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, 2017, 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 in which no banking entity would sponsor the TOB Trust. Specifically, a Fund establishes, structures and “sponsors” the TOB Trusts in which it holds TOB Residuals. In such a structure, certain responsibilities that previously belonged to a third party bank are 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 new or restructured non-bank sponsored 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 pursuant to the liquidity facility 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 Trust 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 non-bank sponsored TOB Trusts, 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 six months ended October 31, 2016, the following table is a summary of each Fund’s TOB Trusts:

 

    

Underlying

Municipal

Bonds

Transferred to
TOB Trusts1

     Liability for
TOB Trust
Certificates2
     Range of
Interest Rates
on TOB Trust
Certificates at
Period End
     Average TOB
Trust
Certificates
Outstanding
    

Daily
Weighted

Average

Rate of Interest
and Other
Expenses on
TOB Trusts

 

MUA

  $ 121,965,226       $ 66,086,523         0.66% - 1.00%       $ 66,086,523         1.26%   

MEN

  $ 120,489,383       $ 65,110,308         0.66% - 1.23%       $ 64,529,282         1.19%   

MHD

  $ 119,589,081       $ 67,744,850         0.66% - 1.23%       $ 63,549,795         1.19%   

MUH

  $ 91,207,268       $ 52,164,040         0.66% - 1.23%       $ 48,733,320         1.19%   

MUS

  $ 49,336,142       $ 25,313,395         0.66% - 0.83%       $ 24,829,704         1.24%   

MUI

  $ 115,072,934       $ 63,101,848         0.66% - 0.71%       $ 63,101,848         1.14%   

MVT

  $ 136,387,704       $ 73,814,588         0.66% - 1.23%       $ 71,492,840         1.21%   

 

  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 Trust 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 maximum potential amounts owed by the Funds, for such reimbursements, as applicable, are included in the maximum potential amounts disclosed for recourse TOB Trusts.

 

  2   

The Funds may invest in TOB Trusts that are structured on a non-recourse or recourse basis. When a Fund invests in TOB Trusts on a non-recourse basis, the Liquidity Provider may be required to make a payment under the liquidity facility. In such an event, the Liquidity Provider will typically either (i) fund the full amount owed under the liquidity facility and be subsequently reimbursed from only the proceeds of the liquidation of all or a portion of the municipal bonds held in the TOB Trust or the remarketing of the TOB Trust Certificates, or (ii) 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, a Fund will usually enter into a reimbursement agreement with the Liquidity

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    87


Notes to Financial Statements (continued)     

 

  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 October 31, 2016, in proportion to their participation in the TOB Trust. The recourse TOB Trusts are identified in the Schedules of Investments including the maximum potential amounts owed by a Fund at October 31, 2016.

For the six months ended October 31, 2016, the following table is a summary of each Fund’s Loan for TOB Trust Certificates:

 

     Loans
Outstanding at
Period End
     Range of
Interest Rates
on Loans at
Period End
     Average Loans
Outstanding
     Daily
Weighted
Average
Rate of Interest
and  Other
Expenses on
Loans
 

MEN

                  $ 95,896         0.78%   

MHD

                  $ 6,176         0.78%   

MUH

                  $ 4,471         0.78%   

MUS

                  $ 2,732         0.78%   

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 credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation 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”).

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), changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange 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, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract.

Securities deposited as initial margin are designated 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 adviser, 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 at an annual rate equal at the following percentages of the average daily value of each Fund’s net assets.

 

     MUA      MEN      MHD      MUH      MUS      MVT  

Investment Advisory Fee

    0.55%         0.50%         0.55%         0.55%         0.55%         0.50%   

For such services, 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.

For purposes of calculating these fees, “net assets” mean the total assets of the Fund minus the sum of its accrued liabilities (which does not include liabilities represented by TOB Trusts and the liquidation preference of preferred shares). It is understood that the liquidation preference of any outstanding preferred stock (other than accumulated dividends) and TOB Trusts is not considered a liability in determining a Fund’s net asset value.

 

                
88    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Notes to Financial Statements (continued)     

 

Waivers: With respect to the Funds, 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 six months ended October 31, 2016, the amounts waived were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Amounts waived

  $ 627       $ 930       $ 828       $ 820       $ 295       $ 2,921       $ 811   

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 six months ended October 31, 2016 the waiver was $20,576.

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.

7. Purchases and Sales:

For the six months ended October 31, 2016, purchases and sales of investments excluding short-term securities, were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Purchases

  $ 27,873,510       $ 27,059,192       $ 22,332,591       $ 17,219,893       $ 19,961,259       $ 25,276,625       $ 23,054,558   

Sales

  $ 30,308,195       $ 25,681,772       $ 14,319,495       $ 11,557,251       $ 16,941,304       $ 23,676,339       $ 17,990,276   

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 of 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 generally 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 October 31, 2016, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

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.

As of October 31, 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

  $ 461,288,666       $ 454,579,077       $ 292,771,548       $ 209,100,196       $ 249,045,035       $ 826,804,114       $ 420,475,724   
 

 

 

 

Gross unrealized appreciation

  $ 56,060,691       $ 53,911,731       $ 39,973,795       $ 28,678,618       $ 31,413,220       $ 62,669,437       $ 50,643,235   

Gross unrealized depreciation

    (6,013,366      (1,387,372      (1,546,888      (790,624      (3,603,413      (2,112,868      (958,384
 

 

 

 

Net unrealized appreciation

  $ 50,047,325       $ 52,524,359       $ 38,426,907       $ 27,887,994       $ 27,809,807       $ 60,556,569       $ 49,684,851   
 

 

 

 

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.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    89


Notes to Financial Statements (continued)     

 

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.

It is possible that regulators could take positions that could limit the market for non-bank sponsored 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 Trust transactions may adversely affect the Funds’ net investment income and dividends to Common Shareholders. Also, fluctuations in the market value of municipal bonds deposited into the TOB Trust may adversely affect the Funds’ NAVs per share.

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 and Risk Retention Rules 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 Trust 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

 

                
90    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Notes to Financial Statements (continued)     

 

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 its assets in securities in the transportation and the country, city, special district, school district sectors. MUI and MVT invested a significant portion of their assets in securities in the transportation sector. Changes in economic conditions affecting such sectors would have a greater impact on the Fund 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:

 

     MUA      MEN      MHD      MUH      MUS      MVT  

Six Months Ended October 31, 2016

    55,344         52,845         21,843         13,780         5,658         52,560   

Year Ended April 30, 2016

    42,352         25,792         7,978                         67,729   

For the six months ended October 31, 2016 and year ended April 30, 2016 for MUI, shares issued and outstanding remained constant.

Preferred Shares

Each Fund’s Preferred Shares rank prior to the Funds’ Common Shares as to the payment of dividends by the Funds 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 liquidation preference of the Funds’ 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 Funds’ 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.

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 to the Board of 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 preference per share, in privately negotiated offerings. 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 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 they fail to comply with certain asset coverage, basic maintenance amount or leverage requirements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    91


Notes to Financial Statements (continued)     

 

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 preference per share plus any outstanding unpaid dividends.

Liquidity Feature: MEN entered into a fee agreement with the liquidity provider that requires an upfront 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 MEN and the liquidity provider was scheduled to expire on July 7, 2016 unless renewed or terminated in advance. In May 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 any 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 six months ended October 31, 2016, the annualized dividend rate for the VRDP Shares was 1.44%.

Special Rate Period: On June 20, 2012, MEN commenced an approximate three-year term initially scheduled to expire on June 24, 2015 (the “special rate period”) 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. Prior to 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 to remarketable securities upon the termination of the special rate period and will be remarketed and available for purchase by qualified institutional investors.

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 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 will 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 end of the special rate period and the VRDP Shares have long-term ratings above A1/A+ and its equivalent by all ratings 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.

For the six months ended October 31, 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 privately negotiated offerings 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.

 

                
92    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Notes to Financial Statements (continued)     

 

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 redemption 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 the 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 comply with 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 each 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 a Fund redeems the VMTP Shares prior to the term redemption date and the VMTP Shares have long-term ratings above A1/A+ or its equivalent by the ratings 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 ratings 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 complying with certain asset coverage and leverage requirements.

For the six months ended October 31, 2016, the average annualized dividend rates for the VMTP Shares were as follows:

 

     MHD      MUH      MUS      MUI      MVT  

Rate

    1.54%         1.54%         1.54%         1.54%         1.54%   

For the six months ended October 31, 2016, VMTP Shares issued and outstanding of each Fund remained constant.

Offering Costs: The Funds incurred costs in connection with the issuance of VRDP Shares, which were recorded as a direct deduction from the carrying value of the related debt liability and will be amortized over the 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. 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 MUI’s 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 were recorded as a deferred charge and will be amortized over the life of the VMTP Shares.

Financial Reporting: The VRDP and VMTP Shares are considered debt of the issuer; therefore, the liquidation preference, which approximates fair value of the VRDP and VMTP Shares, is recorded as a liability in the Statements of Assets and Liabilities net of deferred offering costs. 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.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    93


Notes to Financial Statements (concluded)     

 

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:

 

     Common Dividend Per Share     Preferred Shares3  
     Paid1      Declared2     Shares      Series      Declared  

MUA

  $ 0.0575       $ 0.0575                          

MEN

  $ 0.0565       $ 0.0565        VRDP         W-7       $ 170,260   

MHD

  $ 0.0810       $ 0.0810        VMTP         W-7       $ 106,866   

MUH

  $ 0.0745       $ 0.0745        VMTP         W-7       $ 70,223   

MUS

  $ 0.0675       $ 0.0675        VMTP         W-7       $ 111,080   

MUI

  $ 0.0555       $ 0.0555        VMTP         W-7       $ 366,562   

MVT

  $ 0.0790       $ 0.0790        VMTP         W-7       $ 178,749   

 

  1   

Net investment income dividend paid on December 1, 2016 to Common Shareholders of record on November 15, 2016.

 

  2   

Net investment income dividend declared on December 1, 2016, payable to Common Shareholders of record on December 12, 2016.

 

  3   

Dividends declared for period November 1, 2016 to November 30, 2016.

 

     Common Distribution Per Share  
     Declared4      Declared5      Declared6  

MUA

  $ 0.002893                   

MEN

  $ 0.001183                   

MUI

  $ 0.001592       $ 0.040478       $ 0.102667   

MVT

  $ 0.001677                   

 

  4   

Special taxable net investment income distribution declared on December 1, 2016, payable to Common Shareholders of record on December 12, 2016.

 

  5   

Special short-term capital gain distribution declared on December 1, 2016, payable to Common Shareholders of record on December 12, 2016.

 

  6   

Special long-term capital gain distribution declared on December 1, 2016, payable to Common Shareholders of record on December 12, 2016.

 

                
94    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Disclosure of Investment Advisory Agreements and Sub-Advisory Agreement

 

The Board of Directors (each, a “Board,” collectively, the “Boards,” and the members of which are referred to as “Board Members”) of 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”) and BlackRock MuniVest Fund II, Inc. (“MVT,” and together with MUA, MEN, MHD, MUH, MUS and MUI, each a “Fund,” and, collectively, the “Funds”) met in person on April 28, 2016 (the “April Meeting”) and June 9-10, 2016 (the “June Meeting”) to consider the approval of each Fund’s investment advisory agreement (each, an “Advisory Agreement,” and, collectively, the “Advisory Agreements”) with BlackRock Advisors, LLC (the “Manager”), each Fund’s investment advisor. The Manager is referred to herein as “BlackRock.” The Advisory Agreements are also referred to herein as the “Agreements.”

Activities and Composition of the Board

On the date of the June Meeting, the Board of each Fund consisted of eleven individuals, nine of whom were not “interested persons” of such Fund as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of their respective Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chair of each Board is an Independent Board Member. Each Board has established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee, and an Executive Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Executive Committee, which also has one interested Board Member).

The Agreements

Pursuant to the 1940 Act, each Board is required to consider the continuation of its Advisory Agreement on an annual basis. The Boards have four quarterly meetings per year, each extending over two days, a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreements and additional in-person and telephonic meetings as needed. In connection with this year-long deliberative process, the Boards assessed, among other things, the nature, extent and quality of the services provided to the Funds by BlackRock, BlackRock’s personnel and affiliates, including, as applicable; investment management, administrative, and shareholder services; the oversight of fund service providers; marketing; risk oversight; compliance; and ability to meet applicable legal and regulatory requirements.

The Boards, acting directly and through their respective committees, consider at each of their meetings, and from time to time as appropriate, factors that are relevant to their annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Funds and their shareholders. BlackRock also furnished additional information to the Boards in response to specific questions from the Boards. This additional information is discussed further below in the section titled “Board Considerations in Approving the Agreements.” Among the matters the Boards considered were: (a) investment performance for one-year, three-year, five-year, ten-year, and/or since inception periods, as applicable, against peer funds, applicable benchmarks, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over-performance or underperformance relative to its peers, benchmarks, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, paid to BlackRock and its affiliates by the Funds for services; (c) Fund operating expenses and how BlackRock allocates expenses to the Funds; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Funds’ investment objective(s), policies and restrictions, and meeting regulatory requirements; (e) the Funds’ compliance with their compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Boards; (i) execution quality of portfolio transactions; (j) BlackRock’s implementation of the Funds’ valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, closed-end fund and institutional account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Funds; (l) BlackRock’s compensation methodology for its investment professionals and the incentives and accountability it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.

The Board of each of MEN, MHD, MUH, MUS, MUI and MVT considered BlackRock’s efforts during the past several years with regard to the redemption of outstanding auction rate preferred securities (“AMPS”). As of the date of this report, each of MEN, MHD, MUH, MUS, MUI and MVT has redeemed all of its outstanding AMPS.

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April Meeting, the Boards requested and received materials specifically relating to the Agreements. The Boards are continuously engaged in a process with their independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist their deliberations. The materials provided in connection with the April Meeting included (a) information independently compiled and prepared by Broadridge Financial Solutions, Inc. (“Broadridge”) on Fund fees and expenses as compared with a peer group of funds as determined by Broadridge (“Expense Peers”) and the investment performance of each Fund as compared with a peer group of funds as determined by Broadridge1 and a customized peer group selected by BlackRock (“Customized Peer Group”); (b) information on the profits realized by BlackRock and its affiliates pursuant to the

 

1    Funds are ranked by Broadridge in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    95


Disclosure of Investment Advisory Agreements and Sub-Advisory Agreement (continued)

 

Agreements and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients, sub-advised mutual funds, and open-end funds, under similar investment mandates, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; and (f) a summary of aggregate amounts paid by each Fund to BlackRock.

At the April Meeting, the Boards reviewed materials relating to their consideration of the Agreements. As a result of the discussions that occurred during the April Meeting, and as a culmination of the Boards’ year-long deliberative process, the Boards presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the June Meeting.

At the June Meeting, each Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its Fund for a one-year term ending June 30, 2017. In approving the continuation of the Agreements, the Boards considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Funds; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Funds; (d) the Funds’ costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance metrics as previously discussed; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of its relationship with the Funds; and (g) other factors deemed relevant by the Board Members.

The Boards also considered other matters they deemed important to the approval process, such as other payments made to BlackRock or its affiliates relating to securities lending and cash management, services related to the valuation and pricing of Fund portfolio holdings, and advice from independent legal counsel with respect to the review process and materials submitted for the Boards’ review. The Boards noted the willingness of BlackRock personnel to engage in open, candid discussions with the Boards. The Boards did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Boards, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of the Funds. Throughout the year, the Boards compared the Funds’ performance to the performance of a comparable group of closed-end funds, relevant benchmark, and performance metrics, as applicable. The Boards met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. Each Board also reviewed the materials provided by its Fund’s portfolio management team discussing the Fund’s performance and the Fund’s investment objective(s), strategies and outlook.

The Boards considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and their Funds’ portfolio management teams; BlackRock’s research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Boards engaged in a review of BlackRock’s compensation structure with respect to the Funds’ portfolio management teams and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.

In addition to investment advisory services, the Boards considered the quality of the administrative and other non-investment advisory services provided to the Funds. BlackRock and its affiliates provide the Funds with certain administrative, shareholder, and other services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In particular, BlackRock and its affiliates provide the Funds with administrative services including, among others: (i) preparing disclosure documents, such as the prospectus and the statement of additional information in connection with the initial public offering and periodic shareholder reports; (ii) preparing communications with analysts to support secondary market trading of the Funds; (iii) oversight of daily accounting and pricing; (iv) preparing periodic filings with regulators and stock exchanges; (v) overseeing and coordinating the activities of other service providers; (vi) organizing Board meetings and preparing the materials for such Board meetings; (vii) providing legal and compliance support; (viii) furnishing analytical and other support to assist the Boards in their consideration of strategic issues such as the merger, consolidation or repurposing of certain closed-end funds; and (ix) performing other administrative functions necessary for the operation of the Funds, such as tax reporting, fulfilling regulatory filing requirements and call center services. The Boards reviewed the structure and duties of BlackRock’s fund administration, shareholder services, and legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Funds and BlackRock: Each Board, including the Independent Board Members, also reviewed and considered the performance history of its Fund. In preparation for the April Meeting, the Boards were provided with reports independently prepared by Broadridge, which included a comprehensive analysis of each Fund’s performance. The Boards also reviewed a narrative and statistical analysis of the Broadridge data that was prepared by BlackRock. In connection with its review, each Board received and reviewed information regarding the investment performance, based on net asset value (NAV), of its Fund as compared to other funds in its applicable Broadridge category and the Customized Peer Group. The Boards were provided with a description of the methodology used by Broadridge to select peer funds and periodically met with Broadridge representatives to review its methodology. The Boards were provided with information on the composition of the Broadridge performance universes and expense universes. Each Board and its Performance Oversight Committee regularly review, and meet with Fund management to discuss, the performance of its Fund throughout the year.

 

                
96    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Disclosure of Investment Advisory Agreements and Sub-Advisory Agreement (continued)

 

In evaluating performance, the Boards recognized that the performance data reflects a snapshot of a period as of a particular date and that selecting a different performance period could produce significantly different results. Further, the Boards recognized that it is possible that long-term performance can be adversely affected by even one period of significant underperformance so that a single investment decision or theme has the ability to affect long-term performance disproportionately.

The Board of MUA noted that for the one-, three- and five-year periods reported, MUA ranked first out of three funds, second out of three funds and second out of three funds, respectively, against its Customized Peer Group Composite.

The Board of MEN noted that for the one-, three- and five-year periods reported, MEN ranked in the second, first and second quartiles, respectively, against its Customized Peer Group Composite.

The Board of MHD noted that for the one-, three- and five-year periods reported, MHD ranked in the second, first and first quartiles, respectively, against its Customized Peer Group Composite.

The Board of MUH noted that for the one-, three- and five-year periods reported, MUH ranked in the third, first and first quartiles, respectively, against its Customized Peer Group Composite. The Board of MUH and BlackRock reviewed and discussed the reasons for MUH’s underperformance during the one-year period.

The Board of MUI noted that for the one-, three- and five-year periods reported, MUI ranked in the second, second and first quartiles, respectively, against its Customized Peer Group Composite.

The Board of MVT noted that for the one-, three- and five-year periods reported, MVT ranked in the second, first and first quartiles, respectively, against its Customized Peer Group Composite.

The Board of MUS noted that for each of the one-, three- and five-year periods reported, MUS ranked in the second quartile, against its Customized Peer Group Composite.

BlackRock believes that the Customized Peer Group Composite is an appropriate performance metric for each of the Funds in that it ranks the Fund’s performance on a blend of total return and yield.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Funds: Each Board, including the Independent Board Members, reviewed its Fund’s contractual management fee rate compared with the other funds in its Broadridge category. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. Each Board also compared its Fund’s total expense ratio, as well as its actual management fee rate as a percentage of total assets, to those of other funds in its Broadridge category. The total expense ratio represents a fund’s total net operating expenses, excluding any investment related expenses. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual management fee rate gives effect to any management fee reimbursements or waivers that benefit a fund. The Boards considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds (including mutual funds sponsored by third parties).

The Boards received and reviewed statements relating to BlackRock’s financial condition. The Boards reviewed BlackRock’s profitability methodology and were also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Funds. The Boards reviewed BlackRock’s profitability with respect to the Funds and other funds the Boards currently oversee for the year ended December 31, 2015 compared to available aggregate profitability data provided for the prior two years. The Boards reviewed BlackRock’s profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Boards reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Boards recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at an individual fund level is difficult.

The Boards noted that, in general, individual fund or product line profitability of other advisors is not publicly available. The Boards reviewed BlackRock’s overall operating margin, in general, compared to that of certain other publicly-traded asset management firms. The Boards considered the differences between BlackRock and these other firms, including the contribution of technology at BlackRock, BlackRock’s expense management, and the relative product mix.

In addition, the Boards considered the cost of the services provided to the Funds by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management of the Funds and the other funds advised by BlackRock and its affiliates. As part of their analysis, the Boards reviewed BlackRock’s methodology in allocating its costs of managing the Funds, to the Funds. The Boards may receive and review information from independent third parties as part of their annual evaluation. The Boards considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    97


Disclosure of Investment Advisory Agreements and Sub-Advisory Agreement (concluded)

 

Boards. The Boards further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk, and liability profile in servicing the Funds in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, closed-end fund, sub-advised mutual fund and institutional account product channels, as applicable.

The Board of MUA noted that MUA’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio each ranked in the first quartile, respectively, relative to its Expense Peers.

The Board of each of MEN, MVT, and MHD noted that its respective Fund’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio ranked in the first and second quartiles, respectively, relative to the Fund’s Expense Peers.

The Board of each of MUI, MUH, and MUS noted that its respective Fund’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio ranked in the second and first quartiles, respectively, relative to the Fund’s Expense Peers.

D. Economies of Scale: Each Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of its Fund increase. Each Board also considered the extent to which its Fund benefits from such economies in a variety of ways, and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable its Fund to more fully participate in these economies of scale. Each Board considered its Fund’s asset levels and whether the current fee was appropriate.

Based on the Boards’ review and consideration of the issue, the Boards concluded that most closed-end funds do not have fund level breakpoints because closed-end funds generally do not experience substantial growth after the initial public offering. They are typically priced at scale at a fund’s inception.

E. Other Factors Deemed Relevant by the Board Members: The Boards, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Funds, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Funds, including for administrative, securities lending and cash management services. The Boards also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Boards also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts. The Boards further noted that they had considered the investment by BlackRock’s funds in affiliated exchange traded funds (i.e., ETFs) without any offset against the management fees payable by the funds to BlackRock.

In connection with their consideration of the Agreements, the Boards also received information regarding BlackRock’s brokerage and soft dollar practices. The Boards received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.

The Boards noted the competitive nature of the closed-end fund marketplace, and that shareholders are able to sell their Fund shares in the secondary market if they believe that the Funds’ fees and expenses are too high or if they are dissatisfied with the performance of the Funds.

The Boards also considered the various notable initiatives and projects BlackRock performed in connection with its closed-end fund product line. These initiatives included the redemption of AMPS for the BlackRock closed-end funds with AMPS outstanding; developing equity shelf programs; efforts to eliminate product overlap with fund mergers; ongoing services to manage leverage that has become increasingly complex; periodic evaluation of share repurchases and other support initiatives for certain BlackRock funds; and continued communications efforts with shareholders, fund analysts and financial advisers. With respect to the latter, the Independent Board Members noted BlackRock’s continued commitment to supporting the secondary market for the common shares of its closed-end funds through a comprehensive secondary market communication program designed to raise investor and analyst awareness and understanding of closed-end funds. BlackRock’s support services included, among other things: continuing communications concerning the redemption efforts related to AMPS; sponsoring and participating in conferences; communicating with closed-end fund analysts covering the BlackRock funds throughout the year; providing marketing and product updates for the closed-end funds; and maintaining and enhancing its closed-end fund website.

Conclusion

Each Board, including the Independent Board Members, unanimously approved the continuation of its Advisory Agreement between the Manager and its Fund for a one-year term ending June 30, 2017. Based upon its evaluation of all of the aforementioned factors in their totality, as well as other information, each Board, including the Independent Board Members, was satisfied that the terms of the Advisory Agreement were fair and reasonable and in the best interest of its Fund and its shareholders. In arriving at its decision to approve the Advisory Agreement for its Fund, each Board did not identify any single factor or group of factors as, all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for the Funds reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.

 

                
98    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Officers and Directors     

 

Richard E. Cavanagh, Chair of the Board and Director

Karen P. Robards, Vice Chair of the Board and Director

Michael J. Castellano, Director

Cynthia L. Egan, Director

Frank J. Fabozzi, Director

Jerrold B. Harris, Director

R. Glenn Hubbard, Director

W. Carl Kester, Director

Catherine A. Lynch, Director

Barbara G. Novick, Director

John M. Perlowski, Director, President and Chief Executive Officer

Jonathan Diorio, Vice President

Neal J. Andrews, Chief Financial Officer

Jay M. Fife, Treasurer

Charles Park, Chief Compliance Officer

Janey Ahn, Secretary

 

As of the date of this report:

 

 

The portfolio managers of MEN are Michael Kalinoski and Walter O’Connor.

 

 

The portfolio managers of MUS are Ted Jaeckel and Phillip Soccio.

 

 

The portfolio managers of MUI are Timothy Browse and Walter O’Connor.

 

         

Investment Adviser

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.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    99


Additional Information     

 

Proxy Results      

The Annual Meeting of Shareholders was held on July 26, 2016 for shareholders of record on May 31, 2016, to elect director nominees for each Fund. There were no broker non-votes with regard to any of the Funds.

Approved the Directors as follows:

 

     

Catherine A. Lynch1

  

Richard E. Cavanagh2

  

Cynthia L. Egan2

      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain

MUA

   33,124,874    1,056,655    0    33,078,329    1,103,199    0    33,143,713    1,037,816    0
    

Jerrold B. Harris2

  

Barbara G. Novick2

              
      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain               

MUA

   32,851,662    1,329,866    0    33,174,838    1,006,691    0         

For the Fund listed above, Directors whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are Michael J. Castellano, Frank J. Fabozzi, R. Glenn Hubbard, W. Carl Kester, John M. Perlowski, and Karen P. Robards.

 

  1   

Class II.

 

  2   

Class III.

Approved the Directors as follows:

 

     

Michael J. Castellano

  

Richard E. Cavanagh

  

Cynthia L. Egan

      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain

MEN

   27,522,348    449,419    0    27,464,505    507,262    0    27,514,002    457,765    0

MHD

   13,184,732    195,988    0    13,167,386    213,334    0    13,133,695    247,025    0

MUH

   10,464,249    343,608    0    10,462,742    345,115    0    10,457,650    350,207    0

MUS

   12,114,171    397,453    0    12,113,175    398,449    0    12,237,000    274,624    0

MUI

   34,813,159    1,832,102    0    34,742,226    1,903,035    0    34,843,932    1,801,329    0

MVT

   19,593,518    423,743    0    19,659,761    357,500    0    19,560,177    457,085    0
    

Frank J. Fabozzi1

  

Jerrold B. Harris

  

R. Glenn Hubbard

      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain

MEN

   1,425    0    0    27,405,376    566,391    0    27,503,000    468,767    0

MHD

   837    0    0    13,132,170    248,550    0    13,127,967    252,753    0

MUH

   550    0    0    10,449,193    358,664    0    10,472,527    335,330    0

MUS

   870    0    0    12,081,050    430,574    0    12,202,223    309,401    0

MUI

   2,871    0    0    34,704,598    1,940,663    0    34,815,888    1,829,373    0

MVT

   1,400    0    0    19,621,346    395,915    0    19,606,156    411,106    0
    

W. Carl Kester1

  

Catherine A. Lynch

  

Barbara G. Novick

      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain

MEN

   1,425    0    0    27,529,875    441,892    0    27,529,262    442,505    0

MHD

   837    0    0    13,158,600    222,120    0    13,165,594    215,126    0

MUH

   550    0    0    10,465,909    341,948    0    10,447,990    359,867    0

MUS

   870    0    0    12,250,371    261,253    0    12,248,749    262,875    0

MUI

   2,871    0    0    34,853,173    1,792,088    0    34,835,340    1,809,921    0

MVT

   1,400    0    0    19,530,512    486,749    0    19,629,635    387,626    0
    

John M. Perlowski

  

Karen P. Robards

    
      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain               

MEN

   27,493,018    478,749    0    27,520,838    450,929    0         

MHD

   13,185,349    195,371    0    13,153,218    227,502    0         

MUH

   10,457,811    350,046    0    10,467,451    340,406    0         

MUS

   12,185,305    326,319    0    12,250,842    260,782    0         

MUI

   34,824,366    1,820,895    0    34,830,426    1,814,835    0         

MVT

   19,663,162    354,099    0    19,585,650    431,612    0         

 

  ¹   Voted on by holders of Preferred Shares only.

 

                
100    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


Additional Information (continued)     

 

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.

 

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. Other than as noted on page 105, there have been no changes in the persons who are primarily responsible for the day-to-day management of the Funds’ portfolios.

Effective September 26, 2016, BlackRock implemented a new methodology for calculating “effective duration” for BlackRock’s municipal bond portfolios. The new methodology replaces the model previously used by BlackRock to evaluate municipal bond duration and is a common indicator of an investment’s sensitivity to interest rate movements. The new methodology will be applied to each Fund’s duration reported for periods after September 26, 2016.

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Funds, including each Fund’s effective duration and additional information about the new methodology, may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. Any reference to BlackRock’s website in this report 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 Advisers, Banks or Brokerages:

Please contact your financial advisor. Please note that not all investment advisers, banks or brokerages may offer this service.

Householding

The Funds will mail only one copy of shareholder documents, 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.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2016    101


Additional Information (concluded)     

 

 

General Information (concluded)

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.

 

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.

 

October 31, 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

  $ 0.347500                 $ 0.347500        100                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.

 

                
102    SEMI-ANNUAL REPORT    OCTOBER 31, 2016   


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

 

CEMUNI7-10/16-SAR    LOGO


Item 2 – Code of Ethics – Not Applicable to this semi-annual report

Item 3 – Audit Committee Financial Expert – Not Applicable to this semi-annual report

Item 4 – Principal Accountant Fees and Services – Not Applicable to this semi-annual report

Item 5 – Audit Committee of Listed Registrants – Not Applicable to this semi-annual report

Item 6 – Investments

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.

(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

 

Item 7 –  Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable to this semi-annual report

 

Item 8 –  Portfolio Managers of Closed-End Management Investment Companies
  (a) Not Applicable to this semi-annual report
  (b) As of the date of this filing, there have been no changes in any of the portfolio managers identified in the most recent annual report on Form N-CSR.

 

Item 9 –  Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable

 

Item 10 –  Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.

Item 11 – Controls and Procedures

(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12 – Exhibits attached hereto

(a)(1) – Code of Ethics – Not Applicable to this semi-annual report

(a)(2) – Certifications – Attached hereto

(a)(3) – Not Applicable

(b) – Certifications – Attached hereto

 

2


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BlackRock MuniHoldings Fund, Inc.
By:      

/s/ John M. Perlowski                                

 

John M. Perlowski

 

Chief Executive Officer (principal executive officer) of

 

BlackRock MuniHoldings Fund, Inc.

Date: January 4, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:      

/s/ John M. Perlowski                                

 

John M. Perlowski

 

Chief Executive Officer (principal executive officer) of

 

BlackRock MuniHoldings Fund, Inc.

Date: January 4, 2017

 

By:      

/s/ Neal J. Andrews                                 

 

Neal J. Andrews

 

Chief Financial Officer (principal financial officer) of

 

BlackRock MuniHoldings Fund, Inc.

Date: January 4, 2017

 

3