BlackRock Muni Intermediate Duration Fund, Inc.
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number: 811-21348

Name of Fund:   BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

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

Intermediate Duration 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: 04/30/2014

Date of reporting period: 04/30/2014


Table of Contents

Item 1 – Report to Stockholders


Table of Contents

APRIL 30, 2014

 

 

 

 

 

ANNUAL REPORT

 

    LOGO

 

BlackRock MuniAssets Fund, Inc. (MUA)

BlackRock MuniEnhanced Fund, Inc. (MEN)

BlackRock MuniHoldings Fund, Inc. (MHD)

BlackRock MuniHoldings Fund II, Inc. (MUH)

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

BlackRock MuniVest Fund II, Inc. (MVT)

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents
Table of Contents     

 

     Page  

Shareholder Letter

    3   

Annual Report:

 

Municipal Market Overview

    4   

The Benefits and Risks of Leveraging

    5   

Derivative Financial Instruments

    5   

Fund Summaries

    6   
Financial Statements:  

Schedules of Investments

    20   

Statements of Assets and Liabilities

    66   

Statements of Operations

    68   

Statements of Changes in Net Assets

    69   

Statements of Cash Flows

    73   

Financial Highlights

    75   

Notes to Financial Statements

    82   

Report of Independent Registered Public Accounting Firm

    91   

Automatic Dividend Reinvestment Plan

    92   

Officers and Directors

    93   

Additional Information

    96   

 

                
2    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Shareholder Letter

 

Dear Shareholder,

Markets have remained highly attuned to potential changes in U.S. monetary policy over the past year. This was markedly evident one year ago in May of 2013 when then-Federal Reserve Chairman Bernanke first mentioned the possibility of reducing (or “tapering”) the central bank’s asset purchase programs — comments that were widely misinterpreted as signaling an end to the Fed’s zero-interest-rate policy. U.S. Treasury yields rose sharply following his comments, triggering a steep sell-off across fixed income markets. (Bond prices move in the opposite direction of yields.) Global equities also suffered as investors feared the implications of a potential end to a program that had greatly supported stocks. Emerging markets, which are more sensitive to changes in global liquidity, were especially hurt by the prospect of ebbing cash flows from the United States. Markets broadly rebounded in late June, however, when the Fed’s tone turned more dovish. At the same time, improving economic indicators and better corporate earnings helped extend gains through most of the summer.

Although the tone of economic and financial news was mixed last autumn, it was a surprisingly positive period for most asset classes. Early on, the Fed defied market expectations with its decision to delay tapering, but higher volatility returned in late September 2013 when the U.S. Treasury Department warned that the national debt would soon breach its statutory maximum. The ensuing political brinksmanship led to a partial government shutdown, roiling global financial markets through the first half of October. Equities and other so-called “risk assets” managed to resume their rally when politicians finally engineered a compromise to reopen the government and extend the debt ceiling.

The remainder of 2013 was a generally positive period for stock markets in the developed world, although investors continued to grapple with uncertainty about when and how much the Fed would scale back on stimulus. When the Fed ultimately announced its tapering plans in mid-December, markets reacted positively, as this action signaled the Fed’s perception of real improvement in the economy, and investors were finally released from the anxiety that had gripped them for quite some time.

The start of the new year brought a stark change in sentiment. Heightened volatility in emerging markets — driven by reduced global liquidity, severe currency weakness, high levels of debt and uneven growth — combined with mixed U.S. economic data caused global equities to weaken in January while bond markets found renewed strength from investors seeking relatively safer assets. Although these headwinds persisted, equities were back on the rise in February as investors were encouraged by a one-year extension of the U.S. debt ceiling and market-friendly comments from new Fed Chair Janet Yellen. While U.S. economic data had softened, investors were assuaged by increasing evidence that this was a temporary trend resulting from harsher-than-usual winter weather.

In the final months of the period, signs of decelerating growth in China and geopolitical tensions in Russia and Ukraine made for a bumpy ride, but markets continued their climb as investors focused on improving U.S. economic data, stronger corporate earnings and a still-dovish central bank. Within developed markets, investors shifted from growth to value stocks as the strong performance of growth stocks in 2013 had pushed valuations higher in many of these sectors. Emerging markets also benefited from this broad rotation into cheaper valuations and were further supported by an improving growth outlook for a number of developing countries.

Even though investors were gearing up for a modest shift toward tighter monetary policy from the Fed, equity markets in the developed world posted solid gains for the six- and 12-month periods ended April 30. Emerging markets, however, experienced increased volatility amid heightened risks for the asset class. Interest rate uncertainty posed a headwind for fixed income assets, and higher-quality sectors of the market performed poorly over the reporting period. Conversely, high yield bonds benefited from income-oriented investors’ search for yield in the overall low-rate environment. Short-term interest rates remained near zero, keeping yields on money market securities close to historic lows.

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

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

  In a modest global growth environment, expectations around monetary policy changes continued to be a key theme in financial market performance.

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of April 30, 2014  
    6-month     12-month  

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

    8.36     20.44

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

    3.08        20.50   

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

    4.44        13.35   

Emerging market equities (MSCI Emerging
Markets Index)

    (2.98     (1.84

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

    0.03        0.06   

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

    0.88        (5.25

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

    1.74        (0.26

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

    4.24        0.46   

U.S. high yield bonds

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

    4.72        6.28   
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.    

 

                
   THIS PAGE NOT PART OF YOUR FUND REPORT       3


Table of Contents
Municipal Market Overview     

 

For the Reporting Period Ended April 30, 2014      

Municipal Market Conditions

After a strong start to 2013, the municipal market was upturned as investors reacted to statements issued by the U.S. Federal Reserve in May and June relating to the eventual reduction of its bond-buying stimulus program (which ultimately took effect in January 2014). The prospect of U.S. monetary policy tightening sooner than previously expected led to a sharp rise in interest rates and waning municipal bond performance. (Bond prices fall as rates rise.) Municipal bond mutual funds saw strong outflows through the remainder of 2013, before investors again sought the relative safety of the asset class in the New Year. For the 12-month period ended April 30, 2014, net outflows were approximately $60 billion (based on data from the Investment Company Institute).

High levels of interest rate volatility, particularly on the long-end of the curve resulted in a sharp curtailment of tax-exempt issuance in May of 2013 through the end of the period. However, from a historical perspective, total new issuance for the 12 months ended April 30, 2014 remained relatively strong at $300 billion (but meaningfully lower than the $388 billion issued in the prior 12-month period). A significant portion of new supply during this period was attributable to refinancing activity (roughly 40%) as issuers took advantage of lower interest rates to reduce their borrowing costs.

S&P Municipal Bond Index

Total Returns as of April 30, 2014

  6 months :   4.24%

12 months :   0.46%

A Closer Look at Yields

LOGO

From April 30, 2013 to April 30, 2014, muni yields increased by 65 basis points (“bps”) from 2.84% to 3.49% on AAA-rated 30-year municipal bonds, while increasing 61 bps from 1.69% to 2.30% on 10-year bonds and rising another 49 bps from 0.74% to 1.23% on 5-year issues (as measured by Thomson Municipal Market Data). Overall, the municipal yield curve remained relatively steep over the 12-month period as the spread between 2- and 30-year maturities widened by 59 bps and the spread between 2- and 10-year maturities widened by 55 bps.

During the same time period, U.S. Treasury rates rose by 58 bps on 30-year and 98 bps on 10-year bonds, while moving up 100 bps in 5-years. Accordingly, tax-exempt municipal bonds underperformed Treasuries on the long end of the yield curve as investors sought to reduce interest rate risk later in the period. On the short and intermediate parts of the curve, the outperformance of municipal bonds versus Treasuries was driven largely by a supply/demand imbalance within the municipal market and a rotation from long-duration assets (which are more sensitive to interest rate movements) into short- and intermediate-duration investments (which are less sensitive to interest rate movements). Additionally, municipal bonds benefited from the increased appeal of tax-exempt investing in the new higher tax rate environment. The asset class is known for its lower relative volatility and preservation of principal with an emphasis on income as tax rates rise. The municipal market continues to be an attractive avenue for investors seeking yield in today’s environment. However, opportunities have not been as broad-based as in 2011 and 2012, warranting a more tactical approach going forward.

Financial Conditions of Municipal Issuers Continue to Improve

Following an extended period of nation-wide austerity and de-leveraging as states sought to balance their budgets, 15 consecutive quarters of positive revenue growth coupled with the elimination of more than 750,000 jobs in recent years have put state and local governments in a better financial position. Many local municipalities, however, continue to face increased health care and pension costs passed down from the state level. BlackRock maintains the view that municipal bond defaults will be minimal and remain in the periphery, and that the overall market is fundamentally sound. We continue to recognize that careful credit research, appropriate structure and security selection remain imperative amid uncertainty in a modestly improving economic environment.

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

 

                
4    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
The Benefits and Risks of Leveraging     

 

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

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

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

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

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

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 (“TOBs”) as described in the Notes to Financial Statements.

Under the Investment Company Act of 1940 (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.

 

 

Derivative Financial Instruments     

 

The Funds may invest in various derivative financial instruments, including financial futures contracts, as specified in Note 4 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to hedge market and/or interest rate risks. Derivative financial instruments involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The Funds’ ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may require a Fund to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation a Fund can realize on an investment, may result in lower dividends paid to shareholders and/or may cause a Fund to hold an investment that it might otherwise sell. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    5


Table of Contents
Fund Summary as of April 30, 2014    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. or BBB or lower by Standard & Poor’s Corporation) or non-rated securities which are of comparable quality. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance      
Ÿ  

For the 12-month period ended April 30, 2014, the Fund returned (2.06)% based on market price and 0.47% based on NAV. For the same period, the closed-end Lipper High Yield Municipal Debt Funds category posted an average return of (3.45)% based on market price and 0.09% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund benefited from holding unrated and non-investment grade bonds, which exhibited superior performance compared to investment grade bonds during the period. The Fund’s concentrations in project finance, development district and corporate-related debt also had a positive impact on results. The Fund’s more seasoned holdings possessing high coupons generated a high level of income while exhibiting low volatility over the 12-month period.

 

Ÿ  

As interest rates moved sharply higher early in the period, the Fund’s duration exposure (sensitivity to interest rate movements) was the most significant detractor from performance. (Bond prices fall when rates rise.) Modest exposure to Detroit municipal bonds hurt results. In the beginning of the period, the Fund’s exposure to Puerto Rico government-related credits, although limited, was a detractor from results as credit spreads on these bonds widened materially due to investors’ lack of confidence and a weak local economy. The Fund sold its exposure to these underperforming securities, but later in the period, purchased a different bond with more attractive characteristics. The Fund’s state and local tax-backed and transportation holdings generally produced negative returns. Additionally, the Fund’s higher quality holdings incurred mild price declines over the period.

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

 

Fund Information      

Symbol on New York Stock Exchange (“NYSE”)

   MUA

Initial Offering Date

   June 25, 1993

Yield on Closing Market Price as of April 30, 2014 ($12.85)1

   5.84%

Tax Equivalent Yield2

   10.32%

Current Monthly Distribution per Common Share3

   $0.0625

Current Annualized Distribution per Common Share3

   $0.7500

Economic Leverage as of April 30, 20144

   13%

 

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

 

                
6    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
     BlackRock MuniAssets Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              
           
        4/30/14        4/30/13        Change      High        Low  

Market Price

     $ 12.85         $ 13.96           (7.95 )%     $ 14.00         $ 11.13   

Net Asset Value

     $ 13.56         $ 14.36           (5.57 )%     $ 14.39         $ 12.53   

 

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

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    4/30/14     4/30/13  

Health

     23     25

Transportation

     20        21   

County/City/Special District/School District

     16        15   

Corporate

     14        14   

Utilities

     12        12   

Tobacco

     6        4   

Education

     5        5   

State

     4        4   
Credit Quality Allocation1    4/30/14     4/30/13  

AAA/Aaa

            1

AA/Aa

     21     20   

A

     9        11   

BBB/Baa

     27        28   

BB/Ba

     7        4   

B

     9        7   

CCC/Caa

            1   

Not Rated2

     27        28   

 

  1   

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

 

  2   

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of April 30, 2014 and April 30, 2013, the market value of these securities was $21,133,957, and $22,305,427, each representing 4%, respectively, of the Fund’s long-term investments.

 
Call/Maturity Schedule3  

Calendar Year Ended December 31,

  

2014

     14

2015

     3   

2016

     3   

2017

     5   

2018

     11   

 

  3   

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

 

                
   ANNUAL REPORT    APRIL 30, 2014    7


Table of Contents
Fund Summary as of April 30, 2014    BlackRock MuniEnhanced Fund, Inc.

 

Fund Overview      

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

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

 

Performance      
Ÿ  

For the 12-month period ended April 30, 2014, the Fund returned (4.76)% based on market price and 1.06% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of (5.00)% based on market price and (0.78)% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund benefited from the accrual of income generated from coupon payments on its municipal bond holdings. Additionally, short positions in U.S. Treasury futures contracts used to manage interest rate risk had a positive impact on the Fund’s performance for the period.

 

Ÿ  

The largest detractor from performance was the Fund’s duration exposure (sensitivity to interest rate movements) as tax-exempt municipal rates increased significantly during the first half of the period. (Bond prices fall when rates rise.) During the second half of the period, however, intermediate and long-term rates fell, resulting in less significant rate increases for the overall annual period. The Fund’s exposure to the long-end of the yield curve also detracted from performance, especially in the first half of the period when shorter rates (two to five years) rose less than long rates (twenty years and longer). In the beginning of the period, the Fund’s exposure to Puerto Rico government-related credits, although limited, was a detractor from results as credit spreads on these bonds widened materially due to investors’ lack of confidence and a weak local economy. The Fund sold its exposure to these securities early in the period.

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

 

Fund Information      

Symbol on NYSE

   MEN

Initial Offering Date

   March 2, 1989

Yield on Closing Market Price as of April 30, 2014 ($11.27)1

   6.44%

Tax Equivalent Yield2

   11.38%

Current Monthly Distribution per Common Share3

   $0.0605

Current Annualized Distribution per Common Share3

   $0.7260

Economic Leverage as of April 30, 20144

   38%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
8    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
     BlackRock MuniEnhanced Fund, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                              
           
        4/30/14        4/30/13        Change      High        Low  

Market Price

     $ 11.27         $ 12.65           (10.91 )%     $ 13.25         $ 9.96   

Net Asset Value

     $ 11.94         $ 12.63           (5.46 )%     $ 12.67         $ 10.68   

 

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

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    4/30/14     4/30/13  

County/City/Special District/School District

     24     22

State

     22        20   

Transportation

     19        24   

Utilities

     15        14   

Education

     8        7   

Health

     8        9   

Corporate

     2        2   

Housing

     2        2   
Credit Quality Allocation1    4/30/14     4/30/13  

AAA/Aaa

     13     14

AA/Aa

     58        57   

A

     25        25   

BBB/Baa

     4        3   

B

            1   

 

  1   

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

   
Call/Maturity Schedule2        

Calendar Year Ended December 31,

  

2014

     5

2015

     7   

2016

     4   

2017

     12   

2018

     11   

 

  2   

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

 

                
   ANNUAL REPORT    APRIL 30, 2014    9


Table of Contents
Fund Summary as of April 30, 2014    BlackRock MuniHoldings Fund, Inc.

 

Fund Overview

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

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

 

Performance

 

Ÿ  

For the 12-month period ended April 30, 2014, the Fund returned (5.55)% based on market price and (0.15)% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of (5.00)% based on market price and (0.78)% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

As interest rates moved sharply higher early in the period, the Fund’s duration exposure (sensitivity to interest rate movements) was the most significant detractor from performance. (Bond prices fall when rates rise.) The Fund’s state and local tax-backed and transportation holdings generally produced slightly negative returns for the period. In the beginning of the period, the Fund’s exposure to Puerto Rico government-related credits, although limited, was a detractor from results as credit spreads on these bonds widened materially due to investors’ lack of confidence and a weak local economy. The Fund sold its exposure to these securities during the period. Additionally, the Fund’s holdings of higher quality investment grade bonds generated modestly negative returns.

 

Ÿ  

During a period in which interest rates increased in the earlier half and declined in the latter half, the additional income afforded by the Fund’s use of leverage, a persistently low cost of borrowing and the Fund’s emphasis on credit exposure helped mitigate much of the market-related volatility. The Fund benefited from holding unrated as well as low investment grade and non-investment grade bonds, which exhibited superior performance compared to higher quality investment grade bonds during the period. The Fund’s concentrations in education, school district, utilities and corporate-related debt also had a positive impact on 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.

 

Fund Information

Symbol on NYSE

   MHD

Initial Offering Date

   May 2, 1997

Yield on Closing Market Price as of April 30, 2014 ($16.01)1

   6.63%

Tax Equivalent Yield2

   11.71%

Current Monthly Distribution per Common Share3

   $0.0885

Current Annualized Distribution per Common Share3

   $1.0620

Economic Leverage as of April 30, 20144

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

 

                
10    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
     BlackRock MuniHoldings Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                                        
           
      4/30/14      4/30/13      Change      High      Low  

Market Price

     $16.01         $18.20         (12.03)%         $18.21         $14.17   

Net Asset Value

     $16.85         $18.12         (7.01)%         $18.17         $14.84   

 

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

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    4/30/14     4/30/13  

Transportation

     22     22

Health

     19        21   

County/City/Special District/School District

     13        13   

State

     13        13   

Utilities

     10        12   

Corporate

     10        7   

Education

     9        9   

Tobacco

     3        1   

Housing

     1        2   
Credit Quality Allocation1    4/30/14     4/30/13  

AAA/Aaa

     9     9

AA/Aa

     39        42   

A

     29        29   

BBB/Baa

     11        9   

BB/Ba

     3        1   

B

     3        3   

Not Rated2

     6        7   

 

  1   

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

 

  2   

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of April 30, 2014 and April 30, 2013, the market value of these securities was $4,061,128, representing 1%, and $7,320,539, representing 2%, respectively, of the Fund’s long-term investments.

   
Call/Maturity Schedule3        

Calendar Year Ended December 31,

  

2014

     9

2015

     1   

2016

     3   

2017

     5   

2018

     6   

 

  3   

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

 

                
   ANNUAL REPORT    APRIL 30, 2014    11


Table of Contents
Fund Summary as of April 30, 2014    BlackRock MuniHoldings Fund II, Inc.

 

Fund Overview      

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

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

 

Performance      

 

Ÿ  

For the 12-month period ended April 30, 2014, the Fund returned (4.30)% based on market price and (0.40)% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of (5.00)% based on market price and (0.78)% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

As interest rates moved sharply higher early in the period, the Fund’s duration exposure (sensitivity to interest rate movements) was the most significant detractor from performance. (Bond prices fall when rates rise.) The Fund’s state and local tax-backed and transportation holdings generally produced slightly negative returns for the period. In the beginning of the period, the Fund’s exposure to Puerto Rico government-related credits, although limited, was a detractor from results as credit spreads on these bonds widened materially due to investors’ lack of confidence and a weak local economy. The Fund sold its exposure to these securities during the period. Additionally, the Fund’s various holdings of mid-tier quality investment grade bonds generated modestly negative returns.

 

Ÿ  

During a period in which interest rates increased in the earlier half and declined in the latter half, the additional income afforded by the Fund’s use of leverage, a persistently low cost of borrowing and the Fund’s emphasis on credit exposure helped mitigate much of the market-related volatility. The Fund benefited from holding unrated as well as low investment grade and non-investment grade bonds, which exhibited superior performance compared to higher quality investment grade bonds during the period. The Fund’s concentrations in health care, school district, utilities, project finance and corporate-related debt also had a positive impact on 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.

 

Fund Information      

Symbol on NYSE

   MUH

Initial Offering Date

   February 27, 1998

Yield on Closing Market Price as of April 30, 2014 ($14.84)1

   6.71%

Tax Equivalent Yield2

   11.86%

Current Monthly Distribution per Common Share3

   $0.083

Current Annualized Distribution per Common Share3

   $0.996

Economic Leverage as of April 30, 20144

   37%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
12    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
     BlackRock MuniHoldings Fund II, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                                        
           
      4/30/14      4/30/13      Change      High      Low  

Market Price

     $14.84         $16.75         (11.40)%         $16.87         $13.06   

Net Asset Value

     $15.61         $16.93         (7.80)%         $16.98         $13.93   

 

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

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation   4/30/14     4/30/13  

Health

    21     20

Transportation

    19        21   

County/City/Special District/School District

    15        17   

State

    14        15   

Utilities

    10        10   

Education

    10        8   

Corporate

    7        7   

Tobacco

    3        1   

Housing

    1        1   
Credit Quality Allocation1    4/30/14     4/30/13  

AAA/Aaa

     9     9

AA/Aa

     43        48   

A

     26        26   

BBB/Baa

     11        8   

BB/Ba

     2          

B

     3        2   

CCC/Caa

            1   

Not Rated2

     6        6   

 

  1   

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

 

  2   

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of April 30, 2014 and April 30, 2013, the market value of these securities was $15,305,545, representing 6%, and $7,446,854, representing 2%, respectively, of the Fund’s long-term investments.

 

   
Call/Maturity Schedule3        

Calendar Year Ended December 31,

  

2014

     8

2015

     1   

2016

     4   

2017

     6   

2018

     7   

 

  3   

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

 

                
   ANNUAL REPORT    APRIL 30, 2014    13


Table of Contents
Fund Summary as of April 30, 2014    BlackRock MuniHoldings Quality Fund, Inc.

 

Fund Overview

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

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

 

Performance      
Ÿ  

For the 12-month period ended April 30, 2014, the Fund returned (7.78)% based on market price and (1.07)% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of (5.00)% based on market price and (0.78)% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund’s longer duration holdings (those with greater sensitivity to interest rate movements) and exposure to the long-end of the yield curve had a negative impact on performance as interest rates moved sharply higher and the municipal yield curve steepened significantly during the first half of the period, with shorter rates (two to five years) increasing less than long rates (twenty years and longer). This especially impacted the Fund’s holdings in the tax-backed, utilities, transportation and education sectors. During the second half of the period, however, intermediate and long-term rates fell, resulting in less significant rate increases for the overall annual period. In the beginning of the period, the Fund’s exposure to Puerto Rico government-related credits was a detractor from results as credit spreads on these bonds widened materially due to investors’ lack of confidence and a weak local economy. The Fund sold its exposure to these securities early in the period.

 

Ÿ  

The Fund benefited from maintaining short positions in U.S. Treasury futures contracts used to manage interest rate risk. Additionally, the Fund’s holdings in pre-refunded bonds with terms of up to five years helped performance.

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

 

Fund Information

Symbol on NYSE

   MUS

Initial Offering Date

   May 1, 1998

Yield on Closing Market Price as of April 30, 2014 ($12.88)1

   6.29%

Tax Equivalent Yield2

   11.11%

Current Monthly Distribution per Common Share3

   $0.0675

Current Annualized Distribution per Common Share3

   $0.8100

Economic Leverage as of April 30, 20144

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

 

                
14    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
     BlackRock MuniHoldings Quality Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      
           
        4/30/14        4/30/13        Change      High        Low  

Market Price

     $ 12.88         $ 14.92           (13.67 )%     $ 15.08         $ 11.33   

Net Asset Value

     $ 14.18         $ 15.31           (7.38 )%     $ 15.37         $ 12.67   

 

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

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    4/30/14     4/30/13  

Transportation

     33     26

County/City/Special District/School District

     27        27   

Utilities

     19        17   

Health

     9        9   

State

     7        13   

Education

     2        6   

Housing

     2        1   

Tobacco

     1        1   
Credit Quality Allocation1    4/30/14     4/30/13  

AAA/Aaa

     6     11

AA/Aa

     67        55   

A

     25        32   

BBB/Baa

     2        2   

 

  1   

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

   
Call/Maturity Schedule2        

Calendar Year Ended December 31,

  

2014

     1

2015

     3   

2016

     4   

2017

       

2018

     27   

 

  2   

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

 

                
   ANNUAL REPORT    APRIL 30, 2014    15


Table of Contents
Fund Summary as of April 30, 2014    BlackRock Muni Intermediate Duration Fund, Inc.

 

Fund Overview      

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

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

 

Performance      
Ÿ  

For the 12-month period ended April 30, 2014, the Fund returned (3.73)% based on market price and 0.50% based on NAV. For the same period, the closed-end Lipper Intermediate Municipal Debt Funds category posted an average return of (1.95)% based on market price and 0.41% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund benefited from the accrual of income generated from coupon payments on its municipal bond holdings. Exposure to corporate and health care credits contributed positively to returns as these sectors were among the better performing during the period. While the tobacco sector broadly underperformed the market, the Fund’s select tobacco holdings added to performance. The Fund’s use of 10-year U.S. Treasury futures contracts as a means of managing interest rate risk enhanced results for the period.

 

Ÿ  

As interest rates moved sharply higher early in the period, the Fund’s long duration (high sensitivity to interest rate movements) was the most significant detractor from performance. (Bond prices fall when rates rise.) Concentrated exposure on the long-end of the yield curve within the Fund’s intermediate duration mandate was detrimental as rates increased more in the long-end than in the short-end of the curve. The Fund’s exposure to the utility sector also had a negative impact on returns. In the beginning of the period, the Fund’s exposure to Puerto Rico government-related credits, although limited, was a detractor from results as credit spreads on these bonds widened materially due to investors’ lack of confidence and a weak local economy. The Fund sold its exposure to these securities early in the period.

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

 

Fund Information      

Symbol on NYSE

   MUI

Initial Offering Date

   August 1, 2003

Yield on Closing Market Price as of April 30, 2014 ($14.55)1

   5.65%

Tax Equivalent Yield2

   9.98%

Current Monthly Distribution per Common Share3

   $0.0685

Current Annualized Distribution per Common Share3

   $0.8220

Economic Leverage as of April 30, 20144

   37%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
16    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
     BlackRock Muni Intermediate Duration Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      
           
        4/30/14        4/30/13        Change      High        Low  

Market Price

     $ 14.55         $ 16.12           (9.74 )%     $ 16.20         $ 13.04   

Net Asset Value

     $ 15.64         $ 16.60           (5.78 )%     $ 16.64         $ 14.33   

 

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

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    4/30/14     4/30/13  

County/City/Special District/School District

     24     26

Transportation

     20        13   

State

     16        18   

Health

     12        12   

Education

     9        10   

Corporate

     8        8   

Utilities

     7        8   

Housing

     2        2   

Tobacco

     2        3   
Credit Quality Allocation1    4/30/14     4/30/13  

AAA/Aaa

     3     4

AA/Aa

     48        53   

A

     35        29   

BBB/Baa

     8        6   

BB/Ba

     1        1   

B

     1        2   

Not Rated2

     4        5   

 

  1   

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

 

  2   

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of April 30, 2014 and April 30, 2013, the market value of these securities was $4,453,656, representing less than 1%, and $8,944,363, representing 1%, respectively, of the Fund’s long-term investment.

   
Call/Maturity Schedule3        

Calendar Year Ended December 31,

  

2014

     5

2015

     3   

2016

     5   

2017

     6   

2018

     7   

 

  3   

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

 

                
   ANNUAL REPORT    APRIL 30, 2014    17


Table of Contents
Fund Summary as of April 30, 2014    BlackRock MuniVest Fund II, Inc.

 

Fund Overview

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

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

 

Performance

 

Ÿ  

For the 12-month period ended April 30, 2014, the Fund returned (5.74)% based on market price and (0.37)% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of (5.00)% based on market price and (0.78)% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

As interest rates moved sharply higher early in the period, the Fund’s duration exposure (sensitivity to interest rate movements) was the most significant detractor from performance. (Bond prices fall when rates rise.) The Fund’s state and local tax-backed and transportation holdings generally produced slightly negative returns for the period. In the beginning of the period, the Fund’s exposure to Puerto Rico government-related credits, although limited, was a detractor from results as credit spreads on these bonds widened materially due to investors’ lack of confidence and a weak local economy. The Fund sold its exposure to these securities during the period. Additionally, the Fund’s various holdings of higher quality investment grade bonds generated modestly negative returns.

 

Ÿ  

During a period in which interest rates increased in the earlier half and declined in the latter half, the additional income afforded by the Fund’s use of leverage, a persistently low cost of borrowing and the Fund’s emphasis on credit exposure helped mitigate much of the market-related volatility. The Fund benefited from holding unrated as well as low investment grade and non-investment grade bonds, which exhibited superior performance compared to higher quality investment grade bonds during the period. The Fund’s concentrations in education, health care, project finance and corporate-related debt also had a positive impact on 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.

 

Fund Information

Symbol on NYSE

   MVT

Initial Offering Date

   March 29, 1993

Yield on Closing Market Price as of April 30, 2014 ($15.16)1

   7.01%

Tax Equivalent Yield2

   12.39%

Current Monthly Distribution per Common Share3

   $0.0885

Current Annualized Distribution per Common Share3

   $1.0620

Economic Leverage as of April 30, 20144

   39%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
18    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
     BlackRock MuniVest Fund II, Inc.

 

Market Price and Net Asset Value Per Share Summary                                        
           
      4/30/14      4/30/13      Change      High      Low  

Market Price

     $15.16         $17.31         (12.42)%         $17.34         $13.50   

Net Asset Value

     $15.45         $16.69         (7.43)%         $16.74         $13.70   

 

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

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    4/30/14     4/30/13  

Health

     21     20

Transportation

     20        22   

State

     15        15   

Utilities

     12        11   

County/City/Special District/School District

     11        11   

Corporate

     8        10   

Education

     8        7   

Tobacco

     3        2   

Housing

     2        2   
Credit Quality Allocation1    4/30/14     4/30/13  

AAA/Aaa

     8     9

AA/Aa

     42        46   

A

     28        25   

BBB/Baa

     10        10   

BB/Ba

     3        1   

B

     3        2   

Not Rated2

     6        7   

 

  1   

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

 

  2   

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of April 30, 2014 and April 30, 2013 the market value of these securities was $4,021,023, representing less than 1%, and $6,940,695, representing 1%, respectively, of the Fund’s long-term investments.

   
Call/Maturity Schedule3        

Calendar Year Ended December 31,

  

2014

     7

2015

     1   

2016

     3   

2017

     8   

2018

     13   

 

  3   

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

 

                
   ANNUAL REPORT    APRIL 30, 2014    19


Table of Contents

Schedule of Investments April 30, 2014

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 2.9%

    

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

   $ 2,165      $ 2,469,702   

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

    

5.25%, 1/01/17

     895        899,896   

5.25%, 1/01/19

     2,000        2,009,860   

5.50%, 1/01/21

     1,215        1,215,036   

4.75%, 1/01/25

     3,145        3,013,099   

County of Jefferson Alabama Sewer, Refunding RB:

    

Convertible CAB, Senior Lien, Series C (AGM), 0.00%, 10/01/38 (a)

     615        373,760   

Convertible CAB, Senior Lien, Series C (AGM), 0.00%, 10/01/42 (a)

     535        323,065   

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

     10        10,148   

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

     3,745        3,950,600   
    

 

 

 
               14,265,166   

Alaska — 1.2%

    

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

    

4.63%, 6/01/23

     1,610        1,553,730   

5.00%, 6/01/32

     1,500        1,195,470   

5.00%, 6/01/46

     4,000        2,903,840   
    

 

 

 
               5,653,040   

Arizona — 2.2%

    

City of Phoenix Arizona IDA, RB:

    

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

     500        507,015   

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

     425        430,317   

Series A, 6.50%, 7/01/34

     570        562,379   

Series A, 6.75%, 7/01/44

     1,000        992,860   

City of Show Low Arizona, Special Assessment Bonds, Improvement District No. 5, 6.38%, 1/01/15

     50        50,349   

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

     865        824,362   

Phoenix IDA Arizona, Refunding RB, America West Airlines, Inc. Project, AMT, 6.30%, 4/01/23

     5,750        5,761,672   

University Medical Center Corp. Arizona, RB:

    

6.25%, 7/01/29

     820        903,730   

6.50%, 7/01/39

     500        551,440   
    

 

 

 
               10,584,124   
Municipal Bonds   

Par  

(000)

    Value  

California — 3.8%

    

California Pollution Control Financing Authority, RB, County of San Diego California Water Authority Desalination Project Pipeline,
5.00%, 11/21/45 (b)

   $ 1,270      $ 1,270,279   

California School Finance Authority, RB:

    

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

     1,570        1,637,871   

Value Schools, 6.65%, 7/01/33

     435        451,904   

Value Schools, 6.90%, 7/01/43

     975        1,011,796   

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

     2,175        2,319,551   

City of Fontana California, Refunding RB, Special Tax Bonds, Community Facilities District No. 22-Sierra, Series H, 6.00%, 9/01/34

     2,320        2,330,370   

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

    

6.50%, 5/01/36

     900        1,054,215   

6.50%, 5/01/42

     2,220        2,594,425   

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

     375        419,419   

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

     2,885        3,035,713   

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

     2,205        2,153,844   
    

 

 

 
               18,279,387   

Colorado — 2.0%

    

Denver Health & Hospital Authority, RB, Series A (c):

    

5.00%, 12/01/39

     1,100        1,130,316   

5.25%, 12/01/45

     1,650        1,725,801   

Plaza Metropolitan District No. 1 Colorado, Tax Allocation Bonds, Public Improvement Fee, Tax Increment, 8.00%, 6/01/14 (d)

     4,850        4,882,737   

Plaza Metropolitan District No. 1 Colorado, Refunding, Tax Allocation Bonds, Public Improvement Fee, Tax Increment, 5.00%, 12/01/40

     575        575,811   

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

     1,500        1,604,655   
    

 

 

 
               9,919,320   

 

Portfolio Abbreviations

 

To simplify the listings of portfolio holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:

     AGC    Assured Guaranty Corp.    HFA    Housing Finance Agency
     AGM    Assured Guaranty Municipal Corp.    HRB    Housing Revenue Bonds
     AMBAC    American Municipal Bond Assurance Corp.    HUD    Department of Housing and Urban Development
     AMT    Alternative Minimum Tax (subject to)    IDA    Industrial Development Authority
     ARB    Airport Revenue Bonds    ISD    Independent School District
     BARB    Building Aid Revenue Bonds    LRB    Lease Revenue Bonds
     BHAC    Berkshire Hathaway Assurance Corp.    MRB    Mortgage Revenue Bonds
     CAB    Capital Appreciation Bonds    NPFGC    National Public Finance Guarantee Corp.
     COP    Certificates of Participation    PSF-GTD    Permanent School Fund Guaranteed
     EDA    Economic Development Authority    Radian    Radian Financial Guaranty
     EDC    Economic Development Corp.    RB    Revenue Bonds
     ERB    Education Revenue Bonds    SBPA    Stand-by Bond Purchase Agreements
     GARB    General Airport Revenue Bonds    S/F    Single-Family
     GO    General Obligation Bonds    Syncora    Syncora Guarantee
     HDA    Housing Development Authority    VRDN    Variable Rate Demand Notes

 

See Notes to Financial Statements.

 

                
20    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Connecticut — 0.3%

    

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

   $ 1,370      $ 1,370,356   

Delaware — 0.9%

    

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

     1,000        1,070,150   

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

     3,120        3,183,430   
    

 

 

 
               4,253,580   

District of Columbia — 0.9%

    

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

    

7.38%, 1/01/30

     1,665        1,669,812   

7.50%, 1/01/39

     1,615        1,618,779   

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

     1,055        1,129,937   
    

 

 

 
               4,418,528   

Florida — 10.7%

    

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

     4,100        4,018,123   

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

     2,510        2,578,222   

County of Hillsborough Florida IDA, RB, National Gypsum Co. AMT:

    

Series A, 7.13%, 4/01/30

     3,000        3,013,500   

Series B, 7.13%, 4/01/30

     1,560        1,561,232   

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

     3,500        3,662,050   

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

     4,090        4,008,323   

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

     410        411,173   

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

     4,500        4,377,600   

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

     905        1,017,184   

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

     1,485        1,846,731   

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

     4,550        5,189,957   

Midtown Miami Community Development District, Refunding, Special Assessment Bonds (c):

    

Series A, 5.00%, 5/01/37

     850        845,742   

Series B, 5.00%, 5/01/37

     500        497,495   

Midtown Miami Community Development District, Special Assesment Bonds, Series A:

    

6.00%, 5/01/24

     1,085        1,088,776   

6.25%, 5/01/37

     4,605        4,621,716   

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

     500        537,345   

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

     4,739        1,941,682   

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

     1,075        1,075,892   

Tolomato Community Development District, Refunding, CAB Special Assessment Bonds:

    

Series A-1, 6.65%, 5/01/40

     910        919,227   
Municipal Bonds   

Par  

(000)

    Value  

Florida (concluded)

    

Tolomato Community Development District, Refunding, CAB Special Assessment Bonds (concluded):

    

Convertible Series A-2, 0.00%, 5/01/39 (a)

   $ 250      $ 183,010   

Convertible Series A-3, 0.00%, 5/01/40 (a)

     585        348,894   

Convertible Series A-4, 0.00%, 5/01/40 (a)

     305        134,624   

Tolomato Community Development District (e)(f):

    

Series 1, 6.65%, 5/01/40

     50        50,579   

Series 2, 6.65%, 5/01/40

     2,110        1,225,615   

Series 3, 6.65%, 5/01/40

     710        7   

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

    

6.75%, 5/01/31

     1,765        2,105,239   

7.00%, 5/01/41

     2,865        3,461,264   

5.50%, 5/01/42

     1,320        1,397,880   
    

 

 

 
               52,119,082   

Georgia — 2.0%

    

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

     1,035        1,043,932   

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

     2,755        2,838,339   

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

     3,365        4,085,850   

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

    

6.38%, 11/15/29

     700        780,416   

6.63%, 11/15/39

     880        966,275   
    

 

 

 
               9,714,812   

Guam — 1.5%

    

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

    

5.25%, 7/01/33

     1,450        1,518,657   

5.50%, 7/01/43

     2,415        2,540,145   

Guam Government Waterworks Authority, Refunding RB, Water & Wastewater System, 6.00%, 7/01/25

     1,265        1,290,920   

Territory of Guam, GO, Series A:

    

6.00%, 11/15/19

     615        664,797   

7.00%, 11/15/39

     1,115        1,201,636   
    

 

 

 
               7,216,155   

Illinois — 4.3%

    

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

     3,450        3,460,523   

Illinois Finance Authority, Refunding RB:

    

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

     1,214        12   

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

     3,129        31   

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

     4,000        4,150,120   

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

     2,395        2,294,889   

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

     1,175        1,175,776   

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

     4,170        4,315,575   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,400        1,631,560   

6.00%, 6/01/28

     710        823,898   

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

     1,800        1,834,578   

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

     1,420        1,420,312   
    

 

 

 
               21,107,274   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    21


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Indiana — 1.1%

    

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

    

6.75%, 1/01/34

   $ 825      $ 884,821   

7.00%, 1/01/44

     2,000        2,158,600   

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

    

5.00%, 7/01/44

     470        474,583   

5.00%, 7/01/48

     1,555        1,575,448   
    

 

 

 
               5,093,452   

Iowa — 2.8%

    

Iowa Finance Authority, Refunding RB:

    

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

     4,090        4,155,971   

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

     2,190        2,189,146   

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

     1,355        1,237,142   

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

     2,115        1,937,721   

Iowa Tobacco Settlement Authority, Refunding RB, Series C, 5.38%, 6/01/38

     4,900        4,225,319   
    

 

 

 
               13,745,299   

Kentucky — 0.9%

    

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

     4,000        4,325,160   

Louisiana — 2.8%

    

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

     5,000        5,548,750   

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

     1,855        2,003,901   

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

     5,570        5,845,715   
    

 

 

 
               13,398,366   

Maine — 0.7%

    

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

     2,955        3,191,075   

Maryland — 2.5%

    

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

     2,840        3,034,114   

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

     3,615        3,765,782   

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

     4,785        5,119,423   
    

 

 

 
               11,919,319   

Massachusetts — 1.0%

    

Massachusetts Development Finance Agency, RB, Series A:

    

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

     1,025        1,139,472   

North Hill Communities Issue, 6.50%, 11/15/43

     2,020        2,042,806   

Massachusetts Development Finance Agency, Refunding RB:

    

Eastern Nazarene College, 5.63%, 4/01/19

     25        25,005   

Eastern Nazarene College, 5.63%, 4/01/29

     80        80,038   

Tufts Medical Center, Series I, 6.75%, 1/01/36

     1,490        1,731,470   
    

 

 

 
               5,018,791   
Municipal Bonds   

Par  

(000)

    Value  

Michigan — 2.7%

    

City of Detroit Michigan, GO, Taxable Capital Improvement Limited Tax (e)(f):

    

Series A-1, 5.00%, 4/01/16

   $ 650      $ 175,487   

Series A-2, 8.00%, 4/01/15

     3,185        859,886   

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A:

    

5.00%, 7/01/32

     1,610        1,553,972   

5.25%, 7/01/39

     2,785        2,708,970   

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, Series V,
8.25%, 9/01/18 (d)

     6,310        7,739,341   
    

 

 

 
               13,037,656   

Minnesota — 0.4%

    

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

     1,785        2,106,800   

Missouri — 0.5%

    

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

     2,315        2,637,132   

New Jersey — 5.1%

    

New Jersey EDA, RB:

    

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

     2,250        2,573,618   

Patterson Charter School for Science and Technology, Inc. Project, Series A, 6.10%, 7/01/44

     1,085        1,115,781   

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

     1,530        1,585,570   

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

     2,155        2,268,547   

New Jersey EDA, Refunding RB, Newark Airport Marriott Hotel, 7.00%, 10/01/14

     4,000        4,070,000   

New Jersey Health Care Facilities Financing Authority, Refunding RB:

    

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

     2,650        2,847,584   

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

     4,090        4,352,782   

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

    

4.63%, 6/01/26

     2,000        1,760,400   

5.00%, 6/01/29

     5,000        4,270,450   
    

 

 

 
               24,844,732   

New Mexico — 0.5%

    

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

     2,970        2,547,458   

New York — 4.2%

    

City of New York New York Industrial Development Agency, RB:

    

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

     1,765        1,951,790   

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

     4,130        4,151,022   

Special Needs Facilities Pooled Program, Series C-1, 6.50%, 7/01/24

     610        603,198   

Special Needs Facilities Pooled Program, Series C-1, 6.63%, 7/01/29

     1,100        1,060,092   

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

     3,695        3,892,313   

County of Dutchess New York IDA, Refunding RB, St. Francis Hospital, Series A, 7.50%, 3/01/29 (e)(f)

     1,400        1,273,860   

 

See Notes to Financial Statements.

 

                
22    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

New York (concluded)

    

Dutchess County Industrial Development Agency New York, RB, St. Francis Hospital, Series B,
7.50%, 3/01/29

   $ 1,000      $ 909,900   

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

     2,000        2,395,020   

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        1,381,277   

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

     1,335        1,342,196   

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        1,473,826   
    

 

 

 
               20,434,494   

North Carolina — 1.6%

    

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

    

Deerfield Project, 6.13%, 11/01/38

     4,565        4,953,299   

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

     1,000        1,114,310   

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

     1,420        1,562,511   
    

 

 

 
               7,630,120   

North Dakota — 0.5%

    

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

     2,155        2,204,867   

Ohio — 2.7%

    

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

    

5.75%, 6/01/34

     6,745        5,514,914   

6.00%, 6/01/42

     3,040        2,483,011   

State of Ohio, RB, Ford Motor Co. Project, AMT, 5.75%, 4/01/35

     4,880        4,952,517   
    

 

 

 
               12,950,442   

Oklahoma — 0.3%

    

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

     1,305        1,332,992   

Pennsylvania — 6.1%

    

Allentown Neighborhood Improvement Zone Development Authority, Refunding RB, Series A:

    

5.00%, 5/01/35

     1,815        1,832,878   

5.00%, 5/01/42

     4,170        4,175,463   

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

     2,000        1,963,800   

City of Philadelphia Pennsylvania Industrial Development, RB, Commercial Development, AMT, 7.75%, 12/01/17

     8,000        8,021,680   

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

     6,165        6,633,047   

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

     1,160        1,215,935   

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

     2,705        2,500,664   

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

     2,110        2,192,691   

Pennsylvania Economic Development Financing Authority, RB, National Gypsum Co., Series A, AMT, 6.25%, 11/01/27

     1,250        1,250,187   
    

 

 

 
               29,786,345   
Municipal Bonds   

Par  

(000)

    Value  

Puerto Rico — 1.1%

    

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

   $ 6,000      $ 5,550,120   

Rhode Island — 0.6%

    

Central Falls Detention Facility Corp., Refunding RB, 7.25%, 7/15/35

     4,190        3,070,851   

Texas — 12.5%

    

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

     5,080        139,700   

Central Texas Regional Mobility Authority, Refunding RB:

    

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

     1,000        515,960   

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

     2,000        973,340   

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

     1,170        536,363   

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

     3,690        1,397,219   

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

     4,000        1,407,840   

Senior Lien, 5.75%, 1/01/25

     675        736,135   

Senior Lien, 6.25%, 1/01/46

     2,210        2,418,558   

Sub-Lien, 5.00%, 1/01/42

     330        320,823   

City of Houston Texas Airport System, RB, Special Facilities Continental Airlines, Inc. AMT:

    

Series A, 6.63%, 7/15/38

     2,890        3,142,788   

Series E, 6.75%, 7/01/21

     4,550        4,551,319   

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

    

5.50%, 8/15/31

     955        1,019,854   

5.75%, 8/15/41

     720        773,050   

Clifton Higher Education Finance Corp., Refunding RB, Uplift Education, Series A, 4.40%, 12/01/47

     810        732,491   

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

     5,040        5,446,022   

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        504,056   

County of Harris Texas-Houston Sports Authority, Refunding RB, CAB, Senior Lien, Series A (NPFGC), 0.00%, 11/15/38 (g)

     10,000        2,345,200   

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

     2,090        2,366,361   

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

    

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

     1,745        1,917,860   

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

     4,200        3,418,842   

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

     3,080        3,222,234   

La Vernia Higher Education Finance Corp., RB, Kipp, Inc., Series A, 6.38%, 8/15/44

     860        954,746   

New Hope Cultural Education Facilities Corp., RB, Stephenville Tarleton St.:

    

5.88%, 4/01/36

     1,210        1,241,581   

6.00%, 4/01/45

     1,845        1,887,066   

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

     1,600        1,653,120   

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

     2,110        589,893   

North Texas Tollway Authority, Refunding RB, 2nd Tier System, Series F, 6.13%, 1/01/31

     4,425        4,740,502   

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

    

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

     2,895        2,940,191   

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

     900        817,704   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    23


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

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

    

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

   $ 3,775      $ 4,377,037   

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

     3,000        3,424,260   
    

 

 

 
               60,512,115   

Utah — 0.6%

    

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

     2,950        3,078,001   

Vermont — 0.2%

    

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

     770        780,680   

Virginia — 3.0%

    

County of Fairfax Virginia EDA, Refunding RB:

    

Goodwin House, Inc., 5.13%, 10/01/42

     2,500        2,550,500   

Vinson Hall LLC, Series A, 5.00%, 12/01/42

     1,330        1,306,113   

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

    

6.63%, 3/01/26

     1,485        1,667,893   

6.88%, 3/01/36

     1,300        1,470,872   

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

     6,805        7,379,682   
    

 

 

 
               14,375,060   

Washington — 0.6%

    

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

     1,455        1,527,182   

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

     1,495        1,498,349   
    

 

 

 
               3,025,531   

Wisconsin — 0.3%

    

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

    

7.25%, 9/15/29

     425        476,871   

7.63%, 9/15/39

     855        963,431   
    

 

 

 
               1,440,302   
Total Municipal Bonds — 88.0%        426,937,984   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
              

Colorado — 2.4%

    

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

     11,475        11,974,392   
Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
  

Par  

(000)

    Value  

District of Columbia — 1.6%

    

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

   $ 6,679      $ 7,660,417   

Florida — 3.4%

    

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

     15,000        16,466,400   

Illinois — 3.0%

    

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

     6,510        6,783,550   

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

     7,180        8,099,327   
    

 

 

 
               14,882,877   

New York — 13.5%

    

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

    

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

     14,181        15,199,577   

Series EE, 5.50%, 6/15/43

     7,605        8,764,154   

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

     8,609        9,645,683   

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

     4,520        5,018,927   

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

     18,105        19,541,813   

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

     6,600        7,300,194   
    

 

 

 
               65,470,348   

Washington — 1.8%

    

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

     7,966        8,614,167   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 25.7%
        125,068,601   
Total Long-Term Investments
(Cost — $535,933,435) — 113.7%
        552,006,585   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (k)(l)

     259,703        259,703   
Total Short-Term Securities
(Cost — $259,703) — 0.1%
        259,703   
Total Investments (Cost — $536,193,138) — 113.8%        552,266,288   
Liabilities in Excess of Other Assets — 0.9%        4,212,036   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (14.7)%

   

    (71,158,949
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 485,319,375   
    

 

 

 

 

Notes to Schedule of investments

 

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

 

(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.

 

 

See Notes to Financial Statements.

 

                
24    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

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

 

Counterparty      Value        Unrealized
Appreciation
 

Citigroup Global Markets, Inc.

     $ 845,742         $ 23,928   

FMSC FMS Bond, Inc.

     $ 497,495         $ 14,075   

Piper Jaffray & Co.

     $ 2,856,117         $ 22,451   

SIMS HERBERT

     $ 537,345         $ 37,345   

 

(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)   Non-income producing security.

 

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

 

(g)   Zero-coupon bond.

 

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

 

(i)   Represent bonds transferred to a TOB. In exchange for which the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(j)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from January 1, 2015 to November 15, 2019 is $21,570,076.

 

(k)   Investments in issuers considered to be an affiliate of the Fund during the year ended April 30, 2014, for purposes of Section 2(a)(3) of the Investment Company Act 1940, were as follows:

 

Affiliate      Shares Held
at April 30,
2013
       Net
Activity
       Shares Held
at April 30,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       9,209,652           (8,949,949        259,703         $ 898   

 

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

 

Ÿ  

Financial futures contracts outstanding as of April 30, 2014 were as follows:

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (500   10-Year US Treasury Note   Chicago Board of Trade   June 2014   $ 62,210,938      $ (111,475

 

Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2014:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 552,006,585              $ 552,006,585   

Short-Term Securities

  $ 259,703                          259,703   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 259,703         $ 552,006,585              $ 552,266,288   
 

 

 

      

 

 

      

 

    

 

 

 

 

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

    

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    25


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2                 

Liabilities:

                

Interest rate contracts

  $ (111,475                     $ (111,475

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

 

The carrying amount for certain of the Fund’s assets and/or liabilities approximates fair value for financial statement purposes. As of April 30, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

      

   

     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 683,000                        $ 683,000   

Liabilities:

                

TOB trust certificates

            $ (71,144,505             (71,144,505
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 683,000         $ (71,144,505           $ (70,461,505
 

 

 

      

 

 

      

 

    

 

 

 

There were no transfers between levels during the year ended April 30, 2014.

 

See Notes to Financial Statements.

 

                
26    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments April 30, 2014

  

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 Schools, Series A:

    

5.50%, 1/01/22

   $ 2,750      $ 2,750,303   

4.75%, 1/01/25

     2,200        2,107,732   
    

 

 

 
               4,858,035   

Alaska — 0.8%

    

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

     400        423,000   

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

     990        1,090,495   

Borough of Matanuska-Susitna Alaska, RB, Goose Creek Correctional Center (AGC), 6.00%, 9/01/28

     1,200        1,443,540   
    

 

 

 
               2,957,035   

Arizona — 1.4%

    

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

     1,300        1,354,275   

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

    

5.00%, 10/01/27

     2,700        2,961,819   

5.00%, 10/01/29

     400        435,140   
    

 

 

 
               4,751,234   

California — 19.1%

    

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

    

5.40%, 10/01/24

     10,185        10,988,087   

5.45%, 10/01/25

     3,700        3,982,421   

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

     5,000        5,915,450   

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

     2,400        708,768   

California Health Facilities Financing Authority, RB:

    

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

     550        633,138   

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

     1,200        1,423,944   

California Health Facilities Financing Authority, Refunding RB, Saint Joseph’s Health System, Series A, 5.00%, 7/01/37

     1,090        1,177,265   

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

     710        758,010   

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

     1,480        1,573,373   

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

     1,420        1,572,948   

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

     850        945,217   

County of Orange California Sanitation District, COP, Series B (AGM):

    

5.00%, 2/01/30

     1,500        1,651,785   

5.00%, 2/01/31

     900        984,141   

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

     2,175        2,628,901   

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

     1,300        1,440,907   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

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

   $ 2,500      $ 1,359,925   

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

     3,750        1,285,350   

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

     5,000        1,534,300   

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

    

0.00%, 7/01/30

     5,000        2,461,950   

0.00%, 7/01/31

     1,280        593,190   

San Diego California Unified School District, GO, CAB, Election of 2008, Series G (a):

    

Series C, 0.00%, 7/01/38

     1,600        491,904   

Series G, 0.00%, 7/01/34

     650        229,132   

Series G, 0.00%, 7/01/35

     690        228,418   

Series G, 0.00%, 7/01/36

     1,035        322,392   

Series G, 0.00%, 7/01/37

     690        202,301   

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

    

0.00%, 8/01/31

     2,145        907,228   

0.00%, 8/01/32

     2,680        1,051,096   

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

    

5.00%, 8/01/34

     700        760,165   

5.00%, 8/01/38

     600        644,838   

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

     12,740        6,735,256   

State of California, GO, Refunding, Various Purpose:

    

5.00%, 2/01/38

     2,500        2,692,725   

5.00%, 10/01/41

     1,000        1,068,920   

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

     1,000        1,072,180   

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

     5,500        1,889,690   

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

     5,035        5,555,821   
    

 

 

 
               67,471,136   

Colorado — 0.6%

    

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

     2,000        2,181,560   

District of Columbia — 1.6%

    

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

     5,480        5,556,665   

Florida — 10.0%

    

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

     850        952,595   

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

     3,000        3,249,060   

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

     2,625        2,848,755   

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

     1,450        1,686,132   

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

     4,050        4,450,059   

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

    

5.63%, 10/01/26

     960        1,081,680   

5.38%, 10/01/32

     3,160        3,387,867   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    27


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Florida (concluded)

    

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

   $ 1,400      $ 1,590,078   

County of Miami-Dade Florida, RB, Seaport:

    

Series A, 6.00%, 10/01/38

     2,025        2,324,761   

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

     640        737,440   

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

     415        472,291   

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

     660        737,451   

County of Miami-Dade Florida, Refunding RB, Special Obligation, Sub-Series B, 5.00%, 10/01/37

     710        739,174   

County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport, Series A, AMT (AGC), 5.00%, 10/01/40

     3,900        3,948,711   

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

     190        200,904   

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

     2,000        2,155,180   

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

     275        290,018   

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

    

5.13%, 6/01/27

     2,000        2,235,500   

5.38%, 10/01/29

     1,050        1,185,660   

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

     1,000        1,099,310   
    

 

 

 
               35,372,626   

Georgia — 6.8%

    

City of Atlanta Georgia Department of Aviation, Refunding GARB, Series B (AGM), 5.25%, 7/01/14 (c)

     12,355        12,461,747   

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

     1,150        1,220,311   

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

     7,475        10,162,786   
    

 

 

 
               23,844,844   

Illinois — 23.3%

    

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

    

Series A, 5.75%, 1/01/39

     5,110        5,578,638   

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

     1,460        1,466,351   

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

     2,700        2,788,695   

City of Chicago Illinois, GO:

    

Series A, 5.25%, 1/01/35

     400        407,628   

Refunding Series A, 5.00%, 1/01/34

     5,750        5,815,550   

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

     3,425        3,512,474   

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

     2,225        2,287,344   

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

     550        578,683   

City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/36

     595        639,203   

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

     285        304,591   

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

     330        350,566   

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

    

5.75%, 8/15/34

     650        719,550   

6.00%, 8/15/41

     1,000        1,124,000   
Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

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

   $ 2,155      $ 2,135,605   

Illinois Municipal Electric Agency, RB, Series A (NPFGC), 5.25%, 2/01/35

     1,000        1,076,470   

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

     17,620        18,589,805   

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

     9,145        9,781,309   

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

    

0.00%, 12/15/26

     5,000        3,000,650   

0.00%, 12/15/33

     9,950        3,855,326   

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

    

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

     3,450        688,896   

4.25%, 6/15/42

     4,000        3,926,880   

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

     675        783,283   

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

     7,290        8,503,858   

State of Illinois, GO:

    

5.25%, 2/01/33

     830        890,847   

5.50%, 7/01/33

     820        898,425   

5.25%, 2/01/34

     830        887,436   

5.50%, 7/01/38

     445        485,437   

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

     905        971,572   
    

 

 

 
               82,049,072   

Indiana — 1.5%

    

Indiana Finance Authority, RB, Series A:

    

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

     1,100        1,209,703   

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

     890        905,006   

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

     515        520,021   

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

    

5.25%, 1/01/29

     600        654,288   

5.50%, 1/01/38

     1,825        1,962,970   
    

 

 

 
               5,251,988   

Iowa — 3.7%

    

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

     5,725        6,451,903   

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

    

5.60%, 12/01/26

     3,030        3,202,195   

5.70%, 12/01/27

     1,375        1,447,490   

5.80%, 12/01/29

     930        972,864   

5.85%, 12/01/30

     970        1,012,767   
    

 

 

 
               13,087,219   

Louisiana — 1.2%

    

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, East Baton Rouge Sewerage Commission Projects, Sub-Lien, Series A:

    

5.00%, 2/01/43

     1,420        1,515,268   

4.00%, 2/01/48

     1,420        1,305,108   

 

See Notes to Financial Statements.

 

                
28    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Louisiana (concluded)

    

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

   $ 1,250      $ 1,409,600   
    

 

 

 
               4,229,976   

Massachusetts — 4.3%

    

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

     1,150        1,172,655   

Massachusetts School Building Authority, RB, Dedicated Sales Tax Series A:

    

Senior, 5.00%, 5/15/43

     1,280        1,408,934   

(AGM), 5.00%, 8/15/15 (c)

     230        244,205   

(AGM), 5.00%, 8/15/15 (c)

     8,855        9,401,885   

(AGM), 5.00%, 8/15/30

     85        89,604   

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

     2,700        2,971,863   
    

 

 

 
               15,289,146   

Michigan — 2.5%

    

City of Detroit Michigan Sewage Disposal System, Refunding RB:

    

2nd Lien, Series E (BHAC), 5.75%, 7/01/31

     2,500        2,559,100   

Senior Lien, Series B (AGM), 7.50%, 7/01/33

     500        542,470   

City of Detroit Michigan Water Supply System, RB, 2nd Lien, Series B (AGM):

    

6.25%, 7/01/36

     400        404,452   

7.00%, 7/01/36

     200        213,394   

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

     1,700        1,926,525   

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

    

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

     145        159,117   

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

     700        766,248   

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

     900        979,173   

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

     890        935,960   

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

     380        404,920   
    

 

 

 
               8,891,359   

Minnesota — 0.8%

    

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

     2,500        2,933,425   

Nebraska — 1.7%

    

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

    

5.00%, 9/01/32

     5,000        5,235,600   

5.25%, 9/01/37

     750        793,500   
    

 

 

 
               6,029,100   

Nevada — 1.6%

    

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

     850        982,320   

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

    

5.25%, 7/01/42

     500        534,270   

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

     3,800        4,076,450   

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

     75        75,077   
    

 

 

 
               5,668,117   
Municipal Bonds   

Par  

(000)

    Value  

New Jersey — 8.2%

    

New Jersey EDA, RB:

    

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

   $ 895      $ 942,158   

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

     685        718,606   

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

     3,125        3,149,312   

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

     7,800        7,860,684   

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

     655        797,724   

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

     1,345        1,552,493   

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

    

5.50%, 12/01/26

     600        656,616   

5.75%, 12/01/27

     3,870        4,283,858   

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

     1,230        1,220,406   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     1,460        1,619,520   

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

     1,150        1,283,538   

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

     4,360        2,129,206   

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

     2,000        2,198,600   

Rutgers — The State University of New Jersey, Refunding RB, Series L, 5.00%, 5/01/43

     475        520,011   
    

 

 

 
               28,932,732   

New York — 5.5%

    

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        1,552,723   

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

     1,600        1,828,384   

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

     2,750        3,146,495   

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

     1,480        1,651,265   

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

     1,500        1,684,005   

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

     700        777,329   

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

     4,000        4,790,040   

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

     1,200        1,396,356   

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

     2,500        2,558,450   
    

 

 

 
               19,385,047   

Ohio — 1.1%

    

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

     530        630,716   

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

     10,000        3,273,700   
    

 

 

 
               3,904,416   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    29


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Pennsylvania — 2.0%

    

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

   $ 2,000      $ 2,101,660   

Pennsylvania Turnpike Commission, RB:

    

Series A, 5.00%, 12/01/38

     620        671,944   

Series C, 5.50%, 12/01/33

     555        629,714   

Sub-Series A, 5.00%, 12/01/43

     2,270        2,413,146   

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

     575        662,900   

Philadelphia School District, GO, Series E, 6.00%, 9/01/38

     400        436,356   
    

 

 

 
               6,915,720   

South Carolina — 4.3%

    

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

    

5.25%, 12/01/15

     3,120        3,366,418   

5.25%, 12/01/15

     2,765        2,983,380   

5.25%, 12/01/15

     1,010        1,089,770   

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

     115        131,226   

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

     3,000        3,281,730   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series E, 5.50%, 12/01/53

     745        825,229   

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

    

Series A, 5.50%, 1/01/38

     1,000        1,123,430   

Series B, 5.00%, 12/01/38

     2,080        2,230,488   
    

 

 

 
               15,031,671   

Tennessee — 2.2%

    

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

     1,730        1,930,680   

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

     5,000        5,832,950   
    

 

 

 
               7,763,630   

Texas — 12.2%

    

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

    

6.00%, 11/15/35

     2,100        2,453,640   

5.38%, 11/15/38

     1,350        1,471,905   

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

     575        626,382   

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

     2,130        749,760   

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

     750        831,578   

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

    

Series D, 5.00%, 11/01/38

     1,975        2,037,291   

Series D, 5.00%, 11/01/42

     1,500        1,546,350   

Series H, 5.00%, 11/01/32

     3,000        3,155,070   

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

     975        1,094,321   

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

     1,725        1,912,835   

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

    

Series A, 6.00%, 1/01/28

     2,795        3,232,837   

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

     1,600        1,771,104   

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

     3,800        4,310,454   

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

     4,015        4,605,727   
Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

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

    

0.00%, 9/15/35

   $ 4,990      $ 1,780,332   

0.00%, 9/15/36

     11,525        3,867,329   

0.00%, 9/15/37

     8,245        2,603,689   

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

    

5.00%, 12/15/31

     1,190        1,227,794   

5.00%, 12/15/32

     1,000        1,028,880   

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

     2,750        2,824,937   
    

 

 

 
               43,132,215   

Washington — 0.8%

    

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

     1,600        1,750,720   

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

    

5.00%, 10/01/39

     525        548,751   

5.25%, 10/01/39

     625        665,119   
    

 

 

 
               2,964,590   

Wisconsin — 0.4%

    

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

     1,375        1,509,020   
Total Municipal Bonds — 119.0%              419,961,578   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (d)
 

Arizona — 0.8%

    

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

     1,200        1,341,888   

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

     1,500        1,638,435   
    

 

 

 
               2,980,323   

California — 2.7%

    

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

     1,999        2,201,286   

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

     2,810        3,124,804   

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

     2,500        2,770,975   

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

     404        464,074   

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

     840        978,947   
    

 

 

 
               9,540,086   

Colorado — 2.4%

    

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

    

5.50%, 7/01/34 (e)

     900        1,020,334   

5.00%, 2/01/41

     7,001        7,331,597   
    

 

 

 
               8,351,931   

 

See Notes to Financial Statements.

 

                
30    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (d)
  

Par  

(000)

    Value  

District of Columbia — 1.7%

    

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

   $ 1,005      $ 1,179,290   

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

     1,780        2,041,250   

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

     2,530        2,764,076   
    

 

 

 
               5,984,616   

Florida — 11.4%

    

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

    

5.00%, 10/01/32 (e)

     4,000        4,364,320   

5.00%, 10/01/37

     7,500        8,039,175   

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

     4,480        4,786,119   

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

     10,000        10,713,700   

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

     4,621        4,898,580   

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

    

(NPFGC), 5.00%, 8/01/31

     2,000        2,133,400   

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

     3,544        3,875,711   

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

     1,349        1,493,795   
    

 

 

 
               40,304,800   

Illinois — 3.3%

    

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

     2,000        2,027,960   

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

     270        280,581   

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

     4,399        4,875,526   

State of Illinois Toll Highway Authority, RB:

    

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

     1,880        2,089,444   

Series A, 5.00%, 1/01/38

     2,138        2,255,273   
    

 

 

 
               11,528,784   

Louisiana — 1.6%

    

State of Louisiana Gas & Fuels, RB, Series A (AGM), 5.00%, 5/01/36

     5,400        5,758,290   

Michigan — 2.3%

    

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

     7,550        7,973,782   

Nevada — 3.3%

    

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

     3,778        4,352,919   

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

    

Limited Tax, 5.75%, 7/01/34

     1,829        2,137,822   

5.50%, 7/01/29

     4,499        5,273,255   
    

 

 

 
               11,763,996   

New Jersey — 0.6%

    

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

     1,840        1,997,137   

New York — 3.8%

    

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

     1,260        1,442,875   
Municipal Bonds Transferred to
Tender Option Bond Trusts (d)
  

Par  

(000)

    Value  

New York (concluded)

    

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

   $ 5,680      $ 6,088,406   

City of New York New York Water & Sewer System, RB, Series DD, 5.00%, 6/15/35

     1,665        1,858,257   

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

     2,500        2,586,850   

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

     1,300        1,468,454   
    

 

 

 
               13,444,842   

Ohio — 0.2%

    

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

     580        633,986   

South Carolina — 0.4%

    

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

     1,275        1,432,373   

Texas — 1.2%

    

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

     2,200        2,400,068   

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

     1,600        1,758,528   
    

 

 

 
               4,158,596   

Utah — 1.6%

    

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

     5,000        5,518,900   

Virginia — 0.1%

    

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

     350        384,034   

Washington — 1.2%

    

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

     4,004        4,411,062   

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        2,107,175   

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

     1,430        1,520,387   
    

 

 

 
               3,627,562   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 39.6%
        139,795,100   
Total Long-Term Investments
(Cost — $517,702,500) — 158.6%
        559,756,678   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (f)(g)

     3,108,476        3,108,476   
Total Short-Term Securities
(Cost — $3,108,476) — 0.9%
             3,108,476   
Total Investments (Cost — $520,810,976) — 159.5%        562,865,154   
Other Assets Less Liabilities — 1.7%        5,917,588   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (20.8%)

   

    (73,404,662
VRDP Shares, at Liquidation Value — (40.4%)        (142,500,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 352,878,080   
    

 

 

 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    31


Table of Contents
Schedule of Investments (continued)    BlackRock MuniEnhanced Fund, Inc. (MEN)

 

 

Notes to Schedule of investments

 

(a)   Zero-coupon bond.

 

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

 

(c)   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)   Represent bonds transferred to a TOB. In exchange for which the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(e)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from February 1, 2016 to December 1, 2029 is $14,921,848.

 

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

 

(g)   Investments in issuers considered to be an affiliate of the Fund during the year ended April 30, 2014, for purposes of Section 2(a)(3) of the Investment Company Act 1940, were as follows:

 

Affiliate      Shares Held
at April 30,
2013
       Net
Activity
       Shares Held
at April 30,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       545,905           2,562,571           3,108,476         $ 1,202   

 

Ÿ  

Financial futures contracts outstanding as of April 30, 2014 were as follows:

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (225   10-Year U.S Treasury Note   Chicago Board of Trade   June 2014   $ 27,994,922      $ (94,724

 

Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2014:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 559,756,678              $ 559,756,678   

Short-Term Securities

  $ 3,108,476                          3,108,476   
 

 

 

 

Total

  $ 3,108,476         $ 559,756,678              $ 562,865,154   
 

 

 

 

 

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

      

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2                 

Liabilities:

                

Interest rate contracts

  $ (94,724                       $        (94,724)   

 

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

      

 

 

See Notes to Financial Statements.

 

                
32    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

The carrying amount for certain of the Fund’s assets and/or liabilities approximates fair value for financial statement purposes. As of April 30, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 294,000                        $ 294,000   

Liabilities:

                

TOB trust certificates

            $ (73,378,987             (73,378,987

VRDP Shares

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

 

 

 

Total

  $ 294,000         $ (215,878,987           $ (215,584,987
 

 

 

 

There were no transfers between levels during the year ended April 30, 2014.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    33


Table of Contents

Schedule of Investments April 30, 2014

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 4.0%

    

County of Jefferson Alabama Sewer, Refunding RB:

    

Convertible CAB, Senior Lien, Series C (AGM), 0.00%, 10/01/38 (a)

   $ 420      $ 255,251   

Convertible CAB, Senior Lien, Series C (AGM), 0.00%, 10/01/42 (a)

     365        220,409   

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

     570        578,407   

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

     1,090        1,121,098   

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

     1,000        1,054,900   

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

     1,545        1,745,649   

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

     4,550        4,533,119   
    

 

 

 
               9,508,833   

Alaska — 0.5%

    

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

     1,660        1,205,094   

Arizona — 3.6%

    

City of Show Low Arizona, Special Assessment Bonds, Improvement District No. 5, 6.38%, 1/01/15

     40        40,279   

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

     1,800        1,646,748   

Phoenix IDA Arizona, Refunding RB, America West Airlines, Inc. Project, AMT, 6.30%, 4/01/23

     2,215        2,219,496   

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     2,000        2,191,340   

5.00%, 12/01/37

     2,360        2,584,743   
    

 

 

 
               8,682,606   

California — 12.2%

    

California Health Facilities Financing Authority, RB:

    

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

     1,530        1,761,275   

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

     2,200        2,606,076   

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

     875        957,031   

California Pollution Control Financing Authority, RB (b):

    

County of San Diego California Water Authority Desalination Project Pipeline, 5.00%, 11/21/45

     865        865,190   

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

     710        711,839   

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

     1,025        1,004,715   

California State Public Works Board, RB, Various Capital Projects:

    

Series I, 5.00%, 11/01/38

     550        589,528   

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

     820        983,254   

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

     1,510        1,610,324   

California Statewide Communities Development Authority, Refunding RB, Episcopal Communities & Services, 5.00%, 5/15/47

     250        251,748   

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

     555        625,241   

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

     255        283,767   

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

     2,405        1,814,741   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

San Diego Community College District California, GO, Election of 2006, 5.00%, 8/01/43

   $ 750      $ 826,380   

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

     3,475        1,877,508   

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

     8,370        10,200,770   

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

     2,245        2,192,916   
    

 

 

 
               29,162,303   

Colorado — 2.7%

    

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

     1,455        1,470,030   

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

     1,230        1,249,569   

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

     710        774,454   

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

     1,425        1,524,422   

University of Colorado, RB, Series A, 5.38%, 6/01/38

     1,250        1,429,888   
    

 

 

 
               6,448,363   

Connecticut — 1.6%

    

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

     955        1,017,171   

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

     2,515        2,750,303   
    

 

 

 
               3,767,474   

Delaware — 1.4%

    

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

     790        845,418   

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

     2,430        2,479,402   
    

 

 

 
               3,324,820   

District of Columbia — 3.3%

    

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

     1,520        1,579,842   

Metropolitan Washington Airports Authority, Refunding RB:

    

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

     505        527,367   

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

     1,470        1,546,249   

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

     13,485        4,290,118   
    

 

 

 
               7,943,576   

Florida — 7.3%

    

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

     2,375        2,552,959   

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

     750        840,525   

County of Hillsborough Florida IDA, RB, National Gypsum Co., Series B, AMT, 7.13%, 4/01/30

     1,900        1,901,501   

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

     2,340        687,352   

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

     2,620        2,842,936   

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

     450        480,748   

 

See Notes to Financial Statements.

 

                
34    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Florida (concluded)

    

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

   $ 2,095      $ 2,389,662   

Midtown Miami Community Development District, Special Assessment Bonds, Series B, 6.50%, 5/01/37

     2,270        2,278,603   

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

     620        410,924   

Preserve at Wilderness Lake Community Development District, Special Assessment Bonds, Series A, 5.90%, 5/01/14

     1,390        1,390,208   

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

     1,635        1,599,962   
    

 

 

 
               17,375,380   

Georgia — 1.4%

    

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

     585        648,355   

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

     2,410        2,620,875   
    

 

 

 
               3,269,230   

Hawaii — 0.4%

    

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

     945        1,043,176   

Illinois — 15.8%

    

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

    

Series A, 5.75%, 1/01/39

     2,000        2,183,420   

Series C, 6.50%, 1/01/41

     4,055        4,704,773   

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

     2,230        2,251,051   

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

    

5.00%, 1/01/35

     2,000        2,013,580   

5.25%, 1/01/32

     2,195        2,277,422   

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

     570        604,639   

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

     900        912,600   

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

     3,210        3,219,791   

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

     730        779,326   

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

     1,000        1,032,150   

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

     560        617,406   

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

     1,115        1,237,873   

Illinois State Toll Highway Authority, RB, Series A, 5.00%, 1/01/38

     1,610        1,697,906   

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

    

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

     13,220        2,149,308   

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

     3,070        3,132,198   

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

     1,740        1,774,835   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     315        367,101   

6.00%, 6/01/28

     800        928,336   

State of Illinois, GO:

    

5.00%, 2/01/39

     1,100        1,139,435   

Series A, 5.00%, 4/01/38

     2,625        2,716,560   

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

     440        487,700   
Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

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

    

5.00%, 4/01/39

   $ 580      $ 622,665   

5.00%, 4/01/44

     705        752,707   
    

 

 

 
               37,602,782   

Indiana — 4.1%

    

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

    

6.75%, 1/01/34

     560        600,606   

7.00%, 1/01/44

     1,355        1,462,451   

Indiana Finance Authority, RB, Series A:

    

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

     2,275        2,501,886   

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

     310        313,023   

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

     1,030        1,043,544   

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

     585        618,134   

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

     1,300        1,411,423   

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

     775        870,178   

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

     880        950,840   
    

 

 

 
               9,772,085   

Iowa — 2.2%

    

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

    

5.00%, 12/01/19

     665        673,047   

5.50%, 12/01/22

     1,630        1,656,292   

5.25%, 12/01/25

     320        319,875   

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

     1,085        1,133,402   

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

     1,730        1,472,645   
    

 

 

 
               5,255,261   

Kansas — 0.7%

    

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

     1,520        1,698,205   

Kentucky — 0.5%

    

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

     705        757,755   

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

     865        526,725   
    

 

 

 
               1,284,480   

Louisiana — 3.5%

    

East Baton Rouge Sewerage Commission, RB, Series A, 5.25%, 2/01/39

     570        619,801   

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

     3,500        3,884,125   

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

     430        448,576   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    35


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Louisiana (concluded)

    

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

    

5.50%, 5/15/30

   $ 700      $ 756,546   

5.25%, 5/15/31

     600        634,866   

5.25%, 5/15/32

     765        804,658   

5.25%, 5/15/33

     830        870,736   

5.25%, 5/15/35

     350        367,325   
    

 

 

 
               8,386,633   

Maine — 0.1%

    

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

     210        219,807   

Maryland — 1.2%

    

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

     300        312,513   

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

     820        877,310   

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

     1,520        1,650,720   
    

 

 

 
               2,840,543   

Massachusetts — 2.5%

    

Massachusetts Development Finance Agency, Refunding RB:

    

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

     1,165        1,300,257   

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

     1,575        1,583,489   

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

     255        272,475   

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

     2,900        2,906,235   
    

 

 

 
               6,062,456   

Michigan — 3.4%

    

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

    

Series A, 5.00%, 7/01/32

     1,090        1,052,068   

Series A, 5.25%, 7/01/39

     3,085        3,000,780   

Series B (AGM), 7.50%, 7/01/33

     635        688,937   

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

     955        1,009,664   

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

     2,105        2,256,181   
    

 

 

 
               8,007,630   

Minnesota — 1.1%

    

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

     2,135        2,519,898   

Mississippi — 0.3%

    

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

     675        729,938   

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        189,219   

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

     175        185,048   
    

 

 

 
               374,267   
Municipal Bonds   

Par  

(000)

    Value  

Nebraska — 0.3%

    

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

   $ 575      $ 608,350   

New Hampshire — 1.4%

    

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

     3,035        3,359,168   

New Jersey — 5.1%

    

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

    

5.13%, 9/15/23

     1,410        1,426,666   

5.25%, 9/15/29

     1,365        1,379,510   

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

     1,550        1,652,300   

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

     1,925        2,051,011   

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

    

Series A, 5.50%, 6/15/41

     1,575        1,731,398   

Series B, 5.25%, 6/15/36

     1,705        1,850,215   

Rutgers — The State University of New Jersey, Refunding RB, Series L:

    

5.00%, 5/01/38

     350        386,260   

5.00%, 5/01/43

     365        399,587   

Tobacco Settlement Financing Corp. New Jersey, Refunding RB, Series 1A, 4.50%, 6/01/23

     1,215        1,176,630   
    

 

 

 
               12,053,577   

New York — 7.8%

    

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

     1,500        1,507,635   

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

     1,560        1,682,429   

County of Dutchess New York IDA, Refunding RB, St. Francis Hospital, Series A, 7.50%, 3/01/29 (d)(e)

     790        718,821   

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

     1,450        1,648,331   

Metropolitan Transportation Authority, RB, Series B:

    

5.25%, 11/15/38

     1,715        1,887,838   

5.25%, 11/15/39

     610        672,006   

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

     1,740        1,912,556   

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        924,477   

New York State Dormitory Authority, Refunding RB, General Purpose, Series A, 5.00%, 6/15/31

     1,235        1,383,558   

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

    

6.00%, 12/01/36

     900        989,883   

6.00%, 12/01/42

     875        960,811   

Sales Tax Asset Receivable Corp., Refunding RB, Series A (AMBAC), 5.25%, 10/15/27

     4,240        4,330,270   
    

 

 

 
               18,618,615   

North Carolina — 0.6%

    

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

     970        1,056,670   

 

See Notes to Financial Statements.

 

                
36    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

North Carolina (concluded)

    

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

   $ 415      $ 456,649   
    

 

 

 
               1,513,319   

Ohio — 0.2%

    

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

     470        492,226   

Oklahoma — 0.4%

    

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

     975        939,237   

Pennsylvania — 4.3%

    

City of Philadelphia Pennsylvania IDA, RB:

    

Arbor House, Inc. Project, Series E, 6.10%, 7/01/33

     1,095        1,102,731   

Commercial Development, AMT, 7.75%, 12/01/17

     725        726,965   

Saligman House Project, Section 8 Retirement Facilities, Series C (HUD), 6.10%, 7/01/33

     1,230        1,238,684   

Pennsylvania Economic Development Financing Authority, RB:

    

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

     2,520        2,870,481   

National Gypsum Co., Series B, AMT, 6.13%, 11/01/27

     2,500        2,500,100   

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

     795        854,506   

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

     885        845,847   
    

 

 

 
               10,139,314   

South Carolina — 1.0%

    

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

     2,285        2,437,090   

Tennessee — 1.3%

    

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

     980        1,053,333   

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

     1,940        1,922,172   
    

 

 

 
               2,975,505   

Texas — 8.8%

    

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/46

     1,480        1,619,668   

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

     250        250,890   

Sub-Lien, 5.00%, 1/01/42

     220        213,882   

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

     1,500        1,622,265   

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

     1,050        1,177,396   

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

     1,070        1,209,250   

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        344,880   

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

     1,910        2,429,444   

La Vernia Higher Education Finance Corp., RB, Kipp, Inc., Series A, 6.38%, 8/15/44

     450        499,576   
Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

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

   $ 1,400      $ 391,398   

North Texas Tollway Authority, Refunding RB, 2nd Tier System, Series F, 6.13%, 1/01/31

     4,190        4,488,747   

San Antonio Energy Acquisition Public Facility Corp., RB, Gas Supply:

    

5.50%, 8/01/24

     1,100        1,252,482   

5.50%, 8/01/25

     1,120        1,285,200   

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

    

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

     2,000        2,318,960   

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

     1,700        1,940,414   
    

 

 

 
               21,044,452   

Vermont — 0.2%

    

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

     460        465,860   

Virginia — 2.7%

    

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

     1,000        1,020,200   

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

    

5.00%, 7/01/42

     625        570,469   

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

     970        875,415   

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

    

5.25%, 1/01/32

     550        576,218   

6.00%, 1/01/37

     3,180        3,448,551   
    

 

 

 
               6,490,853   

Washington — 0.8%

    

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

     1,625        1,805,098   

Wisconsin — 3.2%

    

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

     4,980        5,826,500   

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

     1,710        1,876,674   
    

 

 

 
               7,703,174   

Wyoming — 0.1%

    

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

     210        215,968   
Total Municipal Bonds — 112.2%              267,346,646   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
 

California — 9.6%

    

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

     2,270        2,484,442   

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

     1,845        2,091,750   

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

     6,600        7,278,744   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    37


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  

California (concluded)

    

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

   $ 4,122      $ 4,443,114   

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

     1,620        1,795,592   

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

     748        859,396   

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

     3,494        3,879,766   
    

 

 

 
               22,832,804   

Colorado — 2.5%

    

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

    

Series C-3, 5.10%, 10/01/41

     2,580        2,676,156   

Series C-7, 5.00%, 9/01/36

     1,650        1,711,710   

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

     1,490        1,689,220   
    

 

 

 
               6,077,086   

Connecticut — 2.9%

    

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

    

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

     3,179        3,476,672   

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

     3,262        3,560,912   
    

 

 

 
               7,037,584   

Florida — 1.8%

    

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

     3,939        4,229,574   

Georgia — 1.0%

    

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

     2,259        2,464,000   

Massachusetts — 2.0%

    

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

     4,502        4,901,226   

New Hampshire — 0.7%

    

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

     1,409        1,599,410   

New York — 6.5%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series FF-2, 5.50%, 6/15/40

     1,110        1,257,078   

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

     1,110        1,232,524   

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

     7,440        8,030,439   

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

     4,460        4,933,161   
    

 

 

 
               15,453,202   

North Carolina — 0.5%

    

North Carolina Capital Facilities Finance Agency, Refunding RB, Wake Forest University, 5.00%, 1/01/38

     1,080        1,191,521   
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  

Ohio — 4.6%

    

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

   $ 9,644      $ 10,856,373   

Tennessee — 1.0%

    

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

     2,250        2,402,730   

Texas — 5.0%

    

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

     1,720        1,860,386   

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

     2,350        2,546,954   

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

     4,624        5,213,713   

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

     2,040        2,254,291   
    

 

 

 
               11,875,344   

Utah — 1.1%

    

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

     2,518        2,657,002   

Virginia — 2.7%

    

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

     3,749        4,174,680   

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

     2,095        2,229,495   
    

 

 

 
               6,404,175   

Washington — 0.9%

    

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

     1,860        2,048,583   

Wisconsin — 1.8%

    

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

     3,959        4,210,304   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 44.6%
        106,240,918   
Total Long-Term Investments
(Cost — $346,105,928) — 156.8%
        373,587,564   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (i)(j)

     804,766        804,766   
Total Short-Term Securities
(Cost — $804,766) — 0.4%
        804,766   
Total Investments (Cost — $346,910,694) — 157.2%        374,392,330   
Other Assets Less Liabilities — 3.2%        7,672,186   

Liability for TOB Trust Certificates, Including
Interest Expense and Fees Payable — (25.3%)

   

    (60,251,209
VMTP Shares, at Liquidation Value — (35.1%)        (83,700,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 238,113,307   
    

 

 

 

 

See Notes to Financial Statements.

 

                
38    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

 

Notes to Schedule of investments

 

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

 

(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)   Non-income producing security.

 

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

 

(f)   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.

 

(g)   Represent bonds transferred to a TOB. In exchange for which the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(h)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from October 1, 2016 to February 15, 2031 is $11,666,423.

 

(i)   Investments in issuers considered to be an affiliate of the Fund during the year ended April 30, 2014, for purposes of Section 2(a)(3) of the Investment Company Act 1940, were as follows:

 

Affiliate      Shares Held
at April 30,
2013
       Net
Activity
       Shares Held
at April 30,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       1,244,129           (439,363        804,766         $ 1,198   

 

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

 

Ÿ  

Financial futures contracts outstanding as of April 30, 2014 were as follows:

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (269   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2014   $ 33,469,484      $ (83,241

 

Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2014:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 373,587,564              $ 373,587,564   

Short-Term Securities

  $ 804,766                          804,766   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 804,766         $ 373,587,564              $ 374,392,330   
 

 

 

 

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

      

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2             

Liabilities:

                

Interest rate contracts

  $ (83,241                     $ (83,241

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

      

 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    39


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

 

The carrying amount for certain of the Fund’s assets and/or liabilities approximates fair value for financial reporting purposes. As of April 30, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 417,000                             $ 417,000   

Liabilities:

                

Bank overdraft

            $ (1,197             (1,197

TOB Trust certificates

              (60,238,073             (60,238,073

VMTP Shares

              (83,700,000                  (83,700,000
 

 

 

 

Total

  $ 417,000         $ (143,939,270                $ (143,522,270
 

 

 

 

There were no transfers between levels during the year ended April 30, 2014.

 

See Notes to Financial Statements.

 

                
40    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments April 30, 2014

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 3.5%

    

County of Jefferson Alabama Sewer, Refunding RB:

    

Convertible CAB, Senior Lien, Series C (AGM), 0.00%, 10/01/38 (a)

   $ 310      $ 188,399   

Convertible CAB, Senior Lien, Series C (AGM), 0.00%, 10/01/42 (a)

     270        163,042   

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

     420        426,195   

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

     1,875        1,977,938   

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

     3,450        3,437,201   
    

 

 

 
               6,192,775   

Alaska — 0.7%

    

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

     1,660        1,205,094   

Arizona — 1.2%

    

City of Show Low Arizona, Special Assessment Bonds, Improvement District No. 5, 6.38%, 1/01/15

     10        10,069   

Phoenix IDA Arizona, Refunding RB, America West Airlines, Inc. Project, AMT, 6.30%, 4/01/23

     2,060        2,064,182   
    

 

 

 
               2,074,251   

California — 17.0%

    

Benicia Unified School District, GO, CAB, Series A (NPFGC), 0.00%, 8/01/20 (b)

     2,000        1,724,440   

California Health Facilities Financing Authority, RB:

    

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

     1,110        1,277,788   

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

     1,585        1,877,559   

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

     635        694,531   

California Pollution Control Financing Authority, RB (c):

    

County of San Diego California Water Authority Desalination Project Pipeline, 5.00%, 11/21/45

     620        620,137   

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

     515        516,334   

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

     730        715,553   

California State Public Works Board, LRB Various Capital Projects:

    

Series I, 5.00%, 11/01/38

     405        434,107   

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

     600        719,454   

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

     1,090        1,162,420   

California Statewide Communities Development Authority, Refunding RB, Episcopal Communities & Services, 5.00%, 5/15/47

     185        186,293   

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

     400        450,624   

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

     185        205,870   

San Diego Community College District California, GO, Election of 2006, 5.00%, 8/01/43

     545        600,503   

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

     2,525        1,364,232   

San Marino Unified School District, GO, Series A (NPFGC) (b):

    

0.00%, 7/01/17

     1,820        1,744,561   

0.00%, 7/01/18

     1,945        1,824,488   

0.00%, 7/01/19

     2,070        1,891,711   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

  

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

   $ 1,265      $ 1,516,153   

6.50%, 4/01/33

     7,325        8,927,197   

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

     1,640        1,601,952   
    

 

 

 
               30,055,907   

Colorado — 1.5%

    

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

     1,055        1,065,898   

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

     510        556,298   

University of Colorado, RB, Series A, 5.38%, 6/01/38

     920        1,052,397   
    

 

 

 
               2,674,593   

Connecticut — 1.6%

    

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

     685        729,593   

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

     1,875        2,050,425   
    

 

 

 
               2,780,018   

Delaware — 1.5%

    

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

     570        609,986   

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

     2,050        2,091,676   
    

 

 

 
               2,701,662   

District of Columbia — 2.7%

    

Metropolitan Washington Airports Authority, Refunding RB:

    

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

     255        266,294   

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

     1,000        1,051,870   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/34 (b)

     10,170        3,480,988   
    

 

 

 
               4,799,152   

Florida — 6.0%

    

Ballantrae Community Development District, Special Assessment Bonds, 6.00%, 5/01/35

     1,430        1,433,575   

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

     1,725        1,854,254   

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

     545        610,782   

County of Hillsborough Florida IDA, RB, National Gypsum Co., Series B, AMT, 7.13%, 4/01/30

     1,380        1,381,090   

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

     1,765        518,451   

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

     330        352,549   

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

     1,525        1,739,491   

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

     470        311,507   

Preserve at Wilderness Lake Community Development District, Special Assessment Bonds, Series A, 5.90%, 5/01/34

     1,165        1,165,175   

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

     1,260        1,232,998   
    

 

 

 
               10,599,872   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    41


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Georgia — 1.3%

    

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

   $ 420      $ 465,486   

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

     1,740        1,892,250   
    

 

 

 
               2,357,736   

Hawaii — 0.4%

    

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

     680        750,645   

Idaho — 1.1%

    

County of Power Idaho Industrial Development Corp., RB, FMC Corp. Project, AMT, 6.45%, 8/01/32

     2,000        2,002,720   

Illinois — 16.8%

    

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

    

Series A, 5.75%, 1/01/39

     2,500        2,729,275   

Series C, 6.50%, 1/01/41

     2,935        3,405,304   

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

     1,615        1,630,246   

City of Chicago Illinois, GO, Refunding, Series A, 5.25%, 1/01/32

     2,290        2,375,989   

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

     410        434,916   

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

     600        608,400   

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

     1,350        1,354,117   

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

     530        565,812   

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

     3,645        3,762,187   

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

     410        452,029   

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

     800        888,160   

Illinois State Toll Highway Authority, RB, Series A, 5.00%, 1/01/38

     1,165        1,228,609   

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

    

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

     9,555        1,553,452   

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

     2,230        2,275,180   

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

     1,260        1,285,225   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     230        268,042   

6.00%, 6/01/28

     500        580,210   

State of Illinois, GO:

    

5.00%, 2/01/39

     810        839,039   

Series A, 5.00%, 4/01/38

     1,920        1,986,970   

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

     315        349,149   

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

    

5.00%, 4/01/39

     425        456,263   

5.00%, 4/01/44

     520        555,188   
    

 

 

 
               29,583,762   

Indiana — 4.5%

    

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

    

6.75%, 1/01/34

     415        445,092   

7.00%, 1/01/44

     1,000        1,079,300   

Indiana Finance Authority, RB, Series A:

    

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

     1,660        1,825,552   
Municipal Bonds   

Par  

(000)

    Value  

Indiana (concluded)

    

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

    

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

   $ 225      $ 227,194   

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

     740        749,731   

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

     420        443,789   

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

     1,660        1,802,278   

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

     565        634,387   

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

     640        691,520   
    

 

 

 
               7,898,843   

Iowa — 2.3%

    

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

    

5.00%, 12/01/19

     485        490,869   

5.50%, 12/01/22

     1,175        1,193,953   

5.25%, 12/01/25

     230        229,910   

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

     945        987,156   

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

     1,270        1,081,075   
    

 

 

 
               3,982,963   

Kansas — 0.7%

    

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

     1,105        1,234,550   

Kentucky — 0.5%

    

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

     520        558,912   

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

     635        386,670   
    

 

 

 
               945,582   

Louisiana — 3.4%

    

East Baton Rouge Sewerage Commission, RB, Series A, 5.25%, 2/01/39

     420        456,695   

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

     2,500        2,774,375   

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

     310        323,392   

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

    

5.50%, 5/15/30

     510        551,198   

5.25%, 5/15/31

     435        460,278   

5.25%, 5/15/32

     555        583,771   

5.25%, 5/15/33

     600        629,448   

5.25%, 5/15/35

     255        267,623   
    

 

 

 
               6,046,780   

Maine — 0.1%

    

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

     150        157,005   

Maryland — 1.2%

    

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

     220        229,176   

 

See Notes to Financial Statements.

 

                
42    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Maryland (concluded)

    

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

   $ 605      $ 647,284   

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

     1,095        1,189,170   
    

 

 

 
               2,065,630   

Massachusetts — 3.2%

    

Massachusetts Development Finance Agency, Refunding RB:

    

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

     845        943,104   

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

     1,155        1,161,225   

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

     360        384,671   

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

     2,100        2,104,515   

Massachusetts HFA, Refunding RB, Series F, AMT, 5.70%, 6/01/40

     990        1,024,591   
    

 

 

 
               5,618,106   

Michigan — 3.3%

    

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

    

Series A, 5.00%, 7/01/32

     790        762,508   

Series A, 5.25%, 7/01/39

     2,235        2,173,985   

Series B (AGM), 7.50%, 7/01/33

     460        499,072   

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

     690        729,496   

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

     1,520        1,629,166   
    

 

 

 
               5,794,227   

Minnesota — 1.0%

    

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

     1,540        1,817,631   

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        135,156   

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

     130        137,465   
    

 

 

 
               272,621   

New Hampshire — 1.0%

    

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

     1,530        1,693,419   

New Jersey — 3.6%

    

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

    

5.13%, 9/15/23

     1,040        1,052,293   

5.25%, 9/15/29

     990        1,000,524   

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

     1,125        1,199,250   

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

    

Series A, 5.50%, 6/15/41

     1,025        1,126,782   

Series B, 5.25%, 6/15/36

     1,235        1,340,185   
Municipal Bonds   

Par  

(000)

    Value  

New Jersey (concluded)

    

Rutgers — The State University of New Jersey, Refunding RB, Series L:

    

5.00%, 5/01/38

   $ 255      $ 281,418   

5.00%, 5/01/43

     265        290,111   
    

 

 

 
               6,290,563   

New York — 7.3%

    

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

     1,240        1,337,315   

County of Dutchess New York IDA, Refunding RB, St. Francis Hospital, Series A, 7.50%, 3/01/29 (d)(e)

     800        727,920   

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

     1,050        1,193,619   

Metropolitan Transportation Authority, RB, Series B:

    

5.25%, 11/15/38

     1,255        1,381,479   

5.25%, 11/15/39

     445        490,234   

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

     1,270        1,395,946   

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        668,886   

New York State Dormitory Authority, Refunding RB, General Purpose, Series A, 5.00%, 6/15/31

     895        1,002,660   

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

    

6.00%, 12/01/36

     650        714,916   

6.00%, 12/01/42

     630        691,784   

Sales Tax Asset Receivable Corp., Refunding RB, Series A (AMBAC), 5.25%, 10/15/27

     3,200        3,268,128   
    

 

 

 
               12,872,887   

North Carolina — 0.6%

    

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

     705        767,992   

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

     305        335,610   
    

 

 

 
               1,103,602   

Ohio — 0.2%

    

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

     350        366,551   

Pennsylvania — 3.0%

    

City of Philadelphia Pennsylvania IDA, RB, Commercial Development, AMT, 7.75%, 12/01/17

     540        541,463   

Pennsylvania Economic Development Financing Authority, RB:

    

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

     1,830        2,084,517   

National Gypsum Co., Series A, AMT, 6.25%, 11/01/27

     1,500        1,500,225   

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

     585        628,787   

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

     645        616,465   
    

 

 

 
               5,371,457   

South Carolina — 1.0%

    

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

     1,650        1,759,824   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    43


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Tennessee — 1.3%

    

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

   $ 720      $ 773,878   

County of Hardeman Tennessee Correctional Facilities Corp., RB, Series B, 7.38%, 8/01/17

     1,575        1,578,197   
    

 

 

 
               2,352,075   

Texas — 6.9%

    

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/46

     1,070        1,170,976   

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

     180        180,641   

Sub-Lien, 5.00%, 1/01/42

     160        155,550   

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

     260        291,546   

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

     535        604,625   

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

     240        254,681   

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

     1,380        1,755,305   

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A (b):

    

0.00%, 9/15/40

     2,525        717,984   

0.00%, 9/15/41

     1,395        371,251   

La Vernia Higher Education Finance Corp., RB, Kipp, Inc., Series A, 6.38%, 8/15/44

     320        355,254   

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

     1,015        283,764   

North Texas Tollway Authority, Refunding RB, 2nd Tier System, Series F, 6.13%, 1/01/31

     3,020        3,235,326   

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

    

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

     1,165        1,350,794   

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

     1,300        1,483,846   
    

 

 

 
               12,211,543   

Vermont — 0.1%

    

Vermont Educational & Health Buildings Financing Agency, RB, 6.50%, 6/15/32

     80        80,858   

Virginia — 3.1%

    

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

     2,500        2,550,500   

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

    

5.25%, 1/01/32

     400        419,068   

6.00%, 1/01/37

     2,325        2,521,346   
    

 

 

 
               5,490,914   

Washington — 0.8%

    

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

     1,195        1,327,442   

Wisconsin — 3.2%

    

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

     3,620        4,235,328   
Municipal Bonds   

Par  

(000)

    Value  

Wisconsin (concluded)

    

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

   $ 1,235      $ 1,355,375   
    

 

 

 
               5,590,703   
Total Municipal Bonds — 107.8%              190,123,963   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
 

California — 11.2%

    

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

     1,640        1,794,927   

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

     1,335        1,513,543   

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

     4,770        5,260,547   

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

     2,968        3,199,042   

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

     1,170        1,296,816   

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

     553        635,953   

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

     5,519        6,127,699   
    

 

 

 
               19,828,527   

Colorado — 2.5%

    

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

    

Series C-3, 5.10%, 10/01/41

     1,870        1,939,695   

Series C-7, 5.00%, 9/01/36

     1,200        1,244,880   

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

     1,080        1,224,401   
    

 

 

 
               4,408,976   

Connecticut — 2.9%

    

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

    

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

     2,299        2,514,574   

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

     2,362        2,577,838   
    

 

 

 
               5,092,412   

Florida — 1.7%

    

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

     2,840        3,048,729   

Georgia — 1.0%

    

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

     1,649        1,798,938   

Massachusetts — 2.0%

    

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

     3,211        3,496,208   

New Hampshire — 0.7%

    

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

     1,019        1,157,020   

 

See Notes to Financial Statements.

 

                
44    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  

New York — 8.4%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series FF-2, 5.50%, 6/15/40

   $ 810      $ 917,327   

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

     3,299        3,660,582   

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

     810        899,409   

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

     5,400        5,828,544   

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

     3,250        3,594,793   
    

 

 

 
               14,900,655   

North Carolina — 0.5%

    

North Carolina Capital Facilities Finance Agency, Refunding RB, Wake Forest University, 5.00%, 1/01/38

     800        882,608   

Ohio — 4.5%

    

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

     6,974        7,851,032   

Tennessee — 1.5%

    

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

     2,500        2,669,700   

Texas — 5.1%

    

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

     1,260        1,362,841   

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

     3,363        3,791,791   

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

     1,710        1,853,315   

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

     1,800        1,989,081   
    

 

 

 
               8,997,028   
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  

Utah — 0.8%

    

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

   $ 1,394      $ 1,470,840   

Virginia — 2.7%

    

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

     2,729        3,039,167   

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

     1,553        1,652,710   
    

 

 

 
               4,691,877   

Washington — 0.9%

    

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

     1,365        1,503,396   

Wisconsin — 1.7%

    

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

     2,859        3,040,775   

Total Municipal Bonds Transferred to

Tender Option Bond Trusts — 48.1%

  

  

    84,838,721   
Total Long-Term Investments
(Cost — $253,793,855) — 155.9%
        274,962,684   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (i)(j)

     944,029        944,029   
Total Short-Term Securities
(Cost — $944,029) — 0.5%
        944,029   
Total Investments (Cost — $254,737,884) — 156.4%        275,906,713   
Other Assets Less Liabilities — 2.3%        3,996,536   

Liability for TOB Trust Certificates, Including
Interest Expense and Fees Payable — (27.5)%

   

    (48,508,115
VMTP Shares, at Liquidation Value — (31.2)%        (55,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 176,395,134   
    

 

 

 

 

Notes to Schedule of investments

 

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

 

(b)   Zero-coupon bond.

 

(c)   Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

(d)   Non-income producing security.

 

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

 

(f)   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.

 

(g)   Represent bonds transferred to a TOB. In exchange for which the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(h)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from October 1, 2016 to February 15, 2031 is $8,468,522.

 

(i)   Investments in issuers considered to be an affiliate of the Fund during the year ended April 30, 2014, for purposes of Section 2(a)(3) of the Investment Company Act 1940, were as follows:

 

Affiliate      Shares Held
at April 30,
2013
       Net
Activity
       Shares Held
at April 30,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       1,169,756           (225,727        944,029         $ 564   

 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    45


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

 

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

 

Ÿ  

Financial futures contracts outstanding as of April 30, 2014 were as follows:

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (179   10-Year U.S Treasury Note   Chicago Board of Trade   June 2014   $ 22,271,516      $ (40,052

 

Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2014:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 274,962,684              $ 274,962,684   

Short-Term Securities

  $ 944,029                          944,029   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 944,029         $ 274,962,684              $ 275,906,713   
 

 

 

      

 

 

      

 

    

 

 

 

 

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

      

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2                 

Liabilities:

                

Interest rate contracts

  $ (40,052                     $ (40,052

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

      

The carrying amount for certain of the Fund’s assets and/or liabilities approximates fair value for financial statement purposes. As of April 30, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 245,000                             $ 245,000   

Liabilities:

                

Bank overdraft

            $ (854                  (854

TOB trust certificates

              (48,497,038                  (48,497,038

VMTP Shares

              (55,000,000                  (55,000,000
 

 

 

 

Total

  $ 245,000         $ (103,497,892                $ (103,252,892
 

 

 

 

There were no transfers between levels during the year ended April 30, 2014.

 

See Notes to Financial Statements.

 

                
46    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments April 30, 2014

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 1.8%

    

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

   $ 2,330      $ 2,691,196   

City of Selma Alabama IDB, RB, Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.38%, 12/01/35

     565        599,245   
    

 

 

 
               3,290,441   

California — 23.1%

    

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

     2,895        3,274,332   

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

     1,730        2,049,323   

California State Public Works Board, LRB, Various Capital Projects, Series I, 5.50%, 11/01/30

     1,500        1,757,955   

California State Public Works Board, RB, Department of Corrections & Rehabilitation, Series F, 5.25%, 9/01/33

     725        811,174   

Central Unified School District, GO, Election of 2008, Series A (AGC), 5.63%, 8/01/33

     1,325        1,451,630   

City & County of San Francisco California Airports Commission, Refunding ARB, 2nd Series A, AMT:

    

5.50%, 5/01/28

     1,085        1,244,115   

5.25%, 5/01/33

     850        939,820   

City of San Jose California, Refunding ARB, Series A-1, AMT:

    

5.50%, 3/01/30

     2,400        2,648,040   

5.75%, 3/01/34

     2,180        2,424,204   

City of Sunnyvale California, Refunding RB, 5.25%, 4/01/40

     1,605        1,751,264   

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

     2,100        2,382,261   

County of Ventura California Community College District, GO, Election of 2002, Series C, 5.50%, 8/01/33

     1,850        2,131,255   

Kern Community College District, GO, Safety, Repair & Improvement, Election of 2002, Series C, 5.50%, 11/01/33

     1,420        1,655,408   

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

     1,000        1,137,040   

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

     1,575        1,769,717   

Oceanside Unified School District, GO, Series A (AGC), 5.25%, 8/01/33

     1,825        1,950,834   

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

     1,335        1,467,833   

San Pablo Joint Powers Financing Authority, Refunding, Tax Allocation Bonds, CAB (NPFGC) (a):

    

0.00%, 12/01/24

     2,635        1,470,066   

0.00%, 12/01/25

     2,355        1,233,737   

0.00%, 12/01/26

     2,355        1,142,081   

State of California Public Works Board, LRB, Various Capital Projects, Series I, 5.50%, 11/01/31

     2,465        2,871,478   

Township of Washington California Health Care District, GO, Election of 2004, Series B, 5.50%, 8/01/40

     540        620,287   

University of California, Refunding RB, The Regents of Medical Center, Series J, 5.25%, 5/15/38

     4,070        4,488,477   
    

 

 

 
               42,672,331   
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      $ 1,125,600   

5.50%, 11/15/30

     340        378,689   

5.50%, 11/15/31

     405        447,039   

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

     1,900        2,151,427   
    

 

 

 
               4,102,755   

District of Columbia — 1.2%

    

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

     2,000        2,251,540   

Florida — 13.9%

    

City of Jacksonville Florida, Refunding RB, Series A, 5.25%, 10/01/33

     400        445,552   

City of Saint Petersburg FL Public Utility Revenue, Refunding, (NPFGC), 5.00%, 10/01/35

     4,295        4,503,136   

County of Hillsborough Florida Aviation Authority, Refunding ARB, Tampa International Airport, Series A, AMT, 5.50%, 10/01/29

     1,735        1,940,407   

County of Lee Florida, Refunding ARB, Series A, AMT, 5.38%, 10/01/32

     1,500        1,608,165   

County of Miami-Dade Florida, RB, Seaport:

    

Series A, 5.38%, 10/01/33

     1,015        1,112,338   

Series A, 6.00%, 10/01/38

     1,000        1,148,030   

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

     460        523,503   

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

     615        687,170   

County of Miami-Dade Florida Aviation, Refunding ARB, Series A, AMT, 5.00%, 10/01/31

     2,900        3,092,676   

County of Orange Florida School Board, COP, Series A (AGC), 5.50%, 8/01/34

     4,645        5,079,958   

Reedy Creek Improvement District, GO, Series A, 5.25%, 6/01/32

     1,040        1,160,848   

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

     3,995        4,396,178   
    

 

 

 
               25,697,961   

Georgia — 1.9%

    

Augusta Georgia Water & Sewerage, RB, (AGM), 5.25%, 10/01/34

     3,500        3,565,870   

Hawaii — 0.5%

    

State of Hawaii, Department of Transportation, COP, AMT:

    

5.25%, 8/01/25

     425        471,185   

5.25%, 8/01/26

     460        505,103   
    

 

 

 
               976,288   

Illinois — 17.3%

    

City of Chicago, GO, Refunding Series A, 5.25%, 1/01/29

     1,000        1,055,000   

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

    

Series A, 5.75%, 1/01/39

     1,145        1,250,008   

Series C, 6.50%, 1/01/41

     5,225        6,062,254   

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

     850        877,923   

City of Chicago Illinois, Refunding RB, Series A:

    

Sales Tax, 5.25%, 1/01/38

     1,795        1,904,082   

Waterworks, Second Lien (AMBAC), 5.00%, 11/01/36

     1,735        1,801,902   

City of Chicago Illinois Transit Authority, RB:

    

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

     2,000        2,203,200   

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

     1,000        1,074,290   

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

     1,790        1,910,950   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    47


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Illinois (concluded)

    

City of Chicago Illinois Wastewater Transmission, RB, 2nd Lien, 5.00%, 1/01/42

   $ 2,050      $ 2,110,372   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago:

    

5.50%, 12/01/38

     1,250        1,378,138   

5.25%, 12/01/43

     2,990        3,182,107   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,405        1,637,387   

6.00%, 6/01/28

     400        464,168   

State of Illinois, GO:

    

5.25%, 2/01/31

     875        950,031   

5.25%, 2/01/32

     1,355        1,462,180   

5.50%, 7/01/33

     2,000        2,191,280   

5.50%, 7/01/38

     425        463,620   
    

 

 

 
               31,978,892   

Indiana — 3.8%

    

Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges East End Crossing Project, Series A, AMT, 5.00%, 7/01/40

     565        574,526   

Indianapolis Local Public Improvement Bond Bank, RB, Series F, 5.25%, 2/01/36

     3,055        3,341,223   

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

     2,780        2,990,168   
    

 

 

 
               6,905,917   

Louisiana — 1.6%

    

Lake Charles Harbor & Terminal District, RB, Series B, AMT, 5.50%, 1/01/29

     1,500        1,672,500   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.50%, 5/15/29

     1,215        1,320,839   
    

 

 

 
               2,993,339   

Massachusetts — 3.5%

    

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

     1,500        1,529,550   

Massachusetts School Building Authority, RB, Dedicated Sales Tax, Series A (AGM), 5.00%, 8/15/15 (b)

     4,600        4,884,096   
    

 

 

 
               6,413,646   

Michigan — 4.5%

    

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

    

Series B (AGM), 7.50%, 7/01/33

     750        813,705   

Series C-1 (AGM), 7.00%, 7/01/27

     4,810        5,208,893   

Royal Oak Hospital Finance Authority, Refunding RB, William Beaumont Hospital, 8.25%, 9/01/18 (b)

     1,910        2,342,653   
    

 

 

 
               8,365,251   

Minnesota — 0.9%

    

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

     1,325        1,554,715   

Mississippi — 2.4%

    

Mississippi Development Bank, RB, Special Obligation, Jackson Water & Sewer System Project (AGM), 6.88%, 12/01/40

     2,595        3,344,566   

Mississippi State University Educational Building Corp., Refunding RB, Mississippi State University Improvement Project, 5.25%, 8/01/38

     1,000        1,121,290   
    

 

 

 
               4,465,856   
Municipal Bonds    Par  
(000)
    Value  

Nevada — 3.8%

    

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

   $ 1,410      $ 1,512,577   

County of Clark Nevada, GO, Limited Tax, 5.00%, 6/01/38

     3,500        3,702,440   

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

     1,500        1,711,740   
    

 

 

 
               6,926,757   

New Jersey — 8.2%

    

New Jersey EDA, RB, The Goethals Bridge Replacement Project:

    

AMT, 5.38%, 1/01/43

     3,000        3,158,070   

AMT, 5.00%, 1/01/31

     790        843,641   

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

     2,100        2,235,576   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     1,890        2,109,467   

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

     1,780        1,956,754   

Transportation System, Series A (AGC), 5.63%, 12/15/28

     3,170        3,713,148   

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

     1,000        1,085,170   
    

 

 

 
               15,101,826   

New York — 6.8%

    

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

    

Fiscal 2009, 5.25%, 6/15/40

     3,410        3,800,445   

Fiscal 2011, 5.38%, 6/15/43

     1,305        1,480,013   

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

     2,510        2,787,280   

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/44

     2,000        2,184,280   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 166th Series, 5.25%, 7/15/36

     2,000        2,230,320   
    

 

 

 
               12,482,338   

Ohio — 1.8%

    

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1:

    

5.25%, 2/15/30

     1,000        1,128,170   

5.25%, 2/15/31

     2,000        2,243,500   
    

 

 

 
               3,371,670   

Pennsylvania — 1.0%

    

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

     650        698,653   

Township of Bristol Pennsylvania School District, GO, 5.25%, 6/01/37

     1,000        1,096,000   
    

 

 

 
               1,794,653   

South Carolina — 3.6%

    

County of Charleston South Carolina, RB, Special Source, 5.25%, 12/01/38

     2,180        2,482,628   

County of Charleston South Carolina Airport District, ARB, Series A, AMT:

    

5.50%, 7/01/38

     1,000        1,082,980   

6.00%, 7/01/38

     1,695        1,892,281   

5.50%, 7/01/41

     1,000        1,086,130   
    

 

 

 
               6,544,019   

 

See Notes to Financial Statements.

 

                
48    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Texas — 23.2%

    

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

   $ 2,500      $ 2,785,025   

City of Beaumont Texas, GO, Certificates of Obligation, 5.25%, 3/01/37

     1,360        1,529,578   

City of Houston Texas Utility System, Refunding RB, Combined 1st Lien, Series A (AGC), 6.00%, 11/15/35

     4,000        4,673,600   

Dallas Area Rapid Transit, Refunding RB, Senior Lien, 5.25%, 12/01/38

     2,600        2,919,592   

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

    

Series A, 5.00%, 11/01/38

     1,965        2,027,684   

Series H, 5.00%, 11/01/37

     2,200        2,277,880   

Lower Colorado River Authority, Refunding RB, 5.50%, 5/15/33

     1,240        1,383,927   

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

     4,250        4,786,775   

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

    

(NPFGC), Series A, 5.63%, 1/01/33

     6,585        7,304,411   

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

     4,885        5,407,402   

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

     6,275        6,946,048   

Red River Education Financing Corp., RB, Texas Christian University Project, 5.25%, 3/15/38

     620        696,601   
    

 

 

 
               42,738,523   

Virginia — 1.2%

    

City of Lexington Virginia IDA, RB, Washington & Lee University, 5.00%, 1/01/43

     570        621,044   

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

     1,300        1,614,067   
    

 

 

 
               2,235,111   

Washington — 1.5%

    

City of Seattle Washington Municipal Light & Power, Refunding RB, Series A, 5.25%, 2/01/36

     1,375        1,523,761   

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

     1,075        1,218,287   
    

 

 

 
               2,742,048   
Total Municipal Bonds129.7%              239,171,747   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
              

Alabama — 1.2%

    

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

     2,120        2,231,024   

California — 1.9%

    

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

     3,149        3,496,785   

Colorado — 3.2%

    

Colorado Health Facilities Authority, RB, Catholic Health, Series C-3 (AGM), 5.10%, 10/01/41

     5,610        5,819,085   

District of Columbia — 0.6%

    

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

     1,040        1,192,640   

Florida — 4.9%

    

County of Lee Florida Housing Finance Authority, RB, S/F Housing, Multi-County Program, Series A-2, AMT (Ginnie Mae), 6.00%, 9/01/40

     435        451,587   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
   Par  
(000)
    Value  

Florida (concluded)

    

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1, 6.00%, 7/01/38

   $ 7,500      $ 8,592,375   
    

 

 

 
               9,043,962   

Illinois — 1.4%

    

City of Chicago Illinois, Refunding RB, Waterworks, 2nd Lien (AGM), 5.25%, 11/01/33

     2,508        2,649,953   

Kentucky — 0.9%

    

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

     1,406        1,601,754   

Nevada — 5.5%

    

County of Clark Nevada Water Reclamation District, GO:

    

Limited Tax, 6.00%, 7/01/38

     5,000        5,799,450   

Series B, 5.50%, 7/01/29

     3,749        4,394,379   
    

 

 

 
               10,193,829   

New Jersey — 1.3%

    

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

     2,291        2,437,226   

New York — 5.1%

    

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

     1,400        1,552,974   

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

     4,530        4,889,501   

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

     2,660        2,942,199   
    

 

 

 
               9,384,674   

Utah — 0.6%

    

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

     1,004        1,059,637   
Total Municipal Bonds Transferred to Tender Option Bond Trusts26.6%              49,110,569   
Total Long-Term Investments
(Cost — $266,299,012) — 156.3%
        288,282,316   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (e)(f)

     4,947,879        4,947,879   
Total Short-Term Securities
(Cost — $4,947,879) — 2.7%
        4,947,879   
Total Investments (Cost — $271,246,891) — 159.0%        293,230,195   
Other Assets Less Liabilities1.9%        3,444,799   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable
(13.7%)

   

    (25,196,205
VMTP Shares, at Liquidation Value(47.2%)        (87,000,000
    

 

 

 
Net Assets Applicable to Common Shares100.0%      $ 184,478,789   
    

 

 

 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    49


Table of Contents
Schedule of Investments (continued)    BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

 

Notes to Schedule of investments

 

(a)   Zero-coupon bond.

 

(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)   Represent bonds transferred to a TOB. In exchange for which the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(d)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from October 1, 2016 to November 15, 2019 is $2,220,432.

 

(e)   Investments in issuers considered to be an affiliate of the Fund during the year ended April 30, 2014, for purposes of Section 2(a)(3) of the Investment Company Act 1940, were as follows:

 

Affiliate      Shares Held
at April 30,
2013
       Net
Activity
       Shares Held
at April 30,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       3,309,474           1,638,405           4,947,879         $ 1,138   

 

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

 

Ÿ  

Financial futures contracts outstanding as of April 30, 2014 were as follows:

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (163   10-Year U.S Treasury Note   Chicago Board of Trade   June 2014   $ 20,280,766      $ (18,669

 

Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

                
50    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2014:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 288,282,316              $ 288,282,316   

Short-Term Securities

  $ 4,947,879                          4,947,879   
 

 

 

 

Total

  $ 4,947,879         $ 288,282,316              $ 293,230,195   
 

 

 

 

 

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

    

 

     Level 1      Level 2        Level 3        Total  
Derivative Financial Instruments2               

Liabilities:

              

Interest rate contracts

  $ (18,669                        $ (18,669

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

      

The carrying amount for certain of the Fund’s assets and/or liabilities approximates fair value for financial statement purposes. As of April 30, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 250,998                        $ 250,998   

Liabilities:

                

TOB trust certificates

            $ (25,187,249             (25,187,249

VMTP Shares

              (87,000,000             (87,000,000
 

 

 

 

Total

  $ 250,998         $ (112,187,249           $ (111,936,251
 

 

 

 

There were no transfers between levels during the year ended April 30, 2014.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    51


Table of Contents

Schedule of Investments April 30, 2014

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 2.9%

    

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/34

   $ 4,615      $ 5,330,417   

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

    

5.50%, 1/01/21

     5,500        5,500,165   

5.25%, 1/01/23

     6,500        6,500,195   
    

 

 

 
               17,330,777   

Arizona — 5.3%

    

Arizona Board of Regents, University of Arizona, RB, 5.00%, 8/01/28

     2,000        2,247,000   

Arizona Health Facilities Authority, Refunding RB, Phoenix Children’s Hospital, Series A, 5.00%, 2/01/30

     2,685        2,796,830   

City of Tucson Arizona, COP, (AGC):

    

4.25%, 7/01/21

     1,870        2,012,700   

4.25%, 7/01/22

     1,895        2,028,730   

City of Tucson Arizona, COP, Refunding, (AGC), 4.00%, 7/01/20

     2,325        2,546,898   

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

     1,015        967,315   

County of Pima Arizona IDA, RB, Arizona Charter Schools Project:

    

Series C, 6.70%, 7/01/21

     20        20,033   

Series K, 6.38%, 7/01/31

     895        896,396   

County of Pima Arizona IDA, Refunding RB, Tucson Electric Power Co. Project, San Juan Project, Series A, 4.95%, 10/01/20

     2,325        2,608,092   

County of Pinal Arizona Electric District No. 3, Refunding RB, 5.00%, 7/01/25

     1,600        1,779,376   

Glendale Union School District No 205, GO, Series C:

    

5.00%, 7/01/24

     1,945        2,227,064   

5.00%, 7/01/27

     500        557,960   

Industrial Development Authority of the City of Phoenix, RB, 5.75%, 7/01/24 (a)(b)

     750        745,943   

Phoenix-Mesa Gateway Airport Authority, RB, Mesa Project, AMT:

    

5.00%, 7/01/27

     700        745,332   

5.00%, 7/01/32

     1,925        2,002,096   

Salt River Project Agricultural Improvement & Power District, RB, Series A, 5.00%, 1/01/25

     4,000        4,502,520   

Scottsdale IDA, Refunding RB, Scottsdale Healthcare, Series C (AGM), 5.00%, 9/01/35

     2,050        2,178,965   

State of Arizona, COP, Department of Administration, Series A (AGM),
4.25%, 10/01/23

     1,000        1,078,820   
    

 

 

 
               31,942,070   

Arkansas — 0.6%

    

Arkansas State University, RB,
5.00%, 12/01/33

     480        523,483   

City of Benton, RB:

    

5.00%, 6/01/28

     600        684,126   

5.00%, 6/01/29

     1,055        1,194,229   

City of Fort Smith, Refunding RB,
4.50%, 5/01/24

     875        995,820   
    

 

 

 
               3,397,658   

California — 3.5%

    

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 5.00% 8/15/22

     2,135        2,476,258   

California Pollution Control Financing Authority, RB, Mandatory Put Bonds, Republic Services, Inc. Project, Series B, AMT,
5.25%, 6/01/23 (c)

     605        649,129   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

California Pollution Control Financing Authority, Refunding RB, Pacific Gas, Series C, AMT (NPFGC), 4.75%, 12/01/23

   $ 5,000      $ 5,328,450   

City of San Jose California, Refunding ARB, Series A-1, AMT, 5.00%, 3/01/25

     2,000        2,208,460   

State of California, GO:

    

5.50%, 4/01/28

     15        15,064   

5.00%, 11/01/32

     2,000        2,177,920   

Various Purposes, 5.75%, 4/01/31

     7,000        8,177,400   
    

 

 

 
               21,032,681   

Colorado — 1.3%

    

Denver Urban Renewal Authority, Refunding, Tax Allocation Bond, Stapleton, Senior-Series A-1, 5.00%, 12/01/23

     2,500        2,863,875   

Plaza Metropolitan District No. 1, Tax Allocation Bonds, Public Improvement Fee, Tax Increment, 7.50%, 6/01/14 (d)

     2,570        2,586,242   

University of Northern Colorado, Refunding RB, Series A, 5.00%, 6/01/31

     2,000        2,274,900   
    

 

 

 
               7,725,017   

Connecticut — 2.3%

    

Connecticut State Development Authority, RB, Learjet, Inc. Project, AMT, 7.95%, 4/01/26

     1,160        1,198,616   

Connecticut State Health & Educational Facility Authority, Refunding RB, Lawrence & Memorial Hospital, Series F, 5.00%, 7/01/31

     4,530        4,832,966   

State of Connecticut, GO, Series B,
5.00%, 4/15/31

     6,990        7,820,832   
    

 

 

 
               13,852,414   

Florida — 9.0%

    

Broward County Florida Airport System, ARB, Series Q-2, AMT, 5.00%, 10/01/32

     1,250        1,321,175   

County of Broward Florida School Board, COP, Refunding, Series A (AGM), 5.00%, 7/01/24

     10,000        11,367,600   

County of Highlands Health Facilities Authority, Refunding RB, Adventis Health, Series G, 5.13%, 11/15/16 (d)

     35        39,100   

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

    

5.50%, 10/01/23

     1,000        1,154,800   

(AGM), 5.00%, 10/01/27

     1,635        1,769,119   

County of Miami-Dade Florida, RB, AMT, Series B:

    

6.00%, 10/01/28

     3,470        4,042,689   

6.00%, 10/01/29

     3,480        4,033,494   

County of Miami-Dade Florida Expressway Authority, Refunding RB, Series A,
5.00%, 7/01/26

     4,000        4,460,600   

County of Miami-Dade Florida Transit System Sales Surtax Revenue, Refunding RB:

    

5.00%, 7/01/32

     1,500        1,646,310   

5.00%, 7/01/33

     3,000        3,277,080   

County of Miami-Dade Florida Water & Sewer System Revenue, Refunding RB, Series C (BHAC), 5.00%, 10/01/23

     8,000        9,113,360   

Greater Orlando Aviation Authority Airport Facilities, Refunding RB, AMT, Series B:

    

5.00%, 10/01/25

     1,000        1,100,330   

5.00%, 10/01/26

     2,935        3,204,374   

Midtown Miami Community Development District, Refunding, Special Assessment Bonds, 4.25%, 5/01/24 (a)

     3,000        2,992,740   

 

See Notes to Financial Statements.

 

                
52    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Florida (concluded)

    

Midtown Miami Community Development District, Special Assessment Bonds:

    

Series A, 6.00%, 5/01/24

   $ 2,530      $ 2,538,804   

Series B, 6.50%, 5/01/37

     1,805        1,811,841   

Sterling Hill Community Development District, Refunding RB, Special Assessment Bonds, Series B, 5.50%, 11/01/10 (e)(f)

     155        99,216   
    

 

 

 
               53,972,632   

Georgia — 1.2%

    

Fulton County Development Authority, Refunding RB, Robert Woodruff, Series B,
5.25%, 3/15/24

     3,000        3,361,290   

Medical Center Hospital Authority, Refunding RB, Columbus Regional Healthcare (AGM):

    

4.00%, 8/01/23

     1,500        1,559,400   

4.13%, 8/01/24

     2,000        2,076,980   
    

 

 

 
               6,997,670   

Guam — 0.4%

    

Territory of Guam, RB, Section 30, Series A, 5.38%, 12/01/24

     2,100        2,264,052   

Hawaii — 0.9%

    

State of Hawaii Airports System, Refunding ARB, Series A, 5.25%, 7/01/29

     5,000        5,644,400   

Idaho — 0.6%

    

Idaho Health Facilities Authority, Refunding RB, St. Luke’s Regional Medical Center (AGM), 4.63%, 7/01/30

     3,700        3,843,597   

Illinois — 13.8%

    

City of Chicago, GO, Refunding Series A, 5.25%, 1/01/30

     1,000        1,047,820   

City of Chicago Illinois Midway Airport, Refunding ARB, AMT, 2nd Lien, Series A,
5.50%, 1/01/32

     1,500        1,613,280   

City of Chicago Illinois O’Hare International Airport, Refunding GARB, AMT:

    

Series C, 5.25%, 1/01/28

     1,350        1,478,736   

Series C, 5.25%, 1/01/29

     3,020        3,287,179   

Senior Lien, Series A, 5.00%, 1/01/23

     13,000        14,875,250   

City of Chicago Illinois Transit Authority, RB, 5.25%, 12/01/31

     3,700        4,035,294   

Madison-Macoupin Etc. Counties Community College District No. 536, GO, Refunding, Lewis & Clark Community College:

    

5.00%, 5/01/30

     475        510,350   

5.00%, 5/01/31

     500        535,260   

5.00%, 5/01/32

     500        533,315   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     3,500        4,078,900   

6.25%, 6/01/24

     12,750        14,110,553   

State of Illinois, GO:

    

5.25%, 2/01/30

     5,000        5,453,900   

5.00%, 5/01/30 (a)

     10,000        10,723,900   

State of Illinois, GO, Refunding, 5.00%, 8/01/21

     3,000        3,435,690   

State of Illinois Toll Highway Authority, RB,
Series A, 5.00%, 1/01/34

     9,140        9,810,510   

Village of Hodgkins Illinois, RB, MBM Project, AMT, 5.90%, 11/01/17

     6,000        6,006,840   

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

     1,360        1,360,299   
    

 

 

 
               82,897,076   
Municipal Bonds   

Par  

(000)

    Value  

Indiana — 4.1%

    

City of Whiting Indiana, RB, BP Products North America, Inc. Project, 5.25%, 1/01/21

   $ 4,800      $ 5,706,672   

County of Jasper Indiana, Refunding RB, Northern Indiana Public Service Co., Series C (NPFGC), 5.85%, 4/01/19

     2,000        2,288,580   

Indiana Finance Authority, RB, Wastewater, 1st Lien, Series A, 5.25%, 10/01/31

     10,000        11,238,700   

Indiana Finance Authority, Refunding RB, US Steel Corp. Project, 6.00%, 12/01/19

     5,000        5,315,850   
    

 

 

 
               24,549,802   

Iowa — 1.0%

    

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

    

5.25%, 4/01/23

     695        794,274   

5.25%, 4/01/24

     730        825,959   

5.25%, 4/01/25

     520        582,525   

5.25%, 4/01/26

     360        400,460   

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

    

5.00%, 9/01/22

     2,315        2,339,886   

Upper Iowa University Project,
5.00%, 9/01/20

     1,000        1,038,410   
    

 

 

 
               5,981,514   

Kansas — 1.5%

    

Kansas Development Finance Authority, RB, KU Health System, Series H, 5.00%, 3/01/26

     3,220        3,500,301   

Kansas Development Finance Authority, Refunding RB:

    

Adventist Health System/Sunbelt Obligated Group, Series C, 5.00%, 11/15/23

     1,500        1,700,985   

Sisters of Charity of Leavenworth Health System, Series A, 4.00%, 1/01/22

     3,425        3,624,232   
    

 

 

 
               8,825,518   

Kentucky — 1.5%

    

State of Kentucky Property & Building Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/24

     8,000        9,136,320   

Louisiana — 4.0%

    

City of New Orleans Louisiana Aviation Board, Refunding GARB, Restructuring, Series A-2 (AGC), 6.00%, 1/01/23

     850        976,676   

Jefferson Parish Hospital Service District No. 1, Refunding RB, West Jefferson Medical Center, Series A (AGM), 5.50%, 1/01/26

     3,000        3,273,810   

Louisiana Local Government Environmental Facilities & Community Development Authority, Refunding RB, BRCC Facilities Corp. Project:

    

5.00%, 12/01/27

     3,445        3,799,835   

5.00%, 12/01/28

     3,715        4,075,578   

Louisiana Public Facilities Authority, Refunding RB, Entergy Gulf States Louisiana LLC Project, Series A, 5.00%, 9/01/28

     2,000        2,092,940   

State of Louisiana Gasoline & Fuels Tax Revenue, Refunding RB, 4.00%, 5/01/34

     5,750        5,856,547   

Terrebonne Levee & Conservation District, RB, Sales Tax, 5.00%, 7/01/28

     3,660        4,029,953   
    

 

 

 
               24,105,339   

Maine — 0.3%

    

Portland Housing Development Corp., Refunding RB, Senior Living, Retirement Facilities,
Series A, 6.00%, 2/01/34

     1,965        1,989,504   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    53


Table of Contents

Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Maryland — 0.7%

    

Maryland EDC, RB, Transportation Facilities Project, Series A, 5.13%, 6/01/20

   $ 1,750      $ 1,888,687   

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

     790        845,213   

Maryland Health & Higher Educational Facilities Authority, RB, Johns Hopkins Health System, Series B, 5.00%, 7/01/33

     1,140        1,257,979   
    

 

 

 
               3,991,879   

Massachusetts — 2.4%

    

Massachusetts Health & Educational Facilities Authority, Refunding RB, Winchester Hospital, 5.00%, 7/01/25

     1,060        1,142,617   

Massachusetts School Building Authority, RB, Dedicated Sales Tax, Series A (AGM),
5.00%, 8/15/15 (d)

     6,870        7,294,291   

Massachusetts School Building Authority, Refunding RB, Senior Series A,
5.00%, 8/15/25

     5,000        5,885,750   
    

 

 

 
               14,322,658   

Michigan — 2.7%

    

City of Detroit Michigan Water Supply System, Refunding RB, Second Lien, Series C (BHAC), 5.75%, 7/01/26

     4,235        4,411,049   

Manistee Area Public Schools, GO, Refunding, (Q-SBLF), 5.00%, 5/01/25

     1,000        1,127,750   

Michigan State Building Authority, Refunding RB, Facilities Program, Series II-A,
5.00%, 10/15/24

     2,500        2,833,225   

Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health System, 5.25%, 11/15/24

     4,900        5,353,642   

State of Michigan Trunk Line Revenue, RB, 5.00%, 11/15/31

     2,000        2,198,700   
    

 

 

 
               15,924,366   

Minnesota — 1.6%

    

City of St. Cloud Minnesota, Refunding RB, Centracare Health System, Series A,
4.25%, 5/01/21

     2,300        2,534,347   

University of Minnesota, RB, Biomedical Science Research Facilities Funding Program:

    

Series B, 5.00%, 8/01/36

     1,000        1,095,970   

Series C, 5.00%, 8/01/27

     1,390        1,617,585   

Series C, 5.00%, 8/01/28

     740        853,227   

Series C, 5.00%, 8/01/29

     1,555        1,778,905   

Series C, 5.00%, 8/01/30

     1,635        1,859,191   
    

 

 

 
               9,739,225   

Mississippi — 0.8%

    

Mississippi Business Finance Corp., Refunding RB, System Energy Resource, Inc. Project, 5.88%, 4/01/22

     5,000        5,001,800   

Missouri — 2.9%

    

Health & Educational Facilities Authority of the State of Missouri, Refunding RB, Series A, 5.00%, 6/01/30 (a)

     2,000        2,218,920   

Missouri Joint Municipal Electric Utility Commission Power, RB, Prairie State Project, Series A (BHAC), 5.00%, 1/01/32

     5,000        5,415,050   

Missouri State Environmental Improvement & Energy Resource Authority, Refunding RB, Revolving Funds Program, Series A,
5.00%, 1/01/25

     3,150        3,732,592   
Municipal Bonds   

Par  

(000)

    Value  

Missouri (concluded)

  

Missouri State Health & Educational Facilities Authority, Refunding RB, SSM Health Care, Series B, 4.25%, 6/01/25

   $ 5,975      $ 6,304,342   
    

 

 

 
               17,670,904   

Montana — 0.7%

    

Montana State Board of Regents, RB,
5.00%, 11/15/30

     1,000        1,141,690   

Yellowstone County School District No 2 Billings, GO:

    

5.00%, 6/15/30

     715        835,642   

4.50%, 6/15/31

     1,780        1,978,719   
    

 

 

 
               3,956,051   

Nebraska — 0.9%

    

Douglas County School District No. 17 Nebraska, GO, Refunding, 2.00%, 6/15/25

     3,380        3,158,171   

Lancaster County Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, 5.50%, 1/01/30

     1,000        1,075,360   

Nebraska Public Power District, RB, Series A, 5.00%, 1/01/30

     1,000        1,117,190   
    

 

 

 
               5,350,721   

Nevada — 1.6%

    

Clark County Department of Aviation, Refunding RB, 5.00%, 7/01/33

     5,000        5,533,050   

County of Humboldt Nevada, Refunding RB, Idaho Power Co. Project, 5.15%, 12/01/24

     3,800        4,201,888   
    

 

 

 
               9,734,938   

New Jersey — 14.5%

    

County of Essex New Jersey Improvement Authority, LRB, Newark Project, Series A (AGM), 5.00%, 11/01/20

     2,000        2,212,020   

Garden State Preservation Trust, RB, Election of 2005, Series A (AGM), 5.80%, 11/01/15 (d)

     5,050        5,472,230   

New Jersey EDA, RB, AMT:

    

5.50%, 1/01/26

     1,500        1,717,725   

5.50%, 1/01/27

     1,000        1,127,800   

Continental Airlines, Inc. Project,
5.13%, 9/15/23

     6,040        6,111,393   

New Jersey EDA, Refunding RB:

    

New Jersey American Water Co., Series E, AMT, 4.70%, 12/01/25

     3,000        3,209,580   

School Facilities Construction, Series AA, 4.25%, 12/15/24

     3,850        4,083,310   

School Facilities Construction, Series EE, 5.00%, 9/01/23

     3,465        3,962,401   

School Facilities Construction, Series NN, 5.00%, 3/01/29

     6,500        7,172,880   

New Jersey Health Care Facilities Financing Authority, Refunding RB, Hackensack University Medical, Series B (AGM),
4.00%, 1/01/24

     635        668,534   

New Jersey Higher Education Student Assistance Authority, Refunding RB:

    

Series 1, AMT, 5.50%, 12/01/26

     1,665        1,822,109   

Series 1, AMT, 5.00%, 12/01/27

     6,690        6,690,268   

Student Loan, Series 1A,
4.75%, 12/01/21

     2,040        2,159,605   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series X, AMT,
5.10%, 10/01/23

     2,105        2,183,011   

New Jersey State Turnpike Authority, Refunding RB, Series B, 5.00%, 1/01/29

     10,000        11,168,300   

 

See Notes to Financial Statements.

 

                
54    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

New Jersey (concluded)

  

New Jersey Transportation Trust Fund Authority, RB:

    

Series B, 5.25%, 6/15/26

   $ 3,500      $ 3,972,675   

Transportation Program, Series AA, 5.25%, 6/15/31

     12,000        13,409,040   

Transportation System, Series A,
5.25%, 6/15/24

     3,185        3,670,012   

Newark Housing Authority, RB, Series A:

    

5.00%, 12/01/23

     1,230        1,421,474   

5.00%, 12/01/25

     1,345        1,524,154   

South Jersey Port Corp., RB, Marine Terminal, Series O-1 (AGC), 4.63%, 1/01/23

     1,375        1,492,233   

State of New Jersey, GO, Refunding, Series O, 5.25%, 8/01/21

     1,355        1,636,759   
    

 

 

 
               86,887,513   

New Mexico — 0.2%

    

New Mexico State University, Refunding RB, Series B, 5.00%, 4/01/25

     850        1,007,003   

New York — 23.2%

    

City of New York New York, GO:

    

5.25%, 9/01/22

     8,250        9,602,587   

Series D1, 5.13%, 12/01/26

     4,615        5,240,194   

Sub-Series I-1, 5.50%, 4/01/21

     5,000        5,939,650   

City of New York New York, GO, Refunding:

    

Series B, 5.00%, 8/01/30

     1,140        1,272,844   

Series E, 5.00%, 8/01/24

     4,000        4,641,920   

Series E, 5.00%, 8/01/30

     6,230        6,958,848   

County of Essex New York Industrial Development Agency, Refunding RB, International Paper Co. Project, Series A, AMT, 5.20%, 12/01/23

     5,000        5,101,950   

County of Westchester New York Healthcare Corp., Refunding RB, Senior Lien, Remarketing, Series A:

    

5.00%, 11/01/24

     5,470        5,999,660   

5.00%, 11/01/30

     1,000        1,051,690   

Long Island Power Authority, Refunding RB, Electric System, Series A, 5.50%, 4/01/24

     1,000        1,121,280   

Metropolitan Transportation Authority, RB:

    

Series A, 5.00%, 11/15/25

     1,980        2,166,556   

Series B, 5.25%, 11/15/33

     4,405        4,949,678   

Sub-Series B-1, 5.00%, 11/15/24

     2,300        2,706,824   

Sub-Series B-4, 5.00%, 11/15/24

     1,500        1,756,305   

Monroe County Industrial Development Corp., Refunding RB, Series A, 5.00%, 7/01/29

     5,695        6,388,309   

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B,
5.50%, 6/15/31

     13,970        15,802,445   

New York City Industrial Development Agency, Refunding RB, New York Stock Exchange Project, Series A, 4.25%, 5/01/24

     1,740        1,843,669   

New York City Transitional Finance Authority, BARB, Fiscal 2009, Series S-3,
5.00%, 1/15/23

     3,560        4,110,910   

New York City Trust for Cultural Resources, Refunding RB, Carnegie Hall, Series A,
5.00%, 12/01/29

     2,750        3,093,860   

New York State Dormitory Authority, RB:

    

Education, Series D, 5.00%, 9/15/16 (d)

     5        5,546   

Fordham University, Series A,
5.25%, 7/01/25

     900        1,044,531   

Mount Sinai School of Medicine, Series A (NPFGC), 5.15%, 7/01/24

     1,000        1,140,830   

Municipal Health Facilities Lease, Sub-Series 2-4, 5.00%, 1/15/27

     6,900        7,647,270   
Municipal Bonds   

Par  

(000)

    Value  

New York (concluded)

  

New York State Dormitory Authority, RB (concluded):

    

New York University Hospitals Center, Series A, 5.00%, 7/01/22

   $ 1,725      $ 1,931,345   

New York University Hospitals Center, Series A, 5.13%, 7/01/23

     1,670        1,864,472   

North Shore-Long Island Jewish Health System, Series A, 5.50%, 5/01/30

     1,495        1,614,750   

New York State Dormitory Authority, Refunding RB:

    

Mount Sinai Hospital Series A,
4.25%, 7/01/23

     2,225        2,362,483   

North Shore-Long Island Jewish Health System, Series E, 5.00%, 5/01/23

     2,160        2,361,074   

North Shore-Long Island Jewish Obligated Group, Series E, 5.00%, 5/01/22

     650        718,354   

Yeshiva University, 4.00%, 9/01/23

     2,860        2,826,938   

Yeshiva University, 4.25%, 9/01/24

     2,750        2,751,155   

New York State Urban Development Corp., RB, Service Contract, Series B, 5.00%, 1/01/21

     8,000        9,116,800   

Port Authority of New York & New Jersey, ARB, JFK International Air Terminal LLC Project, 5.00%, 12/01/20

     2,475        2,746,136   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 152nd Series, AMT, 5.00%, 11/01/23

     1,000        1,102,340   

Port Authority of New York & New Jersey, Refunding RB, Consolidated, 153rd Series, 5.00%, 7/15/24

     2,010        2,292,646   

State of New York Dormitory Authority, RB, Mental Health Services (AGM):

    

5.00%, 8/15/18 (d)

     30        35,054   

5.00%, 2/15/22

     3,960        4,536,061   

5.00%, 8/15/18 (d)

     10        11,712   

United Nations Development Corp., Refunding RB, Series A, 4.25%, 7/01/24

     2,985        3,155,772   
    

 

 

 
               139,014,448   

North Carolina — 1.2%

    

City of Charlotte North Carolina, RB, Charlotte Douglas Airport, Series A, 5.00%, 7/01/33

     4,000        4,322,040   

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

     1,105        1,071,817   

North Carolina Medical Care Commission, Refunding RB, WakeMed, Series A,
5.00%, 10/01/31

     1,500        1,626,360   
    

 

 

 
               7,020,217   

Ohio — 1.1%

    

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1, 5.25%, 2/15/31

     6,000        6,730,500   

Oregon — 2.2%

    

Home Forward, Refunding RB,
5.00%, 1/01/29 (a)

     485        532,113   

Klamath County School District, GO:

    

5.00%, 6/15/30

     1,000        1,132,970   

5.00%, 6/15/31

     1,000        1,126,250   

Oregon Health & Science University, Refunding RB:

    

Series A, 5.00%, 7/01/26

     1,500        1,700,205   

Series E, 5.00%, 7/01/30

     1,000        1,104,240   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    55


Table of Contents

Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Oregon (concluded)

    

Oregon State Facilities Authority, Refunding RB, Series A:

    

Reed College Project, 5.00%, 7/01/29

   $ 1,835      $ 2,031,510   

5.00%, 11/15/29

     1,000        1,109,080   

State of Oregon, GO, Series H, 5.00%, 5/01/36

     2,000        2,225,520   

Umatilla County School District No 16R Pendleton, Series A, 5.00%, 6/15/32

     2,000        2,294,260   
    

 

 

 
               13,256,148   

Pennsylvania — 7.5%

    

City of Philadelphia Pennsylvania, ARB, Series A, AMT, 5.00%, 6/15/20

     2,895        3,179,057   

City of Pittsburgh Pennsylvania, GO, Refunding, Series B (AGM), 5.25%, 9/01/17

     9,630        10,652,417   

County of Allegheny Pennsylvania, GO, Refunding, Series C-68, 5.00%, 11/01/25

     2,515        2,782,118   

County of Allegheny Pennsylvania, GO, Series C-67:

    

5.00%, 11/01/25

     2,700        2,986,767   

5.00%, 11/01/26

     2,375        2,612,381   

Montgomery County IDA Pennsylvania, MRB, Whitemarsh Continuing Care,
6.00%, 2/01/21

     3,500        3,571,855   

Pennsylvania Economic Development Financing Authority, RB, National Gypsum Co., Series A, AMT, 6.25%, 11/01/27

     7,710        7,711,157   

Pennsylvania Turnpike Commission, RB, Sub-Series B, 5.25%, 12/01/31

     4,000        4,376,240   

South Fork Municipal Authority, Refunding RB, Conemaugh Valley Memorial Hospital, Series A (AGC), 6.00%, 7/01/26

     6,225        7,111,191   
    

 

 

 
               44,983,183   

Puerto Rico — 1.6%

    

Puerto Rico Housing Finance Authority, Refunding RB, Subordinate, Capital Fund Modernization, 5.13%, 12/01/27

     9,450        9,468,711   

Rhode Island — 1.1%

    

Rhode Island Clean Water Finance Agency, RB, 5.00%, 10/01/32

     1,435        1,638,583   

Rhode Island Health & Educational Building Corp., RB, City of Newport Issue Financing Program, Series C, 5.00%, 5/15/30

     2,305        2,557,421   

Rhode Island Health & Educational Building Corp., Refunding RB, 5.00%, 9/01/32

     2,000        2,274,640   
    

 

 

 
               6,470,644   

South Carolina — 0.2%

    

County of Florence South Carolina, Refunding RB, McLeod Regional Medical Center, Series A, 4.50%, 11/01/25

     1,000        1,066,190   

South Dakota — 0.2%

    

South Dakota Health & Educational Facilities Authority, Refunding RB, Regional Health, 5.00%, 9/01/25

     1,000        1,097,440   

Tennessee — 1.3%

    

County of Memphis-Shelby Tennessee Sports Authority, Inc., Refunding RB, Memphis Arena Project:

    

Series A, 5.00%, 11/01/23

     2,695        2,982,583   

Series B, 5.00%, 11/01/22

     1,000        1,117,680   

Knox County Health Educational & Housing Facility Board Tennessee, Refunding RB, Eastowne Village Project, 4.00%, 6/01/31 (c)

     3,625        3,869,180   
    

 

 

 
               7,969,443   
Municipal Bonds   

Par  

(000)

    Value  

Texas — 8.6%

    

City of Grapevine Texas, GO, 5.00%, 2/15/33

   $ 5,685      $ 6,389,372   

City of Houston Texas, Refunding ARB, Series A:

    

Senior Lien, 5.25%, 7/01/29

     4,055        4,570,107   

Subordinate Lien, AMT, 5.00%, 7/01/25

     1,500        1,664,115   

Subordinate Lien, AMT, 5.00%, 7/01/32

     1,010        1,073,226   

Dallas-Fort Worth International Airport Facilities Improvement Corp., ARB, Series 2001-A-1, AMT, 6.15%, 1/01/16

     4,000        3,992,960   

Dallas/Fort Worth International Airport, Refunding RB, AMT:

    

Series E, 5.00%, 11/01/26

     2,185        2,368,824   

Series E, 5.00%, 11/01/27

     4,960        5,341,474   

Series F, 5.00%, 11/01/31

     6,345        6,727,540   

Frisco ISD, GO, Refunding, (PSF-GTD),
4.25%, 8/15/28

     3,700        4,001,698   

Love Field Airport Modernization Corp., RB, Southwest Airlines Co. Project, AMT,
5.00%, 11/01/28

     1,000        1,063,690   

Red River Education Financing Corp., RB, 5.00%, 3/15/33

     1,340        1,468,586   

San Jacinto River Authority, RB, Special Project (AGM), 5.25%, 10/01/25

     2,910        3,201,931   

Socorro ISD, GO, Refunding, School Building (PSF-GTD), 5.00%, 8/15/32

     2,500        2,835,950   

Via Metropolitan Transit Authority, Refunding RB:

    

5.25%, 8/01/28

     1,585        1,779,876   

5.25%, 8/01/29

     1,720        1,912,932   

5.25%, 8/01/33

     3,000        3,260,820   
    

 

 

 
               51,653,101   

US Virgin Islands — 1.0%

    

Virgin Islands Public Finance Authority, Refunding RB, Series A, 5.25%, 10/01/24

     5,000        5,872,900   

Virginia — 1.0%

    

Virginia Commonwealth Transportation Board, RB, 5.00%, 5/15/28

     5,000        5,735,250   

West Virginia — 1.4%

    

West Virginia Hospital Finance Authority, Refunding RB, Charleston Area Medical Center, Inc., Series A, 5.13%, 9/01/23

     4,000        4,406,400   

West Virginia University, RB, West Virginia University Project, Series B,
5.00%, 10/01/30

     3,500        3,903,270   
    

 

 

 
               8,309,670   

Wisconsin — 1.5%

    

Public Finance Authority, Refunding RB, Wisconsin Airport Facilities, Senior Obligated Group, Series B, AMT, 5.25%, 7/01/28

     4,765        4,926,057   

WPPI Energy, Refunding RB, Supply System, Series A, 5.00%, 7/01/33

     3,500        3,822,455   
    

 

 

 
               8,748,512   
Total Municipal Bonds136.3%              816,471,456   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
 

California — 1.7%

    

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

     9,028        10,024,116   

 

See Notes to Financial Statements.

 

                
56    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  

Illinois — 3.9%

    

Du Page & Will Counties Community School District No. 204, GO, School Building, Series A (NPFGC), 5.25%, 12/30/22

   $ 8,650      $ 9,698,522   

McHenry County Conservation District Illinois, GO, (AGM), 5.13%, 2/01/27

     12,695        13,828,283   
    

 

 

 
               23,526,805   

Louisiana — 2.4%

    

State of Louisiana, GO, Series A, 5.00%, 8/01/24

     12,000        14,229,840   

Massachusetts — 1.9%

    

Massachusetts Development Finance Agency, Refunding RB, Partners Healthcare, Series L, 5.00%, 7/01/31

     10,175        11,189,014   

Minnesota — 1.9%

    

State of Minnesota, GO, State Various Purposes, Series A, 4.00%, 8/01/29

     10,525        11,468,012   

New York — 7.0%

    

City Of New York New York, GO, Refunding, Series E, 5.00%, 8/01/27

     3,507        4,029,469   

City of New York New York, GO, Series I, 5.00%, 3/01/32

     7,009        7,797,443   

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, Series A, 4.75%, 6/15/30

     8,000        8,766,240   

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/25

     4,001        4,665,231   

New York State Urban Development Corp., RB, Series A-1, 5.00%, 3/15/32

     5,501        6,152,384   

Port Authority of New York & New Jersey, ARB, Consolidated, 169th Series, AMT, 5.00%, 10/15/26

     5,530        6,178,393   
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  

New York (concluded)

    

Port Authority of New York & New Jersey, RB, 178th Series, AMT, 5.00%, 12/01/32

   $ 4,009      $ 4,382,235   
    

 

 

 
               41,971,395   

Washington — 1.8%

    

Snohomish County School District No. 15-Edmonds Washington, GO, (NPFGC), 5.00%, 12/01/19

     10,000        10,963,800   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 20.6%
        123,372,982   
Total Long-Term Investments
(Cost — $886,713,771) — 156.9%
        939,844,438   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (h)(i)

     25,184,531        25,184,531   
Total Short-Term Securities
(Cost — $25,184,531) — 4.2%
        25,184,531   
Total Investments (Cost — $911,898,302) — 161.1%        965,028,969   
Liabilities in Excess of Other Assets — (1.7)%        (9,769,782

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (11.5%)

   

    (69,092,788
VMTP Shares, at Liquidation Value — (47.9%)        (287,100,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 599,066,399   
    

 

 

 

 

Notes to Schedule of Investments

 

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

 

Counterparty      Value        Unrealized
Appreciation
 

Wedbush Morgan Securities

     $ 532,113         $ 2,066   

Citigroup Global Markets, Inc.

     $ 2,992,740         $ 22,800   

Goldman Sachs & Co.

     $ 2,218,920         $ 9,520   

Piper Jaffray & Co.

     $ 745,943         $ 1,703   

Wells Fargo Bank NA

     $ 10,723,900         $ 35,200   

 

(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 shown is as of report date.

 

(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)   Non-income producing security.

 

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

 

(g)   Represent bonds transferred to a TOB. In exchange for which the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(h)   Investments in issuers considered to be an affiliate of the Fund during the year ended April 30, 2014, for purposes of Section 2(a)(3) of the Investment Company Act 1940, were as follows:

 

Affiliate      Shares Held
at April 30,
2013
       Net
Activity
       Shares Held
at April 30,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       3,667,115           21,517,416           25,184,531         $ 393   

 

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

 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    57


Table of Contents
Schedule of Investments (concluded)    BlackRock Muni Intermediate Duration Fund, Inc.  (MUI)

 

Ÿ  

Financial futures contracts outstanding as of April 30, 2014 were as follows:

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (720   10-Year U.S Treasury Note   Chicago Board of Trade   June 2014   $ 89,583,750      $ (82,464

 

Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2014:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 939,844,438                   $ 939,844,438   

Short-Term Securities

  $ 25,184,531                               25,184,531   
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 25,184,531         $ 939,844,438                   $ 965,028,969   
 

 

 

      

 

 

      

 

 

      

 

 

 

 

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

      

     Level 1        Level 2        Level 3        Total  
Derivative Financial Instruments2             

Liabilities:

                

Interest rate contracts

  $ (82,464                          $ (82,464

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

      

The carrying amount for certain of the Fund’s assets and/or liabilities approximates fair value for financial statement purposes. As of April 30, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 983,000                             $ 983,000   

Liabilities:

                

TOB trust certificates

            $ (69,070,132                  (69,070,132

VMTP Shares

              (287,100,000                  (287,100,000
 

 

 

 

Total

  $ 983,000         $ (356,170,132                $ (355,187,132
 

 

 

 

There were no transfers between levels during the year ended April 30, 2014.

 

See Notes to Financial Statements.

 

                
58    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments April 30, 2014

  

BlackRock MuniVest Fund II, Inc. (MVT)

(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%, 1/01/19

   $ 1,490      $ 1,497,346   

County of Jefferson Alabama Sewer, Refunding RB:

    

Convertible CAB, Senior Lien, Series C (AGM), 0.00%, 10/01/38 (a)

     585        355,528   

Convertible CAB, Senior Lien, Series C (AGM), 0.00%, 10/01/42 (a)

     510        307,968   

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

     805        816,874   

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

     3,575        3,771,267   
    

 

 

 
               6,748,983   

Alaska — 1.0%

    

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

    

4.63%, 6/01/23

     1,570        1,515,128   

5.00%, 6/01/46

     2,250        1,633,410   
    

 

 

 
               3,148,538   

Arizona — 0.3%

    

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

     900        823,374   

County of Pima Arizona IDA, RB, Arizona Charter Schools Project, Series C, 6.75%, 7/01/31

     45        45,022   
    

 

 

 
               868,396   

California — 14.0%

    

California Health Facilities Financing Authority, RB:

    

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

     2,200        2,532,552   

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

     3,170        3,755,119   

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

     1,265        1,383,594   

California Pollution Control Financing Authority, RB (b):

    

County of San Diego California Water Authority Desalination Project Pipeline, 5.00%, 11/21/45

     1,230        1,230,271   

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

     1,025        1,027,655   

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

     1,495        1,465,414   

California State Public Works Board, LRB Various Capital Projects:

    

Series I, 5.00%, 11/01/38

     775        830,699   

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

     1,185        1,420,922   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport Series A:

    

5.25%, 5/15/39

     800        901,248   

Senior, 5.00%, 5/15/40

     5,930        6,391,532   

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

     360        402,642   

San Diego Community College District California, GO, Election of 2006, 5.00%, 8/01/43

     1,085        1,195,496   

San Marcos Unified School District, GO, CAB, Election of 2010, Series B, 0.00%, 8/01/42 (c)

     2,000        491,460   

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     2,525        3,026,313   

6.50%, 4/01/33

     14,925        18,189,545   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

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

   $ 1,075      $ 1,050,060   
    

 

 

 
               45,294,522   

Colorado — 2.0%

    

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

     1,060        1,215,385   

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

     1,000        1,015,910   

Plaza Metropolitan District No. 1 Colorado, Tax Allocation Bonds, Public Improvement Fee, Tax Increment, 8.00%, 6/01/14 (d)

     3,300        3,322,275   

University of Colorado, RB, Series A, 5.75%, 6/01/28

     750        892,433   
    

 

 

 
               6,446,003   

Connecticut — 1.9%

    

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

     1,375        1,464,512   

Connecticut State Health & Educational Facility Authority, Refunding RB, Wesleyan University, Series G, 5.00%, 7/01/35

     3,385        3,701,701   

Mohegan Tribe of Indians of Connecticut, Refunding RB, Public Improvement, Priority Distribution, 6.25%, 1/01/31

     950        950,247   
    

 

 

 
               6,116,460   

Delaware — 1.7%

    

County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40

     1,125        1,203,919   

Delaware State EDA, RB, Exempt Facilities, Indian River Power LLC Project, 5.38%, 10/01/45

     4,065        4,147,641   
    

 

 

 
               5,351,560   

District of Columbia — 2.5%

    

District of Columbia, Refunding RB, Kipp Charter School, Series A, 6.00%, 7/01/43

     240        266,026   

Metropolitan Washington Airports Authority, Refunding RB:

    

1st Senior Lien, Series A, 5.25%, 10/01/44

     1,500        1,577,805   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/33 (c)

     6,590        2,427,229   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/34 (c)

     4,830        1,653,212   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/35 (c)

     6,515        2,072,682   
    

 

 

 
               7,996,954   

Florida — 3.8%

    

County of Hillsborough Florida IDA, RB, National Gypsum Co., Series B, AMT, 7.13%, 4/01/30

     2,720        2,722,149   

County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport, Series A-1, 5.38%, 10/01/41

     1,165        1,264,130   

County of Tampa-Hillsborough Florida Expressway Authority, Refunding RB, Series A, 5.00%, 7/01/37

     645        689,073   

Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/40

     3,015        3,439,060   

Midtown Miami Community Development District, Special Assessment Bonds, Series A, 6.25%, 5/01/37

     915        918,321   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    59


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Florida (concluded)

    

Palm Coast Park Community Development District, Special Assessment Bonds, 5.70%, 5/01/37

   $ 1,135      $ 752,255   

Village Community Development District No. 10, Special Assessment Bonds, 5.13%, 5/01/43

     2,480        2,426,854   
    

 

 

 
               12,211,842   

Georgia — 3.1%

    

DeKalb Private Hospital Authority, Refunding RB, Children’s Healthcare, 5.25%, 11/15/39

     130        144,079   

Fulton County Residential Care Facilities for the Elderly Authority, Refunding RB, Canterbury Court Project, Series A, 6.13%, 2/15/26

     2,000        2,020,980   

Metropolitan Atlanta Rapid Transit Authority, RB, Sales Tax, 3rd Indenture, Series A, 5.00%, 7/01/39

     3,465        3,768,187   

Municipal Electric Authority of Georgia, Refunding RB:

    

Series W, 6.60%, 1/01/18

     3,120        3,413,935   

Series X, 6.50%, 1/01/20

     730        835,040   
    

 

 

 
               10,182,221   

Hawaii — 0.5%

    

State of Hawaii Harbor System, RB, Series A, 5.25%, 7/01/30

     1,355        1,495,771   

Illinois — 22.7%

    

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien, Series C, 6.50%, 1/01/41

     5,865        6,804,808   

City of Chicago Illinois, GO, Series A:

    

Project, 5.00%, 1/01/34

     3,200        3,230,208   

Refunding, 5.25%, 1/01/32

     4,555        4,726,040   

City of Chicago Illinois, Refunding RB, Sales Tax, Series A, 5.25%, 1/01/38

     820        869,831   

City of Chicago Illinois, Special Assessment Bonds, Lake Shore East, 6.75%, 12/01/32

     800        811,200   

City of Chicago Illinois Board of Education, GO, Series A, 5.25%, 12/01/41

     4,455        4,468,588   

City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40

     1,050        1,120,948   

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien:

    

Project, 5.00%, 11/01/42

     3,780        3,901,527   

Water Project (AGM), 5.25%, 11/01/33

     1,325        1,399,902   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38

     805        887,521   

Illinois Finance Authority, RB:

    

Advocate Health Care Network, Series D, 6.50%, 11/01/38

     5,000        5,787,750   

Community Rehabilitation Providers Facilities, Series A, 6.50%, 7/01/22

     285        285,003   

Illinois Finance Authority, Refunding RB, Central Dupage Health, Series B, 5.50%, 11/01/39

     1,610        1,787,422   

Illinois State Toll Highway Authority, RB, Series A, 5.00%, 1/01/38

     2,315        2,441,399   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project:

    

Series B (AGM), 5.00%, 6/15/50

     4,315        4,402,422   

Series B-2, 5.00%, 6/15/50

     2,500        2,550,050   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     440        512,776   

6.00%, 6/01/28

     1,140        1,322,879   

Regional Transportation Authority, RB:

    

Series A (AMBAC), 7.20%, 11/01/20

     1,065        1,242,333   

Series A (NPFGC), 6.70%, 11/01/21

     5,920        6,895,616   

Series C (NPFGC), 7.75%, 6/01/20

     2,500        3,023,225   
Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

State of Illinois, GO:

    

5.00%, 2/01/39

   $ 1,540      $ 1,595,209   

Series A, 5.00%, 4/01/35

     3,000        3,127,020   

Series A, 5.00%, 4/01/38

     3,640        3,766,963   

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/34

     630        698,298   

University of Illinois, RB, Auxiliary Facilities System, Series A:

    

5.00%, 4/01/39

     810        869,584   

5.00%, 4/01/44

     985        1,051,655   

Village of Hodgkins Illinois, RB, Metropolitan Biosolids Management LLC Project, AMT, 6.00%, 11/01/23

     2,800        2,803,080   

Village of Wheeling Illinois, Tax Allocation Bonds, North Milwaukee/Lake-Cook TIF Project, 6.00%, 1/01/25

     1,320        1,320,290   
    

 

 

 
               73,703,547   

Indiana — 4.2%

    

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

    

6.75%, 1/01/34

     790        847,283   

7.00%, 1/01/44

     1,905        2,056,066   

Indiana Finance Authority, RB, Series A:

    

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

     3,280        3,607,114   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

     450        454,388   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/48

     1,430        1,448,805   

Sisters of St. Francis Health Services, 5.25%, 11/01/39

     840        887,578   

Indiana Finance Authority, Refunding RB, Parkview Health System, Series A, 5.75%, 5/01/31

     2,795        3,034,559   

Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 1/15/40

     1,270        1,372,235   
    

 

 

 
               13,708,028   

Iowa — 2.3%

    

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project:

    

5.00%, 12/01/19

     960        971,616   

5.50%, 12/01/22

     2,340        2,377,744   

5.25%, 12/01/25

     460        459,821   

Iowa Student Loan Liquidity Corp., Refunding RB, Student Loan, Senior Series A-1, AMT, 5.15%, 12/01/22

     1,595        1,666,153   

Iowa Tobacco Settlement Authority, Refunding RB, Asset-Backed, Series C, 5.63%, 6/01/46

     2,405        2,047,232   
    

 

 

 
               7,522,566   

Kentucky — 0.6%

    

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     995        1,069,456   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/43 (a)

     1,200        730,716   
    

 

 

 
               1,800,172   

Louisiana — 3.8%

    

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35

     3,320        3,692,736   

 

See Notes to Financial Statements.

 

                
60    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Louisiana (concluded)

    

Sabine River Authority Louisiana, Refunding RB, International Paper Co. Project, 6.20%, 2/01/25

   $ 3,600      $ 3,606,840   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A:

    

5.50%, 5/15/30

     1,020        1,102,396   

5.25%, 5/15/31

     870        920,556   

5.25%, 5/15/32

     1,110        1,167,542   

5.25%, 5/15/33

     1,205        1,264,141   

5.25%, 5/15/35

     505        529,998   
    

 

 

 
               12,284,209   

Maryland — 1.7%

    

County of Montgomery Maryland, GO, West Germantown Development District, Series A (Radian), 6.70%, 7/01/27

     1,100        1,102,860   

Maryland Community Development Administration, Refunding, HRB, Residential, Series D, AMT, 4.90%, 9/01/42

     1,500        1,506,600   

Maryland EDC, RB, Transportation Facilities Project, Series A, 5.75%, 6/01/35

     435        453,144   

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25

     1,160        1,241,072   

Maryland Health & Higher Educational Facilities Authority, RB, University of Maryland Medical System, Series B (NPFGC), 7.00%, 7/01/22

     890        1,079,036   
    

 

 

 
               5,382,712   

Massachusetts — 3.4%

    

Massachusetts Development Finance Agency, Refunding RB, Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42

     2,205        2,216,885   

Massachusetts Health & Educational Facilities Authority, Refunding RB, Partners Healthcare System, Series J1, 5.00%, 7/01/39

     990        1,057,845   

Massachusetts HFA, RB, AMT:

    

M/F Housing, Series A, 5.20%, 12/01/37

     2,830        2,857,139   

S/F Housing, Series 130, 5.00%, 12/01/32

     2,720        2,778,045   

Massachusetts HFA, Refunding RB, Series F, AMT, 5.70%, 6/01/40

     2,035        2,106,103   
    

 

 

 
               11,016,017   

Michigan — 7.6%

    

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien:

    

Series A, 5.00%, 7/01/32

     1,565        1,510,538   

Series A, 5.25%, 7/01/39

     4,425        4,304,198   

Series B (AGM), 7.50%, 7/01/33

     910        987,295   

Kalamazoo Hospital Finance Authority, Refunding RB, Bronson Methodist Hospital, 5.50%, 5/15/36

     1,380        1,458,991   

Michigan State Hospital Finance Authority, Refunding RB, Series A:

    

Henry Ford Health System, 5.25%, 11/15/46

     5,080        5,115,611   

McLaren Health Care, 5.75%, 5/15/38

     8,560        9,613,479   

Royal Oak Hospital Finance Authority, Refunding RB, William Beaumont Hospital, 8.25%, 9/01/18 (d)

     1,400        1,717,128   
    

 

 

 
               24,707,240   

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        3,527,370   
Municipal Bonds   

Par  

(000)

    Value  

Mississippi (concluded)

    

University of Southern Mississippi, RB, Campus Facilities Improvements Project, 5.38%, 9/01/36

   $ 1,065      $ 1,151,680   
    

 

 

 
               4,679,050   

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        275,719   

State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 5/01/43

     245        259,068   
    

 

 

 
               534,787   

Nebraska — 0.7%

    

Central Plains Energy Project Nebraska, RB, Gas Project No. 3:

    

5.25%, 9/01/37

     825        872,850   

5.00%, 9/01/42

     1,445        1,493,653   
    

 

 

 
               2,366,503   

New Jersey — 4.3%

    

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT, 5.25%, 9/15/29

     1,955        1,975,782   

New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 4/01/31

     2,240        2,387,840   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series AA, 6.38%, 10/01/28

     625        651,188   

New Jersey State Turnpike Authority, RB, Series A, 5.00%, 1/01/43

     1,985        2,114,938   

New Jersey Transportation Trust Fund Authority, RB, Transportation System:

    

Series A, 5.50%, 6/15/41

     1,635        1,797,355   

Series B, 5.25%, 6/15/36

     2,460        2,669,518   

Rutgers - The State University of New Jersey, Refunding RB, Series L:

    

5.00%, 5/01/38

     505        557,318   

5.00%, 5/01/43

     525        574,749   

Tobacco Settlement Financing Corp. New Jersey, Refunding RB, Series 1A, 4.50%, 6/01/23

     1,335        1,292,841   
    

 

 

 
               14,021,529   

New York — 13.0%

    

City of New York New York Industrial Development Agency, ARB, British Airways PLC Project, AMT, 7.63%, 12/01/32

     1,920        1,929,773   

City of New York New York Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series C-1, 6.50%, 7/01/17

     595        595,042   

City of New York New York Transitional Finance Authority, RB, Fiscal 2009, Series S-3, 5.25%, 1/15/39

     6,700        7,433,650   

City of New York New York Transitional Finance Authority, Future Tax Secured Bonds, RB, Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42

     2,460        2,653,061   

Metropolitan Transportation Authority, RB, Series C, 6.50%, 11/15/28

     9,405        11,262,581   

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Construction, 5.25%, 12/15/43

     10,735        11,586,930   

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        1,326,896   

New York State Dormitory Authority, Refunding RB, General Purpose, Series A, 5.00%, 6/15/31

     1,790        2,005,319   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    61


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

New York (concluded)

    

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      $ 1,281,349   

6.00%, 12/01/42

     1,250        1,372,587   

Westchester County Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series E-1, 6.50%, 7/01/17

     850        850,068   
    

 

 

 
               42,297,256   

North Carolina — 1.8%

    

County of Gaston North Carolina Industrial Facilities & Pollution Control Financing Authority, RB, Exempt Facilities, National Gypsum Co. Project, AMT, 5.75%, 8/01/35

     1,675        1,624,700   

North Carolina Medical Care Commission, RB, Health Care Facilities, Duke University Health System, Series A, 5.00%, 6/01/42

     1,400        1,525,090   

North Carolina Medical Care Commission, Refunding RB:

    

Carolina Village Project, 6.00%, 4/01/38

     2,000        2,041,780   

First Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

     595        654,714   
    

 

 

 
               5,846,284   

Ohio — 0.2%

    

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

     660        691,211   

Pennsylvania — 1.7%

    

City of Philadelphia Pennsylvania IDA, RB, Commercial Development, AMT, 7.75%, 12/01/17

     1,265        1,268,428   

Pennsylvania Economic Development Financing Authority, RB, Aqua Pennsylvania, Inc. Project, Series B, 5.00%, 11/15/40

     1,890        2,005,252   

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     1,105        1,187,709   

Philadelphia Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 7/01/42

     1,230        1,175,585   
    

 

 

 
               5,636,974   

South Carolina — 1.1%

    

South Carolina State Ports Authority, RB, 5.25%, 7/01/40

     3,280        3,498,317   

Tennessee — 0.3%

    

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     995        1,069,456   

Texas — 9.3%

    

Brazos River Authority, Refunding RB, Texas Utility Co., Series A, AMT, 7.70%, 4/01/33 (e)(f)

     1,500        41,250   

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/46

     2,140        2,341,952   

Sub-Lien, 5.00%, 1/01/42

     315        306,240   

City of Dallas Texas Waterworks & Sewer System, Refunding RB, 5.00%, 10/01/35

     510        571,878   

City of Houston Texas Airport System, RB, Special Facilities, Continental Airlines, Inc., AMT, Series E, 6.75%, 7/01/21

     4,820        4,821,398   

Clifton Higher Education Finance Corp., RB, Idea Public Schools, 6.00%, 8/15/43

     745        829,043   
Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

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      $ 482,832   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (d)

     2,000        2,543,920   

Fort Bend County Industrial Development Corp., RB, NRG Energy Project, Series B, 4.75%, 11/01/42

     1,475        1,441,208   

North Texas Tollway Authority, Refunding RB, 1st Tier, Series A, 6.25%, 1/01/39

     7,000        7,951,370   

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien:

    

LBJ Infrastructure Group LLC, LBJ Freeway Managed Lanes Project, 7.00%, 6/30/40

     2,000        2,318,960   

NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39

     3,000        3,424,260   

Texas State University System, Refunding RB, 5.00%, 3/15/30

     2,750        2,937,275   
    

 

 

 
               30,011,586   

Utah — 0.9%

    

City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 8/15/41

     2,780        2,932,956   

Virginia — 2.7%

    

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc.:

    

5.13%, 10/01/37

     500        511,535   

5.13%, 10/01/42

     3,440        3,509,488   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings LLC Project, AMT:

    

5.25%, 1/01/32

     1,615        1,691,987   

6.00%, 1/01/37

     2,915        3,161,172   
    

 

 

 
               8,874,182   

Washington — 2.1%

    

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     2,290        2,543,801   

Washington Health Care Facilities Authority, Refunding RB, Catholic Health Initiatives, Series D, 6.38%, 10/01/36

     3,700        4,261,549   
    

 

 

 
               6,805,350   

Wisconsin — 3.4%

    

State of Wisconsin, Refunding RB, Series A, 6.00%, 5/01/36

     7,100        8,306,858   

State of Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Credit Group, Series E, 5.00%, 11/15/33

     2,465        2,705,264   
    

 

 

 
               11,012,122   
Total Municipal Bonds — 122.3%              396,263,304   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
              

California — 6.4%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/44

     3,271        3,578,910   

 

See Notes to Financial Statements.

 

                
62    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  

California (concluded)

    

California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/39 (h)

   $ 2,610      $ 2,959,062   

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/39

     9,480        10,454,923   

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/32

     2,290        2,538,213   

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33

     1,077        1,237,530   
    

 

 

 
               20,768,638   

Colorado — 0.7%

    

Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A, 5.50%, 7/01/34 (h)

     2,129        2,414,791   

Connecticut — 2.0%

    

Connecticut State Health & Educational Facility Authority, RB, Yale University, Series Z-3, 5.05%, 7/01/42

     6,000        6,621,480   

Florida — 1.9%

    

County of Miami-Dade Florida, RB, Water & Sewer System, 5.00%, 10/01/34

     5,679        6,097,457   

Illinois — 1.0%

    

State of Illinois Toll Highway Authority, RB, Senior Priority, Series B, 5.50%, 1/01/33

     2,999        3,334,219   

Maryland — 0.8%

    

Maryland State Transportation Authority, RB, Transportation Facilities Project (AGM), 5.00%, 7/01/41

     2,290        2,498,734   

Massachusetts — 0.8%

    

Massachusetts School Building Authority, RB, Senior, Series B, 5.00%, 10/15/41

     2,266        2,466,950   

New Hampshire — 0.7%

    

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/39 (h)

     2,009        2,280,010   

New York — 5.4%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System 2nd General Resolution:

    

Series DD, 5.00%, 6/15/37

     6,299        6,681,185   

Series FF-2, 5.50%, 6/15/40

     1,575        1,783,692   

Hudson Yards Infrastructure Corp., RB, Fiscal 2012, Series A, 5.75%, 2/15/47 (h)

     1,610        1,787,715   

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51 (h)

     6,440        7,123,219   
    

 

 

 
               17,375,811   

North Carolina — 2.1%

    

North Carolina Capital Facilities Finance Agency, Refunding RB, Duke University Project, Series A, 5.00%, 10/01/41

     6,239        6,715,160   

Ohio — 5.6%

    

Ohio Higher Educational Facility Commission, RB, Cleveland Clinic Health, Series A, 5.25%, 1/01/33

     2,400        2,638,800   

State of Ohio, Refunding RB, Cleveland Clinic Health System Obligated Group, Series A, 5.50%, 1/01/39

     13,843        15,583,877   
    

 

 

 
               18,222,677   
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  

South Carolina — 1.7%

    

State of South Carolina Public Service Authority, Refunding RB, Santee Cooper, Series A, 5.50%, 1/01/38 (h)

   $ 4,995      $ 5,611,533   

Texas — 3.2%

    

City of San Antonio Texas Public Service Board, RB, Electric & Gas Systems, Junior Lien, 5.00%, 2/01/43

     2,520        2,725,682   

County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

     3,400        3,684,954   

Texas Department of Housing & Community Affairs, RB, S/F Mortgage, Series B, AMT (Ginnie Mae), 5.25%, 9/01/32

     1,941        1,983,594   

University of Texas, Refunding RB, Financing System, Series B, 5.00%, 8/15/43

     1,830        2,022,232   
    

 

 

 
               10,416,462   

Washington — 5.7%

    

Central Puget Sound Regional Transit Authority, RB, Series A:

    

5.00%, 11/01/34

     5,000        5,491,250   

5.00%, 11/01/36

     4,000        4,393,000   

(AGM), 5.00%, 11/01/32

     7,693        8,475,186   
    

 

 

 
               18,359,436   

Wisconsin — 0.8%

    

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health, Inc., Obligated Group, Series C, 5.25%, 4/01/39 (h)

     2,499        2,658,020   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 38.8%
        125,841,378   
Total Long-Term Investments
(Cost — $480,721,809) — 161.1%
        522,104,682   
    
                  
Short-Term Securities    Shares         

Money Market Funds — 0.5%

    

FFI Institutional Tax-Exempt Fund, 0.03% (i)(j)

     1,726,061        1,726,061   
    
                  
Short-Term Securities   

Par  

(000)

        

Tennessee — 0.1%

    

Shelby County Health Educational & Housing Facilities Board, Refunding RB, VRDN, Methodist Le Bonheur Healthcare, Series B (US Bank NA SBPA), 0.14%, 6/01/42 (k)

   $ 300        300,000   
Total Short-Term Securities
(Cost — $2,026,061) — 0.6%
             2,026,061   
Total Investments (Cost — $482,747,870) — 161.7%        524,130,743   
Other Assets Less Liabilities — 2.1%        6,746,892   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (20.6%)

   

    (66,731,552
VMTP Shares, at Liquidation Value — (43.2%)        (140,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 324,146,083   
    

 

 

 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    63


Table of Contents
Schedule of Investments (continued)    BlackRock MuniVest Fund II, Inc. (MVT)

 

 

Notes to Schedule of Investments

 

(a)   Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown is as of report date.

 

(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)   Non-income producing security.

 

(f)   Issuer filed for bankruptcy and/or is in default of principal and/or interest payments.

 

(g)   Represent bonds transferred to a TOB. In exchange for which the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(h)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from October 1, 2016 to November 15, 2019 is $ $13,378,781.

 

(i)   Investments in issuers considered to be an affiliate of the Fund during the year ended April 30, 2014, for purposes of Section 2(a)(3) of the Investment Company Act 1940, were as follows:

 

Affiliate      Shares Held
at April 30,
2013
       Net
Activity
       Shares Held
at April 30,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       5,335,715           (3,609,654        1,726,061         $ 1,393   

 

(j)   Represents the current yield as of report date.

 

(k)   Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

Ÿ  

Financial futures contracts outstanding as of April 30, 2014 were as follows:

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional Value     Unrealized
Depreciation
 
  (329   10-Year U.S Treasury Note   Chicago Board of Trade   June 2014   $ 40,934,797      $ (74,117

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

  Ÿ  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access

 

  Ÿ  

Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

  Ÿ  

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

 

See Notes to Financial Statements.

 

                
64    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Schedule of Investments (concluded)    BlackRock MuniVest Fund II, Inc. (MVT)

 

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2014:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 522,104,682              $ 522,104,682   

Short-Term Securities

  $ 1,726,061           300,000                2,026,061   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 1,726,061         $ 522,404,682              $ 524,130,743   
 

 

 

      

 

 

      

 

    

 

 

 

 

1   See above Schedule of Investments for values in each state or political subdivision.

      

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2             

Liabilities:

                

Interest rate contracts

  $ (74,117                     $ (74,117

2  Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

     

The carrying amount for certain of the Fund’s assets and/or liabilities approximates fair value for financial statement purposes. As of April 30, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 450,000                        $ 450,000   

Liabilities:

                

Bank overdraft

            $ (603             (603

TOB trust certificates

              (66,714,748             (66,714,748

VMTP Shares

              (140,000,000             (140,000,000
 

 

 

 

Total

  $ 450,000         $ (206,715,351           $ (206,265,351
 

 

 

 

There were no transfers between levels during the year ended April 30, 2014.

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2014    65


Table of Contents
Statements of Assets and Liabilities     

 

April 30, 2014   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

  $ 552,006,585      $ 559,756,678      $ 373,587,564      $ 274,962,684   

Investments at value — affiliated2

    259,703        3,108,476        804,766        944,029   

Cash pledged for financial futures contracts

    683,000        294,000        417,000        245,000   

Interest receivable

    9,716,837        7,546,141        5,570,189        3,908,558   

Investments sold receivable

    7,156,595               3,250,270        1,005,610   

Deferred offering costs

           222,760        38,654        32,535   

Prepaid expenses

    17,948        81,305        29,715        28,088   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

    569,840,668        571,009,360        383,698,158        281,126,504   
 

 

 

   

 

 

   

 

 

   

 

 

 
       
Accrued Liabilities                                

Investments purchased payable

    10,557,924                        

Income dividends payable — Common Shares

    2,236,480        1,788,707        1,250,790        937,918   

Investment advisory fees payable

    249,761        232,368        171,566        125,778   

Variation margin payable on financial futures contracts

    210,940        94,923        113,486        75,517   

Bank overdraft

                  1,197        854   

Interest expense and fees payable

    14,444        25,675        13,136        11,077   

Officer’s and Directors’ fees payable

    5,130        3,683        2,418        1,808   

Other accrued expenses payable

    102,109        106,937        94,185        81,380   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total accrued liabilities

    13,376,788        2,252,293        1,646,778        1,234,332   
 

 

 

   

 

 

   

 

 

   

 

 

 
       
Other Liabilities                                

TOB trust certificates

    71,144,505        73,378,987        60,238,073        48,497,038   

VRDP Shares, at liquidation value of $100,000 per share3,4

           142,500,000                 

VMTP Shares, at liquidation value of $100,000 per share3,4

                  83,700,000        55,000,000   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total other liabilities

    71,144,505        215,878,987        143,938,073        103,497,038   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    84,521,293        218,131,280        145,584,851        104,731,370   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets Applicable to Common Shareholders

  $ 485,319,375      $ 352,878,080      $ 238,113,307      $ 176,395,134   
 

 

 

   

 

 

   

 

 

   

 

 

 
       
Net Assets Applicable to Common Shareholders Consist of                                

Paid-in capital5

  $ 479,994,397      $ 316,096,121      $ 210,679,970      $ 155,428,474   

Undistributed net investment income

    2,315,804        6,889,231        3,236,074        3,063,134   

Accumulated net realized loss

    (12,952,501     (12,066,726     (3,201,132     (3,225,251

Net unrealized appreciation/depreciation

    15,961,675        41,959,454        27,398,395        21,128,777   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets Applicable to Common Shareholders

  $ 485,319,375      $ 352,878,080      $ 238,113,307      $ 176,395,134   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, per Common Share

  $ 13.56      $ 11.94      $ 16.85      $ 15.61   
 

 

 

   

 

 

   

 

 

   

 

 

 

1 Investments at cost — unaffiliated

  $ 535,933,435      $ 517,702,500      $ 346,105,928      $ 253,793,855   

2 Investments at cost — affiliated

  $ 259,703      $ 3,108,476      $ 804,766      $ 944,029   

3 VRDP/VMTP Shares outstanding, par value $0.10

           1,425        837        550   

4 Preferred Shares authorized, including Auction Market Preferred Shares (“AMPS”)

           8,905        5,837        4,030   

5 Common Shares outstanding, 200 million shares authorized, $0.10 par value

    35,783,679        29,565,404        14,133,224        11,300,218   

 

 

See Notes to Financial Statements.      
                
66    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Statements of Assets and Liabilities (continued)     

 

April 30, 2014   BlackRock
MuniHoldings
Quality
Fund, Inc.
(MUS)
    BlackRock
Muni Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Assets                        

Investments at value — unaffiliated1

  $ 288,282,316      $ 939,844,438      $ 522,404,682   

Investments at value — affiliated2

    4,947,879        25,184,531        1,726,061   

Cash pledged for financial futures contracts

    250,998        983,000        450,000   

Interest receivable

    4,288,578        12,667,215        8,516,258   

Investments sold receivable

           215,000        20,000   

Deferred offering costs

    39,481        134,561        53,170   

Prepaid expenses

    28,502        42,728        32,487   
 

 

 

 

Total assets

    297,837,754        979,071,473        533,202,658   
 

 

 

 
     
Accrued Liabilities                        

Investments purchased payable

           20,071,199          

Income dividends payable — Common Shares

    878,156        2,623,294        1,857,202   

Investment advisory fees payable

    127,167        427,891        216,808   

Variation margin payable on financial futures contracts

    68,766        303,754        138,799   

Bank overdraft

                  603   

Interest expense and fees payable

    8,956        22,656        16,804   

Officer’s and Directors’ fees payable

    1,920        222,616        3,345   

Other accrued expenses payable

    86,751        163,532        108,266   
 

 

 

 

Total accrued liabilities

    1,171,716        23,834,942        2,341,827   
 

 

 

 
     
Other Liabilities                        

TOB trust certificates

    25,187,249        69,070,132        66,714,748   

VMTP Shares, at liquidation value of $100,000 per share3,4

    87,000,000        287,100,000        140,000,000   
 

 

 

 

Total other liabilities

    112,187,249        356,170,132        206,714,748   
 

 

 

 

Total liabilities

    113,358,965        380,005,074        209,056,575   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 184,478,789      $ 599,066,399      $ 324,146,083   
 

 

 

 
     
Net Assets Applicable to Common Shareholders Consist of   

Paid-in capital5

  $ 175,157,293      $ 543,562,871      $ 287,210,758   

Undistributed net investment income

    2,761,533        6,555,268        4,256,666   

Accumulated net realized loss

    (15,404,672     (4,099,943     (8,630,097

Net unrealized appreciation/depreciation

    21,964,635        53,048,203        41,308,756   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 184,478,789      $ 599,066,399      $ 324,146,083   
 

 

 

 

Net asset value, per Common Share

  $ 14.18      $ 15.64      $ 15.45   
 

 

 

 

1 Investments at cost — unaffiliated

  $ 266,299,012      $ 886,713,771      $ 481,021,809   

2 Investments at cost — affiliated

  $ 4,947,879      $ 25,184,531      $ 1,726,061   

3 VMTP Shares outstanding, $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 Common Shares outstanding, 200 million shares authorized, $0.10 par value

    13,009,717        38,296,266        20,985,335   

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2014    67


Table of Contents
Statements of Operations     

 

Year Ended April 30, 2014   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)
 
             
Investment Income                                                        

Interest

  $ 31,403,509      $ 26,630,158      $ 18,431,078      $ 13,517,907      $ 13,577,498      $ 40,300,691      $ 26,568,250   

Income — affiliated

    898        1,202        1,198        564        1,138        393        1,393   
 

 

 

   

 

 

 

Total income

    31,404,407        26,631,360        18,432,276        13,518,471        13,578,636        40,301,084        26,569,643   
 

 

 

   

 

 

 
             
Expenses                                                        

Investment advisory

    2,991,024        2,790,270        2,053,519        1,512,845        1,633,374        5,246,595        2,638,569   

Accounting services

    79,223        80,389        55,803        44,158        46,918        119,868        77,603   

Professional

    68,314        63,684        98,421        61,905        69,126        134,836        83,345   

Transfer agent

    64,336        44,899        26,978        23,705        23,002        51,710        35,182   

Officer and Directors

    49,942        35,780        23,923        17,853        18,705        76,032        32,783   

Custodian

    25,093        28,007        19,006        14,572        17,547        43,776        25,391   

Printing

    13,347        12,667        10,830        9,797        9,967        16,853        14,037   

Registration

    3,206        2,697        2,438        2,434        2,423        3,527        2,492   

Miscellaneous

    30,951        61,388        76,820        73,147        64,827        96,945        79,764   
 

 

 

   

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    3,325,436        3,119,781        2,367,738        1,760,416        1,885,889        5,790,142        2,989,166   

Interest expense, fees and amortization of offering costs1

    544,376        1,956,942        1,355,701        976,126        1,208,926        3,781,742        2,074,199   
 

 

 

   

 

 

 

Total expenses

    3,869,812        5,076,723        3,723,439        2,736,542        3,094,815        9,571,884        5,063,365   

Less fees waived by Manager

    (867     (765     (965     (442     (135,624     (2,398     (1,261
 

 

 

   

 

 

 

Total expenses after fees waived

    3,868,945        5,075,958        3,722,474        2,736,100        2,959,191        9,569,486        5,062,104   
 

 

 

   

 

 

 

Net investment income

    27,535,462        21,555,402        14,709,802        10,782,371        10,619,445        30,731,598        21,507,539   
 

 

 

   

 

 

 
             
Realized and Unrealized Gain (Loss)                                                        
Net realized gain (loss) from:              

Investments

    1,734,568        (2,767,149     (2,573,955     (2,289,928     (8,701,143     (1,612,457     (4,343,732

Financial futures contracts

    (323,695     382,195        (35,994     (71,603     670,050        103,203        (87,237
 

 

 

   

 

 

 
    1,410,873        (2,384,954     (2,609,949     (2,361,531     (8,031,093     (1,509,254     (4,430,969
 

 

 

   

 

 

 
Net change in unrealized appreciation/depreciation on:              

Investments

    (30,865,770     (18,545,921     (14,809,214     (11,154,955     (6,946,509     (31,291,252     (20,719,845

Financial futures contracts

    318,579        135,798        273,418        119,941        233,118        416,532        315,793   
 

 

 

   

 

 

 
    (30,547,191     (18,410,123     (14,535,796     (11,035,014     (6,713,391     (30,874,720     (20,404,052
 

 

 

   

 

 

 

Total realized and unrealized loss

    (29,136,318     (20,795,077     (17,145,745     (13,396,545     (14,744,484     (32,383,974     (24,835,021
 

 

 

   

 

 

 

Net Increase (Decrease) in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ (1,600,856   $ 760,325      $ (2,435,943   $ (2,614,174   $ (4,125,039   $ (1,652,376   $ (3,327,482
 

 

 

   

 

 

 

1 Related to TOBs, VRDP Shares and/or VMTP Shares.

  

 

 

See Notes to Financial Statements.      
                
68    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Statements of Changes in Net Assets     

 

    BlackRock MuniAssets
Fund, Inc. (MUA)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets:   2014     2013  
   
Operations                

Net investment income

  $ 27,535,462      $ 27,672,775   

Net realized gain

    1,410,873        4,181,719   

Net change in unrealized appreciation/depreciation

    (30,547,191     27,645,943   
 

 

 

 

Net increase (decrease) in net assets resulting from operations

    (1,600,856     59,500,437   
 

 

 

 
   
Dividends to Shareholders From1                

Net investment income

    (27,002,723     (27,772,135
 

 

 

 
   
Capital Share Transactions                

Reinvestment of dividends

           597,054   
 

 

 

 
   
Net Assets                

Total increase (decrease) in net assets

    (28,603,579     32,325,356   

Beginning of year

    513,922,954        481,597,598   
 

 

 

 

End of year

  $ 485,319,375      $ 513,922,954   
 

 

 

 

Undistributed net investment income, end of year

  $ 2,315,804      $ 1,922,594   
 

 

 

 

 

    BlackRock MuniEnhanced
Fund, Inc. (MEN)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2014     2013  
   
Operations   

Net investment income

  $ 21,555,402      $ 20,863,078   

Net realized gain (loss)

    (2,384,954     413,480   

Net change in unrealized appreciation/depreciation

    (18,410,123     14,501,115   
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    760,325        35,777,673   
 

 

 

 
   
Dividends to Common Shareholders From1                

Net investment income

    (21,389,300     (20,531,117
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common dividends

    248,371        995,097   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    (20,380,604     16,241,653   

Beginning of year

    373,258,684        357,017,031   
 

 

 

 

End of year

  $ 352,878,080      $ 373,258,684   
 

 

 

 

Undistributed net investment income, end of year

  $ 6,889,231      $ 6,723,045   
 

 

 

 

1 Determined in accordance with federal income tax regulations.

   

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2014    69


Table of Contents
Statements of Changes in Net Assets     

 

 

    BlackRock MuniHoldings
Fund, Inc. (MHD)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2014     2013  
   
Operations   

Net investment income

  $ 14,709,802      $ 15,016,849   

Net realized gain (loss)

    (2,609,949     940,190   

Net change in unrealized appreciation/depreciation

    (14,535,796     13,339,344   

Distributions to VMTP Shareholders from net realized gain

           (115,598
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    (2,435,943     29,180,785   
 

 

 

 
   
Dividends and Distributions to Common Shareholders From1                

Net investment income

    (15,321,048     (15,802,003

Net realized gain

    (209,037     (2,694,641
 

 

 

 

Decrease in net assets resulting from dividends and distributions to Common Shareholders

    (15,530,085     (18,496,644
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common dividends and distributions

    168,146        1,237,551   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    (17,797,882     11,921,692   

Beginning of year

    255,911,189        243,989,497   
 

 

 

 

End of year

  $ 238,113,307      $ 255,911,189   
 

 

 

 

Undistributed net investment income, end of year

  $ 3,236,074      $ 3,703,153   
 

 

 

 

 

    BlackRock MuniHoldings
Fund II, Inc. (MUH)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2014     2013  
   
Operations   

Net investment income

  $ 10,782,371      $ 11,018,658   

Net realized gain (loss)

    (2,361,531     1,895,365   

Net change in unrealized appreciation/depreciation

    (11,035,014     8,628,659   

Distributions to VMTP Shareholders from net realized gain

           (66,164
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    (2,614,174     21,476,518   
 

 

 

 
   
Dividends and Distributions to Common Shareholders From1                

Net investment income

    (11,262,749     (11,743,669

Net realized gain

    (1,093,587     (1,836,005
 

 

 

 

Decrease in net assets resulting from dividends and distributions to Common Shareholders

    (12,356,336     (13,579,674
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common dividends and distributions

           844,464   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    (14,970,510     8,741,308   

Beginning of year

    191,365,644        182,624,336   
 

 

 

 

End of year

  $ 176,395,134      $ 191,365,644   
 

 

 

 

Undistributed net investment income, end of year

  $ 3,063,134      $ 3,482,744   
 

 

 

 

1 Determined in accordance with federal income tax regulations.

   

 

 

 

See Notes to Financial Statements.      
                
70    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Statements of Changes in Net Assets     

 

    BlackRock MuniHoldings
Quality Fund, Inc. (MUS)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2014     2013  
   
Operations   

Net investment income

  $ 10,619,445      $ 10,810,579   

Net realized gain (loss)

    (8,031,093     5,258,789   

Net change in unrealized appreciation/depreciation

    (6,713,391     4,576,039   
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    (4,125,039     20,645,407   
 

 

 

 
   
Dividends to Common Shareholders From1                

Net investment income

    (10,631,996     (11,540,016
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common dividends

           563,444   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    (14,757,035     9,668,835   

Beginning of year

    199,235,824        189,566,989   
 

 

 

 

End of year

  $ 184,478,789      $ 199,235,824   
 

 

 

 

Undistributed net investment income, end of year

  $ 2,761,533      $ 2,656,770   
 

 

 

 

 

    BlackRock Muni Intermediate
Duration Fund, Inc. (MUI)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2014     2013  
   
Operations   

Net investment income

  $ 30,731,598      $ 31,218,864   

Net realized gain (loss)

    (1,509,254     6,278,090   

Net change in unrealized appreciation/depreciation

    (30,874,720     15,436,040   

Distributions to VRDP Shareholders from net realized gain

           (104,404
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    (1,652,376     52,828,590   
 

 

 

 
   
Dividends and Distributions to Common Shareholders From1                

Net investment income

    (32,953,864     (33,231,587

Net realized gain

    (1,979,760     (4,957,743
 

 

 

 

Decrease in net assets resulting from dividends and distributions to Common Shareholders

    (34,933,624     (38,189,330
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common dividends and distributions

           3,576,025   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    (36,586,000     18,215,285   

Beginning of year

    635,652,399        617,437,114   
 

 

 

 

End of year

  $ 599,066,399      $ 635,652,399   
 

 

 

 

Undistributed net investment income, end of year

  $ 6,555,268      $ 8,304,209   
 

 

 

 

1 Determined in accordance with federal income tax regulations.

   

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2014    71


Table of Contents
Statements of Changes in Net Assets     

 

 

    BlackRock MuniVest
Fund II, Inc. (MVT)
 
    Year Ended April 30,  
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   2014     2013  
   
Operations                

Net investment income

  $ 21,507,539      $ 22,156,428   

Net realized gain (loss)

    (4,430,969     2,299,157   

Net change in unrealized appreciation/depreciation

    (20,404,052     14,729,364   
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    (3,327,482     39,184,949   
 

 

 

 
   
Dividends to Common Shareholders From1                

Net investment income

    (22,639,477     (22,892,921
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common dividends

    1,115,168        1,764,861   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    (24,851,791     18,056,889   

Beginning of year

    348,997,874        330,940,985   
 

 

 

 

End of year

  $ 324,146,083      $ 348,997,874   
 

 

 

 

Undistributed net investment income, end of year

  $ 4,256,666      $ 5,323,706   
 

 

 

 

1 Determined in accordance with federal income tax regulations.

   

 

 

See Notes to Financial Statements.      
                
72    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Statements of Cash Flows     

 

Year Ended April 30, 2014       
BlackRock
MuniAssets
Fund, Inc.
(MUA)
    BlackRock
MuniEnhanced
Fund, Inc.
(MEN)
    BlackRock
MuniHoldings
Fund, Inc.
(MHD)
    BlackRock
MuniHoldings
Fund II, Inc.
(MUH)
 
       
Cash Provided by Operating Activities                                

Net increase (decrease) in net assets resulting from operations

  $ (1,600,856   $ 760,325      $ (2,435,943   $ (2,614,174

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

       

(Increase) decrease interest receivable

    (434,154     154,670        312,746        249,837   

Decrease in variation margin receivable on financial futures contracts

    17,250        15,000        16,969        8,438   

Increase in prepaid expenses

    (9,053     (71,208     (22,710     (22,926

Increase in cash pledged for financial futures contracts

    (441,000     (81,000     (217,000     (126,000

Decrease in investment advisory fees payable

    (15,059     (11,801     (12,310     (10,186

Decrease in interest expense and fees payable

    (27,260     (15,306     (25,264     (20,421

Increase (decrease) in other accrued expenses payable

    (255,728     (4,045     2,042        7,279   

Increase in variation margin payable on financial futures contracts

    210,940        94,923        113,486        75,517   

Increase in Officer’s and Directors’ fees payable

    4,954        3,206        2,063        1,543   

Net realized gain (loss) on investments

    (1,734,568     2,767,149        2,573,955        2,289,928   

Net unrealized loss on investments

    30,865,770        18,545,921        14,809,214        11,154,955   

Amortization of premium and accretion of discount on investments

    (746,221     (797,059     27,868        (234,828

Proceeds from sales of long-term investments

    101,080,199        100,240,179        86,744,582        60,983,351   

Purchases of long-term investments

    (103,555,707     (90,118,592     (78,765,207     (52,746,226

Net proceeds from sales (purchases) of short-term securities

    8,949,949        (2,562,571     439,363        225,727   
 

 

 

 

Cash provided by operating activities

    32,309,456        28,919,791        23,563,854        19,221,814   
 

 

 

 
       
Cash Used for Financing Activities                                

Proceeds from TOB trust certificates

           6,327,595        12,942,666        9,803,239   

Repayments of TOB trust certificates

    (5,306,733     (14,192,699     (22,457,148     (17,660,675

Cash dividends paid to Common Shareholders

    (27,002,723     (21,065,822     (15,403,444     (12,356,336

Increase in bank overdraft

                  1,197        854   

Increase in amortization of deferred offering costs

           11,135        59,538        50,495   
 

 

 

 

Cash used for financing activities

    (32,309,456     (28,919,791     (24,857,191     (20,162,423
 

 

 

 
       
Cash                                

Net decrease in cash

                  (1,293,337     (940,609

Cash at beginning of year

                  1,293,337        940,609   
 

 

 

 

Cash at end of year

                           
 

 

 

 
       
Supplemental Disclosure of Cash Flow Information                                

Cash paid during the year for interest

  $ 571,636      $ 1,961,113      $ 1,321,427      $ 946,052   
 

 

 

 
       
Non-cash Financing Activities                                

Capital shares issued in reinvestment of dividends paid to Common Shareholders

         $ 248,371      $ 168,146          
 

 

 

 

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2014    73


Table of Contents
Statements of Cash Flows     

 

Year Ended April 30, 2014   BlackRock
MuniHoldings
Quality
Fund, Inc.
(MUS)
    BlackRock
Muni Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Cash Provided by Operating Activities                        

Net decrease in net assets resulting from operations

  $ (4,125,039   $ (1,652,376   $ (3,327,482

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

     

(Increase) decrease interest receivable

    (88,005     1,124,617        325,834   

Decrease in variation margin receivable on financial futures contracts

    17,438        29,344        19,313   

Increase in prepaid expenses

    (22,641     (25,042     (22,595

Increase in cash pledged for financial futures contracts

    (4,998     (570,000     (178,000

Decrease in investment advisory fees payable

    (10,204     (34,899     (23,975

Decrease in interest expense and fees payable

    (14,615     (35,436     (40,007

Increase (decrease) in other accrued expenses payable

    8,093        (91,622     1,058   

Increase in variation margin payable on financial futures contracts

    68,766        303,754        138,799   

Increase in Officer’s and Directors’ fees payable

    1,624        44,644        2,865   

Net realized gain on investments

    8,701,143        1,612,457        4,343,732   

Net unrealized loss on investments

    6,946,509        31,291,252        20,719,845   

Amortization of premium and accretion of discount on investments

    886,870        3,914,171        212,604   

Proceeds from sales of long-term investments

    170,738,486        249,624,420        121,025,522   

Purchases of long-term investments

    (147,062,285     (193,978,514     (94,211,995

Net proceeds from sales (purchases) of short-term securities

    (1,638,405     (19,717,416     3,309,654   
 

 

 

 

Cash provided by operating activities

    34,402,737        71,839,354        52,295,172   
 

 

 

 
     
Cash Used for Financing Activities                        

Proceeds from TOB trust certificates

    1,108,875        16,016,855        8,684,316   

Repayments of TOB trust certificates

    (24,855,826     (52,885,431     (41,355,903

Cash dividends paid to Common Shareholders

    (10,716,559     (35,048,513     (21,569,880

Increase in bank overdraft

                  603   

Increase in amortization of deferred offering costs

    60,773        77,735        81,286   
 

 

 

 

Cash used for financing activities

    (34,402,737     (71,839,354     (54,159,578
 

 

 

 
     
Cash                        

Net decrease in cash

                  (1,864,406

Cash at beginning of year

                  1,864,406   
 

 

 

 

Cash at end of year

                    
 

 

 

 
     
Supplemental Disclosure of Cash Flow Information                        

Cash paid during the year for interest

  $ 1,162,768      $ 3,739,443      $ 2,032,920   
 

 

 

 
     
Non-cash Financing Activities                        

Capital shares issued in reinvestment of dividends paid to Common Shareholders

                $ 1,115,168   
 

 

 

 

 

 

See Notes to Financial Statements.      
                
74    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Financial Highlights    BlackRock MuniAssets Fund, Inc. (MUA)

 

    Year Ended April 30,  
    2014     2013     2012     2011     2010  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 14.36      $ 13.47      $ 12.14      $ 12.63      $ 10.59   
 

 

 

 

Net investment income1

    0.77        0.77        0.76        0.73        0.80   

Net realized and unrealized gain (loss)

    (0.82     0.90        1.32        (0.46     2.06   
 

 

 

 

Net increase (decrease) from investment operations

    (0.05     1.67        2.08        0.27        2.86   
 

 

 

 

Dividends from net investment income2

    (0.75     (0.78     (0.75     (0.76     (0.82
 

 

 

 

Net asset value, end of year

  $ 13.56      $ 14.36      $ 13.47      $ 12.14      $ 12.63   
 

 

 

 

Market price, end of year

  $ 12.85      $ 13.96      $ 13.15      $ 11.27      $ 12.65   
 

 

 

 
         
Total Investment Return3                                        

Based on net asset value

    0.47%        12.70%        17.90%        2.31%        27.72%   
 

 

 

 

Based on market price

    (2.06)%        12.22%        23.99%        (5.17)%        24.17%   
 

 

 

 
         
Ratios to Average Net Assets                                        

Total expenses

    0.82%        0.83%        0.77%        0.78%        0.72%   
 

 

 

 

Total expenses after fees waived and paid indirectly

    0.82%        0.83%        0.77%        0.78%        0.72%   
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense and fees4

    0.70%        0.71%        0.70%        0.74%        0.67%   
 

 

 

 

Net investment income

    5.84%        5.52%        6.00%        6.07%        6.72%   
 

 

 

 
         
Supplemental Data                                        

Net assets, end of year (000)

  $  485,319      $  513,923      $  481,598      $  433,891      $  266,831   
 

 

 

 

Portfolio turnover

    19%        19%        28%        24%        44%   
 

 

 

 

 

1   

Based on average shares outstanding.

 

2  

Determined in accordance with federal income tax regulations.

 

3   

Total investment 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 dividends and distributions.

 

4   

Interest expense and fees relate to TOBs. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2014    75


Table of Contents
Financial Highlights    BlackRock MuniEnhanced Fund, Inc. (MEN)

 

    Year Ended April 30,  
    2014     2013     2012     2011     2010  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 12.63      $ 12.12      $ 10.30      $ 10.90      $ 9.77   
 

 

 

 

Net investment income1

    0.73        0.71        0.69        0.73        0.75   

Net realized and unrealized gain (loss)

    (0.70     0.50        1.82        (0.62     1.04   

Dividends to AMPS Shareholders from net investment income

                  (0.00 )2      (0.03     (0.03
 

 

 

 

Net increase (decrease) from investment operations

    0.03        1.21        2.51        0.08        1.76   
 

 

 

 

Dividends to Common Shareholders from net investment income3

    (0.72     (0.70     (0.69     (0.68     (0.63
 

 

 

 

Net asset value, end of year

  $ 11.94      $ 12.63      $ 12.12      $ 10.30      $ 10.90   
 

 

 

 

Market price, end of year

  $ 11.27      $ 12.65      $ 11.66      $ 9.99      $ 10.81   
 

 

 

 
         
Total Investment Return Applicable to Common Shareholders4                                        

Based on net asset value

    1.06%        10.16%        25.12%        0.78%        18.76%   
 

 

 

 

Based on market price

    (4.76)%        14.69%        24.11%        (1.44)%        29.59%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.50%        1.49%        1.70% 5      1.24% 5      1.20% 5 
 

 

 

 

Total expenses after fees waived

    1.50%        1.49%        1.70% 5      1.24% 5      1.20% 5 
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs6

    0.92%        0.96% 7      1.35% 5,7      1.09% 5      1.04% 5 
 

 

 

 

Net investment income

    6.37%        5.65%        6.12% 5      6.89% 5      7.17% 5 
 

 

 

 

Dividends to AMPS Shareholders

    —%        —%        0.03%        0.29%        0.32%   
 

 

 

 

Net investment income to Common Shareholders

    6.37%        5.65%        6.09%        6.60%        6.85%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $ 352,878      $ 373,259      $ 357,017      $ 303,264      $ 320,083   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                       $  142,575      $  142,575   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 142,500      $ 142,500      $ 142,500                 
 

 

 

 

Portfolio turnover

    16%        12%        22%        9%        23%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year

                       $ 78,179      $ 81,128   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of year

  $  347,633      $  361,936      $  350,538                 
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Amount is greater than $(0.005) per share.

 

3   

Determined in accordance with federal income tax regulations.

 

4   

Total investment 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 dividends and distributions.

 

5   

Does not reflect the effect of dividends to AMPS Shareholders.

 

6   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.

 

7   

For the years ended April 30, 2013 and April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity, and remarketing fees were 0.91% and 0.98%, respectively.

 

 

See Notes to Financial Statements.      
                
76    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Financial Highlights    BlackRock MuniHoldings Fund, Inc. (MHD)

 

    Year Ended April 30,  
    2014     2013     2012     2011     2010  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 18.12      $ 17.36      $ 14.67      $ 15.75      $ 13.27   
 

 

 

 

Net investment income1

    1.04        1.07        1.12        1.14        1.13   

Net realized and unrealized gain (loss)

    (1.22     1.01        2.67        (1.01     2.39   

Distributions to VMTP Shareholders from net realized gain

           (0.01                     
Dividends and distribution to AMPS Shareholders from:          

Net investment income

                  (0.01     (0.03     (0.03

Net realized gain

                         (0.00 )2      (0.00 )2 
 

 

 

 

Net increase (decrease) from investment operations

    (0.18     2.07        3.78        0.10        3.49   
 

 

 

 
Dividends and distributions to Common Shareholders from:3          

Net investment income

    (1.08     (1.12     (1.09     (1.07     (0.99

Net realized gain

    (0.01     (0.19            (0.11     (0.02
 

 

 

 

Total dividends and distributions to Common Shareholders

    (1.09     (1.31     (1.09     (1.18     (1.01
 

 

 

 

Net asset value, end of year

  $ 16.85      $ 18.12      $ 17.36      $ 14.67      $ 15.75   
 

 

 

 

Market price, end of year

  $ 16.01      $ 18.20      $ 18.08      $ 14.51      $ 15.70   
 

 

 

 
         
Total Investment Return Applicable to Common Shareholders4                                        

Based on net asset value

    (0.15)%        12.20%        26.57%        0.57%        27.31%   
 

 

 

 

Based on market price

    (5.55)%        8.21%        33.28%        (0.21)%        40.68%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.64%        1.60%        1.41% 5      1.28% 5      1.25% 5 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.64%        1.60%        1.41% 5      1.28% 5      1.25% 5 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs6

    1.04%        1.02%        1.09% 5,7      1.13% 5      1.11% 5 
 

 

 

 

Net investment income

    6.48%        5.92%        6.95% 5      7.41% 5      7.67% 5 
 

 

 

 

Dividends to AMPS Shareholders

                  0.09%        0.20%        0.24%   
 

 

 

 

Net investment income to Common Shareholders

    6.48%        5.92%        6.86%        7.21%        7.43%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $ 238,113      $ 255,911      $ 243,989      $  205,368      $  219,133   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                       $ 83,700      $ 83,700   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 83,700      $ 83,700      $ 83,700                 
 

 

 

 

Portfolio turnover

    20%        16%        19%        15%        41%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year

                       $ 86,342      $ 90,454   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $  384,484      $  405,748      $  391,505                 
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Amount is greater than $(0.005) per shares.

 

3   

Determined in accordance with federal income tax regulations.

 

4   

Total investment 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 dividends and distributions.

 

5   

Does not reflect the effect of dividends to AMPS Shareholders.

 

6   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

7   

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.05%.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2014    77


Table of Contents
Financial Highlights    BlackRock MuniHoldings Fund II, Inc. (MUH)

 

    Year Ended April 30,  
    2014     2013     2012     2011     2010  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 16.93      $ 16.23      $ 13.74      $ 14.65      $ 12.47   
 

 

 

 

Net investment income1

    0.95        0.98        1.03        1.03        1.02   

Net realized and unrealized gain (loss)

    (1.17     0.93        2.45        (0.88     2.08   

Distributions to VMTP Shareholders from net realized gain

           (0.01                     
Dividends to Preferred Shareholders from:          

Net investment income

                  (0.01     (0.02     (0.02

Net realized gain

                         (0.00 )2        
 

 

 

 

Net increase (decrease) from investment operations

    (0.22     1.90        3.47        0.13        3.08   
 

 

 

 
Dividends and distributions from:3          

Net investment income

    (1.00     (1.04     (0.98     (0.97     (0.90

Net realized gain

    (0.10     (0.16            (0.07       
 

 

 

 

Total dividends and distributions

    (1.10     (1.20     (0.98     (1.04     (0.90
 

 

 

 

Net asset value, end of year

  $ 15.61      $ 16.93      $ 16.23      $ 13.74      $ 14.65   
 

 

 

 

Market price, end of year

  $ 14.84      $ 16.75      $ 16.46      $ 13.35      $ 14.68   
 

 

 

 
         
Total Investment Return Applicable to Common Shareholders4                                        

Based on net asset value

    (0.40)%        11.99%        26.08%        0.92%        25.71%   
 

 

 

 

Based on market price

    (4.30)%        9.25%        31.60%        (2.14)%        38.64%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.61%        1.59%        1.37% 5      1.23% 5      1.25% 5 
 

 

 

 

Total expenses after fees waived

    1.61%        1.59%        1.37% 5      1.23% 5      1.25% 5 
 

 

 

 

Total expenses after fees waived and excluding interest expense fees, and amortization of offering costs6

    1.04%        1.03%        1.07% 5,7      1.07% 5      1.10% 5 
 

 

 

 

Net investment income

    6.36%        5.81%        6.81% 5      7.18% 5      7.41% 5 
 

 

 

 

Dividends to AMPS Shareholders

                  0.05%        0.14%        0.16%   
 

 

 

 

Net investment income to Common Shareholders

    6.36%        5.81%        6.76%        7.04%        7.25%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable Common Shareholders, end of year (000)

  $  176,395      $  191,366      $  182,624      $  154,259      $  163,722   
 

 

 

 

Preferred Shares outstanding at $25,000 liquidation preference, end of year (000)

                       $ 55,050      $ 55,050   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 55,000      $ 55,000      $ 55,000                 
 

 

 

 

Portfolio turnover

    18%        16%        18%        15%        41%   
 

 

 

 

Asset coverage per Preferred Share at $25,000 liquidation preference, end of year

                       $ 95,056      $ 99,353   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 420,718      $ 447,938      $ 432,044                 
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Amount is greater than (0.005) per share.

 

3   

Determined in accordance with federal income tax regulations.

 

4   

Total investment 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 dividends and distributions.

 

5   

Does not reflect the effect of dividends to AMPS Shareholders.

 

6   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

7   

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.03%.

 

 

See Notes to Financial Statements.      
                
78    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Financial Highlights    BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

    Year Ended April 30,  
    2014     2013     2012     2011     2010  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 15.31      $ 14.61      $ 12.48      $ 13.34      $ 12.27   
 

 

 

 

Net investment income1

    0.82        0.83        0.89        0.91        0.94   

Net realized and unrealized gain (loss)

    (1.13     0.76        2.14        (0.85     0.97   

Dividends to AMPS shareholders from net investment income

                  (0.01     (0.03     (0.03
 

 

 

 

Net increase (decrease) from investment operations

    (0.31     1.59        3.02        0.03        1.88   
 

 

 

 

Dividends to Common Shareholders from net investment income2

    (0.82     (0.89     (0.89     (0.89     (0.81
 

 

 

 

Net asset value, end of year

  $ 14.18      $ 15.31      $ 14.61      $ 12.48      $ 13.34   
 

 

 

 

Market price, end of year

  $ 12.88      $ 14.92      $ 14.52      $ 12.31      $ 13.40   
 

 

 

 
         
Total Investment Return Applicable to Common Shareholders3                                        

Based on net asset value

    (1.07)%        11.06%        24.96%        0.21%        16.05%   
 

 

 

 

Based on market price

    (7.78)%        8.90%        25.90%        (1.60)%        31.59%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.75%        1.80%        1.49% 4      1.34% 4      1.36% 4 
 

 

 

 

Total expenses after fees waived

    1.67%        1.72%        1.41% 4      1.25% 4      1.20% 4 
 

 

 

 

Total expenses after fees waived and excluding interest expense fees, and amortization of offering costs5

    0.99%        1.00%        1.06% 4,6      1.10% 4      1.04% 4 
 

 

 

 

Net investment income

    6.00%        5.48%        6.50% 4      7.04% 4      7.23% 4 
 

 

 

 

Dividends to AMPS Shareholders

                  0.08%        0.21%        0.24%   
 

 

 

 

Net investment income to Common Shareholders

    6.00%        5.48%        6.42%        6.83%        6.99%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $  184,479      $  199,236      $  189,567      $  161,720      $  171,977   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                       $ 87,000      $ 87,000   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 87,000      $ 87,000      $ 87,000                 
 

 

 

 

Portfolio turnover

    46%        34%        30%        28%        22%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year

                       $ 71,472      $ 74,420   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 312,045      $ 329,007      $ 317,893                 
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Determined in accordance with federal income tax regulations.

 

3   

Total investment 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 dividends and distributions.

 

4   

Does not reflect the effect of dividends to AMPS Shareholders.

 

5   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

6   

For the year ended April 30, 2012, the total expense ratio after fees waived and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.01%.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2014    79


Table of Contents
Financial Highlights    BlackRock Muni Intermediate Duration Fund, Inc.  (MUI)

 

    Year Ended April 30,  
    2014     2013     2012     2011     2010  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 16.60      $ 16.21      $ 14.45      $ 14.75      $ 13.05   
 

 

 

 

Net investment income1

    0.80        0.82        0.86        0.95        1.02   

Net realized and unrealized gain (loss)

    (0.85     0.58        1.76        (0.31     1.57   

Distributions to VRDP Shareholders from net realized gain

           (0.01                     

Dividends to AMPS Shareholders from net investment income

                         (0.10     (0.11
 

 

 

 

Net increase (decrease) from investment operations

    (0.05     1.39        2.62        0.54        2.48   
 

 

 

 
Dividends and distributions to Common Shareholders from:2          

Net investment income

    (0.86     (0.87     (0.86     (0.84     (0.78

Net realized gain

    (0.05     (0.13                     
 

 

 

 

Total dividends and distributions to Common Shareholders

    (0.91     (1.00     (0.86     (0.84     (0.78
 

 

 

 

Net asset value, end of year

  $ 15.64      $ 16.60      $ 16.21      $ 14.45      $ 14.75   
 

 

 

 

Market price, end of year

  $ 14.55      $ 16.12      $ 16.45      $ 13.65      $ 14.13   
 

 

 

 
         
Total Investment Return Applicable to Common Shareholders3                                        

Based on net asset value

    0.50%        8.78%        18.74%        3.86%        19.85%   
 

 

 

 

Based on market price

    (3.73)%        4.09%        27.56%        2.41%        27.29%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.65%        1.91%        1.88%        1.45% 4      1.20% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.65%        1.91%        1.88%        1.43% 4      1.10% 4 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense fees, and amortization of offering costs5

    1.00%        1.35% 6      1.65% 6      1.30% 4      1.01% 4 
 

 

 

 

Net investment income

    5.28%        4.93%        5.58%        6.48% 4      7.22% 4 
 

 

 

 

Dividends to AMPS Shareholders

                         0.70%        0.81%   
 

 

 

 

Net investment income to Common Shareholders

    5.28%        4.93%        5.58%        5.78%        6.41%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $  599,066      $  635,652      $  617,437      $  549,516      $  561,140   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                              $ 287,175   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of year (000)

                $ 287,100      $ 287,100          
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 287,100      $ 287,100                        
 

 

 

 

Portfolio turnover

    22%        16%        27%        21%        29%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year

                              $ 73,857   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of year

                $ 315,060      $ 291,402          
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 308,661      $ 321,405                        
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Determined in accordance with federal income tax regulations.

 

3   

Total investment 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 dividends and distributions.

 

4   

Does not reflect the effect of dividends to AMPS Shareholders.

 

5   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs, VRDP Shares and VMTP Shares, respectively.

 

6   

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 was 0.98% and 0.99%, respectively.

 

 

See Notes to Financial Statements.      
                
80    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Financial Highlights    BlackRock MuniVest Fund II, Inc. (MVT)

 

    Year Ended April 30,  
    2014     2013     2012     2011     2010  
         
Per Share Operating Performance                                        

Net asset value, beginning of year

  $ 16.69      $ 15.91      $ 13.47      $ 14.41      $ 11.95   
 

 

 

 

Net investment income1

    1.03        1.06        1.12        1.14        1.18   

Net realized and unrealized gain (loss)

    (1.19     0.82        2.41        (0.99     2.32   

Dividends to AMPS Shareholders from net investment income

                  (0.02     (0.04     (0.05
 

 

 

 

Net increase (decrease) from investment operations

    (0.16     1.88        3.51        0.11        3.45   
 

 

 

 

Dividends to Common Shareholders from net investment income2

    (1.08     (1.10     (1.07     (1.05     (0.99
 

 

 

 

Net asset value, end of year

  $ 15.45      $ 16.69      $ 15.91      $ 13.47      $ 14.41   
 

 

 

 

Market price, end of year

  $ 15.16      $ 17.31      $ 16.75      $ 13.72      $ 14.94   
 

 

 

 
         
Total Investment Return Applicable to Common Shareholders3                                        

Based on net asset value

    (0.37)%        11.95%        26.86%        0.73%        29.75%   
 

 

 

 

Based on market price

    (5.74)%        10.28%        31.13%        (1.04)%        37.99%   
 

 

 

 
         
Ratios to Average Net Assets Applicable to Common Shareholders                                        

Total expenses

    1.63%        1.66%        1.41% 4      1.23% 4      1.25% 4 
 

 

 

 

Total expenses after fees waived

    1.63%        1.66%        1.41% 4      1.23% 4      1.25% 4 
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs5

    0.96%        0.96%        1.04% 4,6      1.07% 4      1.10% 4 
 

 

 

 

Net investment income

    6.93%        6.43%        7.57% 4      8.14% 4      8.72% 4 
 

 

 

 

Dividends to AMPS Shareholders

                  0.15%        0.32%        0.36%   
 

 

 

 

Net investment income to Common Shareholders

    6.93%        6.43%        7.42%        7.82%        8.36%   
 

 

 

 
         
Supplemental Data                                        

Net assets applicable to Common Shareholders, end of year (000)

  $  324,146      $  348,998      $  330,941      $  278,284      $  295,465   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                       $ 140,000      $ 140,000   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 140,000      $ 140,000      $ 140,000                 
 

 

 

 

Portfolio turnover

    17%        15%        13%        16%        30%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year

                       $ 74,698      $ 77,767   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 331,533      $ 349,284      $ 336,386                 
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Determined in accordance with federal income tax regulations.

 

3   

Total investment 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 dividends and distributions.

 

4   

Does not reflect the effect of dividends to AMPS Shareholders.

 

5   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

6   

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.99%.

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    APRIL 30, 2014    81


Table of Contents
Notes to Financial Statements     

 

1. Organization:

BlackRock MuniAssets Fund, Inc. (“MUA”), BlackRock MuniEnhanced Fund, Inc. (“MEN”), BlackRock MuniHoldings Fund, Inc. (“MHD”), BlackRock Muni-Holdings Fund II, Inc. (“MUH”), BlackRock MuniHoldings Quality Fund, Inc. (“MUS”), BlackRock Muni Intermediate Duration Fund, Inc. (“MUI”) and BlackRock MuniVest Fund II, Inc. (“MVT”) (collectively, the “Funds”) are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as non-diversified, closed-end management investment companies. The Funds are organized as Maryland corporations. 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.

2. Significant Accounting Policies:

The Funds’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Funds:

Valuation: U.S. GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds determine the fair values of their financial instruments at market value using independent dealers or pricing services under policies approved by the Board. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to provide oversight of the pricing function for the Funds for all financial instruments.

Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. Financial futures contracts traded on exchanges are valued at their last sale price. Investments in open-end registered investment companies are valued at NAV each business day. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value.

In the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant consistent with the principles of fair value measurement. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof on a quarterly basis.

Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., financial futures contracts) or certain borrowings (e.g., TOBs) that would be "senior securities" for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid securities having a market value at least equal to the amount of the Fund's 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 Fund 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.

Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. The character and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 9.

Income Taxes: 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. See Note 7, for the tax character of each Fund’s distributions paid during the period.

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 the Funds' U.S. federal tax returns remains open for each of the four years ended April 30, 2014. The statutes of limitations on each Funds' state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application of the Funds' facts and circumstances and does not believe there are any uncertain tax positions that require recognition of a tax liability.

Deferred Compensation Plan: Under the Deferred Compensation Plan (the "Plan") approved by each Fund's Board, the independent Directors

 

                
82    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Notes to Financial Statements (continued)     

 

(“Independent Directors”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Directors. This has the same economic effect for the Independent Directors as if the Independent Directors had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.

The Plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Fund. Deferred compensation liabilities are included in officer’s and director’s 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.

Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods.

The Funds have an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodians impose fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Securities and Other Investments:

Zero-Coupon Bonds: The Funds may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.

Forward Commitments and When-Issued Delayed Delivery Securities: The Funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Funds may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Funds may be required to pay more at settlement than the security is worth. In addition, the Funds are not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, the Funds' maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Schedules of Investments.

Municipal Bonds Transferred to TOBs: The Funds leverage their assets through the use of TOBs. A TOB is a special purpose entity established by a third party sponsor, into which a fund, or an agent on behalf of the funds, transfers municipal bonds into a trust (“TOB Trust”). Other funds managed by the investment advisor may also contribute municipal bonds to a TOB into which a Fund has contributed bonds. A TOB typically issues two classes of beneficial interests: short-term floating rate certificates (“TOB Trust Certificates”), which are sold to third party investors, and residual certificates (“TOB Residuals”), which are generally issued to the participating funds that contributed the municipal bonds to the TOB Trust. If multiple funds participate in the same TOB, the rights and obligations under the TOB Residual will be shared among the funds ratably in proportion to their participation.

The TOB Residuals held by a Fund include the right of a Fund (1) to cause the holders of a proportional share of the TOB Trust Certificates to tender their certificates at par plus accrued interest upon the occurrence of certain mandatory tender events defined in the TOB agreements, and (2) to transfer, subject to a specified number of days’ prior notice, a corresponding share of the municipal bonds from the TOB to a Fund. The TOB may also be collapsed without the consent of a Fund, as the TOB Residual holder, upon the occurrence of certain termination events as defined in the TOB agreements. Such termination events may include the bankruptcy or default of the municipal bond, a substantial downgrade in credit quality of the municipal bond, the inability of the TOB to obtain renewal of the liquidity support agreement, a substantial decline in market value of the municipal bond and a judgment or ruling that interest on the municipal bond is subject to federal income taxation. Upon the occurrence of a termination event, the TOB would generally be liquidated in full with the proceeds typically applied first to any accrued fees owed to the trustee, remarketing agent and liquidity provider, and then to the holders of the TOB Trust Certificates up to par plus accrued interest owed on the TOB Trust Certificates, with the balance paid out to the TOB Residual holder. During the year ended April 30, 2014, no TOBs in which the Funds participated were terminated without the consent of the Funds.

The cash received by the TOB from the sale of TOB Trust certificates, less transaction expenses, is paid to a Fund. The Fund typically invests the cash received in additional municipal bonds. Each Fund's transfer of the municipal bonds to a TOB Trust is accounted for as a secured borrowing; therefore, the municipal bonds deposited into a TOB are presented in the Funds' Schedules of Investments and TOB Trust Certificates issued are shown in other liabilities in the Statements of Assets and Liabilities. The carrying amount of each Fund’s payable to the holder of the TOB Trust Certificates, as reported in Statement of Assets and Liabilities as TOB Trust Certificates approximate, its fair value.

The Funds may invest in TOBs on either a non-recourse or recourse basis. TOB Trusts are typically supported by a liquidity facility provided by a bank or other financial institution (the “Liquidity Provider”) that allows the holders of the TOB Trust Certificates to tender their certificates in exchange for payment from the Liquidity Provider of par plus accrued interest on any business day prior to the occurrence of the termination events described above. When a Fund invests in TOBS on a non-recourse basis, and the Liquidity Provider is required to make a payment under the liquidity facility due to a termination event, the Liquidity Provider will typically liquidate all or a portion of the municipal securities held in the TOB Trust and then fund, on a net basis, the balance, if any, of the amount owed under the liquidity facility over the liquidation proceeds (the “Liquidation Shortfall”). If a Fund invests in a TOB on a recourse basis, the Funds will typically enter into a reimbursement agreement with the

 

                
   ANNUAL REPORT    APRIL 30, 2014    83


Table of Contents
Notes to Financial Statements (continued)     

 

Liquidity Provider where the Fund is required to repay the Liquidity Provider the amount of any Liquidation Shortfall. As a result, a Fund investing in a recourse TOB will bear the risk of loss with respect to any Liquidation Shortfall. If multiple Funds participate in any such TOB, these losses will be shared ratably, including the maximum potential amounts owed by Funds at April 30, 2014 in proportion to their participation. The recourse TOB Trusts are identified in the Schedule of Investments including the maximum potential amounts owed by the Funds at April 30, 2014.

Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by the Funds on an accrual basis. Interest expense incurred on the secured borrowing and other expenses related to remarketing, administration and trustee services to a TOB are shown as interest expense, fees and amortization of offering costs in the Statements of Operations. The TOB Trust Certificates have interest rates that generally reset weekly and their holders have the option to tender such certificates to the TOB for redemption at par at each reset date. At April 30, 2014, the aggregate value of the underlying municipal bonds transferred to TOBs, the related liability for TOB Trust Certificates and the range of interest rates on the liability for TOB Trust Certificates were as follows:

 

     Underlying
Municipal Bonds
Transferred to TOBs
    Liability
for TOB Trust
Certificates
   

Range of

Interest Rates

 

MUA

  $ 125,068,601      $ 71,144,505        0.10% - 0.47%   

MEN

  $ 139,795,100      $ 73,378,987        0.10% - 0.38%   

MHD

  $ 106,240,918      $ 60,238,073        0.09% - 0.32%   

MUH

  $ 84,838,721      $ 48,497,038        0.09% - 0.32%   

MUS

  $ 49,110,569      $ 25,187,249        0.12% - 0.37%   

MUI

  $ 123,372,982      $ 69,070,132        0.10% - 0.19%   

MVT

  $ 125,841,378      $ 66,714,748        0.09% - 0.27%   

For the year ended April 30, 2014, the Funds' average TOB trust certificates outstanding and the daily weighted average interest rate, including fees, were as follows:

 

     Average TOB Trust
Certificates
Outstanding
    Daily Weighted
Average
Interest Rate
 

MUA

  $ 72,190,122        0.76

MEN

  $ 77,385,309        0.64

MHD

  $ 62,527,092        0.63

MUH

  $ 50,411,716        0.62

MUS

  $ 32,784,505        0.66

MUI

  $ 85,195,252        0.64

MVT

  $ 77,332,972        0.64

Should short-term interest rates rise, the Funds' investments in TOBs 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.

4. Derivative Financial Instruments:

The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to economically hedge their exposure to certain risks such as interest rate risk. These contracts may be transacted on an exchange.

Financial Futures Contracts: The Funds purchase and/or sell financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date.

Upon entering into a financial futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Securities deposited as initial margin are designated on the Schedules of Investments and cash deposited, if any, is recorded on the Statements of Assets and Liabilities as cash pledged for financial futures contracts. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin. Variation margin is recorded by the Funds as unrealized appreciation or depreciation, and if, applicable as a receivable or payable for variation margin in the Statements of Assets and Liabilities.

When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.

 

The following is a summary of the Funds’ derivative financial instruments categorized by risk exposure:  
Fair Value of Derivative Financial Instruments As of April 30, 2014  
Derivatives Liabilities  
     MUA      MEN      MHD      MUH      MUS      MUI      MVT  
      Statements of Assets
and Liabilities
Location
   Value  
Interest rate contracts:      

Financial futures contracts

   Net unrealized depreciation1    $ (111,475    $ (94,724    $ (83,241    $ (40,052    $ (18,669    $ (82,464    $ (74,117

 

  1   

Includes cumulative appreciation/depreciation on financial futures contracts, as reported in the Schedules of Investments. Only current day's variation margin is reported within the Statements of Assets and Liabilities.

 

                
84    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Notes to Financial Statements (continued)     

 

 

The Effect of Derivative Financial Instruments in the Statements of Operations
Year Ended April 30, 2014
 
    Net Realized Gain (Loss) From  
     MUA     MEN     MHD     MUH     MUS     MUI     MVT  
Interest rate contracts:              

Financial futures contracts

  $ (323,695   $ 382,195      $ (35,994   $ (71,603   $ 670,050      $ 103,203      $ (87,237
    Net Change in Unrealized Appreciation/Depreciation on  
     MUA     MEN     MHD     MUH     MUS     MUI     MVT  
Interest rate contracts:              

Financial futures contracts

  $ 318,579      $ 135,798      $ 273,418      $ 119,941      $ 233,118      $ 416,532      $ 315,793   
             
For the year ended April 30, 2014, the average quarterly balances of outstanding derivative financial instruments were as follows:   
             
     MUA     MEN     MHD     MUH     MUS     MUI     MVT  
Financial futures contracts:              

Average number of contracts purchased

                                       235 2        

Average notional value of contracts purchased

                                     $ 29,121,007 2        

Average number of contracts sold

    270        86        137        97        108        359        178   

Average notional value of contracts sold

  $ 33,875,055      $ 10,795,371      $ 17,134,355      $ 12,127,398      $ 13,601,367      $ 44,968,301      $ 22,248,805   

 

  2  

Actual contract amount shown due to limited activity.

 

Counterparty Credit Risk: A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange-traded futures there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate, for 1940 Act purposes, of BlackRock, Inc. (“BlackRock”).

Each Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Funds' investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of each Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Fund. For such services, each Fund pays the Manager a monthly fee based on a percentage of each Fund's average daily net assets at the following annual rates:

 

MUA

    0.55

MEN

    0.50

MHD

    0.55

MUH

    0.55

MUS

    0.55

MUI

    0.55

MVT

    0.50

Average daily net assets are the average daily value of each Fund’s total assets minus its total accrued liabilities.

The Manager, for the MUS, voluntarily agreed to waive its investment advisory fee on the proceeds of Preferred Shares and TOBs that exceed 35% of total assets minus the sum of its accrued liabilities. This amount is included in fees waived by Manager in the Statements of Operations. For the year ended April 30, 2014 the waiver was $134,621.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with each Fund's investment in other affiliated investment companies, if any. These amounts are shown as fees waived by Manager in the Statements of Operations.

The Manager entered into a sub-advisory agreement with BlackRock Investment Management, LLC (“BIM”), an affiliate of the Manager. The Manager pays BIM, for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Fund to the Manager.

 

                
   ANNUAL REPORT    APRIL 30, 2014    85


Table of Contents
Notes to Financial Statements (continued)     

 

Certain officers and/or directors of the Funds are officers and/or directors of BlackRock or its affiliates. The Funds reimburse the Manager for compensation paid to the Funds' Chief Compliance Officer, which is included in officer and directors in the Statements of Operations.

The Funds may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common trustees. For the year ended April 30, 2014, sale transactions with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act for MUS was $6,887,125.

6. Purchases and Sales:

Purchases and sales of investments, excluding short-term securities, for the year ended April 30, 2014, were as follows:

 

     Purchases     Sales  

MUA

  $ 104,882,916      $ 101,235,037   

MEN

  $ 87,723,867      $ 99,216,159   

MHD

  $ 74,970,206      $ 89,879,852   

MUH

  $ 49,995,236      $ 61,938,961   

MUS

  $ 134,196,505      $ 169,144,001   

MUI

  $ 203,710,179      $ 248,952,766   

MVT

  $ 88,753,917      $ 121,025,522   

 

7. Income Tax Information:

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of April 30, 2014 attributable to amortization methods on fixed income securities, expenses characterized as distributions and the reclassification of distributions were reclassified to the following accounts:

 

     MUA     MEN     MHD     MUH     MUS     MUI     MVT  

Paid-in capital

         $ (11,134   $ (61,041   $ (51,482   $ (62,336   $ (82,890   $ (83,799

Undistributed net investment income

  $ (139,529   $ 84      $ 144,167      $ 60,768      $ 117,314      $ 473,325      $ 64,898   

Accumulated net realized loss

  $ 139,529      $ 11,050      $ (83,126   $ (9,286   $ (54,978   $ (390,435   $ 18,901   
 

 

 

 

The tax character of distributions paid during the fiscal years ended April 30, 2014 and April 30, 2013 was as follows:

 

            MUA     MEN     MHD     MUH     MUS     MUI     MVT  

Tax-exempt income1

    04/30/14      $ 26,837,760      $ 22,842,187      $ 16,193,850      $ 11,813,581      $ 11,552,557      $ 35,584,757      $ 24,120,086   
    04/30/13      $ 26,817,515      $ 21,934,599      $ 16,372,680      $ 11,783,319      $ 12,543,128      $ 34,575,076      $ 24,390,475   

Ordinary income2

    04/30/14      $ 164,963      $ 105      $ 227,602      $ 548,988      $ 10,387      $ 628,513      $ 17,371   
    04/30/13      $ 954,620      $ 7,220      $ 961,986      $ 1,055,751             $ 966,224      $ 119,119   

Long-term capital gains3.

    04/30/14                    $ 9,111      $ 604,877             $ 1,878,099          
    04/30/13                    $ 2,189,737      $ 1,419,112             $ 4,569,048          
 

 

 

 

Total

    04/30/14      $ 27,002,723      $ 22,842,292      $ 16,430,563      $ 12,967,446      $ 11,562,944      $ 38,091,369      $ 24,137,457   
 

 

 

 
    04/30/13      $ 27,772,135      $ 21,941,819      $ 19,524,403      $ 14,258,182      $ 12,543,128      $ 40,110,348      $ 24,509,594   
 

 

 

 

 

  1   

The Funds designate these amounts paid during the fiscal year ended April 30, 2014, as exempt-interest dividends.

 

  2   

Ordinary income consists primarily of taxable income recognized from market discount and net short-term capital gains. Additionally, all ordinary income distributions are comprised of interest related dividends for non-US residents and are eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations.

 

  3   

The Funds designate these amounts paid during the fiscal year ended April 30, 2014, as capital gain dividends.

As of April 30, 2014, the tax components of accumulated net earnings were as follows:

 

     MUA     MEN     MHD     MUH     MUS     MUI     MVT  

Undistributed tax-exempt income

  $ 1,485,419      $ 6,184,008      $ 2,881,827      $ 2,833,013      $ 2,643,281      $ 5,609,926      $ 3,377,504   

Undistributed ordinary income

    886        13,302               196        345        64,287        146   

Capital loss carryforwards

    (12,035,357     (9,958,411     (662,351     (900,214     (14,768,868     (447,981     (4,455,000

Net unrealized gains4

    16,082,886        40,725,450        26,838,880        20,360,356        21,624,052        50,277,296        40,555,187   

Qualified late-year losses5

    (208,856     (182,390     (1,625,019     (1,326,691     (177,314            (2,542,512
 

 

 

 

Total

  $ 5,324,978      $ 36,781,959      $ 27,433,337      $ 20,966,660      $ 9,321,496      $ 55,503,528        36,935,325   
 

 

 

 

 

  4  

The differences between book-basis and tax-basis net unrealized gains were attributable primarily to the tax deferral of losses on wash sales and straddles, amortization and accretion methods of premiums and discounts on fixed income securities, the accrual of income on securities in default, the realization for tax purposes of unrealized gains/losses on certain futures contracts, the deferral of compensation to Directors and the treatment of residual interests in tender option bond trusts.

 

  5   

The Funds have elected to defer certain qualified late-year losses and recognize such losses in the year ending April 30, 2015.

 

                
86    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Notes to Financial Statements (continued)     

 

As of April 30, 2014, 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     MUI     MVT  

2015

  $ 4,897,756                                             

2016

    901,327      $ 2,450,150                                  $ 2,741,816   

2017

    3,645,754        3,540,378                    $ 494,294                 

2018

    396,366        1,225,298                      6,614,798                 

2019

    2,194,154        732,655                                      

No expiration date6

           2,009,930      $ 662,351      $ 900,214        7,659,776      $ 447,981        1,713,184   
 

 

 

 

Total

  $ 12,035,357      $ 9,958,411      $ 662,351      $ 900,214      $ 14,768,868      $ 447,981      $ 4,455,000   
 

 

 

 

 

6    Must be utilized prior to losses subject to expiration.

       

During the year ended April 30, 2014, MUA utilized $1,740,771 of its capital loss carryforward.

As of April 30, 2014, 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

  $ 464,893,091      $ 448,683,692      $ 287,315,377      $ 207,049,320      $ 246,416,976      $ 845,463,536      $ 416,115,205   
 

 

 

 

Gross unrealized appreciation

  $ 37,355,646      $ 43,588,268      $ 28,579,109      $ 22,105,685      $ 22,082,681      $ 55,143,895      $ 44,658,736   

Gross unrealized depreciation

    (21,126,954     (2,785,793     (1,740,229     (1,745,330     (456,711     (4,648,594     (3,357,946
 

 

 

 

Net unrealized appreciation

  $ 16,228,692      $ 40,802,475      $ 26,838,880      $ 20,360,355      $ 21,625,970      $ 50,495,301      $ 41,300,790   
 

 

 

 

 

8. Concentration, Market and Credit Risk:

MEN, MHD, MUH, MUS, MUI, and MVT invest a substantial amount of their assets in issuers located in a single state or limited number of states. Please see the Schedules of Investments for concentrations in specific states or U.S. territories.

Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds' exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.

As of April 30, 2014, MUA, MUH and MVT invested a significant portion of their assets in securities in the Health sector; MEN, MUS and MUI invested a significant portion of their assets in securities in the County/City/Special District/School District sector; MUA, MHD, MUS, MUI and MVT invested a significant portion of their assets in securities in the Transportation sector. Changes in economic conditions affecting the Health, County/City/Special District/School District or Transportation sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.

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.

On December 10, 2013, regulators published final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Volcker Rule"), which prohibit banking entities from engaging in proprietary trading of certain instruments and limit such entities' investments in, and relationships with, “covered funds, as defined in the rules”. Banking entities subject to the Volcker Rule are required to fully comply by July 21, 2015. These rules may preclude banking entities and their affiliates from (i) sponsoring TOB trust programs (as such programs are presently structured) and (ii) continuing relationships with or services for existing TOB trust programs. As a result, TOB trusts may need to be restructured or unwound. There can be no assurances that TOB trusts can be restructured, that new sponsors of TOB trusts will develop, or that alternative forms of leverage will be available to the Fund. Any alternative forms of leverage may be more or less advantageous to the Fund than existing TOB leverage.

TOB transactions constitute an important component of the municipal bond market. Accordingly, implementation of the Volcker Rule may

 

                
   ANNUAL REPORT    APRIL 30, 2014    87


Table of Contents
Notes to Financial Statements (continued)     

 

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 Fund. The ultimate impact of these rules on the TOB market and the overall municipal market is not yet certain.

9. Capital Share Transactions:

Each Fund is authorized to issue 200 million shares, all of which were initially classified as Common Shares. The par value for each Funds' 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 years shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

 

    

Year Ended

April 30, 2014

   

Year Ended

April 30, 2013

 

MUA

           41,756   

MEN

    20,577        78,843   

MHD

    9,784        68,594   

MUH

           50,084   

MUS

           36,838   

MUI

           215,573   

MVT

    75,746        105,288   

Preferred Shares

Each Fund's Preferred Shares rank prior to the Fund's Common Shares as to the payment of dividends by the Fund and distribution of assets upon dissolution or liquidation of the Fund. The 1940 Act prohibits the declaration of any dividend on the Funds’ Common Shares or the repurchase of the Funds’ Common Shares if the Funds fail to maintain the asset coverage of at least 200% of the liquidation preference of the outstanding Preferred Shares. In addition, pursuant to the Preferred Shares' governing instruments, the Funds are restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with the Preferred Shares or repurchasing such shares if the Funds fail to declare and pay dividends on the Preferred Shares, redeem any Preferred Shares required to be redeemed under the Preferred Shares’ governing instruments or comply with the basic maintenance amount requirement of the agencies rating the Preferred Shares.

The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Directors for each Fund. In addition, the 1940 Act requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Fund’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.

VRDP Shares

MEN has issued Series W-7 VRDP Shares, $100,000 liquidation value per share, in a privately negotiated offering. The VRDP Shares were offered to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act of 1933, as amended, (the “Securities Act”) and include a liquidity feature, pursuant to a liquidity agreement, that allows the holders of VRDP Shares to have their shares purchased by the liquidity provider in the event of a failed remarketing. MEN is required to redeem the VRDP Shares owned by the liquidity provider after six months of continuous, unsuccessful remarketing. Upon the occurrence of the first unsuccessful remarketing, the Fund is required to segregate liquid assets to fund the redemption. The VRDP Shares are subject to certain restrictions on transfer. MUI redeemed all its VRDP Shares on December 21, 2012.

The VRDP Shares outstanding as of year ended April 30, 2014 were as follows:

 

     Issue
Date
    Shares
Issued
    Aggregate
Principal
    Maturity
Date
 

MEN

    5/19/11        1,425      $ 142,500,000        6/01/41   

MEN entered into a fee agreement with the liquidity provider that may require a per annum liquidity fee payable to the liquidity provider. These fees, if applicable, are shown as liquidity fees in the Statements of Operations.

The fee agreement between the MEN and the liquidity provider is for a three year term and is scheduled to expire on July 9, 2015 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. MEN is required to redeem any VRDP Shares purchased by the liquidity provider six months after the purchase date. Immediately after the purchase of any VRDP Shares by the liquidity provider, MEN is required to begin to segregate liquid assets with the MEN’s 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.

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 MEN’s custodian to fund the redemption. In addition, MEN is required to redeem certain of its outstanding VRDP Shares if it fails to maintain certain asset coverage, basic maintenance amount or leverage requirements.

Subject to certain conditions, the VRDP Shares may be redeemed, in whole or in part, at any time at the option of MEN. The redemption price per VRDP Share is equal to the liquidation value per share plus any outstanding unpaid dividends. In the event of an optional redemption of the VRDP Shares prior to the initial termination date of the fee agreement, MEN must pay the respective liquidity provider fees on such redeemed VRDP Shares for the remaining term of the fee agreement up to the initial termination date.

 

                
88    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Notes to Financial Statements (continued)     

 

Dividends on the VRDP Shares are payable monthly at a variable rate set weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum rate. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the length of time that the VRDP Shares fail to be remarketed. At the date of issuance, the VRDP Shares were assigned a long-term rating of Aaa from Moody’s and AAA from Fitch. Subsequent to the issuance of the VRDP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of April 30, 2014, the VRDP Shares were assigned a long-term rating of Aa1 from Moody’s under its new ratings methodology. The VRDP Shares continue to be assigned a long-term rating of AAA from Fitch.

The short-term ratings on the VRDP Shares are directly related to the short-term ratings of the liquidity provider for such VRDP Shares. Changes in the credit quality of the liquidity provider could cause a change in the short-term credit ratings of the VRDP Shares as rated by Moody’s, Fitch and/or S&P. A change in the short-term credit rating of the liquidity provider or the VRDP Shares may adversely affect the dividend rate paid on such shares, although the dividend rate paid on the VRDP Shares is not directly related based upon either short-term rating. The liquidity provider may be terminated prior to the scheduled termination date if the liquidity provider fails to maintain short-term debt ratings in one of the two highest rating categories. The short-term ratings on the VRDP Shares were withdrawn by Moody’s, Fitch and/or S&P at the commencement of the special rate period, as described below.

For financial reporting purposes, the VRDP Shares are considered debt of the issuer; therefore, the liquidation value, which approximates fair value, of the VRDP Shares is recorded as a liability in the Statements of Assets and Liabilities. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VRDP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VRDP Shares are treated as equity for tax purposes. Dividends paid to holders of the VRDP Shares are generally classified as tax-exempt income for tax-reporting purposes.

MEN may incur remarketing fees of 0.10% on the aggregate principal amount of all the VRDP Shares, which, if any, are included in remarketing fees on Preferred Shares in the Statements of Operations. All of MEN’s remarketable VRDP Shares that were tendered for remarketing during the year ended April 30, 2014 were successfully remarketed.

The annualized dividend rates for the VRDP Shares for the year ended April 30, 2014 were as follows:

 

     Rate  

MEN

    1.02

On June 20, 2012, MEN announced a special rate period for a three-year term ending June 24, 2015 with respect to its VRDP Shares. The liquidity and fee agreements remain in effect for the duration of the special rate period and the VRDP shares are still subject to mandatory redemption by MEN on maturity date. The VRDP Shares will not be remarketed or subject to optional or mandatory tender events during such time. During the special rate period, MEN is required to maintain the same asset coverage, basic maintenance amount and leverage requirements for the VRDP Shares. MEN will not pay any liquidity and remarketing fees during the special rate period and instead will pay dividends monthly based on the sum of Securities Industry and Financial Markets Association Municipal Swap Index (“SIFMA”) and a percentage per annum based on the long-term ratings assigned to the VRDP Shares. The short-term ratings were withdrawn by Moody’s, Fitch and/or S&P. Short-term ratings may be re-assigned upon the termination of the special rate period when the VRDP Shares revert back to remarketable securities.

If MEN redeems the VRDP Shares on a date that is one year or more before the end of the special rate period and the VRDP Shares are rated above A1/A by Moody’s and Fitch respectively, then such redemption is subject to a redemption premium payable to the holder of the VRDP Shares based on the time remaining in the special rate period, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. After June 24, 2015, the holder of the VRDP Shares and MEN may mutually agree to extend the special rate period. If the special rate period is not extended, the VRDP Shares will revert back to remarketable securities and will be remarketed and available for purchase by qualified institutional investors.

VRDP Shares issued and outstanding remained constant for the year ended April 30, 2014.

VMTP Shares

MHD, MUH, MUS, MUI and MVT (collectively, the “VMTP Funds”), have issued Series W-7 VMTP Shares, $100,000 liquidation value per share, in a privately negotiated offering and sale of VMTP Shares exempt from registration under the Securities Act.

On December 7, 2012, MUI issued Series W-7 VMTP Shares, $100,000 liquidation value per share with a maturity date of January 4, 2016. Total proceeds received of $287,100,000 in a private offering of VMTP Shares were used to redeem all of MUI’s existing VRDP Shares on December 21, 2012. The fee agreement for MUI’s VRDP Shares with the liquidity provider which was for a two year term and was scheduled to expire on December 28, 2012 was terminated upon issuance of the VMTP Shares.

The VMTP Shares outstanding as of year ended April 30, 2014 were as follows:

 

     Issue
Date
    Shares
Issued
    Aggregate
Principal
    Term
Date
 

MHD

    12/16/11        837      $ 83,700,000        1/02/15   

MUH

    12/16/11        550      $ 55,000,000        1/02/15   

MUS

    12/16/11        870      $ 87,000,000        1/02/15   

MUI

    12/07/12        2,871      $ 287,100,000        1/04/16   

MVT

    12/16/11        1,400      $ 140,000,000        1/02/15   

Each VMTP Fund is required to redeem its VMTP Shares on the term date, unless earlier redeemed or repurchased or unless extended. There is no assurance that the term of a Fund's VMTP Shares will be extended or that a Fund's VMTP Shares will be replaced with any other preferred shares or other form of leverage upon the redemption or repurchase of the VMTP Shares. Six months prior to term date, each VMTP Fund is required to

 

                
   ANNUAL REPORT    APRIL 30, 2014    89


Table of Contents
Notes to Financial Statements (concluded)     

 

begin to segregate liquid assets with the Fund’s custodian to fund the redemption. In addition, each VMTP Fund is required to redeem certain of its outstanding VMTP Shares if it fails to maintain certain asset coverage, basic maintenance amount or leverage requirements.

Subject to certain conditions, a Fund's VMTP Shares may be redeemed, in whole or in part, at any time at the option of the Fund. The redemption price per VMTP Share is equal to the liquidation value per share plus any outstanding unpaid dividends and applicable redemption premium. If the Funds redeem the VMTP Shares on a date that is one year or more prior to the term date and the VMTP Shares are rated above A1/A+ by Moody’s and Fitch, respectively, then such redemption is subject to a prescribed redemption premium (up to 3% of the liquidation preference) payable to the holder of the VMTP Shares based on the time remaining to the term date, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. The VMTP Shares are subject to certain restrictions on transfer, and a Fund may also be required to register the VMTP Shares for sale under the Securities Act under certain circumstances. In addition, amendments to the VMTP governing document generally require the consent of the holders of VMTP Shares.

Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread to the SIFMA. The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by Moody’s and Fitch. At the date of issuance, the VMTP Shares were assigned long-term ratings of Aaa from Moody’s and AAA from Fitch. Subsequent to the issuance of the VMTP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of April 30, 2014, the VMTP Shares were assigned a long-term rating of Aa1 from Moody’s under its new rating methodology. The VMTP Shares continue to be assigned a long-term rating of AAA from Fitch. The dividend rate on the VMTP Shares is subject to a step-up spread if the Funds fail to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions or gross-up payments, and maintaining certain asset coverage and leverage requirements.

The average annualized dividend rates for the VMTP Shares for the year ended April 30, 2014 were as follows:

 

     Rate  

MHD

    1.07

MUH

    1.07

MUS

    1.07

MUI

    1.07

MVT

    1.07

For financial reporting purposes, the VMTP Shares are considered debt of the issuer; therefore the liquidation value, which approximates fair value, of the VMTP Shares is recorded as a liability in the Statements of Assets and Liabilities. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VMTP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VMTP Shares are treated as equity for tax purposes. Dividends paid to holders of the VMTP Shares are generally classified as tax-exempt income for tax-reporting purposes.

VMTP Shares issued and outstanding remained constant for the year ended April 30, 2014.

Offering Costs: The Funds, with the exception of MUA, incurred costs in connection with the issuance of VRDP Shares and/or VMTP Shares. For VRDP Shares, these costs were recorded as a deferred charge and will be amortized over the 30-year life of the VRDP Shares with the exception of upfront fees paid to the liquidity provider which were amortized over the life of the liquidity agreement. For VMTP Shares, these costs were recorded as a deferred charge and will be amortized over the 3-year life of the VMTP Shares. Amortization of these costs is included in interest expense, fees and amortization of offering costs in the Statements of Operations.

MUI’s offering costs that were recorded as a deferred charge and amortized over the 30-year life of the VRDP Shares were accelerated and charged to expense immediately upon redemption of MUI’s VRDP Shares. Costs incurred in connection with the issuance of MUI’s VMTP Shares will be recorded as a deferred charge and amortized over the three-year life of the VMTP Shares.

10. Subsequent Events

Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:

The Funds paid a net investment income dividend in the following amounts per share on June 2, 2014 to Common Shareholders of record on May 15, 2014:

 

     Common Dividend Per Share  

MUA

  $ 0.0625   

MEN

  $ 0.0605   

MHD

  $ 0.0885   

MUH

  $ 0.0830   

MUS

  $ 0.0675   

MUI

  $ 0.0685   

MVT

  $ 0.0885   

Additionally, the Funds declared a net investment income dividend on June 2, 2014 payable to Common Shareholders of record on June 16, 2014 for the same amounts noted above.

The dividends declared on Preferred Shares for the period May 1, 2014 to May 31, 2014 for the Funds were as follows:

 

     Series  

VRDP/VMTP
Dividends

Declared

 

MEN

  W-7   $ 128,914   

MHD

  W-7   $ 76,958   

MUH

  W-7   $ 50,570   

MUS

  W-7   $ 79,992   

MUI

  W-7   $ 263,975   

MVT

  W-7   $ 128,723   

 

                
90    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Report of Independent Registered Public Accounting Firm      

 

To the Shareholders and Boards of Directors of

BlackRock MuniAssets Fund, Inc.,

BlackRock MuniEnhanced Fund, Inc.,

BlackRock MuniHoldings Fund, Inc.,

BlackRock MuniHoldings Fund II, Inc.,

BlackRock MuniHoldings Quality Fund, Inc.,

BlackRock Muni Intermediate Duration Fund, Inc., and

BlackRock MuniVest Fund II, Inc.:

We have audited the accompanying statements of assets and liabilities of BlackRock MuniAssets Fund, Inc., BlackRock MuniEnhanced Fund, Inc., BlackRock MuniHoldings Fund, Inc., BlackRock MuniHoldings Fund II, Inc., BlackRock MuniHoldings Quality Fund, Inc., BlackRock Muni Intermediate Duration Fund, Inc., and BlackRock MuniVest Fund II, Inc. (collectively, the “Funds”), including the schedules of investments, as of April 30, 2014, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2014, by correspondence with the custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of BlackRock MuniAssets Fund, Inc., BlackRock MuniEnhanced Fund, Inc., BlackRock MuniHoldings Fund, Inc., BlackRock MuniHoldings Fund II, Inc., BlackRock MuniHoldings Quality Fund, Inc., BlackRock Muni Intermediate Duration Fund, Inc., and BlackRock MuniVest Fund II, Inc., as of April 30, 2014, the results of their operations and their cash flows for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Boston, Massachusetts

June 25, 2014

 

                
   ANNUAL REPORT    APRIL 30, 2014    91


Table of Contents
Automatic Dividend Reinvestment Plan     

 

Pursuant to each Fund’s Dividend Reinvestment Plan (the “Reinvestment Plan”), Common Shareholders are automatically enrolled to have all distributions of dividends and capital gains reinvested by Computershare Trust Company, N.A. (the “Reinvestment Plan Agent”) in the respective Fund’s shares pursuant to the Reinvestment Plan. Shareholders who do not participate in the Reinvestment Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street name or other nominee name, then to the nominee) by the Reinvestment Plan Agent, which serves as agent for the shareholders in administering the Reinvestment Plan.

After MUA, MEN, MHD, MUH, MUS, MUI and MVT declare a dividend or determine to make a capital gain distribution, the Reinvestment Plan Agent will acquire shares for the participants’ accounts, depending upon the following circumstances, either (i) through receipt of unissued but authorized shares from the Funds (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market or on the Fund’s primary exchange (“open-market purchases”). If, on the dividend payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition often referred to as a “market premium”), the Reinvestment Plan Agent will invest the dividend amount in newly issued shares acquired on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the dividend payment date, the dollar amount of the dividend will be divided by 95% of the market price on the dividend payment date. If, on the dividend payment date, the NAV is greater than the market price per share plus estimated brokerage commissions (such condition often referred to as a “market discount”), the Reinvestment Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. If the Reinvestment Plan Agent is unable to invest the full dividend amount in open-market purchases, or if the market discount shifts to a market premium during the purchase period, the Reinvestment Plan Agent will invest any un-invested portion in newly issued shares. Investments in newly issued shares made in this manner would be made pursuant to the same process described above and the date of issue for such newly issued shares will substitute for the dividend payment date.

Participation in the Reinvestment Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Reinvestment Plan Agent prior to the dividend record date. Additionally, the Reinvestment Plan Agent seeks to process notices received after the record date but prior to the payable date and such notices often will become effective by the payable date. Where late notices are not processed by the applicable payable date, such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.

The Reinvestment Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by each Fund. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Reinvestment Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any federal income tax that may be payable on such dividends or distributions.

Each Fund reserves the right to amend or terminate the Reinvestment Plan. There is no direct service charge to participants in the Reinvestment Plan. However, each Fund reserves the right to amend the Reinvestment Plan to include a service charge payable by the participants. Participants in MEN and MUI that request a sale of shares are subject to a $2.50 sales fee and a $0.15 per share fee. Per share fees include any applicable brokerage commissions the Reinvestment Plan Agent is required to pay. Participants in MUA, MHD, MUH, MUS and MVT that request a sale of shares are subject to a $0.02 per share sold brokerage commission. All correspondence concerning the Reinvestment Plan should be directed to Computershare Trust Company, N.A. through the internet at http://www.computershare.com/blackrock, or in writing to Computershare, P.O. Box 30170, College Station, TX 77842-3170, Telephone: (800) 699-1236. Overnight correspondence should be directed to the Computershare, 211 Quality Circle, Suite 210, College Station, TX 77845.

 

                
92    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Officers and Directors     

 

Name, Address
and Year of Birth
 

Position(s)

Held with
Funds

  Length
of Time
Served as a
Director2
  Principal Occupation(s) During Past Five Years   Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen
  Public
Directorships
Independent Directors1                    

Richard E. Cavanagh

 

55 East 52nd Street

New York, NY 10055

 

1946

  Chairman of the Board and Director  

Since

2007

  Trustee, Aircraft Finance Trust from 1999 to 2009; Director, The Guardian Life Insurance Company of America since 1998; Director, Arch Chemical (chemical and allied products) from 1999 to 2011; Trustee, Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005 to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof since 1996; Faculty Member/Adjunct Lecturer, Harvard University since 2007; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007.  

82 RICs consisting of

82 Portfolios

  None

Karen P. Robards

 

55 East 52nd Street

New York, NY 10055

 

1950

  Vice Chairperson of the Board, Chairperson of the Audit Committee and Director  

Since

2007

  Partner of Robards & Company, LLC (financial advisory firm) since 1987; Co-founder and Director of the Cooke Center for Learning and Development (a not-for-profit organization) since 1987; Director of Care Investment Trust, Inc. (health care real estate investment trust) from 2007 to 2010; Investment Banker at Morgan Stanley from 1976 to 1987.  

82 RICs consisting of

82 Portfolios

  AtriCure, Inc. (medical devices); Greenhill & Co., Inc.

Michael J. Castellano

 

55 East 52nd Street

New York, NY 10055

 

1946

  Director and Member of the Audit Committee  

Since

2011

  Chief Financial Officer of Lazard Group LLC from 2001 to 2011; Chief Financial Officer of Lazard Ltd from 2004 to 2011; Director, Support Our Aging Religious (non-profit) since 2009; Director, National Advisory Board of Church Management at Villanova University since 2010. Trustee, Domestic Church Media Foundation since 2012.  

82 RICs consisting of

82 Portfolios

  None

Frank J. Fabozzi3

55 East 52nd Street

New York, NY 10055

 

1948

  Director and Member of the Audit Committee  

Since

2007

  Editor of and Consultant for The Journal of Portfolio Management since 2006; Professor of Finance, EDHEC Business School since 2011; Professor in the Practice of Finance and Becton Fellow, Yale University School of Management from 2006 to 2011; Adjunct Professor of Finance and Becton Fellow, Yale University from 1994 to 2006.  

115 RICs consisting of

237 Portfolios

  None

Kathleen F. Feldstein

 

55 East 52nd Street

New York, NY 10055

 

1941

  Director  

Since

2007

  President of Economics Studies, Inc. (private economic consulting firm) since 1987; Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee Emeritus thereof since 2008; Member of the Board of Partners Community Healthcare, Inc. from 2005 to 2009; Member of the Corporation of Partners HealthCare since 1995; Trustee, Museum of Fine Arts, Boston since 1992; Member of the Visiting Committee to the Harvard University Art Museum since 2003; Director, Catholic Charities of Boston since 2009.  

82 RICs consisting of

82 Portfolios

  The McClatchy Company (publishing);

James T. Flynn

 

55 East 52nd Street

New York, NY 10055

 

1939

  Director and Member of the Audit Committee  

Since

2007

  Chief Financial Officer of JPMorgan & Co., Inc. from 1990 to 1995.  

82 RICs consisting of

82 Portfolios

  None

Jerrold B. Harris

 

55 East 52nd Street

New York, NY 10055

 

1942

  Director  

Since

2007

  Trustee, Ursinus College since 2000; Director, Ducks Unlimited, Inc. (conservations) since 2013 ; Director, Troemner LLC (scientific equipment) since 2000; Director of Delta Waterfowl Foundation from 2010 to 2012; President and Chief Executive Officer, VWR Scientific Products Corporation from 1990 to 1999.  

82 RICs consisting of

82 Portfolios

  BlackRock Kelso Capital Corp. (business development company)

R. Glenn Hubbard

 

55 East 52nd Street

New York, NY 10055

 

1958

  Director   Since
2007
  Dean, Columbia Business School since 2004; Faculty member, Columbia Business School since 1988.  

82 RICs consisting of

82 Portfolios

  ADP (data and information services); Metropolitan Life Insurance Company (insurance)

 

                
   ANNUAL REPORT    APRIL 30, 2014    93


Table of Contents
Officers and Directors (continued)     

 

Name, Address
and Year of Birth
 

Position(s)

Held with
Funds

  Length
of Time
Served as a
Director2
  Principal Occupation(s) During Past Five Years   Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen
  Public
Directorships
Independent Directors1 (concluded)                    

W. Carl Kester

 

55 East 52nd Street

New York, NY 10055

 

1951

  Director and Member of the Audit Committee  

Since

2007

  George Fisher Baker Jr. Professor of Business Administration, Harvard Business School since 2008. Deputy Dean for Academic Affairs from 2006 to 2010; Chairman of the Finance Unit, 2005 to 2006; Senior Associate Dean and Chairman of the MBA Program from 1999 to 2005; Member of the faculty of Harvard Business School since 1981.  

82 RICs consisting of

82 Portfolios

  None
 

1   Independent Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 74. The maximum age limitation may be waived as to any Director by action of a majority of the Directors upon finding of good cause thereof. In 2013, the Board of Directors unanimously approved further extending the mandatory retirement age for James T. Flynn by one additional year which the Board believed would be in the best interest of shareholders. Mr. Flynn can serve until December 31 of the year in which he turns 75. Mr. Flynn turns 75 in 2014.

 

2   Date shown is the earliest date a person has served for the Funds covered by this annual report. Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. As a result, although the chart shows certain Directors as joining the Funds’ board in 2007, those Directors first became members of the boards of other legacy MLIM or legacy BlackRock funds as follows: Richard E. Cavanagh, 1994; Frank J. Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 2004; W. Carl Kester, 1995 and Karen P. Robards, 1998.

 

3   Dr. Fabozzi is also a board member of the BlackRock Equity-Liquidity Complex.

Interested Directors4                         

Paul L. Audet

 

55 East 52nd Street

New York, NY 10055

 

1953

  Director  

Since

2011

  Senior Managing Director of BlackRock and Head of U.S. Mutual Funds since 2011; Head of BlackRock’s Real Estate business from 2008 to 2011; Member of BlackRock’s Global Operating and Corporate Risk Management Committees since 2008; Head of BlackRock’s Global Cash Management business from 2005 to 2010; Acting Chief Financial Officer of BlackRock from 2007 to 2008; Chief Financial Officer of BlackRock from 1998 to 2005.  

144 RICs consisting of

333 Portfolios

  None

Henry Gabbay

 

55 East 52nd Street

New York, NY 10055

 

1947

  Director  

Since

2007

  Consultant, BlackRock from 2007 to 2008; Managing Director, BlackRock from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007; Treasurer of certain closed-end funds in the BlackRock fund complex from 1989 to 2006.  

144 RICs consisting of

333 Portfolios

  None
 

4   Mr. Audet is an “interested person,” as defined in the 1940 Act, of the Funds based on his position with BlackRock and its affiliates as well as his ownership of BlackRock securities. Mr. Gabbay is an “interested person” of the Funds based on his former positions with BlackRock and its affiliates as well as his ownership of BlackRock and The PNC Financial Services Group, Inc. securities. Mr. Audet and Mr. Gabbay are also Directors of two complexes of BlackRock registered open-end funds, the BlackRock Equity-Liquidity Complex and the BlackRock Equity-Bond Complex. Interested Directors of the BlackRock Closed-End Complex serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. The maximum age limitation may be waived as to any Director by action of a majority of the Directors upon finding good cause thereof.

 

                
94    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Officers and Directors (concluded)     

 

 

Name, Address
and Year of Birth
  Position(s)
Held with
the Funds
  Length of
Time Served
  Principal Occupation(s) During Past Five Years
Officers1               

John M. Perlowski

 

55 East 52nd Street

New York, NY 10055

 

1964

  President and Chief Executive Officer   Since
2011
  Managing Director of BlackRock since 2009; Global Head of BlackRock Fund Services since 2009; Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual Funds from 2003 to 2009 and Senior Vice President thereof from 2007 to 2009; Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director of Family Resource Network (charitable foundation) since 2009.

Brendan Kyne

 

55 East 52nd Street

New York, NY 10055

 

1977

  Vice President   Since
2009
  Managing Director of BlackRock, Inc. since 2010; Director of BlackRock, Inc. from 2008 to 2009; Head of Americas Product Development for BlackRock since 2013, Head of Product Development and Management for BlackRock’s U.S. Retail Group 2009 to 2013 and Co-head thereof from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008.

Robert W. Crothers

 

55 East 52nd Street

New York, NY 10055

 

1981

  Vice President   Since
2012
  Director of BlackRock since 2011; Vice President of BlackRock from 2008 to 2010.

Neal Andrews

 

55 East 52nd Street

New York, NY 10055

 

1966

  Chief Financial Officer   Since
2007
  Managing Director of BlackRock since 2006; Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006.

Jay Fife

 

55 East 52nd Street

New York, NY 10055

 

1970

  Treasurer   Since
2007
  Managing Director of BlackRock since 2007; Director of BlackRock in 2006; Assistant Treasurer of the MLIM and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.

Brian Kindelan

 

55 East 52nd Street

New York, NY 10055

 

1959

  Chief Compliance Officer and Anti-Money Laundering Officer   Since
2007
  Chief Compliance Officer of the BlackRock-advised Funds since 2007; Managing Director and Senior Counsel of BlackRock since 2005.

Janey Ahn

 

55 East 52nd Street

New York, NY 10055

 

1975

  Secretary   Since
2012
  Director of BlackRock since 2009; Vice President of BlackRock from 2008 to 2009; Assistant Secretary of the Funds from 2008 to 2012.
   

1   Officers of the Funds serve at the pleasure of the Board.

 

Investment Advisor

BlackRock Advisors, LLC Wilmington, DE 19809

 

Custodians

The Bank of New York Mellon3
New York, NY 10286

 

State Street Bank and
Trust Company
4
Boston, MA 02110

 

VRDP Tender and Paying Agent

and VMTP Redemption and Paying Agent

The Bank of New York Mellon New York, NY 10289

  

Accounting Agent

State Street Bank and
Trust Company
Boston, MA 02110

 

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom LLP New York, NY 10036

Sub-Advisor

BlackRock Investment Management, LLC

Princeton, NJ 08540

  Transfer Agent Computershare Trust Company, N.A.
Canton, MA 02021
 

VRDP Remarketing Agent Citigroup Global Markets Inc.5 New York, NY 10179

   Independent Registered Public Accounting Firm Deloitte & Touche LLP Boston, MA 02116   Address of the Funds 100 Bellevue Parkway Wilmington, DE 19809
    VRDP Liquidity Provider Citibank, N.A.5
New York, NY 10179
    
  3   

For MUA, MHD, MUH, MUS and MVT.

  4   

For MEN and MUI.

  5   

For MEN.

Effective June 6, 2014, Brian Kindelan resigned as Chief Compliance Officer and Anti-Money Laundering Officer of the Funds and Charles Park became Chief Compliance Officer and Anti-Money Laundering Officer of the Funds. Mr. Park joined BlackRock in 2009 and is the current Chief Compliance Officer of BlackRock’s iShares exchange traded funds.

 

                
   ANNUAL REPORT    APRIL 30, 2014    95


Table of Contents
Additional Information     

 

Fund Certification      

 

The Funds are listed for trading on the NYSE and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. Each Fund filed with the SEC the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.

 

Dividend Policy

 

Each Fund’s dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend 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 dividends 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.

 

                
96    ANNUAL REPORT    APRIL 30, 2014   


Table of Contents
Additional Information (continued)     

 

General Information

 

The Funds do not make available copies of their Statements of Additional Information because the Funds’ shares are not continuously offered, which means that the Statement of Additional Information of each Fund has not been updated after completion of the respective Fund’s offerings and the information contained in each Fund’s Statement of Additional Information may have become outdated.

During the period, there were no material changes in the Funds’ investment objectives or policies or to the Funds’ charters or by-laws that would delay or prevent a change of control of the Funds that were not approved by the shareholders or in the principal risk factors associated with investment in the Funds. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Funds’ portfolios.

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Funds may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.

Electronic Delivery

Electronic copies of most financial reports are available on the Funds’ website or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Funds’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Funds will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (800) 882-0052.

Availability of Quarterly Schedule of Investments

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 882-0052.

 

                
   ANNUAL REPORT    APRIL 30, 2014    97


Table of Contents
Additional Information (continued)     

 

General Information (concluded)

 

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 882-0052; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the 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 periodically check the website for updated performance information and the release of other material information about the Funds. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.

 

                
98    ANNUAL REPORT    APRIL 30, 2014   


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Additional Information (concluded)     

 

BlackRock Privacy Principles

 

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

 

                
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This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. Certain of the Funds have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in the short-term dividend rates of the Preferred Shares may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

 

LOGO

 

CEMUNI7-4/14AR    LOGO


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Item 2 – Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, there have been no amendments to or waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com.

 

Item 3 – Audit Committee Financial Expert – The registrant’s board of directors (the “board of directors”), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent:

Michael Castellano

Frank J. Fabozzi

James T. Flynn

W. Carl Kester

Karen P. Robards

The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.

Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements.

Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.

Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.

 

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Item 4 – Principal Accountant Fees and Services

The following table presents fees billed by Deloitte & Touche LLP (“D&T”) in each of the last two fiscal years for the services rendered to the Fund:

 

      (a) Audit Fees    (b) Audit-Related Fees1    (c) Tax Fees2    (d) All Other Fees3
Entity Name   

Current

Fiscal Year

End

  

Previous

Fiscal Year

End

  

Current

Fiscal Year

End

  

Previous

Fiscal Year

End

  

Current

Fiscal Year

End

  

Previous

Fiscal Year

End

  

Current

Fiscal Year

End

  

Previous

Fiscal Year

End

BlackRock Muni Intermediate Duration Fund, Inc.    $38,263    $38,263    $0    $3,000    $20,100    $20,100    $0    $0

The following table presents fees billed by D&T that were required to be approved by the registrant’s audit committee (the “Committee”) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (“Investment Adviser” or “BlackRock”) and entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (“Fund Service Providers”):

 

     Current Fiscal Year End   Previous Fiscal Year End

(b) Audit-Related Fees1

  $0   $0

(c) Tax Fees2

  $0   $0

(d) All Other Fees3

  $2,555,000   $2,865,000

1 The nature of the services includes assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees.

2 The nature of the services includes tax compliance, tax advice and tax planning.

3 Aggregate fees borne by BlackRock in connection with the review of compliance procedures and attestation thereto performed by D&T with respect to all of the registered closed-end funds and some of the registered open-end funds advised by BlackRock.

(e)(1) Audit Committee Pre-Approval Policies and Procedures:

The Committee has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the Investment Adviser and Fund Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are (a) consistent with the SEC’s auditor independence rules and (b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.

Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g.,

 

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unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not Applicable

(g) The aggregate non-audit fees paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Fund Service Providers were:

 

    Entity Name   

Current Fiscal

Year End

  

Previous Fiscal

Year End

  BlackRock Muni Intermediate Duration Fund, Inc.    $20,100    $20,100

Additionally, SSAE 16 Review (Formerly, SAS No. 70) fees for the current and previous fiscal years of $2,555,000 and $2, 865,000, respectively, were billed by D&T to the Investment Adviser.

(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser, and the Fund Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

 

Item 5 – Audit Committee of Listed Registrants

 

  (a) The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):

Michael Castellano

Frank J. Fabozzi

James T. Flynn

W. Carl Kester

Karen P. Robards

 

  (b) Not Applicable

 

Item 6 – Investments

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.

 

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(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous
Form N-CSR filing.

 

Item 7 –  Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The board of directors has delegated the voting of proxies for the Fund’s portfolio securities to the Investment Adviser pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov.

 

Item 8 –  Portfolio Managers of Closed-End Management Investment Companies – as of April 30, 2014.

 

  (a)(1) The registrant is managed by a team of investment professionals comprised of Timothy Browse, Director at BlackRock, Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock and Walter O’Connor, Managing Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Each is jointly responsible for the day-to-day management of the registrant’s portfolio, which includes setting the registrant’s overall investment strategy, overseeing the management of the registrant and selection of its investments. Messrs. Browse, Jaeckel and O’Connor have been members of the registrant’s portfolio management team since 2008, 2006 and 2006, respectively.

 

Portfolio Manager    Biography
Timothy Browse    Director of BlackRock since 2008; Vice President of BlackRock from 2006 to 2007; Vice President of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2004 to 2006.
Theodore R. Jaeckel, Jr.    Managing Director of BlackRock since 2006; Managing Director of MLIM
from 2005 to 2006; Director of MLIM from 1997 to 2005.
Walter O’Connor    Managing Director of BlackRock since 2006; Managing Director of MLIM from 2003 to 2006; Director of MLIM from 1998 to 2003.

 

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  (a)(2) As of April 30, 2014:

 

     

(ii) Number of Other Accounts Managed

and Assets by Account Type

  

(iii) Number of Other Accounts and

Assets for Which Advisory Fee is

Performance-Based

(i) Name of

Portfolio Manager

  

Other

Registered

Investment

Companies

  

Other Pooled

Investment

Vehicles

  

Other

Accounts

  

Other

Registered

Investment

Companies

  

Other Pooled

Investment

Vehicles

  

Other

Accounts

Timothy Browse    11    0    0    0    0    0
     $2.37 Billion    $0    $0    $0    $0    $0
Theodore R. Jaeckel, Jr.    63    0    0    0    0    0
     $24.65 Billion    $0    $0    $0    $0    $0
Walter O’Connor    63    0    0    0    0    0
     $24.65 Billion    $0    $0    $0    $0    $0

 

  (iv) Potential Material Conflicts of Interest

BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, Inc. its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, Inc. or any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock, Inc.’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock, Inc. or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Certain portfolio managers also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. It should also be noted that a portfolio manager may be managing certain hedge fund and/or long only accounts, or may be part of a team managing certain hedge fund and/or long only accounts, subject to incentive fees. Such portfolio managers may therefore be entitled to receive a portion of any incentive fees earned on such accounts. Currently, the portfolio managers of this fund are not entitled to receive a portion of incentive fees of other accounts.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must

 

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be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock, Inc. has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.

  (a)(3) As of April 30, 2014:

Portfolio Manager Compensation Overview

The discussion below describes the portfolio managers’ compensation as of April 30, 2014.

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.

Base compensation. Generally, portfolio managers receive base compensation based on their position with the firm.

Discretionary Incentive Compensation

Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s performance and contribution to the overall performance of these portfolios and BlackRock. In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Funds or other accounts managed by the portfolio managers are measured. Among other things, BlackRock’s Chief Investment Officers make a subjective determination with respect to each portfolio manager’s compensation based on the performance of the Funds and other accounts managed by each portfolio manager relative to the various benchmarks. Performance of fixed income funds is measured on a pre-tax and/or after-tax basis over various time periods including 1-, 3- and 5- year periods, as applicable. With respect to these portfolio managers, such benchmarks for the Fund and other accounts are: a combination of market-based indices (e.g., Standard & Poor’s Municipal Bond Index), certain customized indices and certain fund industry peer groups.

Distribution of Discretionary Incentive Compensation. Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. For some portfolio managers, discretionary incentive compensation is also distributed in deferred cash awards that notionally track the returns of select BlackRock investment products they manage and that vest ratably over a number of years. The BlackRock, Inc. restricted stock units, upon vesting, will be settled in

 

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BlackRock, Inc. common stock. Typically, the cash portion of the discretionary incentive compensation, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of discretionary incentive compensation in BlackRock, Inc. stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods. Providing a portion of discretionary incentive compensation in deferred cash awards that notionally track the BlackRock investment products they manage provides direct alignment with investment product results.

Long-Term Incentive Plan Awards — From time to time long-term incentive equity awards are granted to certain key employees to aid in retention, align their interests with long-term shareholder interests and motivate performance. Equity awards are generally granted in the form of BlackRock, Inc. restricted stock units that, once vested, settle in BlackRock, Inc. common stock. Messrs. Jaeckel and O’Connor have unvested long-term incentive awards.

        Deferred Compensation Program — A portion of the compensation paid to eligible United States-based BlackRock employees may be voluntarily deferred at their election for defined periods of time into an account that tracks the performance of certain of the firm’s investment products. Any portfolio manager who is either a managing director or director at BlackRock with compensation above a specified threshold is eligible to participate in the deferred compensation program.

Other compensation benefits. In addition to base salary and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:

        Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock, Inc. employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit ($260,000 for 2014). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock, Inc. contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the purchase date. All of the eligible portfolio managers are eligible to participate in these plans.

(a)(4) Beneficial Ownership of Securities – As of April 30, 2014.

 

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Portfolio Manager   

Dollar Range of Equity Securities

of the Fund Beneficially Owned

Timothy Browse

   None

Theodore R. Jaeckel, Jr.

   None

Walter O’Connor

   None

(b) Not Applicable

 

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report.

 

Item 10 – Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.

 

Item 11 – Controls and Procedures

(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12 –  Exhibits attached hereto

(a)(1) – Code of Ethics – See Item 2

(a)(2) – Certifications – Attached hereto

(a)(3) – Not Applicable

(b) – Certifications – Attached hereto

 

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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BlackRock Muni Intermediate Duration Fund, Inc.   
By:  

/s/ John M. Perlowski

     
  John M. Perlowski      
  Chief Executive Officer (principal executive officer) of   
  BlackRock Muni Intermediate Duration Fund, Inc.   
Date: July 1, 2014      
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 Muni Intermediate Duration Fund, Inc.   
Date: July 1, 2014      
By:  

/s/ Neal J. Andrews

     
  Neal J. Andrews      
  Chief Financial Officer (principal financial officer) of   
  BlackRock Muni Intermediate Duration Fund, Inc.   
Date: July 1, 2014      

 

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