BLACKROCK MUNI INTERMEDIATE DURATION FUND, INC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number: 811-21348

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: 04/30/2015

Date of reporting period: 04/30/2015


Item 1 – Report to Stockholders


APRIL 30, 2015

 

 

ANNUAL REPORT

 

    LOGO

 

BlackRock MuniAssets Fund, Inc. (MUA)

BlackRock MuniEnhanced Fund, Inc. (MEN)

BlackRock MuniHoldings Fund, Inc. (MHD)

BlackRock MuniHoldings Fund II, Inc. (MUH)

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

BlackRock MuniVest Fund II, Inc. (MVT)

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents     

 

     Page  

The Markets in Review

    3   

Annual Report:

 

Municipal Market Overview

    4   

The Benefits and Risks of Leveraging

    5   

Derivative Financial Instruments

    5   

Fund Summaries

    6   
Financial Statements:  

Schedules of Investments

    20   

Statements of Assets and Liabilities

    63   

Statements of Operations

    65   

Statements of Changes in Net Assets

    67   

Statements of Cash Flows

    71   

Financial Highlights

    73   

Notes to Financial Statements

    80   

Report of Independent Registered Public Accounting Firm

    92   

Automatic Dividend Reinvestment Plan

    93   

Officers and Directors

    94   

Additional Information

    97   

 

                
2    ANNUAL REPORT    APRIL 30, 2015   


The Markets in Review

 

Dear Shareholder,

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

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

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

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

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

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

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

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

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

    4.40     12.98

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

    4.65        9.71   

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

    6.81        1.66   

Emerging market equities
(MSCI Emerging Markets
Index)

    3.92        7.80   

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

Bill Index)

    0.01        0.02   

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

    3.59        8.03   

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

    2.06        4.46   

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

    1.27        4.86   

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

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

 

                
   THIS PAGE NOT PART OF YOUR FUND REPORT       3


Municipal Market Overview     

 

For the Reporting Period Ended April 30, 2015      

Municipal Market Conditions

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

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

S&P Municipal Bond Index

Total Returns as of April 30, 2015

  6 months:   1.27%

12 months:   4.86%

A Closer Look at Yields

 

LOGO

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

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

Financial Conditions of Municipal Issuers

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

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

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

 

                
4    ANNUAL REPORT    APRIL 30, 2015   


The Benefits and Risks of Leveraging     

 

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

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

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

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

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

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

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

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

 

Derivative Financial Instruments     

 

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

 

                
   ANNUAL REPORT    APRIL 30, 2015    5


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

 

Fund Overview      

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

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

 

Performance      
Ÿ  

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

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

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

 

Fund Information      

Symbol on New York Stock Exchange (“NYSE”)

   MUA

Initial Offering Date

   June 25, 1993

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

   5.27%

Tax Equivalent Yield2

   9.31%

Current Monthly Distribution per Common Share3

   $0.0625

Current Annualized Distribution per Common Share3

   $0.7500

Economic Leverage as of April 30, 20154

   11%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
6    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniAssets Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

     

4/30/15

     4/30/14      Change      High      Low  

Market Price

   $ 14.22       $ 12.85         10.66    $ 14.33       $ 12.61   

Net Asset Value

   $ 14.12       $ 13.56         4.13    $ 14.38       $ 13.56   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation  

4/30/15

    4/30/14  

Health

    26     23

Transportation

    19        20   

County/City/Special District/School District

    16        16   

Tobacco

    10        5   

Utilities

    9        14   

Corporate

    8        12   

Education

    8        6   

State

    3        4   

Housing

    1          

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

Credit Quality Allocation1  

4/30/15

    4/30/14  

AA/Aa

    18     21

A

    7        9   

BBB/Baa

    27        27   

BB/Ba

    9        7   

B

    8        9   

CCC/Caa

    1          

N/R2

    30        27   

 

  1   

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

 

  2   

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

 
Call/Maturity Schedule3  

Calendar Year Ended December 31,

 

2015

    9

2016

    2   

2017

    6   

2018

    8   

2019

    6   

 

  3   

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    7


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

 

Fund Overview      

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

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

 

Performance      
Ÿ  

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

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

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

 

Fund Information      

Symbol on NYSE

   MEN

Initial Offering Date

   March 2, 1989

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

   6.22%

Tax Equivalent Yield2

   10.99%

Current Monthly Distribution per Common Share3

   $0.0605

Current Annualized Distribution per Common Share3

   $0.7260

Economic Leverage as of April 30, 20154

   38%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
8    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniEnhanced Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

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

Market Price

   $ 11.67       $ 11.27         3.55    $ 12.13       $ 10.86   

Net Asset Value

   $ 12.27       $ 11.94         2.76    $ 12.72       $ 11.94   

 

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

 

LOGO

 

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

County/City/Special District/School District

    27     24

Transportation

    20        19   

Utilities

    16        15   

State

    15        22   

Education

    10        8   

Health

    9        8   

Corporate

    2        2   

Housing

    1        2   

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

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

AAA/Aaa

    11     13

AA/Aa

    58        58   

A

    25        25   

BBB/Baa

    6        4   

N/R

    2         

 

  1   

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

 

  2   

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

   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2015

    7

2016

    3   

2017

    11   

2018

    11   

2019

    16   

 

  3   

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    9


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

 

Fund Overview

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

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

 

Performance
Ÿ  

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

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

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

 

Fund Information

Symbol on NYSE

   MHD

Initial Offering Date

   May 2, 1997

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

   6.16%

Tax Equivalent Yield2

   10.88%

Current Monthly Distribution per Common Share3

   $0.0885

Current Annualized Distribution per Common Share3

   $1.0620

Economic Leverage as of April 30, 20154

   36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
10    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniHoldings Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

     

4/30/15

     4/30/14      Change      High      Low  

Market Price

   $ 17.25       $ 16.01         7.75    $ 17.97       $ 15.67   

Net Asset Value

   $ 17.59       $ 16.85         4.39    $ 18.24       $ 16.85   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation  

4/30/15

    4/30/14  

Transportation

    25     22

Health

    18        19   

County/City/Special District/School District

    12        13   

State

    11        13   

Utilities

    11        10   

Education

    10        10   

Corporate

    8        9   

Tobacco

    4        3   

Housing

    1        1   

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

Credit Quality Allocation1  

4/30/15

    4/30/14  

AAA/Aaa

    8     9

AA/Aa

    44        39   

A

    26        29   

BBB/Baa

    11        11   

BB/Ba

    4        3   

B

    2        3   

CCC/Caa

    2        

N/R3

    5        6   

 

  1   

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

 

  2   

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

 

  3  

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

   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2015

    5

2016

    3   

2017

    5   

2018

    6   

2019

    26   

 

  4  

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    11


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

 

Fund Overview      

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

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

 

Performance      
Ÿ  

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

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

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

 

Fund Information      

Symbol on NYSE

   MUH

Initial Offering Date

   February 27, 1998

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

   6.09%

Tax Equivalent Yield2

   10.76%

Current Monthly Distribution per Common Share3

   $0.0775

Current Annualized Distribution per Common Share3

   $0.9300

Economic Leverage as of April 30, 20154

   35%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
12    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniHoldings Fund II, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                         

 

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

Market Price

   $ 15.28       $ 14.84         2.96    $ 16.31       $ 14.78   

Net Asset Value

   $ 16.21       $ 15.61         3.84    $ 16.76       $ 15.61   

 

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

 

LOGO

 

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

Transportation

    23     19

Health

    18        21   

State

    14        14   

County/City/Special District/School District

    13        15   

Utilities

    11        10   

Education

    9        10   

Corporate

    7        7   

Tobacco

    4        3   

Housing

    1        1   

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

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

AAA/Aaa

    7     9

AA/Aa

    47        43   

A

    23        26   

BBB/Baa

    11        11   

BB/Ba

    4        2   

B

    2        3   

N/R2

    6        6   

 

  1   

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

 

  2   

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

 

   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2015

    5

2016

    3   

2017

    6   

2018

    7   

2019

    28   

 

  3   

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    13


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

 

Fund Overview

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

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

 

Performance      
Ÿ  

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

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

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

 

Fund Information

Symbol on NYSE

   MUS

Initial Offering Date

   May 1, 1998

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

   6.08%

Tax Equivalent Yield2

   10.74%

Current Monthly Distribution per Common Share3

   $0.0675

Current Annualized Distribution per Common Share3

   $0.8100

Economic Leverage as of April 30, 20154

   36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
14    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniHoldings Quality Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

     

4/30/15

     4/30/14      Change      High      Low  

Market Price

   $ 13.32       $ 12.88         3.42    $ 13.97       $ 12.66   

Net Asset Value

   $ 14.57       $ 14.18         2.75    $ 15.09       $ 14.18   

 

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

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation  

4/30/15

    4/30/14  

Transportation

    34     33

County/City/Special District/School District

    29        27   

Utilities

    13        19   

Health

    9        7   

State

    8        9   

Education

    3        2   

Housing

    2        2   

Tobacco

    1        1   

Corporate

    1          

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

Credit Quality Allocation1  

4/30/15

    4/30/14  

AAA/Aaa

    5     6

AA/Aa

    67        67   

A

    25        25   

BBB/Baa

    3        2   

 

  1   

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

   
Call/Maturity Schedule2       

Calendar Year Ended December 31,

 

2015

    2

2016

    3   

2017

      

2018

    27   

2019

    14   

 

  2   

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    15


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

 

Fund Overview      

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

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

 

Performance      
Ÿ  

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

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

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

 

Fund Information      

Symbol on NYSE

   MUI

Initial Offering Date

   August 1, 2003

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

   5.43%

Tax Equivalent Yield2

   9.59%

Current Monthly Distribution per Common Share3

   $0.0655

Current Annualized Distribution per Common Share3

   $0.7860

Economic Leverage as of April 30, 20154

   36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
16    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock Muni Intermediate Duration Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

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

Market Price

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

Net Asset Value

     $ 15.86         $ 15.64           1.41    $ 16.45         $ 15.62   

 

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

 

LOGO

 

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

Transportation

    23     20

County/City/Special District/School District

    19        24   

State

    16        16   

Utilities

    10        8   

Corporate

    10        7   

Education

    9        9   

Health

    9        12   

Housing

    2        2   

Tobacco

    2        2   

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

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

AAA/Aaa

    4     3

AA/Aa

    50        48   

A

    35        35   

BBB/Baa

    7        8   

BB/Ba

    1        1   

B

    1        1   

CCC/Caa

    2        

N/R3

    2        4   

 

  1   

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

 

  2   

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

 

  3   

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

   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2015

    5

2016

    3   

2017

    6   

2018

    7   

2019

    11   

 

  4  

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    17


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

 

Fund Overview

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

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

 

Performance
Ÿ  

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

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

 

Ÿ  

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

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

 

Fund Information

Symbol on NYSE

   MVT

Initial Offering Date

   March 29, 1993

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

   6.13%

Tax Equivalent Yield2

   10.83%

Current Monthly Distribution per Common Share3

   $0.083

Current Annualized Distribution per Common Share3

   $0.996

Economic Leverage as of April 30, 20154

   38%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
18    ANNUAL REPORT    APRIL 30, 2015   


     BlackRock MuniVest Fund II, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

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

Market Price

   $ 16.26       $ 15.16         7.26    $ 16.65       $ 15.09   

Net Asset Value

   $ 16.01       $ 15.45         3.62    $ 16.54       $ 15.45   

 

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

 

LOGO

 

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

Transportation

    24     21

Health

    18        20   

State

    13        15   

Utilities

    13        12   

County/City/Special District/School District

    12        11   

Corporate

    8        8   

Education

    6        8   

Tobacco

    4        3   

Housing

    2        2   

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

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

AAA/Aaa

    8     8

AA/Aa

    49        42   

A

    21        28   

BBB/Baa

    11        10   

BB/Ba

    3        3   

B

    2        3   

CCC/Caa

    2        

N/R3

    6        6   

 

  1   

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

 

  2  

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

 

  3  

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

   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2015

    4

2016

    3   

2017

    7   

2018

    12   

2019

    23   

 

  4  

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2015    19


Schedule of Investments April 30, 2015

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 2.1%

  

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

    

5.25%, 1/01/17

   $ 895      $ 899,457   

5.25%, 1/01/19

     2,000        2,009,960   

5.50%, 1/01/21

     1,215        1,221,051   

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

     3,745        4,203,950   

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

     2,165        2,524,368   
    

 

 

 
               10,858,786   

Alaska — 1.1%

  

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

    

4.63%, 6/01/23

     1,305        1,305,183   

5.00%, 6/01/32

     1,500        1,308,165   

5.00%, 6/01/46

     4,000        3,141,480   
    

 

 

 
               5,754,828   

Arizona — 1.1%

  

City of Phoenix Arizona IDA, RB:

    

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

     305        310,826   

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

     855        857,650   

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

     500        532,900   

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

     425        454,342   

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

     570        645,217   

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

     1,000        1,144,390   

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

    

5.00%, 7/01/35

     320        320,992   

5.00%, 7/01/45

     255        252,629   

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

     720        700,790   

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

     500        602,915   
    

 

 

 
               5,822,651   

California — 5.1%

  

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

    

5.50%, 8/01/34

     315        327,710   

6.00%, 8/01/44

     665        697,146   

6.13%, 8/01/49

     580        608,751   
Municipal Bonds    Par  
(000)
    Value  

California (concluded)

  

California School Finance Authority, RB:

    

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

   1,570      1,829,097   

Value Schools, 6.65%, 7/01/33

     435        487,043   

Value Schools, 6.90%, 7/01/43

     975        1,103,359   

California Statewide Communities Development Authority, Refunding RB:

    

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

     2,175        2,445,353   

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

     2,390        2,633,015   

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

     1,650        1,650,198   

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

    

6.50%, 5/01/36

     900        1,097,658   

6.50%, 5/01/42

     2,220        2,685,556   

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

     375        451,448   

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

     2,885        3,286,332   

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

     5,020        4,335,222   

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

     2,000        2,000,040   
    

 

 

 
               25,637,928   

Colorado — 1.7%

  

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

     500        499,965   

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

     5,985        6,383,661   

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

     1,500        1,713,465   
    

 

 

 
               8,597,091   

Connecticut — 1.0%

  

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

     755        736,464   

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

     1,420        1,425,737   

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

     2,755        2,754,890   
    

 

 

 
               4,917,091   

 

Portfolio Abbreviations

 

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

 

See Notes to Financial Statements.

 

                
20    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Delaware — 0.2%

  

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

   $ 1,000      $ 1,151,050   

District of Columbia — 0.9%

  

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

    

7.38%, 1/01/30

     1,665        1,666,515   

7.50%, 1/01/39

     1,615        1,616,147   

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

     1,055        1,331,927   
    

 

 

 
               4,614,589   

Florida — 10.2%

  

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

     1,570        1,628,922   

Capital Trust Agency, Inc., RB:

    

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

     515        549,000   

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

     1,105        1,177,223   

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

     355        358,511   

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

     670        669,229   

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

     200        192,222   

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

     2,510        2,885,521   

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

    

5.00%, 6/01/35

     1,460        1,534,329   

5.00%, 6/01/40

     2,000        2,085,220   

5.00%, 6/01/48

     1,460        1,513,816   

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

     3,500        3,844,225   

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

    

5.75%, 6/15/29

     690        692,863   

6.00%, 6/15/34

     835        839,592   

6.13%, 6/15/44

     3,220        3,208,859   

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

     1,970        2,043,934   

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

     410        411,373   

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

     4,500        4,510,800   

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

     720        788,508   

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

     1,485        1,873,342   

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

     4,550        5,975,879   

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

    

Series A, 5.00%, 5/01/37

     845        891,720   

Series B, 5.00%, 5/01/37

     495        522,369   

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

     500        568,370   

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

     4,539        1,974,567   

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

     835        836,094   
Municipal Bonds    Par  
(000)
    Value  

Florida (concluded)

  

Tolomato Community Development District (c)(d):

    

Series 1, 6.65%, 5/01/40

   50      51,228   

Series 3, 6.65%, 5/01/40

     710        7   

Tolomato Community Development District, Refunding, Special Assessment Bonds:

    

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

     250        183,143   

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

     585        349,204   

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

     305        134,786   

0.00%, 5/01/40 (e)

     2,110        1,221,786   

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

     875        9   

Series A1, 6.65%, 5/01/40

     910        926,071   

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

    

6.75%, 5/01/31

     1,660        2,056,209   

7.00%, 5/01/41

     2,735        3,404,473   

5.50%, 5/01/42

     1,260        1,455,905   
    

 

 

 
               51,359,309   

Georgia — 2.0%

  

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

     1,035        1,042,493   

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

     2,745        2,890,760   

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

     3,365        4,200,092   

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

    

6.38%, 11/15/29

     700        799,281   

6.63%, 11/15/39

     880        1,002,654   
    

 

 

 
               9,935,280   

Guam — 1.3%

  

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

    

5.25%, 7/01/33

     1,450        1,631,061   

5.50%, 7/01/43

     2,415        2,761,021   

Territory of Guam, GO, Series A:

    

6.00%, 11/15/19

     615        677,404   

7.00%, 11/15/39

     1,115        1,338,636   
    

 

 

 
               6,408,122   

Illinois — 4.2%

  

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

     3,450        3,339,428   

Illinois Finance Authority, Refunding RB:

    

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

     1,214        12   

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

     3,129        31   

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

     4,000        4,299,600   

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

     2,395        2,523,156   

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

     1,175        1,182,626   

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

     365        380,856   

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

     860        887,210   

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

     4,170        4,507,603   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    21


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Illinois (concluded)

  

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

   $ 180      $ 210,688   

6.00%, 6/01/28

     710        836,274   

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

     1,794        1,827,602   

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

     1,345        1,345,551   
    

 

 

 
               21,340,637   

Indiana — 1.1%

  

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

    

6.75%, 1/01/34

     825        1,002,391   

7.00%, 1/01/44

     2,000        2,444,800   

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

    

5.00%, 7/01/44

     470        500,597   

5.00%, 7/01/48

     1,555        1,654,007   
    

 

 

 
               5,601,795   

Iowa — 3.4%

  

Iowa Finance Authority, Refunding RB:

    

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

     4,090        4,364,725   

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

     2,190        2,442,791   

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

     1,355        1,372,832   

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

     2,115        2,168,827   

Iowa Tobacco Settlement Authority, Refunding RB:

    

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

     1,200        1,143,192   

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

     1,565        1,388,750   

Series C, 5.38%, 6/01/38

     4,900        4,314,303   
    

 

 

 
               17,195,420   

Kentucky — 0.9%

  

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

     4,000        4,534,520   

Louisiana — 3.0%

  

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

     1,055        1,072,228   

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

     5,000        5,543,550   

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

     1,855        2,083,833   

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

     5,570        6,314,765   
    

 

 

 
               15,014,376   

Maine — 0.7%

  

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

     2,955        3,376,088   

Maryland — 2.5%

  

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

     2,840        3,213,772   

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

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

Maryland (concluded)

  

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

   4,785      5,305,130   
    

 

 

 
               12,412,835   

Massachusetts — 2.9%

  

Massachusetts Development Finance Agency, RB:

    

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

     3,360        3,212,261   

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

     5,905        6,287,349   

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

     1,025        1,160,095   

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

     2,020        2,193,397   

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

     1,490        1,747,010   
    

 

 

 
               14,600,112   

Michigan — 0.9%

  

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

    

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

     315        187,728   

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

     100        61,343   

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

     2,785        2,991,007   

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

     415        428,595   

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

     920        968,594   
    

 

 

 
               4,637,267   

Minnesota — 0.6%

  

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

     1,785        2,092,627   

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

     940        961,582   
    

 

 

 
               3,054,209   

Missouri — 1.0%

  

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

     2,315        2,657,666   

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

     2,235        2,292,663   
    

 

 

 
               4,950,329   

New Jersey — 4.5%

  

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

     1,065        1,130,434   

New Jersey EDA, RB:

    

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

     1,940        562,600   

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

     2,250        2,730,960   

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

     1,530        1,731,669   

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

     2,155        2,383,301   

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

     500        515,520   

New Jersey Health Care Facilities Financing Authority, Refunding RB:

    

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

     1,030        1,030,721   

 

See Notes to Financial Statements.

 

                
22    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

New Jersey (concluded)

  

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

    

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

   $ 2,650      $ 3,010,241   

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

     4,090        4,555,851   

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

    

4.63%, 6/01/26

     2,000        1,923,500   

5.00%, 6/01/29

     3,735        3,195,180   
    

 

 

 
               22,769,977   

New Mexico — 0.6%

  

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

     2,970        2,976,712   

New York — 8.6%

  

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

    

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

     1,765        1,918,484   

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

     4,130        4,155,606   

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

    

6.50%, 7/01/24

     610        612,440   

6.63%, 7/01/29

     1,100        1,104,631   

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

     5,400        5,491,368   

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

     3,695        4,181,521   

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

     5,000        5,005,950   

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

     1,452        1,607,066   

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

     2,000        2,373,400   

New York Liberty Development Corp., Refunding RB:

    

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

     1,270        1,447,546   

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

     6,670        6,947,272   

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

     455        495,217   

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

     1,080        1,184,684   

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

     1,565        1,892,461   

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

     1,335        1,383,447   

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

     1,340        1,576,188   

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

     2,500        2,306,975   
    

 

 

 
               43,684,256   

North Carolina — 1.5%

  

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

    

Deerfield Project, 6.13%, 11/01/38

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

North Carolina (concluded)

  

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

    

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

   1,000      1,143,320   

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

     1,420        1,605,452   
    

 

 

 
               7,797,571   

North Dakota — 0.4%

  

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

     2,155        2,247,191   

Ohio — 1.8%

  

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

    

5.75%, 6/01/34

     6,745        5,475,389   

6.00%, 6/01/42

     3,040        2,535,785   

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

     845        886,853   
    

 

 

 
               8,898,027   

Oklahoma — 0.3%

    

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

     1,305        1,374,361   

Oregon — 0.7%

    

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

    

5.40%, 10/01/44

     1,245        1,370,371   

5.50%, 10/01/49

     1,765        1,953,202   
    

 

 

 
               3,323,573   

Pennsylvania — 4.4%

    

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

     4,170        4,414,654   

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

     2,000        2,137,460   

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

     6,165        6,814,791   

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

     1,160        1,215,738   

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

     1,800        1,869,012   

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

     2,110        2,302,917   

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

    

5.00%, 12/31/38

     300        323,982   

5.00%, 6/30/42

     320        345,581   

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

     2,710        2,782,818   
    

 

 

 
               22,206,953   

Puerto Rico — 0.9%

    

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

     6,000        4,687,320   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    23


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Rhode Island — 1.0%

    

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

   $ 4,190      $ 1,043,268   

Tobacco Settlement Financing Corp., Refunding RB:

    

Series A, 5.00%, 6/01/40

     980        1,036,448   

Series B, 4.50%, 6/01/45

     2,805        2,750,471   
    

 

 

 
               4,830,187   

Texas — 10.6%

    

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

     5,080        330,200   

Central Texas Regional Mobility Authority, Refunding RB:

    

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

     1,000        581,880   

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

     2,000        1,109,120   

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

     1,170        619,655   

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

     3,690        1,663,526   

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

     4,000        1,692,640   

Senior Lien, 6.25%, 1/01/46

     2,210        2,573,655   

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

     2,890        3,369,682   

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

     910        965,019   

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

    

5.50%, 8/15/31

     955        1,064,252   

5.75%, 8/15/41

     720        811,166   

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

     5,040        5,724,029   

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

     475        547,932   

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

     2,090        2,388,138   

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

    

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

     1,745        1,987,712   

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

     4,200        4,153,926   

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

    

5.00%, 10/01/44

     435        459,399   

5.00%, 10/01/49

     865        912,878   

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

     3,080        3,343,248   

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

     860        1,034,116   

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

     810        822,255   

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

    

5.88%, 4/01/36

     1,210        1,392,783   

6.00%, 4/01/45

     1,845        2,124,370   

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

     1,600        1,754,240   

North Texas Tollway Authority, Refunding RB, Series A:

    

5.00%, 1/01/35

     240        264,746   

5.00%, 1/01/38

     370        404,688   

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

    

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

     2,895        2,708,967   

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

     900        922,527   
Municipal Bonds    Par  
(000)
    Value  

Texas (concluded)

    

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

    

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

   3,775      4,557,784   

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

     3,000        3,557,880   
    

 

 

 
               53,842,413   

Utah — 0.6%

    

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

     2,950        3,123,991   

Vermont — 0.2%

    

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

     770        807,653   

Virginia — 3.0%

    

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

     2,500        2,570,550   

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

    

5.00%, 3/01/35

     510        510,357   

5.00%, 3/01/45

     520        512,824   

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

    

6.63%, 3/01/26

     1,485        1,708,507   

6.88%, 3/01/36

     1,300        1,493,830   

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

    

5.00%, 7/01/35

     130        137,976   

5.00%, 7/01/45

     375        393,833   

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

     6,805        7,858,754   
    

 

 

 
               15,186,631   

Washington — 0.6%

    

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

     1,455        1,598,550   

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

     1,495        1,570,752   
    

 

 

 
               3,169,302   

Wisconsin — 0.4%

    

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

     430        454,725   

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

    

7.25%, 9/15/29

     425        497,173   

7.63%, 9/15/39

     855        1,009,037   
    

 

 

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

Colorado — 2.5%

  

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

     11,475        12,779,707   

 

See Notes to Financial Statements.

 

                
24    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

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

Florida — 3.3%

  

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

   $ 15,000      $ 16,588,800   

Illinois — 3.0%

  

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

     6,510        6,701,915   

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

     7,180        8,546,785   
    

 

 

 
               15,248,700   

New York — 11.7%

    

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

    

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

     14,181        15,790,033   

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

     8,609        9,845,578   

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

     4,520        5,198,709   

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

     18,105        20,722,621   

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

     6,600        7,636,794   
    

 

 

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

Washington — 1.8%

    

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

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

Total Long-Term Investments

(Cost — $526,023,352) — 110.3%

  

  

    557,214,035   
    
                  
Short-Term Securities    Shares         

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

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

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

   

    (61,081,994
 

 

 

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

 

 

 

 

Notes to Schedule of Investments

 

(a)   Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

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

 

(c)   Non-income producing security.

 

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

 

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

 

(f)   Zero-coupon bond.

 

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

 

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

 

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

 

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

 

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

FFI Institutional Tax-Exempt Fund

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

 

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

 

Ÿ  

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

 

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

 

Ÿ  

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

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    25


Schedule of Investments (concluded)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

 

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

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

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

 

Ÿ  

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

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

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

Short-Term Securities

  $ 961,095                          961,095   
 

 

 

      

 

 

      

 

    

 

 

 

Total

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

 

 

      

 

 

      

 

    

 

 

 

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

       

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2                 

Liabilities:

                

Interest rate contracts

  $ (354,299                     $ (354,299

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

       

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

Assets:

                

Cash pledged for financial futures contracts

  $ 280,000                        $ 280,000   

Liabilities:

                

TOB Trust Certificates

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

 

 

      

 

 

      

 

    

 

 

 

Total

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

 

 

      

 

 

      

 

    

 

 

 

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

 

See Notes to Financial Statements.

 

                
26    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments April 30, 2015

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 1.4%

  

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

    

5.50%, 1/01/22

   $ 2,750      $ 2,763,695   

4.75%, 1/01/25

     2,200        2,210,956   
    

 

 

 
               4,974,651   

Alaska — 0.8%

    

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

     400        401,732   

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

     990        1,132,896   

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

     1,200        1,434,317   
    

 

 

 
               2,968,945   

Arizona — 1.3%

    

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

     1,300        1,312,051   

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

    

5.00%, 10/01/27

     2,700        3,025,377   

5.00%, 10/01/29

     400        445,824   
    

 

 

 
               4,783,252   

Arkansas — 0.1%

    

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

     390        433,586   

California — 19.4%

    

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

    

5.40%, 10/01/24

     10,185        11,163,778   

5.45%, 10/01/25

     3,700        4,059,973   

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

     5,000        5,998,300   

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

     2,400        832,416   

California Health Facilities Financing Authority, RB:

    

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

     550        635,437   

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

     1,200        1,427,952   

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

     1,090        1,222,522   

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

     2,000        2,142,540   

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

     1,480        1,635,444   

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

     1,420        1,562,809   

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

     850        972,213   

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

     1,500        1,616,475   

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

     2,175        2,638,384   

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

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

California (concluded)

    

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

   1,300      1,423,110   

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

     2,500        1,693,150   

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

     3,750        1,521,450   

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

     5,000        1,897,400   

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

    

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

     1,600        608,000   

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

     650        267,586   

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

     690        266,375   

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

     1,035        375,995   

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

     690        235,952   

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

    

0.00%, 7/01/30

     5,000        2,820,500   

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

     1,280        683,277   

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

    

0.00%, 8/01/31

     2,145        1,025,525   

0.00%, 8/01/32

     2,680        1,197,451   

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

    

5.00%, 8/01/34

     700        792,309   

5.00%, 8/01/38

     600        671,724   

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

     12,740        7,573,675   

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

     1,000        1,120,310   

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

     710        786,510   

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

     5,500        2,208,800   

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

     5,035        5,547,462   
    

 

 

 
               70,273,936   

Colorado — 1.5%

    

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

     2,000        2,293,560   

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

     2,770        3,083,038   
    

 

 

 
               5,376,598   

District of Columbia — 1.5%

    

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

     5,480        5,619,521   

Florida — 9.1%

    

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

     1,600        1,728,480   

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

     850        948,694   

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

     3,000        3,112,800   

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

     2,625        2,816,257   

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2015    27


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Florida (concluded)

    

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

   $ 1,450      $ 1,694,339   

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

     4,050        4,489,951   

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

    

5.63%, 10/01/26

     960        1,115,558   

5.38%, 10/01/32

     3,160        3,471,228   

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

     1,400        1,584,184   

County of Miami-Dade Florida, RB, Seaport:

    

Series A, 6.00%, 10/01/38

     2,025        2,443,851   

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

     640        778,714   

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

     415        509,828   

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

     660        794,891   

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

     190        210,444   

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

     2,000        2,285,820   

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

     275        306,853   

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

    

5.13%, 6/01/27

     2,000        2,313,820   

5.38%, 10/01/29

     1,050        1,221,875   

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

     1,000        1,065,660   
    

 

 

 
               32,893,247   

Georgia — 3.6%

    

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

     1,150        1,249,820   

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

     500        574,665   

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

     7,475        10,216,905   

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

    

5.00%, 4/01/31

     190        209,220   

5.00%, 4/01/33

     140        153,381   

5.00%, 4/01/44

     625        676,844   
    

 

 

 
               13,080,835   

Illinois — 20.4%

    

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

    

Series A, 5.75%, 1/01/39

     5,110        5,823,356   

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

     1,460        1,466,322   

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

    

5.25%, 1/01/33

     2,700        2,709,126   

5.00%, 1/01/34

     5,750        5,586,470   

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

     400        397,060   

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

     3,425        3,625,636   

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

     550        590,013   
Municipal Bonds    Par  
(000)
    Value  

Illinois (concluded)

    

City of Chicago Illinois Transit Authority, RB:

    

5.25%, 12/01/49

   900      1,014,858   

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

     595        658,338   

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

     285        312,873   

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

    

5.75%, 8/15/34

     650        760,695   

6.00%, 8/15/41

     1,000        1,178,950   

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

    

4.13%, 8/15/37

     700        665,154   

5.00%, 8/15/44

     700        753,032   

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

     2,125        2,126,148   

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

     1,000        1,079,810   

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

     12,490        12,687,342   

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

     9,145        10,403,992   

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

    

0.00%, 12/15/26

     5,000        3,262,700   

0.00%, 12/15/33

     9,950        4,391,532   

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

    

4.25%, 6/15/42

     1,070        1,072,910   

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

     3,450        876,576   

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

     675        795,049   

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

     6,455        7,507,681   

State of Illinois, GO:

    

5.25%, 2/01/33

     830        884,456   

5.50%, 7/01/33

     820        905,551   

5.25%, 2/01/34

     830        882,597   

5.50%, 7/01/38

     445        489,473   

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

     905        1,003,093   
    

 

 

 
               73,910,793   

Indiana — 1.5%

  

Indiana Finance Authority, RB, Series A:

    

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

     1,100        1,260,336   

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

     890        951,775   

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

     515        548,527   

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

    

5.25%, 1/01/29

     600        675,216   

5.50%, 1/01/38

     1,825        2,071,338   
    

 

 

 
               5,507,192   

Iowa — 3.5%

  

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

     5,725        6,519,286   

 

See Notes to Financial Statements.

 

                
28    ANNUAL REPORT    APRIL 30, 2015   


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Iowa (concluded)

  

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

    

5.60%, 12/01/26

   $ 2,725      $ 2,948,123   

5.70%, 12/01/27

     1,235        1,328,329   

5.80%, 12/01/29

     835        897,024   

5.85%, 12/01/30

     870        935,337   
    

 

 

 
               12,628,099   

Louisiana — 1.2%

  

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

     1,250        1,437,013   

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

     2,795        3,047,612   
    

 

 

 
               4,484,625   

Massachusetts — 1.5%

  

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

     1,150        1,193,769   

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

     1,280        1,438,349   

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

     2,530        2,735,942   
    

 

 

 
               5,368,060   

Michigan — 2.3%

  

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

     2,500        2,768,575   

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

     400        438,564   

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

     1,700        1,985,889   

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

    

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

     145        167,842   

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

     700        808,472   

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

     900        1,005,759   

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

     790        835,607   

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

     380        420,876   
    

 

 

 
               8,431,584   

Minnesota — 0.8%

  

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

     2,500        2,905,725   

Nebraska — 1.8%

    

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

    

5.00%, 9/01/32

     5,000        5,546,150   

5.25%, 9/01/37

     750        838,868   
    

 

 

 
               6,385,018   

Nevada — 1.6%

    

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

     850        980,067   

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

    

5.25%, 7/01/42

     500        560,120   

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

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

Nevada (concluded)

    

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

   75      75,736   
    

 

 

 
               5,891,493   

New Jersey — 10.2%

    

New Jersey EDA, RB:

    

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

     3,125        3,182,500   

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