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: 04/30/2016

Date of reporting period: 04/30/2016


Item 1 – Report to Stockholders


APRIL 30, 2016

 

 

ANNUAL REPORT

 

    LOGO

 

BlackRock MuniAssets Fund, Inc. (MUA)

BlackRock MuniEnhanced Fund, Inc. (MEN)

BlackRock MuniHoldings Fund, Inc. (MHD)

BlackRock MuniHoldings Fund II, Inc. (MUH)

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

BlackRock MuniVest Fund II, Inc. (MVT)

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents     

 

     Page  

The Markets in Review

    3   

Annual Report:

 

Municipal Market Overview

    4   

The Benefits and Risks of Leveraging

    5   

Derivative Financial Instruments

    5   

Fund Summaries

    6   
Financial Statements:  

Schedules of Investments

    20   

Statements of Assets and Liabilities

    68   

Statements of Operations

    70   

Statements of Changes in Net Assets

    72   

Statements of Cash Flows

    76   

Financial Highlights

    78   

Notes to Financial Statements

    85   

Report of Independent Registered Public Accounting Firm

    96   

Automatic Dividend Reinvestment Plan

    97   

Officers and Directors

    98   

Additional Information

    101   

 

                
2    ANNUAL REPORT    APRIL 30, 2016   


The Markets in Review

 

Dear Shareholder,

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

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

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

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

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

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

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of April 30, 2016  
    6-month     12-month  

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

    0.43     1.21

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

    (1.90     (5.94

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

    (3.07     (9.32

Emerging market equities
(MSCI Emerging Markets Index)

    (0.13     (17.87

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

    0.14        0.15   

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

    3.76        3.74   

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

    2.82        2.72   

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

    3.52        5.16   

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

    2.38        (1.08
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.    

 

                
   THIS PAGE NOT PART OF YOUR FUND REPORT       3


Municipal Market Overview     

 

For the Reporting Period Ended April 30, 2016      

Municipal Market Conditions

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

 

For the same 12-month period, total new issuance remained relatively strong from a historical perspective at $380 billion (though lower than the $397 billion issued in the prior 12-month period). A noteworthy portion of new supply during this period was attributable to refinancing activity (roughly 58%) as issuers took advantage of low interest rates and a flatter yield curve to reduce their borrowing costs.

S&P Municipal Bond Index

Total Returns as of April 30, 2016

  6 months:   3.52%

12 months:   5.16%

 

A Closer Look at Yields

 

LOGO

 

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

 

During the same time period, on a relative basis, tax-exempt municipal bonds broadly outperformed U.S. Treasuries with the greatest outperformance experienced in longer-term issues. In absolute terms, the positive performance of municipal bonds was driven largely by falling interest rates as well as a supply/demand imbalance within the municipal market as investors sought income and incremental yield in an environment where opportunities became increasingly scarce. More broadly, municipal bonds benefited from the greater appeal of tax-exempt investing in light of the higher tax rates implemented in 2014. The asset class is known for its lower relative volatility and preservation of principal with an emphasis on income as tax rates rise.

Financial Conditions of Municipal Issuers

The majority of municipal credits remain strong, despite well-publicized distress among a few issuers. Four of the five states with the largest amount of debt outstanding — California, New York, Texas and Florida — have exhibited markedly improved credit fundamentals during the slow national recovery. However, several states with the largest unfunded pension liabilities have seen their bond prices decline noticeably and remain vulnerable to additional price deterioration. On the local level, Chicago’s credit quality downgrade is an outlier relative to other cities due to its larger pension liability and inadequate funding remedies. BlackRock maintains the view that municipal bond defaults will remain minimal and in the periphery while the overall market is fundamentally sound. We continue to advocate careful credit research and believe that a thoughtful approach to structure and security selection remains imperative amid uncertainty in a modestly improving economic environment.

The opinions expressed are those of BlackRock as of April 30, 2016, and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of any individual holdings or market sectors. Investing involves risk including loss of principal. Bond values fluctuate in price so the value of your investment can go down depending on market conditions. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to Alternative Minimum Tax (AMT). Capital gains distributions, if any, are taxable.

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

 

                
4    ANNUAL REPORT    APRIL 30, 2016   


The Benefits and Risks of Leveraging     

 

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

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

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

However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed the Funds’ return on assets purchased with leverage proceeds, income to shareholders is lower than if the Funds had not used leverage. Furthermore, the value of the Funds’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the value of the Funds’ obligations under their respective leverage arrangements generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Funds’ NAVs positively or

negatively. Changes in the future direction of interest rates are very difficult to predict accurately, and there is no assurance that a Fund’s intended leveraging strategy will be successful.

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

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

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

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

 

 

Derivative Financial Instruments     

The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other asset without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instru-

ment and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

 

 

                
   ANNUAL REPORT    APRIL 30, 2016    5


Fund Summary as of April 30, 2016    BlackRock MuniAssets Fund, Inc.

 

Fund Overview      

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

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

 

Fund Information      

Symbol on New York Stock Exchange (“NYSE”)

   MUA

Initial Offering Date

   June 25, 1993

Yield on Closing Market Price as of April 30, 2016 ($14.74)1

   4.88%

Tax Equivalent Yield2

   8.62%

Current Monthly Distribution per Common Share3

   $0.06

Current Annualized Distribution per Common Share3

   $0.72

Economic Leverage as of April 30, 20164

   11%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

Performance      

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

 

    Returns Based On  
     Market Price     NAV  

MUA1,2

    9.30     7.90

Lipper Closed-End High Yield Municipal Debt Funds3

    9.79     7.73

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

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

 

                
6    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniAssets Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

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

Market Price

   $ 14.74       $ 14.22         3.66    $ 15.05       $ 13.22   

Net Asset Value

   $ 14.45       $ 14.12         2.34    $ 14.45       $ 13.84   

 

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

 

LOGO

 

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

Health

    22     26

Transportation

    19        19   

Tobacco

    14        10   

County/City/Special District/School District

    14        16   

Education

    9        8   

Utilities

    8        9   

Corporate

    7        8   

Housing

    4        1   

State

    3        3   

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

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

AA/Aa

    19     18

A

    7        7   

BBB/Baa

    24        27   

BB/Ba

    10        9   

B/B

    9        8   

CCC/Caa

    2      1   

N/R3

    31        30   

 

  1   

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

 

  2   

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

 

  3   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2016 and April 30, 2015, the market value of unrated securities deemed by the investment advisor to be investment grade each represents 5% of the Fund’s total investments.

 
 
Call/Maturity Schedule4  

Calendar Year Ended December 31,

 

2016

    7

2017

    8   

2018

    8   

2019

    5   

2020

    13   

 

  4   

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

 

  *   Excludes short-term securities.
 

 

                
   ANNUAL REPORT    APRIL 30, 2016    7


Fund Summary as of April 30, 2016    BlackRock MuniEnhanced Fund, Inc.

 

Fund Overview      

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

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

 

Fund Information      

Symbol on NYSE

   MEN

Initial Offering Date

   March 2, 1989

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

   5.78%

Tax Equivalent Yield2

   10.21%

Current Monthly Distribution per Common Share3

   $0.0605

Current Annualized Distribution per Common Share3

   $0.7260

Economic Leverage as of April 30, 20164

   36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

Performance      

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

 

    Returns Based On  
     Market Price     NAV  

MEN1,2

    14.35     8.50

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    13.64     8.61

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

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

 

                
8    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniEnhanced Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

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

Market Price

   $ 12.55       $ 11.67         7.54    $ 12.70       $ 10.87   

Net Asset Value

   $ 12.52       $ 12.27         2.04    $ 12.57       $ 11.92   

 

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

 

LOGO

 

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

Transportation

    21     20

County/City/Special District/School District

    21        27   

Utilities

    16        16   

State

    15        15   

Health

    11        9   

Education

    10        10   

Corporate

    4        2   

Housing

    1        1   

Tobacco

    1          

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

Credit Quality Allocation1  

4/30/16

    4/30/15  

AAA/Aaa

    9     11

AA/Aa

    58        58   

A

    25        25   

BBB/Baa

    7        6   

N/R

    1 2       3  

 

  1   

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

 

  2   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2016, the market value of unrated securities deemed by the investment advisor to be investment grade represents less than 1% of the Fund’s total investments.

 

  3   

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

 
   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2016

    8

2017

    10   

2018

    10   

2019

    15   

2020

    4   

 

  4   

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2016    9


Fund Summary as of April 30, 2016    BlackRock MuniHoldings Fund, Inc.

 

Fund Overview

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

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

 

Fund Information

Symbol on NYSE

   MHD

Initial Offering Date

   May 2, 1997

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

   5.69%

Tax Equivalent Yield2

   10.05%

Current Monthly Distribution per Common Share3

   $0.086

Current Annualized Distribution per Common Share3

   $1.032

Economic Leverage as of April 30, 20164

   36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

Performance

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

 

    Returns Based On  
     Market Price     NAV  

MHD1,2

    11.91     8.65

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    13.64     8.61

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

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

 

                
10    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniHoldings Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

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

Market Price

   $ 18.14       $ 17.25         5.16    $ 18.68       $ 15.75   

Net Asset Value

   $ 17.96 1      $ 17.59         2.10    $ 18.00       $ 17.08   

 

  1   

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

 

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

 

LOGO

 

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

Transportation

    24     25

Health

    19        18   

Utilities

    12        11   

County/City/Special District/School District

    12        12   

State

    12        11   

Education

    10        10   

Corporate

    6        8   

Tobacco

    5        4   

Housing

           1   

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

Credit Quality Allocation1   4/30/16    

4/30/15

 

AAA/Aaa

    5     8

AA/Aa

    48        44   

A

    22        26   

BBB/Baa

    13        11   

BB/Ba

    4        4   

B

    1        2   

N/R2

    7        5   

 

  1   

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

 

  2  

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2016 and April 30, 2015, the market value of unrated securities deemed by the investment advisor to be investment grade represents 2% and 1%, respectively, of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    5

2017

    5   

2018

    5   

2019

    25   

2020

    12   

 

  3   

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

 

  *   Excludes short-term securities.
 

 

                
   ANNUAL REPORT    APRIL 30, 2016    11


Fund Summary as of April 30, 2016    BlackRock MuniHoldings Fund II, Inc.

 

Fund Overview      

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

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

 

Fund Information      

Symbol on NYSE

   MUH

Initial Offering Date

   February 27, 1998

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

   5.73%

Tax Equivalent Yield2

   10.12%

Current Monthly Distribution per Common Share3

   $0.0775

Current Annualized Distribution per Common Share3

   $0.9300

Economic Leverage as of April 30, 20164

   35%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

Performance      

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

 

    Returns Based On  
     Market Price     NAV  

MUH1,2

    12.90     8.25

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    13.64     8.61

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

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

 

                
12    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniHoldings Fund II, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                         

 

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

Market Price

   $ 16.23       $ 15.28         6.22    $ 16.56       $ 14.10   

Net Asset Value

   $ 16.51       $ 16.21         1.85    $ 16.55       $ 15.76   

 

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

 

LOGO

 

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

Transportation

    22     23

Health

    19        18   

State

    14        14   

Utilities

    12        11   

County/City/Special District/School District

    12        13   

Education

    9        9   

Corporate

    6        7   

Tobacco

    5        4   

Housing

    1        1   

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

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

AAA/Aaa

    4     7

AA/Aa

    50        47   

A

    23        23   

BBB/Baa

    11        11   

BB/Ba

    4        4   

B

    1        2   

N/R2

    7        6   

 

  1   

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

 

  2   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2016 and April 30, 2015, the market value of unrated securities deemed by the investment advisor to be investment grade represents 3% and 5%, respectively, of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    7

2017

    5   

2018

    5   

2019

    27   

2020

    11   

 

  3   

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

 

  *   Excludes short-term securities.
 

 

                
   ANNUAL REPORT    APRIL 30, 2016    13


Fund Summary as of April 30, 2016    BlackRock MuniHoldings Quality Fund, Inc.

 

Fund Overview

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

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

 

Fund Information

Symbol on NYSE

   MUS

Initial Offering Date

   May 1, 1998

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

   5.66%

Tax Equivalent Yield2

   10.00%

Current Monthly Distribution per Common Share3

   $0.0675

Current Annualized Distribution per Common Share3

   $0.8100

Economic Leverage as of April 30, 20164

   37%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

Performance      

 

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

 

    Returns Based On  
     Market Price     NAV  

MUS1,2

    14.09     8.24

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    13.64     8.61

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

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

 

                
14    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniHoldings Quality Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

      4/30/16     

4/30/15

     Change      High      Low  

Market Price

   $ 14.31       $ 13.32         7.43    $ 14.71       $ 12.58   

Net Asset Value

   $ 14.85 1      $ 14.57         1.92    $ 14.90       $ 14.21   

 

  1   

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

 

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

 

LOGO

 

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

Transportation

    40     34

County/City/Special District/School District

    25        29   

Utilities

    14        13   

Health

    10        9   

State

    5        8   

Education

    3        3   

Housing

    1        2   

Tobacco

    1        1   

Corporate

    1        1   

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

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

AAA/Aaa

    6     5

AA/Aa

    56        67   

A

    32        25   

BBB/Baa

    3        3   

N/R

    3          

 

  1   

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

 
   
Call/Maturity Schedule2       

Calendar Year Ended December 31,

 

2016

    1

2017

      

2018

    26   

2019

    13   

2020

    4   

 

  2   

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

 

  *   Excludes short-term securities.
 

 

                
   ANNUAL REPORT    APRIL 30, 2016    15


Fund Summary as of April 30, 2016    BlackRock Muni Intermediate Duration Fund, Inc.

 

Fund Overview      

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

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

 

Fund Information      

Symbol on NYSE

   MUI

Initial Offering Date

   August 1, 2003

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

   4.78%

Tax Equivalent Yield2

   8.45%

Current Monthly Distribution per Common Share3

   $0.0605

Current Annualized Distribution per Common Share3

   $0.7260

Economic Leverage as of April 30, 20164

   36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

Performance      

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

 

    Returns Based On  
     Market Price     NAV  

MUI1,2

    12.27     9.04

Lipper Intermediate Municipal Debt Funds3

    9.22     6.57

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

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

 

 

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

 

 

With this as the backdrop, the Fund’s holdings in longer-duration and longer-dated bonds generally provided the best returns. (Duration is a measure of interest-rate sensitivity) The Fund’s allocations to the tax-backed (states, local and school districts), transportation and health care sectors were positive contributors to performance. Consistent with the broader market environment, the strongest returns came from the Fund’s holdings in higher-yielding, lower-rated investment-grade credits. With that said, positions in high-quality, pre-refunded bonds also contributed to performance.

 

 

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

 

 

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

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

 

                
16    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock Muni Intermediate Duration Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

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

Market Price

     $ 15.19         $ 14.47           4.98    $ 15.19         $ 13.48   

Net Asset Value

     $ 16.17 1        $ 15.86           1.95    $ 16.21         $ 15.51   

 

  1   

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

 

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

 

LOGO

 

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

Transportation

    24     23

County/City/Special District/School District

    18        19   

State

    14        16   

Education

    13        9   

Health

    11        9   

Utilities

    11        10   

Corporate

    5        10   

Housing

    2        2   

Tobacco

    2        2   

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

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

AAA/Aaa

    3     4

AA/Aa

    47        50   

A

    40        35   

BBB/Baa

    5        7   

BB/Ba

    1        1   

B

    1        1   

CCC/Caa

           2 

N/R3

    3        2   

 

  1   

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

 

  2   

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

 

  3   

The investment advisor evaluates the credit quality of unrated Investments based upon certain factors including but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2016 and April 30, 2015, the market value of unrated securities deemed by the investment advisor to be investment grade represents 1% and less than 1%, respectively, of the Fund’s total investments.

 
   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2016

    5

2017

    5   

2018

    5   

2019

    8   

2020

    8   

 

  4  

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

 

  *   Excludes short-term securities.

 

                
   ANNUAL REPORT    APRIL 30, 2016    17


Fund Summary as of April 30, 2016    BlackRock MuniVest Fund II, Inc.

 

Fund Overview

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

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

 

Fund Information

Symbol on NYSE

   MVT

Initial Offering Date

   March 29, 1993

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

   5.73%

Tax Equivalent Yield2

   10.12%

Current Monthly Distribution per Common Share3

   $0.083

Current Annualized Distribution per Common Share3

   $0.996

Economic Leverage as of April 30, 20164

   38%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

Performance

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

 

    Returns Based On  
     Market Price     NAV  

MVT1,2

    13.88     7.61

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    13.64     8.61

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

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

 

                
18    ANNUAL REPORT    APRIL 30, 2016   


     BlackRock MuniVest Fund II, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

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

Market Price

   $ 17.38       $ 16.26         6.89    $ 17.78       $ 14.53   

Net Asset Value

   $ 16.17       $ 16.01         1.00    $ 16.21       $ 15.56   

 

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

 

LOGO

 

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

Transportation

    24     24

Health

    18        18   

Utilities

    13        13   

State

    13        13   

County/City/Special District/School District

    11        12   

Education

    7        6   

Corporate

    7        8   

Tobacco

    5        4   

Housing

    2        2   

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

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

AAA/Aaa

    6     8

AA/Aa

    49        49   

A

    21        21   

BBB/Baa

    10        11   

BB/Ba

    4        3   

B

    2        2   

N/R2

    8        6   

 

  1   

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

 

  2  

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of April 30, 2016 and April 30, 2015 the market value of unrated securities deemed by the investment advisor to be investment grade represents less than 3% and 1%, respectively, of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2016

    6

2017

    8   

2018

    11   

2019

    23   

2020

    12   

 

  3  

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

 

  *   Excludes short-term securities.
 

 

                
   ANNUAL REPORT    APRIL 30, 2016    19


Schedule of Investments April 30, 2016

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 2.1%

  

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

    

5.25%, 1/01/17

   $ 895      $ 900,370   

5.25%, 1/01/19

     2,000        2,012,000   

5.50%, 1/01/21

     1,215        1,222,290   

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

     3,745        4,393,409   

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

     2,165        2,582,109   
    

 

 

 
               11,110,178   

Alaska — 0.5%

  

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

    

4.63%, 6/01/23

     1,040        1,045,824   

5.00%, 6/01/32

     1,500        1,418,985   
    

 

 

 
               2,464,809   

Arizona — 1.5%

  

City of Phoenix Arizona IDA, RB:

    

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

     500        553,120   

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

     425        471,350   

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

     570        671,072   

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

     1,000        1,190,790   

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

    

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

     305        323,160   

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

     855        889,397   

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

     260        275,683   

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

     290        301,600   

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

     320        336,070   

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

     255        264,285   

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

     1,650        2,057,220   

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

     500        586,505   
    

 

 

 
               7,920,252   

California — 7.8%

  

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

    

5.50%, 8/01/34

     315        332,936   

6.00%, 8/01/44

     665        706,237   

6.13%, 8/01/49

     580        616,592   
Municipal Bonds   

Par  

(000)

    Value  

California (continued)

  

California School Finance Authority, RB:

    

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

   $ 1,570      $ 1,799,660   

Value Schools, 6.65%, 7/01/33

     435        503,091   

Value Schools, 6.90%, 7/01/43

     975        1,135,709   

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

    

5.00%, 12/01/41

     690        750,823   

5.00%, 12/01/46

     920        1,000,298   

5.25%, 12/01/56

     2,760        3,000,368   

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

     2,175        2,495,573   

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

     1,650        1,666,500   

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

    

6.50%, 5/01/36

     900        1,091,529   

6.50%, 5/01/42

     2,220        2,686,555   

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

     375        468,851   

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

    

5.60%, 6/01/36

     1,285        1,301,448   

5.70%, 6/01/46

     3,600        3,646,116   

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

     2,885        3,362,237   

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

    

Bonds, 5.13%, 6/01/47

     3,850        3,753,981   

Senior, 5.75%, 6/01/47

     3,980        3,989,950   

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

    

4.75%, 6/01/25

     1,490        1,490,521   

5.00%, 6/01/37

     4,580        4,579,588   
    

 

 

 
               40,378,563   

Colorado — 2.1%

    

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

     500        508,410   

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

    

6.13%, 12/01/45

     335        347,639   

6.25%, 12/01/50

     1,115        1,154,750   

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

     720        760,090   
 

 

Portfolio Abbreviations

 

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

 

See Notes to Financial Statements.

 

                
20    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Colorado (continued)

    

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

   $ 5,985      $ 6,468,887   

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

     1,500        1,739,130   
    

 

 

 
               10,978,906   

Connecticut — 0.9%

    

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

     1,430        1,433,360   

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

     1,420        1,455,557   

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

     1,835        1,869,241   
    

 

 

 
               4,758,158   

Delaware — 0.7%

    

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

     1,000        1,093,580   

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

     2,280        2,394,524   
    

 

 

 
               3,488,104   

District of Columbia — 0.0%

    

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

     55        53,235   

Florida — 9.4%

    

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

     1,535        1,609,002   

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

    

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

     515        442,550   

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

     1,105        949,714   

5.75%, 1/01/50

     655        654,987   

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

     2,510        2,991,192   

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

    

5.00%, 6/01/35

     1,460        1,577,223   

5.00%, 6/01/40

     2,000        2,138,500   

5.00%, 6/01/48

     2,815        2,987,954   

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

     3,500        3,937,150   

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

    

5.75%, 6/15/29

     690        715,309   

6.00%, 6/15/34

     835        869,218   

6.13%, 6/15/44

     3,220        3,322,557   

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

     1,940        2,033,527   

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

     410        411,456   

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

     535        566,635   

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

     1,485        1,834,718   
Municipal Bonds   

Par  

(000)

    Value  

Florida (continued)

    

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

    

4.00%, 5/01/21

   $ 200      $ 203,910   

4.25%, 5/01/26

     160        162,347   

5.00%, 5/01/36

     460        472,024   

5.13%, 5/01/46

     915        943,548   

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

     4,550        5,961,455   

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

    

Series A, 5.00%, 5/01/37

     845        899,367   

Series B, 5.00%, 5/01/37

     495        526,848   

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

     500        609,170   

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

     4,358        1,743,158   

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

     575        575,874   

Tolomato Community Development District, Refunding, Special Assessment Bonds:

    

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

     250        200,448   

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

     585        350,602   

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

     305        135,405   

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

     805        421,152   

Series A1, 6.65%, 5/01/40

     910        920,420   

Tolomato Community Development District:

    

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

     1,305        806,973   

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

     50        51,070   

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

     875        9   

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

     710        7   

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

    

6.75%, 5/01/31

     1,600        1,942,432   

7.00%, 5/01/41

     2,615        3,188,417   

5.50%, 5/01/42

     1,220        1,402,378   
    

 

 

 
               48,558,706   

Georgia — 1.8%

    

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

     580        581,375   

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

     2,615        2,719,234   

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

     3,365        4,149,011   

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

    

6.38%, 11/15/29

     700        805,315   

6.63%, 11/15/39

     880        1,011,903   

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

     265        300,245   
    

 

 

 
               9,567,083   

Guam — 0.4%

    

Territory of Guam, GO, Series A:

    

6.00%, 11/15/19

     505        559,247   

7.00%, 11/15/19 (b)

     1,115        1,353,164   
    

 

 

 
               1,912,411   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    21


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois — 4.7%

  

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

   $ 3,600      $ 3,581,244   

Illinois Finance Authority, Refunding RB:

    

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

     1,214        12   

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

     3,129        31   

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

     4,000        4,285,760   

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

     2,395        2,546,244   

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

     1,085        1,087,300   

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

     365        391,101   

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

     860        915,806   

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

     4,170        4,619,276   

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

     2,370        2,694,145   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     180        212,231   

6.00%, 6/01/28

     710        848,457   

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

     1,730        1,739,844   

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

     1,260        1,260,819   
    

 

 

 
               24,182,270   

Indiana — 1.6%

  

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

    

6.75%, 1/01/34

     825        1,011,467   

7.00%, 1/01/44

     2,000        2,467,300   

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

     2,510        2,512,083   

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

    

5.00%, 7/01/44

     470        510,317   

5.00%, 7/01/48

     1,555        1,681,250   
    

 

 

 
               8,182,417   

Iowa — 2.7%

  

Iowa Finance Authority, Refunding RB:

    

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

     2,090        2,175,167   

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

     2,190        2,357,185   

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

     1,355        1,385,420   

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

     2,115        2,182,659   

Iowa Tobacco Settlement Authority, Refunding RB:

    

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

     1,200        1,202,568   

Series C, 5.38%, 6/01/38

     4,900        4,877,803   
    

 

 

 
               14,180,802   

Kentucky — 0.9%

  

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

     4,000        4,599,120   
Municipal Bonds   

Par  

(000)

    Value  

Louisiana — 2.9%

    

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

   $ 1,055      $ 1,108,182   

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

     5,000        5,417,500   

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

     1,855        2,126,869   

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

     5,570        6,274,494   
    

 

 

 
               14,927,045   

Maine — 0.7%

  

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

     2,955        3,359,155   

Maryland — 2.0%

    

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

     2,840        3,227,007   

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

     3,615        3,956,437   

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

     3,085        2,974,279   
    

 

 

 
               10,157,723   

Massachusetts — 1.7%

  

Massachusetts Development Finance Agency, RB:

    

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

     1,905        2,148,173   

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

     1,295        1,345,376   

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

     1,025        1,170,345   

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

     2,020        2,200,083   

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

     1,490        1,758,170   
    

 

 

 
               8,622,147   

Michigan — 0.9%

  

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

    

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

     315        121,213   

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

     100        44,446   

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

     2,785        3,099,037   

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

     415        443,797   

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

     920        1,005,578   
    

 

 

 
               4,714,071   

Minnesota — 0.3%

  

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

     1,335        1,386,491   

Missouri — 1.0%

    

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

     2,315        2,620,788   
 

 

See Notes to Financial Statements.

 

                
22    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Missouri (continued)

    

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

   $ 2,235      $ 2,334,078   
    

 

 

 
               4,954,866   

New Jersey — 4.6%

  

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     1,065        1,103,415   

5.25%, 11/01/44

     770        793,423   

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

     1,150        1,173,242   

New Jersey EDA, RB:

    

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

     2,250        2,717,865   

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

     2,155        2,426,250   

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

     1,530        1,764,029   

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

     500        522,950   

New Jersey Health Care Facilities Financing Authority, Refunding RB:

    

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

     2,650        3,080,069   

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

     4,090        4,488,611   

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

     1,140        1,242,554   

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

    

5.00%, 6/01/29

     3,735        3,733,767   

5.00%, 6/01/41

     1,070        1,011,086   
    

 

 

 
               24,057,261   

New Mexico — 0.6%

  

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

     2,970        3,232,013   

New York — 7.6%

    

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

     1,765        1,815,232   

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

    

6.50%, 7/01/24

     610        611,348   

6.63%, 7/01/29

     1,100        1,102,541   

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

     5,400        5,688,954   

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

     3,315        3,165,626   

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

     1,170        1,110,365   

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

     1,354        1,537,894   

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

     2,890        2,876,706   

Metropolitan Transportation Authority, RB, Series C:

    

6.50%, 11/15/18 (b)

     1,490        1,705,931   

6.50%, 11/15/28

     510        583,766   
Municipal Bonds   

Par  

(000)

    Value  

New York (continued)

    

New York Liberty Development Corp., Refunding RB:

    

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

   $ 1,270      $ 1,429,156   

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

     4,705        5,095,703   

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

     455        499,449   

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

     1,080        1,189,847   

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

     1,565        1,924,919   

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

     1,335        1,354,945   

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

     1,340        1,574,514   

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

     1,135        1,134,909   

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

     4,800        4,800,048   
    

 

 

 
               39,201,853   

North Carolina — 1.5%

    

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

    

Deerfield Project, 6.13%, 11/01/38

     4,565        4,985,436   

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

     1,000        1,147,540   

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

     1,420        1,626,511   
    

 

 

 
               7,759,487   

Ohio — 2.6%

    

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

    

Senior Turbo Term, 5.88%, 6/01/47

     4,340        4,199,080   

5.75%, 6/01/34

     6,745        6,432,032   

6.00%, 6/01/42

     3,040        2,994,491   
    

 

 

 
               13,625,603   

Oklahoma — 0.3%

    

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

     1,305        1,389,186   

Oregon — 0.8%

    

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

     1,765        1,939,029   

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

    

5.13%, 7/01/35

     620        638,476   

5.38%, 7/01/45

     1,435        1,487,995   
    

 

 

 
               4,065,500   

Pennsylvania — 4.2%

    

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

     4,140        4,422,845   

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

     2,000        2,204,800   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    23


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Pennsylvania (continued)

    

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

    

6.38%, 1/01/19 (b)

   $ 5,550      $ 6,345,648   

6.38%, 1/01/39

     615        697,742   

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

     1,160        1,194,835   

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

     1,800        1,891,350   

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

     2,110        2,320,325   

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

     2,710        2,845,066   
    

 

 

 
               21,922,611   

Puerto Rico — 0.3%

    

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

     3,450        308,913   

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

     915        606,288   

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

    

6.13%, 7/01/24

     365        248,886   

6.00%, 7/01/38

     730        491,152   
    

 

 

 
               1,655,239   

Rhode Island — 2.1%

    

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

     4,190        1,040,586   

Tobacco Settlement Financing Corp., Refunding RB:

    

Series A, 5.00%, 6/01/40

     980        1,075,168   

Series B, 4.50%, 6/01/45

     5,055        5,241,934   

Series B, 5.00%, 6/01/50

     3,330        3,532,031   
    

 

 

 
               10,889,719   

Texas — 11.1%

    

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

     5,080        114,300   

Central Texas Regional Mobility Authority, Refunding RB:

    

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

     1,000        659,370   

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

     2,000        1,263,060   

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

     1,170        708,751   

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

     3,690        1,966,069   

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

     4,000        2,024,000   

Senior Lien, 6.25%, 1/01/46

     2,210        2,638,873   

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

    

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

     2,890        3,352,429   

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

     910        1,013,085   

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

    

5.50%, 8/15/31

     955        1,062,132   

5.75%, 8/15/41

     720        807,984   

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

     5,040        5,724,986   

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

     475        561,901   
Municipal Bonds   

Par  

(000)

    Value  

Texas (continued)

    

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

   $ 2,090      $ 2,376,664   

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

    

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

     1,745        1,960,857   

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

     4,200        4,296,096   

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

     865        944,407   

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

     3,080        3,478,552   

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

     810        880,065   

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

     1,325        1,377,960   

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

    

5.88%, 4/01/36

     1,210        1,386,067   

6.00%, 4/01/45

     1,845        2,122,654   

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

    

5.50%, 8/15/35

     290        299,779   

5.75%, 8/15/45

     580        595,909   

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

     1,600        1,707,072   

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

    

Eden Home, Inc., 7.25%, 12/15/42 (d)

     2,895        2,546,413   

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

     900        933,183   

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

    

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

     2,535        2,752,934   

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

     3,775        4,524,640   

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

     3,000        3,535,830   
    

 

 

 
               57,616,022   

Utah — 0.6%

  

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

     2,950        3,115,967   

Vermont — 0.2%

    

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

     770        812,496   

Virginia — 3.1%

    

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

     2,500        2,588,950   

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

    

5.00%, 3/01/35

     510        510,689   

5.00%, 3/01/45

     520        517,603   

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

    

6.63%, 3/01/26

     1,485        1,714,135   

6.88%, 3/01/36

     1,300        1,496,534   

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

     2,180        1,904,666   
 

 

See Notes to Financial Statements.

 

                
24    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

Municipal Bonds   

Par  

(000)

    Value  

Virginia (continued)

    

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

   $ 535      $ 552,858   

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

    

5.00%, 7/01/35

     130        137,032   

5.00%, 7/01/45

     375        387,518   

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

     5,410        6,403,979   
    

 

 

 
               16,213,964   

Washington — 0.8%

  

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

     1,455        1,601,984   

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

     1,495        1,582,891   

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

    

5.75%, 1/01/35

     315        322,308   

6.00%, 1/01/45

     850        869,508   
    

 

 

 
               4,376,691   

Wisconsin — 1.1%

  

Public Finance Authority, RB, Series A:

    

4.75%, 12/01/35

     775        807,713   

5.00%, 12/01/45

     1,875        1,969,650   

5.15%, 12/01/50

     1,170        1,229,214   

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

    

7.25%, 9/15/19

     425        506,260   

7.63%, 9/15/19

     855        1,039,765   
    

 

 

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

Colorado — 2.4%

    

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

     11,468        12,710,253   

Florida — 3.2%

    

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

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

Par  

(000)

    Value  

Illinois — 2.8%

    

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

   $ 7,180      $ 8,544,200   

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

     5,056        5,905,351   
    

 

 

 
               14,449,551   

New York — 13.7%

  

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

     8,996        9,392,640   

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

    

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

     14,181        16,694,649   

Series HH, 5.00%, 6/15/31 (j)

     8,610        10,139,739   

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

     4,520        5,313,811   

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

     18,104        21,507,569   

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

     6,600        7,877,856   
    

 

 

 
               70,926,264   

Washington — 1.8%

  

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

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

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

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

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

   

    (66,124,715
    

 

 

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

 

 

 
 
Notes to Schedule of Investments      

 

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

 

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

 

(c)   When-issued security.

 

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

 

(e)   Non-income producing security.

 

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

 

(g)   Zero-coupon bond.

 

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

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    25


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

 

(i)   Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details.

 

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

 

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

 

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

BlackRock Liquidity Funds, MuniCash

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

FFI Institutional Tax-Exempt Fund

       961,095           (961,095            414       

Total

              4,296,151      $ 849     
           

 

 

 

(l)   Current yield as of period end.

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

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

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

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

 

Assets — Derivative Financial Instruments      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
    

Foreign
Currency
Exchange
Contracts

     Interest
Rate
Contracts
     Other
Contracts
     Total  

Futures contracts

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

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

       

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

 

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

Futures contracts

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

Futures contracts

                                   $ 521,509               $      521,509   

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:         

Average notional value of contracts — short

   $ 15,992,732   

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

 

See Notes to Financial Statements.

 

                
26    ANNUAL REPORT    APRIL 30, 2016   


Schedule of Investments (concluded)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

 

Fair Value Hierarchy as of Period End

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

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

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

Short-Term Securities

  $ 4,296,151                          4,296,151   
 

 

 

 

Total

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

 

 

 
                
Derivative Financial Instruments2                                     

Assets:

                

Interest rate contracts

  $ 167,210                        $ 167,210   

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

       

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

       

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

Assets:

                

Cash pledged for futures contracts

  $ 243,950                        $ 243,950   

Liabilities:

                

Bank overdraft

            $ (68,716             (68,716

TOB Trust Certificates

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

 

 

 

Total

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

 

 

 

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

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    APRIL 30, 2016    27


Schedule of Investments April 30, 2016

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 1.3%

  

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

    

5.50%, 1/01/22

   $ 2,750      $ 2,766,500   

4.75%, 1/01/25

     2,200        2,213,200   
    

 

 

 
               4,979,700   

Alaska — 0.7%

  

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

     990        1,139,708   

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

    

6.00%, 9/01/19 (a)

     765        893,673   

6.00%, 9/01/28

     435        505,613   
    

 

 

 
               2,538,994   

Arizona — 0.9%

  

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

    

5.00%, 10/01/27

     2,700        2,994,975   

5.00%, 10/01/29

     400        443,700   
    

 

 

 
               3,438,675   

California — 18.9%

  

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

    

5.40%, 10/01/24

     10,185        10,799,054   

5.45%, 10/01/25

     3,700        3,920,224   

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

     5,000        6,290,300   

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

     2,400        892,344   

California Health Facilities Financing Authority, RB:

    

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

     550        628,210   

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

     1,200        1,449,792   

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

     1,090        1,273,327   

California State University, Refunding RB, Series A:

    

5.00%, 5/01/17 (a)

     850        887,442   

5.00%, 11/01/37

     1,150        1,193,861   

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

     1,480        1,708,897   

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

     1,420        1,528,857   

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

     850        1,001,028   

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

     1,500        1,550,475   

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

     2,175        2,642,647   

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

     1,300        1,371,656   

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

     2,500        1,959,200   

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

     3,750        1,809,525   
Municipal Bonds   

Par  

(000)

    Value  

California (continued)

  

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

   $ 5,000      $ 2,345,200   

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

    

Series C, 0.00%, 7/01/38

     1,600        728,512   

Series G, 0.00%, 7/01/34

     650        299,201   

Series G, 0.00%, 7/01/35

     690        298,667   

Series G, 0.00%, 7/01/36

     1,035        420,976   

Series G, 0.00%, 7/01/37

     690        264,015   

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

    

0.00%, 7/01/30

     5,000        3,244,500   

0.00%, 7/01/31

     1,280        793,088   

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

    

0.00%, 8/01/31

     2,145        1,140,754   

0.00%, 8/01/32

     2,680        1,336,596   

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

    

5.00%, 8/01/34

     700        813,169   

5.00%, 8/01/38

     600        695,364   

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

     12,740        8,726,136   

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

     5,500        2,659,800   

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

     5,035        5,449,934   
    

 

 

 
               70,122,751   

Colorado — 0.6%

  

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

     2,000        2,297,160   

District of Columbia — 1.5%

    

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

     5,360        5,401,165   

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

     120        120,000   
    

 

 

 
               5,521,165   

Florida — 16.0%

  

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

    

5.00%, 10/01/32

     4,000        4,228,720   

5.00%, 10/01/37

     7,500        7,914,600   

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

     1,600        1,820,480   

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

     850        940,772   

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

     2,625        2,759,059   

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

     1,450        1,673,808   

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

     4,050