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 811-08707
Name of Fund: BlackRock MuniHoldings Insured Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock MuniHoldings Insured Fund, Inc., 800 Scudders Mill
Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011,
Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (800) 882-0052
Date of fiscal year end: 04/30/07
Date of reporting period: 05/01/06 - 04/30/07
Item 1 - Report to Stockholders
ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES FIXED INCOME LIQUIDITY
REAL ESTATE
Annual Reports
APRIL 30, 2007
BlackRock MuniHoldings Fund, Inc.
BlackRock MuniHoldings Insured Fund, Inc.
(BLACKROCK logo)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
BlackRock MuniHoldings Fund, Inc. and BlackRock MuniHoldings Insured Fund,
Inc. seek to provide shareholders with current income exempt from federal
income taxes by investing primarily in portfolios of long-term, investment
grade municipal obligations the interest on which, in the opinion of bond
counsel to the issuer, is exempt from federal income taxes. Under normal
circumstances, BlackRock MuniHoldings Insured Fund, Inc. invests at least
80% of its total assets in municipal bonds that are covered by insurance.
These reports, including the financial information herein, are transmitted to
shareholders of BlackRock MuniHoldings Fund, Inc. and BlackRock MuniHoldings
Insured Fund, Inc. for their information. This is not a prospectus. Past
performance results shown in these reports should not be considered a
representation of future performance. The Funds have leveraged their Common
Stock and intend to remain leveraged by issuing Preferred Stock to provide the
Common Stock shareholders with potentially higher rates of return. Leverage
creates risks for Common Stock shareholders, including the likelihood of
greater volatility of net asset value and market price of shares of the Common
Stock, and the risk that fluctuations in the short-term dividend rates of the
Preferred Stock may affect the yield to Common Stock shareholders. Statements
and other information herein are as dated and are subject to change.
A description of the policies and procedures that the Funds use to determine
how to vote proxies relating to portfolio securities is available (1)
without charge, upon request, by calling toll-free 1-800-441-7762; (2) on
www.blackrock.com; and (3) on the Securities and Exchange Commission's Web
site at http://www.sec.gov. Information about how the Funds vote proxies
relating to securities held in the Fund's portfolios during the most recent
12-month period ended June 30 is available (1) at www.blackrock.com and (2)
on the Securities and Exchange Commission's Web site at http://www.sec.gov.
BlackRock MuniHoldings Fund, Inc.
BlackRock MuniHoldings Insured Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
(GO PAPERLESS... logo)
It's Fast, Convenient, & Timely!
BlackRock MuniHoldings Fund, Inc.
BlackRock MuniHoldings Insured Fund, Inc.
Quality Profiles as of April 30, 2007
Percent of
BlackRock MuniHoldings Fund, Inc. by Total
S&P/Moody's Rating Investments
AAA/Aaa 40.3%
AA/Aa 9.6
A/A 14.3
BBB/Baa 13.8
BB/Ba 0.9
B/B 1.1
CCC/Caa 1.9
NR (Not Rated) 17.0
Other* 1.1
* Includes portfolio holdings in short-term investments and
variable rate demand notes.
Percent of
BlackRock MuniHoldings Insured Total
Fund, Inc. by S&P/Moody's Rating Investments
AAA/Aaa 88.7%
AA/Aa 3.9
A/A 3.0
BBB/Baa 3.6
Other* 0.8
* Includes portfolio holdings in short-term investments and
variable rate demand notes.
Dividend Policy
The Funds' dividend policy is to distribute all or a portion of their net
investment income to their shareholders on a monthly basis. In order to
provide shareholders with a more stable level of dividend distributions, the
Funds may at times pay out less than the entire amount of net investment
income earned in any particular month and may at times in any particular month
pay out such accumulated but undistributed income in addition to net investment
income earned in that month. As a result, the dividends paid by the Funds for
any particular month may be more or less than the amount of net investment
income earned by the Funds during such month. The Funds' current accumulated
but undistributed net investment income, if any, is disclosed in the
Statements of Net Assets, which comprises part of the financial information
included in these reports.
ANNUAL REPORTS APRIL 30, 2007
A Letter to Shareholders
Dear Shareholder
In its first four months, 2007 could already be termed an eventful year for
investors. For most financial markets, 2007 opened just as 2006 ended - on a
positive trajectory. Then, at the end of February and into March, global
equity markets registered their first significant decline since last summer.
The market jitters were triggered by a significant setback in the Chinese
market and were exacerbated by worries of a weakening economy, escalating
geopolitical concerns and rising delinquencies in the subprime mortgage
market. Still, underlying stock market fundamentals appeared quite sound,
supported by a generally favorable global economic backdrop, tame inflation,
slowing but still positive earnings growth, relatively low interest rates and
attractive valuations. These conditions prevailed later, and the Dow Jones
Industrial Average crossed the 13,000 mark for the first time in its history
in late April.
Not unlike the equity market, the bond market also experienced volatility as
observers attempted to interpret mixed economic signals. A bond market rally
(falling yields and rising prices) late last year reversed itself early in
2007 amid some transitory signs of economic strength. Overall, yields have
fluctuated month to month but ended April little changed from the beginning of
the year. However, compared to one year ago, yields on 30-year Treasury bonds
fell 36 basis points (.36%) and 10-year yields fell 44 basis points, while
prices correspondingly rose.
For its part, the Federal Reserve Board (the Fed) has left the target short-
term interest rate on hold at 5.25% since first pausing in its interest rate-
hiking campaign on August 8, 2006. The central bankers continue to express
concern about potential inflationary pressures, but also acknowledge signs of
economic weakness. Given this relatively "balanced" assessment, most observers
believe the Fed will keep interest rates on hold for now.
Against this backdrop, most major market indexes posted positive returns for
the annual and semi-annual reporting periods ended April 30, 2007:
Total Returns as of April 30, 2007 6-month 12-month
U.S. equities (Standard & Poor's 500 Index) + 8.60% +15.24%
Small cap U.S. equities (Russell 2000 Index) + 6.86 + 7.83
International equities (MSCI Europe, Australasia, Far East Index) +15.46 +19.81
Fixed income (Lehman Brothers Aggregate Bond Index) + 2.64 + 7.36
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 1.59 + 5.78
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) + 6.96 +11.72
If the first four months are any guide, 2007 could be a year of enhanced
market volatility. As you navigate the un-certainties, we encourage you to
review your investment goals with your financial professional and to make
portfolio changes, as needed. For more insight, we invite you to view "What's
Ahead in 2007: An Investment Perspective" and "Are You Prepared for
Volatility?" at www.blackrock.com/funds. We thank you for entrusting BlackRock
with your investment assets, and we look forward to continuing to serve you in
the months and years ahead.
Sincerely,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
Fund President and Director
THIS PAGE NOT PART OF YOUR FUND REPORT
ANNUAL REPORTS APRIL 30, 2007
A Discussion With Your Funds' Portfolio Managers
The Funds' total return performance exceeded that of their respective Lipper
category averages for the fiscal year as we remained focused on generating
yield and protecting net asset value.
Describe the recent market environment relative to municipal bonds.
Over the past 12 months, long-term bond yields generally moved lower as bond
prices, which move opposite of yields, increased. The long-term tax-exempt
bond market's solid technical position allowed it to outperform the taxable
U.S. Treasury market during the period.
Bond prices began to improve in late June 2006 as economic growth weakened.
The improvement accelerated in response to the Federal Reserve Board's (the
Fed) decision in August to keep its target interest rate on hold at 5.25%
after 17 consecutive interest rate hikes since mid-2004. The bond price rally
continued in the fall amid moderating oil prices and slower gross domestic
product (GDP) growth. By the end of November, 30-year U.S. Treasury bond
yields had fallen to 4.56%.
In early 2007, stronger-than-expected economic releases, especially related to
employment, caused long-term bond prices to give back some of their gains. At
the end of April 2007, U.S. Treasury bond yields stood at 4.81%, a decline of
36 basis points (.36%) over the past 12 months. Ten-year U.S. Treasury yields
fell 44 basis points to 4.63% during the same period.
The tax-exempt bond market benefited from robust demand, which outstripped a
resurgent new-issue calendar and allowed long-term municipal bonds to
outperform comparable-maturity Treasury issues. As measured by Municipal
Market Data, yields on AAA-rated municipal bonds maturing in 30 years declined
43 basis points to 4.10% during the past year. Yields on intermediate
maturities fell less than longer-term municipal yields. Ten-year, AAA-rated
tax-exempt bond yields stood at 3.76% at the end of April, a decline of 32
basis points over the past year.
Investor demand for municipal product continued to strengthen throughout the
12-month period. The Investment Company Institute reports that long-term
municipal bond funds received over $8.7 billion in net new cash flows during
the first three months of 2007, a 42% increase compared to the first three
months of 2006. Weekly fund flows, as reported by AMG Data, also have risen.
Weekly inflows during the April 2007 quarter averaged over $489 million, up
from a weekly average of $400 million in fourth quarter 2006. The improving
demand among retail investors reflects, in large part, increased acceptance of
lower nominal yields and bond coupon structure. Throughout much of last year,
retail-oriented municipal bond broker/dealers noted significant individual
investor resistance to purchasing tax-exempt issues with yields below 4.50%
and/or issues bearing nominal coupons below 5%. As tax-exempt bond yields have
stabilized in recent months, it appears retail investors have become
increasingly comfortable purchasing tax-exempt bonds with those
characteristics, which has served to support the market's performance.
In terms of supply, more than $420 billion in new long-term tax-exempt bonds
was underwritten during the past 12 months, an increase of 11% relative to the
same period a year ago. The pace of new long-term municipal bond issuance
increased over the past six months, when more than $225 billion in new tax-
exempt bonds was issued, an increase of greater than 30% compared to the same
six months a year ago. So far this year, more than $135 billion in long-term
municipal bonds has been underwritten, putting 2007 annual issuance some 4%
ahead of 2005's record pace. Issuers have continued to take advantage of
historically low interest rates to refinance outstanding issues. In the first
four months of 2007, we have seen 10 underwritings exceeding $1 billion in
size. These "mega-deals" have continued to be relatively easily absorbed by
market participants, especially non-traditional and foreign buyers who find
the liquidity afforded by these deals to be particularly attractive.
Looking ahead, we believe investor demand will be critical in maintaining the
tax-exempt market's strong technical position. The increase in new bond supply
seen this year is unlikely to abate significantly, leading to record or near-
record annual issuance. Relatively stable yield ratios compared to taxable
bonds, coupled with a comparatively steep municipal yield curve, should help
to sustain traditional and non-traditional investor interest in tax-exempt
bonds and support the market's performance into mid-2007.
ANNUAL REPORTS APRIL 30, 2007
BlackRock MuniHoldings Fund, Inc.
How did the Fund perform during the fiscal year?
For the 12-month period ended April 30, 2007, the Common Stock of BlackRock
MuniHoldings Fund, Inc. had net annualized yields of 5.38% and 5.39%, based on
a year-end per share net asset value of $16.51 and a per share market price of
$16.49, respectively, and $.888 per share income dividends. Over the same
period, the total investment return on the Fund's Common Stock was +8.06%,
based on a change in per share net asset value from $16.14 to $16.51, and
assuming reinvestment of all distributions.
The Fund's total return, based on net asset value, outpaced the +7.42% average
return of the Lipper General Municipal Debt Funds (Leveraged) category for the
12-month period. (Funds in this Lipper category invest primarily in municipal
debt issues rated in the top four credit-rating categories. These funds can be
leveraged via use of debt, preferred equity and/or reverse repurchase
agreements.)
As in prior reporting periods, Fund performance continued to be driven by our
above-average dividend yield, which is largely the result of the Fund's
exposure to lower-rated, higher-yielding credits. Another significant driver
of positive performance was the refunding activity that has been evident in
the market for some time. A number of the Fund's holdings were refunded during
the period and enjoyed subsequent increases in value. An additional benefit of
the refunding activity was a boost in the overall credit profile of the
portfolio as some of our lower-rated or non-rated bonds were refunded (when a
bond is refunded, the risk of default essentially drops to zero and, therefore,
raises the credit quality to the equivalent of an AAA-rated issue).
For the most part, the Fund's interest rate exposure remained neutral during
the period and did not have a significant effect on performance. On the
negative side, a widening in credit spreads in the healthcare industry was a
detractor, although the Fund's underweight exposure to that sector
significantly limited its influence on overall performance.
For the six-month period ended April 30, 2007, the total investment return on
the Fund's Common Stock was +2.28%, based on a change in per share net asset
value from $16.57 to $16.51, and assuming reinvestment of all distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of distributions, please refer to the Financial
Highlights section of this report. As a closed-end fund, the Fund's shares may
trade in the secondary market at a premium or discount to the Fund's net asset
value. As a result, total investment returns based on changes in the market
value of the Fund's Common Stock may vary significantly from total investment
returns based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
In our semi-annual report to shareholders, we noted that portfolio activity
had been focused on taking advantage of further flattening in the municipal
yield curve by shifting assets to the 10-year to 15-year area of the curve.
During the most recent six months, we made only modest efforts to pursue this
strategy as we came to believe that the yield curve will potentially maintain
its flatness for an extended period of time. While we still see the greatest
value in the 10-year to 15-year part of the curve, we also foresee continued
strength on the long end due, in part, to high demand from traditional
investors who are drawn to the positively sloped municipal curve versus other
asset classes. Addition-ally, issuers have lately become more inclined to
raise capital through structured derivative products rather than traditional
bonds. Should investor demand for structured products remain strong, the
supply of long-term fixed rate bonds may be reduced, which would lend further
strength to the long end of the curve.
Other activity during the 12-month period included an effort to increase
exposure to the high-grade health care sector as part of our larger goal of
upgrading the overall credit quality profile of the portfolio. As heavy
issuance materialized in the sector, bond prices declined and we found
attractive values on high-grade issues (AA or AAA). Given the persistently
narrow credit spreads of these sectors and the added incentive of reduced
prices on high-grade credits, we were able to increase the quality of the
portfolio with less yield loss than is typically associated with a credit
upgrade.
ANNUAL REPORTS APRIL 30, 2007
A Discussion With Your Funds' Portfolio Managers (concluded)
For the six-month period ended April 30, 2007, the Fund's Auction Market
Preferred Stock had average yields of 3.85% for Series A, 3.88% for Series B
and 3.80% for Series C. After raising short-term interest rates in May and
June, the Fed opted to keep the target interest rate on hold at 5.25% through
the rest of the period. As such, the Fund's borrowing costs started to
stabilize and even move slightly lower as the period progressed, although the
period ended with a typical rate spike related to the income tax filing
deadline in April. The municipal yield curve maintained its positive slope and
continued to generate an income benefit to the Common Stock shareholder from
the leveraging of Preferred Stock. As always, should the spread between short-
term and long-term interest rates narrow, the benefits of leverage will
decline and, as a result, reduce the yield on the Fund's Common Stock. (For a
more complete explanation of the benefits and risks of leveraging, see page 8
of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
At period-end, the Fund was neutrally positioned in terms of interest rate
risk, as it appears that the Fed will refrain from changing its target short-
term interest rate for some time. When we see more definite signs that the
economy is indeed continuing to slow to the point where the Fed is likely to
lower rates, we will look to adjust the portfolio to take advantage of the
falling-rate environment. We also will continue to work on reducing the
portfolio's credit exposure while maintaining the competitive income to
shareholders that the Fund has consistently achieved for several years. At
period-end, our borrowing costs were still elevated due to the seasonal spike
associated with tax season, but we expect rates to settle back rather quickly
and allow us more flexibility to pursue our credit strategies.
BlackRock MuniHoldings Insured Fund, Inc.
How did the Fund perform during the fiscal year?
For the 12-month period ended April 30, 2007, the Common Stock of BlackRock
MuniHoldings Insured Fund, Inc. had net annualized yields of 4.43% and 4.75%,
based on a year-end per share net asset value of $14.10 and a per share market
price of $13.13, respectively, and $0.624 per share income dividends. Over the
same period, the total investment return on the Fund's Common Stock was
+7.29%, based on a change in per share net asset value from $13.80 to $14.10,
and assuming reinvestment of all distributions.
The Fund's total return, based on net asset value, exceeded the +6.77% average
return of the Lipper Insured Municipal Debt Funds (Leveraged) category for the
12-month period. (Funds in this Lipper category invest primarily in municipal
debt issues insured as to timely payment. These funds can be leveraged via use
of debt, preferred equity and/or reverse repurchase agreements.) The Fund's
high accrual rate facilitated its favorable total return performance. Our
holdings in five-year to 10-year prerefunded bonds, which offered higher
yields than those currently available in the municipal market, contributed to
that high accrual rate. The Fund's slightly defensive posture on interest
rates detracted from performance somewhat, particularly as the market rallied
toward the end of 2006. We have taken steps to move toward a more neutral
duration stance.
For the six-month period ended April 30, 2007, the total investment return on
the Fund's Common Stock was +1.50%, based on a change in per share net asset
value from $14.22 to $14.10, and assuming reinvestment of all distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of distributions, please refer to the Financial
Highlights section of this report. As a closed-end fund, the Fund's shares may
trade in the secondary market at a premium or discount to the Fund's net asset
value. As a result, total investment returns based on changes in the market
value of the Fund's Common Stock may vary significantly from total investment
returns based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
Our efforts remained focused on capturing the greatest relative value in the
municipal market, with emphasis on protecting the Fund's underlying value and
enhancing yield in the portfolio.
ANNUAL REPORTS APRIL 30, 2007
In the first half of the fiscal year, the lack of new-issue supply and
increased demand for municipal bonds caused spreads to narrow in all sectors
of the municipal market. Amid these tight spreads, we increased our exposure
to tax-exempt bonds in high demand states, such as New York and New Jersey,
in an effort to capitalize on any shift in the demand/supply imbalance.
Increased issuance in the latter half of the year provided more investment
opportunities, although the new issues did not necessarily come with the
maturities and coupon structures that we were seeking for the portfolio.
Late in the period, we sold some shorter-dated prerefunded bonds and with
the proceeds purchased longer-dated securities for their incremental yield
advantage. For the most part, we sold bonds with maturities of 15-years to
20-years and looked to buy bonds in the 25-year to 30-year maturity range
with coupons in the area of 5%. We also selectively used the Fund's
uninsured "basket" to add higher-yielding credits to the portfolio. The
Fund is required to invest 80% of its net assets in insured municipal
bonds, with some flexibility to invest in uninsured issues. Overall, we
increased exposure to uninsured credits approximately 2%-3% in an effort to
capitalize on yield-enhancement opportunities.
From a sector perspective, we bought some health care-related issues,
reflecting supply trends in the market but also our perception of attractive
relative value. In particular, we purchased some Florida hospital bonds that
were available with relatively attractive yields.
For the six months ended April 30, 2007, the Fund's Auction Market Preferred
Stock had average yields of 3.85% for Series A and 3.85% for Series B. The Fed
kept its target interest rate unchanged at 5.25% from August 2006 forward. As
such, the Fund's borrowing costs generally stabilized in the latter half of
the fiscal period. Importantly, the municipal yield curve maintained its
positive slope, particularly compared to the Treasury curve, and continued to
generate an income benefit to the Common Stock shareholder from the leveraging
of Preferred Stock. As always, should the spread between short-term and long-
term interest rates narrow, the benefits of leveraging will decline and, as a
result, reduce the yield available to the Common Stock shareholder. (For a
more complete explanation of the benefits and risks of leveraging, see page 8
of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
We expect the Fed to keep interest rates on hold for now and, against this
backdrop, anticipate crosscurrents of strength and weakness in the market.
The Fund ended the period in a slightly defensive position. We will
continue to target a more neutral duration as the market presents
opportunities in the form of higher yields. As that occurs, we intend to
continue our strategy of selling prerefunded bonds with shorter maturities
and investing in the 20-year to 30-year area of the municipal curve, where
we continue to see the most compelling relative value.
Theodore R. Jaeckel Jr., CFA
Portfolio Manager
BlackRock MuniHoldings Fund, Inc.
Robert D. Sneeden
Portfolio Manager
BlackRock MuniHoldings Insured Fund, Inc.
ANNUAL REPORTS APRIL 30, 2007
The Benefits and Risks of Leveraging
The Funds utilize leveraging to seek to enhance the yield and net asset value
of their Common Stock. However, these objectives cannot be achieved in all
interest rate environments. To leverage, each Fund issues Preferred Stock,
which pays dividends at prevailing short-term interest rates, and invests the
proceeds in long-term municipal bonds. The interest earned on these
investments is paid to Common Stock shareholders in the form of dividends, and
the value of these portfolio holdings is reflected in the per share net asset
value of each Fund's Common Stock. However, in order to benefit Common Stock
shareholders, the yield curve must be positively sloped; that is, short-term
interest rates must be lower than long-term interest rates. At the same time,
a period of generally declining interest rates will benefit Common Stock
shareholders. If either of these conditions change, then the risks of
leveraging will begin to outweigh the benefits.
To illustrate these concepts, assume a fund's Common Stock capitalization of
$100 million and the issuance of Preferred Stock for an additional $50
million, creating a total value of $150 million available for investment in
long-term municipal bonds. If prevailing short-term interest rates are
approximately 3% and long-term interest rates are approximately 6%, the yield
curve has a strongly positive slope. The fund pays dividends on the $50
million of Preferred Stock based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the income
based on long-term interest rates.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the beneficiaries
of the incremental yield. However, if short-term interest rates rise,
narrowing the differential between short-term and long-term interest rates,
the incremental yield pickup on the Common Stock will be reduced or eliminated
completely. At the same time, the market value on the fund's Common Stock
(that is, its price as listed on the New York Stock Exchange), may, as a
result, decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price of the
portfolio's investments, since the value of the fund's Preferred Stock does
not fluctuate. In addition to the decline in net asset value, the market value
of the fund's Common Stock may also decline.
As of April 30, 2007, BlackRock MuniHoldings Fund, Inc. and BlackRock
MuniHoldings Insured Fund, Inc. had leverage amounts, due to Auction Market
Preferred Stock, of 35.27% and 42.45% of total net assets, respectively,
before the deduction of Preferred Stock.
As a part of their investment strategy, the Funds may invest in certain
securities whose potential income return is inversely related to changes in a
floating interest rate ("inverse floaters"). In general, income on inverse
floaters will decrease when short-term interest rates increase and increase
when short-term interest rates decrease. Investments in inverse floaters may
be characterized as derivative securities and may subject the Funds to the
risks of reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of providing
investment leverage and, as a result, the market value of such securities will
generally be more volatile than that of fixed-rate, tax-exempt securities. To
the extent the Funds invest in inverse floaters, the market value of each
Fund's portfolio and the net asset value of each Fund's shares may also be
more volatile than if the Funds did not invest in these securities. (See Note
1(c) to Financial Statements for details of Municipal Bonds Held in Trust.)
Swap Agreements
The Funds may invest in swap agreements, which are over-the-counter contracts
in which one party agrees to make periodic payments based on the change in
market value of a specified bond, basket of bonds, or index in return for
periodic payments based on a fixed or variable interest rate or the change in
market value of a different bond, basket of bonds or index. Swap agreements
may be used to obtain exposure to a bond or market without owning or taking
physical custody of securities. Swap agreements involve the risk that the
party with whom each Fund has entered into a swap will default on its
obligation to pay the Fund and the risk that the Fund will not be able to meet
its obligations to pay the other party to the agreement.
ANNUAL REPORTS APRIL 30, 2007
Schedule of Investments as of April 30, 2007
BlackRock MuniHoldings Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Alabama--4.2%
Birmingham, Alabama, Special Care Facilities
Financing Authority, Revenue Refunding Bonds
(Ascension Health Credit), Series C-2:
$ 1,590 5% due 11/15/2036 $ 1,649
1,160 5% due 11/15/2039 1,200
1,750 Camden, Alabama, IDB, Exempt Facilities Revenue
Bonds (Weyerhaeuser Company), Series A, 6.125%
due 12/01/2024 1,915
4,550 Jefferson County, Alabama, Limited Obligation School
Warrants, Series A, 5% due 1/01/2024 4,751
Arizona--3.0%
Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1), Series A:
900 6.50% due 7/01/2012 919
2,200 6.75% due 7/01/2029 2,246
2,215 Phoenix, Arizona, IDA, Airport Facility, Revenue
Refunding Bonds (America West Airlines Inc. Project),
AMT, 6.30% due 4/01/2023 2,254
1,000 Pinal County, Arizona, COP, 5% due 12/01/2029 1,031
510 Show Low, Arizona, Improvement District No. 5,
Special Assessment Bonds, 6.375% due 1/01/2015 520
Arkansas--0.9%
2,000 University of Arkansas, University Construction
Revenue Bonds (UAMS Campus), Series B, 5%
due 11/01/2023 (h) 2,117
California--20.3%
875 Agua Caliente Band of Cahuilla Indians, California,
Casino Revenue Bonds, 5.60% due 7/01/2013 911
5,700 California Health Facilities Financing Authority
Revenue Bonds (Sutter Health), Series A, 5.25%
due 11/15/2046 6,019
2,965 California Infrastructure and Economic Development
Bank, Insured Revenue Bonds (Rand Corporation),
Series A, 5.50% due 4/01/2032 (b) 3,163
California State, GO:
2,400 5.50% due 4/01/2014 (i) 2,665
100 5.50% due 4/01/2028 110
6,800 California State Public Works Board, Lease Revenue
Bonds (Department of Corrections), Series C, 5.25%
due 6/01/2028 7,199
Face
Amount Municipal Bonds Value
California (concluded)
$ 3,870 California Statewide Communities Development
Authority, Health Facility Revenue Bonds (Memorial
Health Services), Series A, 6% due 10/01/2023 $ 4,219
2,000 East Side Union High School District, California,
Santa Clara County, GO (Election of 2002),
Series D, 5% due 8/01/2021 (k) 2,139
1,165 Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds,
Series A-3, 7.875% due 6/01/2013 1,421
915 Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Refunding
Bonds, Senior Series A-1, 5.125% due 6/01/2047 917
4,745 Los Angeles, California, Unified School District, GO,
Series A, 5% due 7/01/2013 (h)(i) 5,096
Montebello, California, Unified School District,
GO (c)(m):
2,405 5.61% due 8/01/2022 1,251
2,455 5.61% due 8/01/2023 1,218
2,095 Oceanside, California, Unified School District,
GO (Election of 2000), Series C, 5.25%
due 8/01/2032 (h) 2,216
3,490 Sequoia, California, Unified High School District, GO,
Refunding, Series B, 5.50% due 7/01/2035 (e) 3,894
1,000 Sunnyvale, California, School District, GO (Election of
2004), Series A, 5% due 9/01/2026 (e) 1,062
2,915 Tustin, California, Unified School District, Senior Lien
Special Tax Bonds (Community Facilities District
Number 97-1), Series A, 5% due 9/01/2032 (e) 3,023
Colorado--1.7%
2,645 Elk Valley, Colorado, Public Improvement Revenue
Bonds (Public Improvement Fee), Series A, 7.35%
due 9/01/2031 2,805
1,000 Plaza Metropolitan District Number 1, Colorado, Tax
Allocation Revenue Bonds (Public Improvement Fees),
8.125% due 12/01/2025 1,009
Connecticut--2.4%
2,165 Connecticut State Development Authority, Airport
Facility Revenue Bonds (Learjet Inc. Project), AMT,
7.95% due 4/01/2026 2,603
2,735 Connecticut State Development Authority, IDR (AFCO
Cargo BDL-LLC Project), AMT, 8% due 4/01/2030 2,958
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedules of
Investments, we have abbreviated the names of many of the securities according
to the list at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DRIVERS Derivative Inverse Tax-Exempt Receipts
EDA Economic Development Authority
FHA Federal Housing Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
VRDN Variable Rate Demand Notes
ANNUAL REPORTS APRIL 30, 2007
Schedule of Investments (continued)
BlackRock MuniHoldings Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Florida--8.6%
$ 400 Gainesville, Florida, Utilities System Revenue
Refunding Bonds, VRDN, Series C, 3.98%
due 10/01/2026 (f) $ 400
2,900 Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Refunding Bonds (Adventist
Health System), Series G, 5.125% due 11/15/2032 3,001
2,340 Miami-Dade County, Florida, Subordinate Special
Obligation Revenue Bonds, Series A, 5.24%
due 10/01/2037 (h)(m) 508
Midtown Miami, Florida, Community Development
District, Special Assessment Revenue Bonds:
2,250 Series A, 6.25% due 5/01/2037 2,446
2,550 Series B, 6.50% due 5/01/2037 2,810
3,225 Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Orlando Regional
Healthcare), 6% due 12/01/2012 (i) 3,581
2,095 Orlando, Florida, Greater Orlando Aviation Authority,
Airport Facilities Revenue Bonds (JetBlue Airways
Corp.), AMT, 6.50% due 11/15/2036 2,234
800 Orlando, Florida, Urban Community Development
District, Capital Improvement Special Assessment
Bonds, Series A, 6.95% due 5/01/2033 864
725 Palm Coast Park Community Development District,
Florida, Special Assessment Revenue Bonds, 5.70%
due 5/01/2037 744
1,615 Preserve at Wilderness Lake, Florida, Community
Development District, Capital Improvement Bonds,
Series A, 5.90% due 5/01/2034 1,696
400 Sarasota County, Florida, Public Hospital
Board, Hospital Revenue Bonds (Sarasota
Memorial Hospital), VRDN, Series A, 3.99%
due 7/01/2037 (b)(f) 400
1,000 Tern Bay Community Development District, Florida,
Capital Improvement Revenue Refunding Bonds,
Series A, 5.375% due 5/01/2037 1,006
Georgia--0.9%
1,750 Atlanta, Georgia, Tax Allocation Bonds (Atlantic
Station Project), 7.90% due 12/01/2024 1,936
Illinois--3.4%
1,000 Chicago, Illinois, O'Hare International Airport, Special
Facility Revenue Refunding Bonds (American Airlines
Inc. Project), 8.20% due 12/01/2024 1,013
1,200 Chicago, Illinois, Special Assessment Bonds (Lake
Shore East), 6.75% due 12/01/2032 1,300
4,000 Illinois HDA, Homeowner Mortgage Revenue Bonds,
AMT, Sub-Series C-2, 5.35% due 2/01/2027 4,104
700 Illinois State Finance Authority Revenue Bonds
(Landing At Plymouth Place Project), Series A, 6%
due 5/15/2025 746
625 Naperville, Illinois, IDR (General Motors Corporation),
Refunding, VRDN, 7.50% due 12/01/2012 (f) 625
Face
Amount Municipal Bonds Value
Indiana--2.5%
$ 8,325 Allen County, Indiana, Redevelopment District Tax
Increment Revenue Bonds (General Motors
Development Area), 7% due 5/15/2008 (i)(m) $ 5,695
Kentucky--0.9%
2,000 Louisville and Jefferson Counties, Kentucky,
Metropolitan Sewer District, Sewer and Drain System
Revenue Bonds, Series A, 5.50% due 5/15/2034 (h) 2,149
Louisiana--4.3%
4,115 Louisiana Public Facilities Authority, Hospital Revenue
Bonds (Franciscan Missionaries of Our Lady Health
System, Inc.), Series A, 5.25% due 8/15/2036 4,300
1,750 New Orleans, Louisiana, Financing Authority Revenue
Bonds (Xavier University of Louisiana Project),
5.30% due 6/01/2026 (h) 1,839
3,540 New Orleans, Louisiana, GO (Public Improvements),
5% due 10/01/2033 (h) 3,675
Maryland--3.0%
1,875 Anne Arundel County, Maryland, Special Obligation
Revenue Bonds (Arundel Mills Project), 7.10%
due 7/01/2009 (i) 2,039
1,760 Maryland State Economic Development Corporation,
Student Housing Revenue Bonds (University
of Maryland College Park Project), 6%
due 6/01/2013 (i) 1,981
2,750 Maryland State Energy Financing Administration,
Limited Obligation Revenue Bonds (Cogeneration-
AES Warrior Run), AMT, 7.40% due 9/01/2019 2,741
Massachusetts--3.6%
2,900 Massachusetts State, HFA, Housing Revenue Bonds,
AMT, Series A, 5.25% due 12/01/2048 2,975
5,000 Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A, 5%
due 8/15/2030 (e) 5,288
Michigan--2.6%
1,400 Flint, Michigan, Hospital Building Authority, Revenue
Refunding Bonds (Hurley Medical Center), Series A,
6% due 7/01/2020 (a) 1,525
3,000 Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds (Detroit Edison Company
Pollution Control Project), AMT, Series B, 5.65%
due 9/01/2029 3,159
1,300 Michigan State Strategic Fund, PCR (General Motors
Corporation Project), VRDN, 7% due 12/01/2008 (f) 1,300
Minnesota--1.6%
3,500 Minneapolis, Minnesota, Community Development
Agency, Supported Development Revenue Refunding
Bonds, Series G-3, 5.45% due 12/01/2011 (i) 3,750
ANNUAL REPORTS APRIL 30, 2007
Schedule of Investments (continued)
BlackRock MuniHoldings Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Mississippi--5.3%
$ 7,675 Claiborne County, Mississippi, PCR, Refunding
(System Energy Resources Inc. Project), 6.20%
due 2/01/2026 $ 7,704
2,500 Mississippi Business Finance Corporation,
Mississippi, PCR, Refunding (System Energy
Resources Inc. Project), 5.90% due 5/01/2022 2,526
Mississippi Development Bank, Special Obligation
Revenue Refunding Bonds (Gulfport Water and
Sewer System Project) (e):
1,000 5.25% due 7/01/2017 1,101
810 5.25% due 7/01/2019 889
Missouri--1.4%
1,915 Fenton, Missouri, Tax Increment Revenue Refunding
and Improvement Bonds (Gravois Bluffs), 7%
due 10/01/2011 (i) 2,182
1,000 Missouri State Development Finance Board,
Infrastructure Facilities Revenue Refunding Bonds
(Branson), Series A, 5.50% due 12/01/2032 1,051
New Jersey--12.7%
New Jersey EDA, Cigarette Tax Revenue Bonds:
5,385 5.75% due 6/15/2029 5,826
2,280 5.75% due 6/15/2034 2,454
New Jersey EDA, Retirement Community Revenue
Bonds, Series A (i):
1,475 (Cedar Crest Village, Inc. Facility), 7.25%
due 11/15/2011 1,693
2,600 (Seabrook Village, Inc.), 8.25% due 11/15/2010 2,994
1,965 New Jersey EDA, School Facilities Construction
Revenue Bonds, Series O, 5.125% due 3/01/2030 2,088
New Jersey EDA, Special Facility Revenue Bonds
(Continental Airlines Inc. Project), AMT:
1,000 6.625% due 9/15/2012 1,064
2,950 6.25% due 9/15/2029 3,049
3,325 New Jersey Health Care Facilities Financing Authority
Revenue Bonds (South Jersey Hospital), 6%
due 7/01/2012 (i) 3,660
3,500 New Jersey State Turnpike Authority, Turnpike
Revenue Bonds, Series C, 5% due 1/01/2030 (e) 3,696
2,315 Tobacco Settlement Financing Corporation of
New Jersey, Asset-Backed Revenue Bonds, 7%
due 6/01/2013 (i) 2,720
New Mexico--2.6%
2,000 Farmington, New Mexico, PCR, Refunding (Public
Service Company of New Mexico--San Juan
Project), Series A, 6.30% due 12/01/2016 2,043
3,720 New Mexico Finance Authority, Senior Lien State
Transportation Revenue Bonds, Series A, 5.125%
due 6/15/2018 (h) 4,003
Face
Amount Municipal Bonds Value
New York--14.0%
$ 1,155 Dutchess County, New York, IDA, Civic Facility
Revenue Refunding Bonds (Saint Francis Hospital),
Series A, 7.50% due 3/01/2029 $ 1,284
535 New York City, New York, IDA, Civic Facility Revenue
Bonds, Series C, 6.80% due 6/01/2028 588
New York City, New York, IDA, Special Facility Revenue
Bonds (Continental Airlines Inc. Project), AMT:
725 8% due 11/01/2012 795
725 8.375% due 11/01/2016 804
9,115 New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A, 5%
due 10/15/2020 (h) 9,728
3,680 New York State Dormitory Authority Revenue Bonds
(School Districts Financing Program), Series D,
5.25% due 10/01/2023 (h) 3,935
Tobacco Settlement Financing Corporation of New
York Revenue Bonds:
3,150 Series A-1, 5.50% due 6/01/2018 3,382
3,500 Series C-1, 5.50% due 6/01/2017 3,712
3,800 Series C-1, 5.50% due 6/01/2020 (c) 4,129
1,400 Series C-1, 5.50% due 6/01/2022 1,512
2,080 Westchester County, New York, IDA, Continuing Care
Retirement, Mortgage Revenue Bonds (Kendal on
Hudson Project), Series A, 6.50% due 1/01/2034 2,231
Pennsylvania--5.6%
1,700 Bucks County, Pennsylvania, IDA, Retirement
Community Revenue Bonds (Ann's Choice Inc.),
Series A, 6.25% due 1/01/2035 1,805
3,500 Pennsylvania Economic Development Financing
Authority, Exempt Facilities Revenue Bonds
(National Gypsum Company), AMT, Series B, 6.125%
due 11/01/2027 3,639
725 Philadelphia, Pennsylvania, Authority for IDR,
Commercial Development, 7.75% due 12/01/2017 727
Philadelphia, Pennsylvania, Authority for Industrial
Development, Senior Living Revenue Bonds:
1,105 (Arbor House Inc. Project), Series E, 6.10%
due 7/01/2033 1,175
1,245 (Saligman House Project), Series C, 6.10%
due 7/01/2033 1,324
3,500 Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Bonds (Guthrie Healthcare System),
Series B, 7.125% due 12/01/2011 4,207
Rhode Island--1.4%
2,820 Rhode Island State Health and Educational
Building Corporation, Hospital Financing Revenue
Bonds (Lifespan Obligation Group), 6.50%
due 8/15/2012 (i) 3,186
South Carolina--1.5%
3,020 Medical University Hospital Authority, South Carolina,
Hospital Facilities Revenue Refunding Bonds,
Series A, 6.375% due 8/15/2012 (i) 3,405
South Dakota--0.8%
1,825 South Dakota State Health and Educational Facilities
Authority Revenue Bonds (Sanford Health), 5%
due 11/01/2040 1,884
ANNUAL REPORTS APRIL 30, 2007
Schedule of Investments (continued)
BlackRock MuniHoldings Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Tennessee--7.5%
$ 600 Blount County, Tennessee, Public Building
Authority, Local Government Public Improvement
Revenue Bonds, VRDN, Series A-2C, 4.03%
due 6/01/2021 (b)(f) $ 600
4,280 Hardeman County, Tennessee, Correctional Facilities
Corporation Revenue Bonds, 7.75% due 8/01/2017 4,382
Shelby County, Tennessee, Health, Educational
and Housing Facility Board, Hospital Revenue
Refunding Bonds:
4,575 (Methodist Healthcare), 6.50% due 9/01/2012 (i) 5,190
3,500 (Saint Jude Children's Research Hospital), 5%
due 7/01/2031 3,670
3,400 Tennessee Educational Loan Revenue Bonds
(Educational Funding South Inc.), AMT, Senior
Series B, 6.20% due 12/01/2021 3,406
Texas--11.4%
4,000 Austin, Texas, Convention Center Revenue Bonds
(Convention Enterprises Inc.), First Tier, Series A,
6.70% due 1/01/2011 (i) 4,399
400 Bell County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Scott &
White Memorial Hospital), VRDN, Series B-1, 4%
due 8/15/2029 (f)(h) 400
2,340 Brazos River Authority, Texas, Revenue Refunding
Bonds (Reliant Energy, Inc. Project), Series B, 7.75%
due 12/01/2018 2,455
3,655 Brazos River, Texas, Harbor Navigation District,
Brazoria County Environmental Revenue Refunding
Bonds (Dow Chemical Company Project), AMT,
Series A-7, 6.625% due 5/15/2033 4,011
1,800 Houston, Texas, Health Facilities Development
Corporation, Retirement Facility Revenue Bonds
(Buckingham Senior Living Community), Series A,
7.125% due 2/15/2034 2,009
3,000 Lower Colorado River Authority, Texas, PCR (Samsung
Austin Semiconductor), AMT, 6.375% due 4/01/2027 3,065
1,485 Matagorda County, Texas, Navigation District
Number 1, Revenue Refunding Bonds (Reliant
Energy, Inc.), Series C, 8% due 5/01/2029 1,557
1,425 Port Corpus Christi, Texas, Individual Development
Corporation, Environmental Facilities Revenue Bonds
(Citgo Petroleum Corporation Project), AMT, 8.25%
due 11/01/2031 1,457
3,890 Texas State Department of Housing and Community
Affairs, Residential Mortgage Revenue Bonds, AMT,
Series A, 5.70% due 1/01/2033 (d) 3,909
2,785 Texas State Department of Housing and Community
Affairs, Residential Mortgage Revenue Refunding
Bonds, AMT, Series B, 5.25% due 7/01/2022 (d) 2,854
Face
Amount Municipal Bonds Value
Utah--0.1%
$ 300 Murray City, Utah, Hospital Revenue Bonds (IHC
Health Services, Inc.), VRDN, Series A, 4%
due 5/15/2037 (f) $ 300
Vermont--1.1%
2,370 Vermont Educational and Health Buildings Financing
Agency, Revenue Bonds (Developmental and Mental
Health), Series A, 6% due 6/15/2017 2,472
Virginia--5.4%
1,150 Chesterfield County, Virginia, IDA, PCR (Virginia
Electric and Power Company), Series A, 5.875%
due 6/01/2017 1,232
3,000 Fairfax County, Virginia, EDA, Resource Recovery
Revenue Refunding Bonds, AMT, Series A, 6.10%
due 2/01/2011 (b) 3,230
Pocahontas Parkway Association, Virginia, Toll
Road Revenue Bonds (i):
3,825 Senior Series A, 5.50% due 8/15/2008 3,988
1,500 Senior Series B, 8.40% due 8/15/2008 (m) 430
300 Senior Series B, 8.80% due 8/15/2008 (m) 81
3,035 Tobacco Settlement Financing Corporation of
Virginia, Asset-Backed Revenue Bonds, 5.625%
due 6/01/2015 (i) 3,373
Washington--0.6%
1,360 Seattle, Washington, Housing Authority Revenue
Bonds (Replacement Housing Project), 6.125%
due 12/01/2032 1,398
Wisconsin--1.2%
Wisconsin State Health and Educational Facilities
Authority Revenue Bonds:
825 (New Castle Place Project), Series A, 7%
due 12/01/2031 862
1,755 (Synergy Health Inc.), 6% due 11/15/2032 1,908
Puerto Rico--3.5%
2,680 Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Refunding Bonds, Series N, 5.25% due 7/01/2036 (n) 3,107
2,500 Puerto Rico Electric Power Authority, Power Revenue
Refunding Bonds, Series UU, 5% due 7/01/2021 (e) 2,707
2,060 Puerto Rico Industrial, Medical and Environmental
Pollution Control Facilities Financing Authority,
Special Facilities Revenue Bonds (American Airlines
Inc.), Series A, 6.45% due 12/01/2025 2,102
U.S. Virgin Islands--1.7%
3,460 Virgin Islands Government Refinery Facilities, Revenue
Refunding Bonds (Hovensa Coker Project), AMT,
6.50% due 7/01/2021 3,895
Total Municipal Bonds
(Cost--$305,359)--141.7% 324,974
ANNUAL REPORTS APRIL 30, 2007
Schedule of Investments (concluded)
BlackRock MuniHoldings Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Held in Trust (g) Value
California--3.2%
$ 6,810 California Pollution Control Financing Authority,
PCR, Refunding (Pacific Gas and Electric), AMT,
Series A, 5.35% due 12/01/2016 (h) $ 7,262
Maryland--5.1%
10,835 Baltimore, Maryland, Convention Center Hotel
Revenue Bonds, Senior Series A, 5.25%
due 9/01/2039 (k) 11,714
New York--2.0%
4,240 New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A, 5.25%
due 10/15/2027 (a) 4,596
South Carolina--5.2%
11,600 South Carolina State Ports Authority, Ports Revenue
Bonds, AMT, 5.30% due 7/01/2026 (e) 11,850
Face
Amount Municipal Bonds Held in Trust (g) Value
Texas--5.3%
$11,760 Harris County, Texas, Toll Road Revenue
Refunding Bonds, Senior Lien, Series A, 5.25%
due 8/15/2035 (e) $ 12,225
Total Municipal Bonds Held in Trust
(Cost--$47,662)--20.8% 47,647
Shares
Held Short-Term Securities
9 Merrill Lynch Institutional Tax-Exempt Fund,3.70% (j)(l) 9
Total Short-Term Securities
(Cost--$9)--0.0% 9
Total Investments (Cost--$353,030*)--162.5% 372,630
Other Assets Less Liabilities--2.0% 4,641
Liability for Trust Certificates,
Including Interest Expense Payable--(10.0%) (22,826)
Preferred Stock, at Redemption Value--(54.5%) (125,069)
----------
Net Assets Applicable to Common Stock--100.0% $ 229,376
==========
* The cost and unrealized appreciation (depreciation) of investments
as of April 30, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 329,975
===============
Gross unrealized appreciation $ 20,278
Gross unrealized depreciation (246)
---------------
Net unrealized appreciation $ 20,032
===============
(a) ACA Insured.
(b) AMBAC Insured.
(c) FGIC Insured.
(d) FNMA/GNMA Collateralized.
(e) FSA Insured.
(f) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(g) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund may have acquired the residual interest certificates.
These securities serve as collateral in a financing transaction. See
Note 1(c) to Financial Statements for details of Municipal Bonds
Held in Trust.
(h) MBIA Insured.
(i) Prerefunded.
(j) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
Merrill Lynch Institutional Tax-Exempt Fund -- --++
++ Amount is less than $1,000.
(k) XL Capital Insured.
(l) Represents the current yield as of April 30, 2007.
(m) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(n) Assured Guaranty Insured.
See Notes to Financial Statements.
ANNUAL REPORTS APRIL 30, 2007
Schedule of Investments as of April 30, 2007
BlackRock MuniHoldings Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Alabama--1.3%
$ 2,170 Jefferson County, Alabama, Limited Obligation
School Warrants, Series A, 5.50% due 1/01/2022 $ 2,354
California--30.2%
California State, GO:
1,260 5.50% due 4/01/2014 (f) 1,399
40 5.50% due 4/01/2028 44
2,000 California State Public Works Board, Lease Revenue
Bonds (Department of General Services--Capitol
East End Complex), Series A, 5% due 12/01/2027 (a) 2,083
5,955 California State, Various Purpose, GO, 5.25%
due 12/01/2022 (d) 6,410
East Side Union High School District, California, Santa
Clara County, GO (Election of 2002):
1,800 Series B, 5% due 8/01/2027 (b) 1,882
1,335 Series D, 5% due 8/01/2021 (g) 1,428
5,155 Series D, 5% due 8/01/2029 (g) 5,440
2,565 Modesto, California, Schools Infrastructure Financing
Agency, Special Tax Bonds, 5.50% due 9/01/2036 (a) 2,799
5,005 San Francisco, California, City and County, GO
(California Academy of Sciences Improvements),
Series E, 5% due 6/15/2023 (e) 5,298
1,265 San Jose, California, GO (Libraries, Parks and Public
Safety Projects), 5% due 9/01/2030 (e) 1,326
San Pablo, California, Joint Powers Financing Authority,
Tax Allocation Revenue Refunding Bonds (e)(q):
2,635 5.66% due 12/01/2024 1,118
2,355 5.66% due 12/01/2025 943
2,355 5.66% due 12/01/2026 895
4,265 Santa Ana, California, Unified School District, GO, 5%
due 8/01/2032 (e) 4,431
3,145 Sequoia, California, Unified High School District, GO,
Refunding, Series B, 5.50% due 7/01/2035 (d) 3,509
4,540 Stockton, California, Public Financing Revenue Bonds
(Redevelopment Projects), Series A, 5.25%
due 9/01/2031 (h) 4,836
Tustin, California, Unified School District, Senior Lien
Special Tax Bonds (Community Facilities District
Number 97-1), Series A (d):
2,180 5% due 9/01/2032 2,261
2,800 5% due 9/01/2038 2,899
2,000 University of California Revenue Bonds (Multiple
Purpose Projects), Series Q, 5% due 9/01/2022 (d) 2,100
3,480 West Contra Costa, California, Unified School District,
GO, Series C, 5% due 8/01/2021 (b) 3,682
Colorado--6.2%
10,620 Aurora, Colorado, COP, 5.75% due 12/01/2010 (a)(f) 11,326
Florida--10.0%
1,215 Florida Housing Finance Corporation, Homeowner
Mortgage Revenue Bonds, AMT, Series 2, 4.80%
due 7/01/2032 (n)(o)(p) 1,218
3,150 Jacksonville, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Baptist Medical Center
Project), Series A, 5% due 8/15/2037 3,239
Face
Amount Municipal Bonds Value
Florida (concluded)
$ 3,000 Lee Memorial Health System, Florida, Hospital
Revenue Bonds, Series A, 5% due 4/01/2032 (a) $ 3,170
2,000 Marion County, Florida, Hospital District, Revenue
Refunding Bonds (Monroe Regional Medical Center),
5% due 10/01/2034 2,034
1,400 Miami-Dade County, Florida, Educational Facilities
Authority Revenue Bonds (University of Miami),
Series A, 5% due 4/01/2037 (a) 1,484
2,225 Miami-Dade County, Florida, Subordinate Special
Obligation Revenue Bonds, Series A, 5.24%
due 10/01/2037 (e)(q) 483
3,850 Pasco County, Florida, Half-Cent Sales Tax Revenue
Bonds, 5.125% due 12/01/2028 (a) 4,057
2,275 South Florida Water Management District, COP, 5%
due 10/01/2036 (a) 2,401
Georgia--2.5%
200 Atlanta, Georgia, Water and Wastewater Revenue
Bonds, VRDN, Series C, 4% due 11/01/2041 (d)(i) 200
4,000 Augusta, Georgia, Water and Sewer Revenue Bonds,
5.25% due 10/01/2034 (d) 4,308
Illinois--9.9%
Chicago, Illinois, GO:
4,500 (City Colleges), 5% due 1/01/2039 (a) 4,747
7,965 Series A, 6% due 7/01/2010 (b)(f) 8,576
4,500 Illinois State, GO, First Series, 6% due 1/01/2018 (b) 4,752
45 Lake, Cook, Kane and McHenry Counties, Illinois,
Community Unit School District Number 220, GO,
5.75% due 12/01/2019 (b) 48
Massachusetts--8.8%
3,375 Massachusetts Bay Transportation Authority, Sales Tax
Revenue Refunding Bonds, Senior Series A, 5%
due 7/01/2035 3,470
1,000 Massachusetts State Development Finance Agency,
Education Revenue Bonds (Belmont Hill School),
4.50% due 9/01/2036 987
565 Massachusetts State, HFA, Housing Development
Revenue Refunding Bonds, AMT, Series A, 5.15%
due 6/01/2011 (e) 576
2,440 Massachusetts State, HFA, Rental Housing
Mortgage Revenue Bonds, AMT, Series C, 5.50%
due 7/01/2032 (d) 2,582
8,000 Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A, 5%
due 8/15/2030 (d) 8,461
Michigan--2.4%
2,035 Boyne City, Michigan, Public School District, GO,
5.75% due 5/01/2009 (b)(f) 2,116
300 Detroit, Michigan, Sewer Disposal Revenue Bonds,
Senior Lien, VRDN, Series B, 4% due 7/01/2033 (d)(i) 300
Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds, AMT (g):
400 DRIVERS, Series 858Z, 6.687% due 12/01/2011 (j)(s) 461
1,500 (Detroit Edison Company Pollution Control
Project), Series B, 5.65% due 9/01/2029 1,591
ANNUAL REPORTS APRIL 30, 2007
Schedule of Investments (continued)
BlackRock MuniHoldings Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Minnesota--2.4%
$ 4,015 Sauk Rapids, Minnesota, Independent School District
Number 47, GO, Series A, 5.65% due 2/01/2019 (e) $ 4,275
Missouri--5.1%
2,000 Cape Girardeau, Missouri, School District Number 063,
GO (Missouri Direct Deposit Program), 5.50%
due 3/01/2018 (b) 2,087
Mehlville, Missouri, School District Number R-9, COP,
Series A (d):
1,925 5.50% due 3/01/2014 2,045
2,175 5.50% due 3/01/2015 2,311
1,170 5.50% due 3/01/2016 1,244
1,500 5.50% due 3/01/2017 1,588
Nebraska--2.4%
500 Nebraska Educational Financing Authority Revenue
Bonds (Creighton University Project), VRDN, Series C,
4% due 7/01/2035 (b)(i) 500
Omaha Convention Hotel Corporation, Nebraska,
Convention Center Revenue Bonds, First Tier,
Series A (a):
1,585 5.50% due 4/01/2020 1,706
2,000 5.50% due 4/01/2021 2,143
New Jersey--15.8%
New Jersey EDA, Cigarette Tax Revenue Bonds:
1,800 5.625% due 6/15/2018 1,857
5,295 5.75% due 6/15/2029 5,729
3,800 5.75% due 6/15/2034 (l) 4,246
6,700 New Jersey EDA, Motor Vehicle Surcharge Revenue
Bonds, Series A, 5.25% due 7/01/2033 (e) 7,187
3,685 New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Bonds, Series D, 5%
due 6/15/2019 (d) 3,937
5,500 New Jersey State Turnpike Authority, Turnpike Revenue
Bonds, Series C, 5% due 1/01/2030 (d) 5,808
New Mexico--2.0%
3,325 New Mexico Finance Authority, Senior Lien State
Transportation Revenue Bonds, Series A, 5.125%
due 6/15/2018 (e) 3,578
New York--24.3%
10,000 Nassau Health Care Corporation, New York, Health
System Revenue Bonds, 5.75% due 8/01/2009 (d)(f) 10,643
New York City, New York, GO (d):
4,000 Series E, 5% due 11/01/2017 4,306
7,085 Series G, 5.75% due 10/15/2007 (f) 7,219
New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A:
4,055 5% due 10/15/2020 (e) 4,328
4,095 5.25% due 10/15/2027 (a) 4,439
4,000 5% due 10/15/2032 (a) 4,229
3,505 New York State Dormitory Authority Revenue Bonds
(School Districts Financing Program), Series D,
5.25% due 10/01/2023 (e) 3,748
4,900 Tobacco Settlement Financing Corporation of New York
Revenue Bonds, Series C-1, 5.50% due 6/01/2017 5,197
Face
Amount Municipal Bonds Value
Oregon--0.8%
$ 1,400 Portland, Oregon, Urban Renewal and Redevelopment
Tax Allocation Bonds (Oregon Convention Center),
Series A, 5.75% due 6/15/2015 (a) $ 1,494
Pennsylvania--11.4%
3,900 Pennsylvania State Higher Educational Facilities
Authority, State System of Higher Education Revenue
Bonds, Series O, 5.125% due 6/15/2024 (a) 3,905
6,045 Philadelphia, Pennsylvania, Airport Revenue Bonds
(Philadelphia Airport System), AMT, Series B, 5.50%
due 6/15/2017 (b) 6,175
3,390 Pittsburgh, Pennsylvania, GO, Refunding, Series B,
5.25% due 9/01/2017 (d) 3,730
2,615 Pittsburgh, Pennsylvania, GO, Series C, 5.25%
due 9/01/2017 (d) 2,877
1,800 Washington County, Pennsylvania, Capital Funding
Authority Revenue Bonds (Capital Projects and
Equipment Program), 6.15% due 12/01/2029 (a) 1,935
1,885 York County, Pennsylvania, School of Technology
Authority, Lease Revenue Refunding Bonds, 5.50%
due 2/15/2013 (b)(f) 2,036
Rhode Island--4.7%
5,000 Providence, Rhode Island, Redevelopment Agency
Revenue Refunding Bonds (Public Safety
and Municipal Buildings), Series A, 5.75%
due 4/01/2010 (a)(f) 5,326
2,870 Rhode Island State Health and Educational Building
Corporation Revenue Bonds (Rhode Island School
of Design), Series D, 5.50% due 8/15/2031 (g) 3,132
South Carolina--0.9%
1,525 Medical University Hospital Authority, South
Carolina, FHA-Insured Mortgage Hospital Facilities,
Revenue Refunding Bonds, Series A, 5.25%
due 2/15/2025 (c)(e) 1,627
Tennessee--2.6%
Tennessee HDA, Revenue Refunding Bonds
(Homeownership Program), AMT, Series A (d):
2,400 5.25% due 7/01/2022 2,468
2,205 5.35% due 1/01/2026 2,264
Texas--7.9%
Bell County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Scott & White
Memorial Hospital), VRDN (e)(i):
115 Series 2001-1, 4% due 8/15/2031 115
250 Series B-2, 4% due 8/15/2029 250
10,370 Dallas, Texas, Area Rapid Transit, Senior Lien Revenue
Refunding Bonds, 5% due 12/01/2036 (a) 10,968
100 Harris County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Texas
Children's Hospital), VRDN, Series B-1, 4.01%
due 10/01/2029 (e)(i) 100
2,707 Houston, Texas, Community College System,
Participation Interests, COP (Alief Center Project),
5.75% due 8/15/2022 (e) 2,803
ANNUAL REPORTS APRIL 30, 2007
Schedule of Investments (continued)
BlackRock MuniHoldings Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Utah--0.7%
$ 1,300 Emery County, Utah, PCR, Refunding (PacifiCorp
Projects), VRDN, 4% due 11/01/2024 (a)(i) $ 1,300
Virginia--0.9%
1,500 Virginia State, HDA, Commonwealth Mortgage
Revenue Bonds, Series H, Sub-Series H-1, 5.35%
due 7/01/2031 (e) 1,553
Washington--4.8%
4,000 Bellevue, Washington, GO, Refunding, 5.50%
due 12/01/2039 (e) 4,395
2,310 Chelan County, Washington, Public Utility District
Number 001, Consolidated Revenue Bonds
(Chelan Hydro System), AMT, Series A, 5.45%
due 7/01/2037 (a) 2,448
1,810 Snohomish County, Washington, Public Utility District
Number 001, Electric Revenue Bonds, 5.50%
due 12/01/2022 (d) 1,954
West Virginia--2.8%
5,000 West Virginia State Housing Development Fund,
Housing Finance Revenue Refunding Bonds,
Series D, 5.20% due 11/01/2021 (e) 5,169
Wisconsin--0.3%
500 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Blood Center of
Southeastern Wisconsin Project), 5.50%
due 6/01/2024 528
Wyoming--0.9%
1,500 Wyoming Student Loan Corporation, Student Loan
Revenue Refunding Bonds, Series A, 6.20%
due 6/01/2024 1,584
Puerto Rico--2.0%
1,000 Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Refunding Bonds, Series M, 5% due 7/01/2037 1,049
605 Puerto Rico Commonwealth, Public Improvement, GO,
Refunding, Series B, 5.25% due 7/01/2032 649
1,870 Puerto Rico Public Buildings Authority, Government
Facilities Revenue Refunding Bonds, Series D,
5.25% due 7/01/2036 1,956
Total Municipal Bonds
(Cost--$288,409)--164.0% 297,864
Face
Amount Municipal Bonds Held in Trust (r) Value
Arkansas--4.3%
$ 7,420 Arkansas State Development Finance Authority,
M/F Mortgage Revenue Refunding Bonds, Series C,
5.35% due 12/01/2035 (c)(e) $ 7,743
California--3.8%
6,500 California Pollution Control Financing Authority, PCR,
Refunding (Pacific Gas and Electric), AMT, Series A,
5.35% due 12/01/2016 (e) 6,931
Illinois--2.6%
4,300 Chicago, Illinois, O'Hare International Airport
Revenue Bonds, Third Lien, AMT, Series B-2, 6%
due 1/01/2029 (g) 4,813
Michigan--2.8%
3,500 Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds (Detroit Edison Company
Pollution Control Project), AMT, Series C, 5.65%
due 9/01/2029 (g) 3,712
1,200 Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds (Detroit Edison Company
Pollution Control Project), AMT, Series A, 5.50%
due 6/01/2030 (g) 1,291
Texas--4.7%
8,000 Dallas-Fort Worth, Texas, International Airport
Revenue Bonds, AMT, Series A, 5.50%
due 11/01/2033 (e) 8,591
Total Municipal Bonds Held in Trust
(Cost--$31,655)--18.2% 33,081
Shares
Held Short-Term Securities
21 Merrill Lynch Institutional Tax-Exempt Fund,
3.70% (k)(m) 21
Total Short-Term Securities
(Cost--$21)--0.0% 21
Total Investments (Cost--$320,085*)--182.20% 330,966
Other Assets Less Liabilities--0.2% 438
Liability for Trust Certificates,
Including Interest Expense Payable--(8.6%) (15,686)
Preferred Stock, at Redemption Value--(73.8%) (134,078)
----------
Net Assets Applicable to Common Stock--100.0% $ 181,640
==========
ANNUAL REPORTS APRIL 30, 2007
Schedule of Investments (concluded)
BlackRock MuniHoldings Insured Fund, Inc. (In Thousands)
* The cost and unrealized appreciation (depreciation) of investments
as of April 30, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 306,015
===============
Gross unrealized appreciation $ 9,580
Gross unrealized depreciation (89)
---------------
Net unrealized appreciation $ 9,491
===============
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FHA Insured.
(d) FSA Insured.
(e) MBIA Insured.
(f) Prerefunded.
(g) XL Capital Insured.
(h) Radian Insured.
(i) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(j) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(k) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
Merrill Lynch Institutional Tax-Exempt Fund -- $ 1
(l) Assured Guaranty Insured.
(m) Represents the current yield as of April 30, 2007.
(n) FHLMC Collateralized.
(o) FNMA Collateralized.
(p) GNMA Collateralized.
(q) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(r) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund may have acquired the residual interest certificates.
These securities serve as collateral in a financing transaction. See
Note 1(c) to Financial Statements for details of Municipal Bonds Held
in Trust.
(s) These securities are short-term floating rate certificates issued by
tender option bond trusts and are secured by the underlying municipal
bond securities.
o Forward interest rate swaps outstanding as of April 30, 2007
were as follows:
Notional Unrealized
Amount Appreciation
Pay a fixed rate of 3.627% and receive
a floating rate based on the 1-week
Bond Market Association rate
Broker, JPMorgan Chase
Expires June 2017 $15,700 $ 32
See Notes to Financial Statements.
ANNUAL REPORTS APRIL 30, 2007
Statements of Net Assets
BlackRock
BlackRock MuniHoldings
MuniHoldings Insured
As of April 30, 2007 Fund, Inc. Fund, Inc.
Assets
Investments in unaffiliated securities, at value* $ 372,620,594 $ 330,944,917
Investments in affiliated securities, at value** 8,920 20,847
Cash 24,688 44,170
Unrealized appreciation on forward interest rate swaps -- 31,667
Receivable for securities sold 8,725,091 --
Interest receivable 5,871,533 4,503,439
Prepaid expenses 2,780 2,887
--------------- ---------------
Total assets 387,253,606 335,547,927
--------------- ---------------
Liabilities
Trust certificates 22,622,500 15,460,000
Payable for securities purchased 8,704,290 3,244,060
Interest expense payable 203,716 225,689
Payable to investment adviser 159,940 125,996
Payable to other affiliates 3,990 3,060
Dividends payable to Common Stock shareholders 986,673 657,196
Accrued expenses 127,025 113,852
--------------- ---------------
Total liabilities 32,808,134 19,829,853
--------------- ---------------
Preferred Stock
Preferred Stock, at redemption value, par value $.10 per share*** of AMPS+++
at $25,000 per share liquidation preference 125,069,126 134,077,738
--------------- ---------------
Net Assets Applicable to Common Stock
Net assets applicable to Common Stock $ 229,376,346 $ 181,640,336
=============== ===============
Net Assets Consist of
Undistributed investment income--net $ 1,777,949 $ 61,080
Undistributed (accumulated) realized capital gains (losses)--net 1,067,944 (21,088,448)
Unrealized appreciation--net 19,599,313 10,912,569
--------------- ---------------
Total accumulated earnings (losses)--net 22,445,206 (10,114,799)
--------------- ---------------
Common Stock, par value $.10 per share++ 1,389,680 1,288,620
Paid-in capital in excess of par 205,541,460 190,466,515
--------------- ---------------
Net Assets $ 229,376,346 $ 181,640,336
=============== ===============
Net asset value per share of Common Stock $ 16.51 $ 14.10
=============== ===============
Market price $ 16.49 $ 13.13
=============== ===============
* Identified cost of unaffiliated securities $ 353,021,281 $ 320,064,015
=============== ===============
** Identified cost of affiliated securities $ 8,920 $ 20,847
=============== ===============
*** Preferred Stock authorized, issued and outstanding:
Series A Shares 2,200 2,680
=============== ===============
Series B Shares 2,200 2,680
=============== ===============
Series C Shares 600 --
=============== ===============
++ Common Stock issued and outstanding 13,896,800 12,886,200
=============== ===============
+++ Auction Market Preferred Stock.
See Notes to Financial Statements.
ANNUAL REPORTS APRIL 30, 2007
Statements of Operations
BlackRock
BlackRock MuniHoldings
MuniHoldings Insured
For the Year Ended April 30, 2007 Fund, Inc. Fund, Inc.
Investment Income
Interest and amortization of premium and discount earned $ 19,749,101 $ 14,794,903
Dividends from affiliates 303 707
--------------- ---------------
Total income 19,749,404 14,795,610
--------------- ---------------
Expenses
Investment advisory fees 1,939,284 1,731,141
Interest expense and fees 847,344 592,559
Commission fees 317,150 339,985
Accounting services 130,901 118,884
Professional fees 68,977 55,004
Transfer agent fees 55,661 46,968
Directors' fees and expenses 31,689 31,268
Printing and shareholder reports 26,113 23,620
Custodian fees 20,560 18,599
Pricing fees 19,976 15,508
Listing fees 9,520 9,379
Other 42,543 39,823
--------------- ---------------
Total expenses before waiver and/or reimbursement 3,509,718 3,022,738
Waiver and/or reimbursement of expenses (18) (201,733)
--------------- ---------------
Total expenses after waiver and/or reimbursement 3,509,700 2,821,005
--------------- ---------------
Investment income--net 16,239,704 11,974,605
--------------- ---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net 1,240,725 947,604
Forward interest rate swaps--net -- (336,064)
--------------- ---------------
Total realized gain--net 1,240,725 611,540
--------------- ---------------
Change in unrealized appreciation/depreciation on:
Investments--net 4,521,157 4,082,268
Forward interest rate swaps--net -- 31,667
--------------- ---------------
Total change in unrealized appreciation/depreciation--net 4,521,157 4,113,935
--------------- ---------------
Total realized and unrealized gain--net 5,761,882 4,725,475
--------------- ---------------
Dividends to Preferred Stock Shareholders
Investment income--net (4,394,391) (4,679,918)
--------------- ---------------
Net Increase in Net Assets Resulting from Operations $ 17,607,195 $ 12,020,162
=============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS APRIL 30, 2007
Statements of Changes in Net Assets BlackRock MuniHoldings Fund, Inc.
For the Year Ended April 30,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 16,239,704 $ 16,071,908
Realized gain--net 1,240,725 3,422,736
Change in unrealized appreciation--net 4,521,157 (3,470,614)
Dividends to Preferred Stock shareholders (4,394,391) (3,250,051)
--------------- ---------------
Net increase in net assets resulting from operations 17,607,195 12,773,979
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (12,475,627) (14,886,804)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (12,475,627) (14,886,804)
--------------- ---------------
Stock Transactions
Offering and underwriting costs resulting from the issuance of Preferred Stock -- (253,446)
Value of shares issued to Common Stock shareholders in reinvestment of dividends 587,176 805,613
--------------- ---------------
Net increase in net assets resulting from stock transactions 587,176 552,167
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 5,718,744 (1,560,658)
Beginning of year 223,657,602 225,218,260
--------------- ---------------
End of year* $ 229,376,346 $ 223,657,602
=============== ===============
* Undistributed investment income--net $ 1,777,949 $ 2,408,263
=============== ===============
See Notes to Financial Statements.
BlackRock MuniHoldings Insured Fund, Inc.
For the Year Ended April 30,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 11,974,605 $ 12,512,241
Realized gain--net 611,540 2,359,298
Change in unrealized appreciation/depreciation--net 4,113,935 (8,816,423)
Dividends to Preferred Stock shareholders (4,679,918) (3,639,222)
--------------- ---------------
Net increase in net assets resulting from operations 12,020,162 2,415,894
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (8,169,851) (10,717,062)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (8,169,851) (10,717,062)
--------------- ---------------
Stock Transactions
Value of shares issued to Common Stock shareholders in reinvestment of dividends -- 269,995
--------------- ---------------
Net increase in net assets resulting from stock transactions -- 269,995
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 3,850,311 (8,031,173)
Beginning of year 177,790,025 185,821,198
--------------- ---------------
End of year* $ 181,640,336 $ 177,790,025
=============== ===============
* Undistributed investment income--net $ 61,080 $ 936,244
=============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS APRIL 30, 2007
Financial Highlights BlackRock MuniHoldings Fund, Inc.
The following per share data and ratios have been derived For the Year Ended April 30,
from information provided in the financial statements. 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of year $ 16.14 $ 16.31 $ 15.54 $ 15.07 $ 14.50
----------- ----------- ----------- ----------- -----------
Investment income--net++++ 1.17 1.16 1.20 1.25 1.25
Realized and unrealized gain (loss)--net .42 --++++++ .84 .40 .40
Less dividends to Preferred Stock shareholders from
investment income--net (.32) (.23) (.12) (.07) (.10)
----------- ----------- ----------- ----------- -----------
Total from investment operations 1.27 .93 1.92 1.58 1.55
----------- ----------- ----------- ----------- -----------
Less dividends to Common Stock shareholders from
investment income--net (.90) (1.08) (1.15) (1.11) (.98)
----------- ----------- ----------- ----------- -----------
Offering and underwriting costs resulting from the
issuance of Preferred Stock -- (.02) -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 16.51 $ 16.14 $ 16.31 $ 15.54 $ 15.07
=========== =========== =========== =========== ===========
Market price per share, end of year $ 16.49 $ 16.20 $ 16.12 $ 14.43 $ 14.43
=========== =========== =========== =========== ===========
Total Investment Return++
Based on net asset value per share 8.06% 5.69% 12.95% 10.94% 11.54%
=========== =========== =========== =========== ===========
Based on market price per share 7.52% 7.34% 20.22% 7.58% 15.75%
=========== =========== =========== =========== ===========
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of reimbursement and excluding
interest expense and fees** 1.17% 1.15% 1.13% 1.14% 1.18%
=========== =========== =========== =========== ===========
Total expenses, net of reimbursement** 1.54% 1.30% 1.15% 1.23% 1.37%
=========== =========== =========== =========== ===========
Total expenses** 1.54% 1.30% 1.15% 1.24% 1.37%
=========== =========== =========== =========== ===========
Total investment income--net** 7.14% 7.15% 7.61% 7.98% 8.40%
=========== =========== =========== =========== ===========
Amount of dividends to Preferred Stock shareholders 1.93% 1.45% .74% .45% .66%
=========== =========== =========== =========== ===========
Investment income--net, to Common Stock shareholders 5.20% 5.70% 6.87% 7.53% 7.74%
=========== =========== =========== =========== ===========
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 3.52% 2.76% 1.47% .88% 1.23%
=========== =========== =========== =========== ===========
Supplemental Data
Net assets applicable to Common Stock, end
of year (in thousands) $ 229,376 $ 223,658 $ 225,218 $ 214,473 $ 207,960
=========== =========== =========== =========== ===========
Preferred Stock outstanding at liquidation
preference, end of year (in thousands) $ 125,000 $ 125,000 $ 110,000 $ 110,000 $ 110,000
=========== =========== =========== =========== ===========
Portfolio turnover 20% 45% 34% 41% 46%
=========== =========== =========== =========== ===========
Leverage
Asset coverage per $1,000 $ 2,835 $ 2,789 $ 3,047 $ 2,950 $ 2,891
=========== =========== =========== =========== ===========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 884 $ 688 $ 366 $ 220 $ 315
=========== =========== =========== =========== ===========
Series B--Investment income--net $ 879 $ 684 $ 365 $ 223 $ 302
=========== =========== =========== =========== ===========
Series C*--Investment income--net $ 859 $ 389 -- -- --
=========== =========== =========== =========== ===========
* Series C was issued on October 19, 2005.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
++ Total investment returns based on market value, which can be significantly greater
or lesser than the net asset value, may result in substantially different returns.
Total investment returns exclude the effects of sales charges.
++++ Based on average shares outstanding.
++++++ Amount is less than $(.01).
See Notes to Financial Statements.
ANNUAL REPORTS APRIL 30, 2007
Financial Highlights BlackRock MuniHoldings Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended April 30,
from information provided in the financial statements. 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of year $ 13.80 $ 14.44 $ 14.12 $ 14.48 $ 13.78
----------- ----------- ----------- ----------- -----------
Investment income--net*** .93 .97 1.01 1.04 1.06
Realized and unrealized gain (loss)--net .36 (.50) .38 (.42) .62
Less dividends to Preferred Stock shareholders from
investment income--net (.36) (.28) (.16) (.09) (.13)
----------- ----------- ----------- ----------- -----------
Total from investment operations .93 .19 1.23 .53 1.55
----------- ----------- ----------- ----------- -----------
Less dividends to Common Stock shareholders from
investment income--net (.63) (.83) (.91) (.89) (.85)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 14.10 $ 13.80 $ 14.44 $ 14.12 $ 14.48
=========== =========== =========== =========== ===========
Market price per share, end of year $ 13.13 $ 13.10 $ 13.70 $ 12.64 $ 13.50
=========== =========== =========== =========== ===========
Total Investment Return**
Based on net asset value per share 7.29% 1.46% 9.35% 4.07% 12.04%
=========== =========== =========== =========== ===========
Based on market price per share 5.25% 1.51% 15.90% (.07%) 13.79%
=========== =========== =========== =========== ===========
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of waiver and/or reimbursement and
excluding interest expense and fees* 1.23% 1.24% 1.24% 1.24% 1.28%
=========== =========== =========== =========== ===========
Total expenses, net of waiver and/or reimbursement* 1.56% 1.54% 1.60% 1.57% 1.69%
=========== =========== =========== =========== ===========
Total expenses* 1.67% 1.65% 1.70% 1.67% 1.79%
=========== =========== =========== =========== ===========
Total investment income--net* 6.62% 6.87% 7.09% 7.12% 7.55%
=========== =========== =========== =========== ===========
Amount of dividends to Preferred Stock shareholders 2.59% 2.00% 1.09% .65% .91%
=========== =========== =========== =========== ===========
Investment income--net, to Common Stock shareholders 4.03% 4.87% 6.00% 6.47% 6.64%
=========== =========== =========== =========== ===========
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 3.49% 2.72% 1.50% .90% 1.23%
=========== =========== =========== =========== ===========
Supplemental Data
Net assets applicable to Common Stock, end
of year (in thousands) $ 181,640 $ 177,790 $ 185,821 $ 181,726 $ 186,372
=========== =========== =========== =========== ===========
Preferred Stock outstanding at liquidation
preference, end of year (in thousands) $ 134,000 $ 134,000 $ 134,000 $ 134,000 $ 134,000
=========== =========== =========== =========== ===========
Portfolio turnover 29% 59% 43% 41% 48%
=========== =========== =========== =========== ===========
Leverage
Asset coverage per $1,000 $ 2,356 $ 2,327 $ 2,387 $ 2,356 $ 2,391
=========== =========== =========== =========== ===========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 875 $ 686 $ 372 $ 225 $ 313
=========== =========== =========== =========== ===========
Series B--Investment income--net $ 871 $ 672 $ 376 $ 228 $ 302
=========== =========== =========== =========== ===========
* Do not reflect the effect of dividends to Preferred Stock shareholders.
** Total investment returns based on market value, which can be significantly greater
or lesser than the net asset value, may result in substantially different returns.
Total investment returns exclude the effects of sales charges. If applicable, the
Fund's Manager waived a portion of its management fee. Without such waiver,
the Fund's performance would have been lower.
*** Based on average shares outstanding.
See Notes to Financial Statements.
ANNUAL REPORTS APRIL 30, 2007
Notes to Financial Statements
1. Significant Accounting Policies:
On September 29, 2006, MuniHoldings Fund, Inc. and MuniHoldings Insured Fund,
Inc. were renamed BlackRock MuniHoldings Fund, Inc. and BlackRock MuniHoldings
Insured Fund, Inc. (the "Funds" or individually as the "Fund"), respectively.
The Funds are registered under the Investment Company Act of 1940, as amended,
as non-diversified, closed-end management investment companies. The Funds'
financial statements are prepared in conformity with U.S. generally accepted
accounting principles, which may require the use of management accruals and
estimates. Actual results may differ from these estimates. The Funds determine
and make available for publication the net asset values of their Common Stock
on a daily basis. The Funds' Common Stock shares are listed on the New York
Stock Exchange under the symbols MHD and MUS, respectively. The following is a
summary of significant accounting policies followed by the Funds.
(a) Valuation of investments--Municipal bonds are traded primarily in the over-
the-counter ("OTC") markets and are valued at the last available bid price in
the OTC market or on the basis of values as obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Funds under the general
direction of the respective Board of Directors. Such valuations and procedures
are reviewed periodically by the Board of Directors of the Funds. Financial
futures contracts and options thereon, which are traded on exchanges, are
valued at their closing prices as of the close of such exchanges. Options
written or purchased are valued at the last sale price in the case of exchange-
traded options. Options traded in the OTC market are valued at the last asked
price (options written) or the last bid price (options purchased). Swap
agreements are valued by quoted fair values received daily by the Funds'
pricing service. Short-term investments with a remaining maturity of 60 days
or less are valued at amortized cost, which approximates market value, under
which method the investment is valued at cost and any premium or discount is
amortized on a straight line basis to maturity. Investments in open-end
investment companies are valued at their net asset value each business day.
Securities and other assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Boards of Directors of the Funds.
(b) Derivative financial instruments--Each Fund may engage in various
portfolio investment strategies both to increase the return of the Fund and to
hedge, or protect, its exposure to interest rate movements and movements in
the securities markets. Losses may arise due to changes in the value of the
contract due to an unfavorable change in the price of the underlying security
or if the counterparty does not perform under the contract. The counterparty
for certain instruments may pledge cash or securities as collateral.
* Financial futures contracts--Each Fund may purchase or sell financial
futures contracts and options on such financial futures contracts. Financial
futures contracts are contracts for delayed delivery of securities at a
specific future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits, and maintains as collateral, such initial margin
as required by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from, or pay to the broker, an amount
of cash equal to the daily fluctuation in value of the contract. Such receipts
or payments are known as variation margin and are recorded by the Fund as
unrealized gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
* Options--Each Fund may write covered call options and purchase call and put
options. When the Fund writes an option, an amount equal to the premium
received by the Fund is reflected as an asset and an equivalent liability. The
amount of the liability is subsequently marked-to-market to reflect the
current market value of the option written. When a security is purchased or
sold through an exercise of an option, the related premium paid (or received)
is added to (or deducted from) the basis of the security acquired or deducted
from (or added to) the proceeds of the security sold. When an option expires
(or the Fund enters into a closing transaction), the Fund realizes a gain or
loss on the option to the extent of the premiums received or paid (or gain or
loss to the extent the cost of the closing transaction exceeds the premium
paid or received).
Written and purchased options are non-income producing investments.
ANNUAL REPORTS APRIL 30, 2007
Notes to Financial Statements (continued)
* Forward interest rate swaps--Each Fund may enter into forward interest rate
swaps. In a forward interest rate swap, the Fund and the counterparty agree to
make periodic net payments on a specified notional contract amount, commencing
on a specified future effective date, unless terminated earlier. When the
agreement is closed, the Fund records a realized gain or loss in an amount
equal to the value of the agreement.
* Swaps--Each Fund may enter into swap agreements, which are OTC contracts in
which the Fund and a counterparty agree to make periodic net payments on a
specified notional amount. The net payments can be made for a set period of
time or may be triggered by a predetermined credit event. The net periodic
payments may be based on a fixed or variable interest rate; the change in
market value of a specified security, basket of securities, or index; or the
return generated by a security. These periodic payments received or made by
the Fund are recorded in the accompanying Statement of Operations as realized
gains or losses, respectively. Gains or losses are also realized upon
termination of the swap agreements. Swaps are marked-to-market daily and
changes in value are recorded as unrealized appreciation (depreciation). Risks
include changes in the returns of the underlying instruments, failure of the
counterparties to perform under the contracts' terms and the possible lack of
liquidity with respect to the swap agreements.
(c) Municipal bonds held in trust--Certain Funds invest in leveraged residual
certificates ("TOB Residuals") issued by tender option bond trusts ("TOBs"). A
TOB is established by a third party sponsor forming a special purpose entity,
into which a Fund, or an agent on behalf of the Fund, transfers municipal
securities. A TOB typically issues two classes of beneficial interests: short-
term floating rate certificates, which are sold to third party investors, and
residual certificates, which are generally issued to the Fund which made the
transfer or to affiliates of the Fund. Each Fund's transfers of the municipal
securities to a TOB do not qualify for sale treatment under Statement of
Financial Accounting Standards No. 140 "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities" ("FAS 140"), therefore
the municipal securities deposited into a TOB are presented in the Funds'
schedules of investments and the proceeds from the transactions are reported
as a liability for trust certificates of the Funds. Similarly, proceeds from
residual certificates issued to affiliates, if any, from the transaction are
included in the liability for trust certificates. Interest income from the
underlying security is recorded by the Funds on an accrual basis. Interest
expense incurred on the secured borrowing and other expenses related to
remarketing, administration and trustee services to a TOB are reported as
expenses of a Fund. The floating rate certificates have interest rates that
generally reset weekly and their holders have the option to tender
certificates to the TOB for redemption at par at each reset date. The residual
interests held by the Funds include the right of the Funds (1) to cause the
holders of a proportional share of floating rate certificates to tender their
certificates at par, and (2) to transfer a corresponding share of the
municipal securities from the TOB to the Funds. At April 30, 2007, the
aggregate value of the underlying municipal securities transferred to TOBs and
the related liability for trust certificates were:
Underlying
Municipal
Liability for Range of Bonds
Trust Interest Transferred
Certificates Rates to TOBs
BlackRock
MuniHoldings 3.94% -
Fund, Inc. $22,622,500 4.00% $47,647,422
BlackRock
MuniHoldings
Insured 3.94% -
Fund, Inc. $15,460,000 4.02% $33,081,437
Financial transactions executed through TOBs generally will underperform the
market for fixed rate municipal bonds in a rising interest rate environment,
but tend to outperform the market for fixed rate bonds when interest rates
decline or remain relatively stable. Should short-term interest rates rise,
the Funds' investments in TOB Residuals likely will adversely affect the
Funds' investment income - net and distributions to shareholders. Fluctuations
in the market value of municipal securities deposited into the TOB may
adversely affect the Funds' net asset values per share.
While the Funds' investment policies and restrictions expressly permit
investments in inverse floating rate securities such as TOB Residuals, they
generally do not allow the Funds to borrow money for purposes of making
investments. Fund management believes that the Funds' restrictions on
borrowings do not apply to the liabilities for trust certificates reflected as
a result of the Funds' investment in TOB Residuals.
(d) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Funds amortize all
premiums and discounts on debt securities.
ANNUAL REPORTS APRIL 30, 2007
Notes to Financial Statements (continued)
(e) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
(f) Offering costs--Direct expenses relating to the public offering of the
BlackRock MuniHoldings Fund, Inc. Preferred Stock were charged to capital at
the time of issuance of the shares.
(g) Income taxes--It is each Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
(h) Recent accounting pronouncements--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
109." FIN 48 prescribes the minimum recognition threshold a tax position must
meet in connection with accounting for uncertainties in income tax positions
taken or expected to be taken by an entity, including mutual funds, before
being measured and recognized in the financial statements. Adoption of FIN 48
is required for the last net asset value calculation in the first required
financial statement reporting period for fiscal years beginning after December
15, 2006. The impact on each of the Fund's financial statements, if any, is
currently being assessed.
In September 2006, "Statement of Financial Accounting Standards No. 157, Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS
157 and its impact on each of the Fund's financial statements, if any, has not
been determined.
In February 2007, FASB issued "Statement of Financial Accounting Standards No.
159, The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), which is effective for fiscal years beginning after November 15,
2007. Early adoption is permitted as of the beginning of a fiscal year that
begins on or before November 15, 2007, provided the entity also elects to
apply the provisions of FAS 157. FAS 159 permits entities to choose to measure
many financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. FAS 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons
between entities that choose different measurement attributes for similar
types of assets and liabilities. At this time, management is evaluating the
implications of FAS 159 and its impact on each of the Fund's financial
statements, if any, has not been determined.
2. Investment Advisory Agreement and Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM"), and its affiliates, including Fund Asset
Management, L.P. ("FAM"), with BlackRock, Inc. to create a new independent
company. Merrill Lynch has a 49.8% economic interest and a 45% voting interest
in the combined company and The PNC Financial Services Group, Inc. has
approximately a 34% economic and voting interest. The new company operates
under the BlackRock name and is governed by a board of directors with a
majority of independent members.
On August 15, 2006, shareholders of each Fund approved a new Investment
Advisory Agreement with BlackRock Advisors, LLC ("the Manager"), an indirect,
wholly owned subsidiary of BlackRock Inc. The new Investment Advisory
Agreement between each Fund and the Manager became effective on September 29,
2006. Prior to September 29, 2006, FAM was the Funds' manager. The general
partner of FAM is Princeton Services, Inc. ("PSI"), an indirect, wholly owned
subsidiary of Merrill Lynch, which is the limited partner.
ANNUAL REPORTS APRIL 30, 2007
Notes to Financial Statements (continued)
The Manager is responsible for the management of each Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of each Fund. For such services, each
Fund pays a monthly fee at an annual rate of .55% of the Fund's average daily
net assets, including proceeds from the issuance of Preferred Stock. The
Manager (and formerly FAM) has agreed to reimburse its management fee by the
amount of management fees each Fund pays to the Manager and/or FAM indirectly
through its investment in the Merrill Lynch Institutional Tax-Exempt Fund. The
reimbursements were as follows:
For the Period For the Period
May 1, 2006 to September 30, 2006
September 29, 2006 to April 30, 2007
Reimbursement Reimbursement
by FAM by the Manager
BlackRock MuniHoldings
Fund, Inc. $ 8 $ 10
BlackRock MuniHoldings
Insured Fund, Inc. $ 17 $ 23
In addition, FAM and/or the Manager has agreed to waive its management
fee based on the proceeds of Preferred Stock that exceeds 35% of each
Fund's total net assets. The waivers were as follows:
FAM
For the Period For the Period
May 1, 2006 to May 1, 2006 to
September 29, 2006 September 29, 2006
Fees Earned Fees Waived
BlackRock MuniHoldings
Insured Fund, Inc. $ 725,103 $ 87,933
Manager
For the Period For the Period
September 30, 2006 September 30, 2006
to April 30, 2007 to April 30, 2007
Fees Earned Fees Waived
BlackRock MuniHoldings
Insured Fund, Inc. $1,006,038 $113,760
In addition, the Manager has entered into separate sub-advisory agreements
with BlackRock Investment Management, LLC ("BIM") an affiliate of the Manager,
with respect to each Fund, under which the Manager pays BIM for services it
provides a monthly fee that is a percentage of the management fee paid by each
Fund to the Manager.
The Funds reimbursed FAM and/or the Manager for certain accounting services.
The reimbursements were as follows:
For the Period For the Period
May 1, 2006 to September 30, 2006
September 29, 2006 to April 30, 2007
Reimbursement Reimbursement
to FAM to the Manager
BlackRock MuniHoldings
Fund, Inc. $ 3,345 $ 3,990
BlackRock MuniHoldings
Insured Fund, Inc. $ 2,975 $ 3,570
Prior to September 29, 2006, certain officers and/or directors of the Funds
were officers and/or directors of Merrill Lynch, FAM, MLIM, and/or PSI.
Commencing September 29, 2006, certain officers and/or directors of the Funds
are officers and/or directors of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended April 30, 2007 were as follows:
BlackRock
BlackRock MuniHoldings
MuniHoldings Insured
Fund, Inc. Fund, Inc.
Total Purchases $71,532,902 $97,647,894
Total Sales $78,324,744 $93,442,658
4. Stock Transactions:
Each Fund is authorized to issue 200,000,000 shares of stock,
including Preferred Stock, par value $.10 per share, all of which were
initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of stock
without approval of holders of Common Stock.
Common Stock
BlackRock MuniHoldings Fund, Inc.
Shares issued and outstanding during the years ended April 30, 2007
and April 30, 2006 increased by 35,650 and 49,412, respectively, as a
result of dividend reinvestment.
BlackRock MuniHoldings Insured Fund, Inc.
Shares issued and outstanding for the year ended April 30, 2007 remained
constant. Shares issued and outstanding for the year ended April 30, 2006
increased by 18,659 as a result of dividend reinvestment.
ANNUAL REPORTS APRIL 30, 2007
Notes to Financial Statements (continued)
Preferred Stock
Auction Market Preferred Stock are shares of Preferred Stock of the Funds,
with a par value of $.10 per share and a liquidation preference of $25,000 per
share, plus accrued and unpaid dividends, that entitle their holders to
receive cash dividends at an annual rate that may vary for the successive
dividend periods. The yields in effect at April 30, 2007 were as follows:
BlackRock
BlackRock MuniHoldings
MuniHoldings Insured
Fund, Inc. Fund, Inc.
Series A 3.85% 3.85%
Series B 3.88% 3.85%
Series C 3.80% --
BlackRock MuniHoldings Fund, Inc.
Shares issued and outstanding during the year ended April 30, 2007 remained
constant. Shares issued and outstanding during the year ended April 30, 2006
increased by 600 from the issuance of an additional series of Preferred Stock.
BlackRock MuniHoldings Insured Fund, Inc.
Shares issued and outstanding during the years ended April 30, 2007
and April 30, 2006 remained constant.
Each Fund pays commissions to certain broker-dealers at the end of each
auction at an annual rate ranging from .25% to .375%, calculated on the
proceeds of each auction. For the year ended April 30, 2007, Merrill
Lynch, Pierce, Fenner & Smith Incorporated earned commissions as follows:
Commissions
BlackRock MuniHoldings Fund, Inc. $ 144,812
BlackRock MuniHoldings Insured Fund, Inc. $ 144,025
5. Distributions to Shareholders:
Each Fund paid a tax-exempt income dividend to holders of Common Stock in the
amounts of $.071000 per share and $.051000 per share relating to BlackRock
MuniHoldings Fund, Inc. and BlackRock MuniHoldings Insured Fund, Inc.,
respectively, on June 1, 2007 to shareholders of record on May 15, 2007.
BlackRock MuniHoldings Fund, Inc.
The tax character of distributions paid during the fiscal years ended
April 30, 2007 and April 30, 2006 was as follows:
4/30/2007 4/30/2006
Distributions paid from:
Tax-exempt income $ 16,870,018 $ 18,136,855
--------------- ---------------
Total distributions $ 16,870,018 $ 18,136,855
=============== ===============
As of April 30, 2007, the components of accumulated earnings on a tax
basis were as follows:
Undistributed tax-exempt income--net $ 1,302,763
Undistributed ordinary income 53,813
Undistributed long-term capital gains--net 1,114,233
---------------
Total undistributed earnings--net 2,470,809
Capital loss carryforward --
Unrealized gains--net 19,974,397*
---------------
Total accumulated earnings--net $ 22,445,206
===============
* The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on
straddles, the difference between book and tax amortization
methods for premiums and discounts on fixed income securities,
and the difference between the book and tax treatment of residual
interests in tender option bond trusts.
BlackRock MuniHoldings Insured Fund, Inc.
The tax character of distributions paid during the fiscal years ended
April 30, 2007 and April 30, 2006 was as follows:
4/30/2007 4/30/2006
Distributions paid from:
Tax-exempt income $ 12,849,769 $ 14,356,284
--------------- ---------------
Total distributions $ 12,849,769 $ 14,356,284
=============== ===============
As of April 30, 2007, the components of accumulated earnings on a tax
basis were as follows:
Undistributed tax-exempt income--net $ 407,035
Undistributed long-term capital gains--net --
---------------
Total undistributed earnings--net 407,035
Capital loss carryforward (18,093,121)*
Unrealized gains--net 7,571,287**
---------------
Total accumulated earnings--net $ (10,114,799)
===============
* On April 30, 2007, the Fund had a net capital loss carryforward
of $18,093,121, of which $8,509,208 expires in 2008 and
$9,583,913 expires in 2009. This amount will be available to
offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles, and the difference
between the book and tax treatment of residual interests in tender
option bond trusts.
ANNUAL REPORTS APRIL 30, 2007
Notes to Financial Statements (concluded)
6. Restatement Information
Subsequent to the initial issuance of their April 30, 2006 financial
statements, the Funds determined that the criteria for sale accounting in FAS
140 had not been met for certain transfers of municipal bonds, and that these
transfers should have been accounted for as secured borrowings rather than as
sales. As a result, certain financial highlights for each of the three years
in the period ended April 30, 2005 have been restated to give effect to
recording the transfers of the municipal bonds as secured borrowings,
including recording interest on the bonds as interest income and interest on
the secured borrowings as interest expense.
MuniHoldings Fund, Inc.
Financial Highlights
For the Years Ended April 30, 2005, 2004 and 2003
2005 2004 2003
Previously Previously Previously
Reported Restated Reported Restated Reported Restated
Total expenses, net of reimbursement* 1.13% 1.15% 1.14% 1.23% 1.18% 1.37%
Total expenses* 1.13% 1.15% 1.15% 1.24% 1.18% 1.37%
Portfolio turnover 36.23% 34% 42.89% 41% 50.68% 46%
* Do not reflect the effect of dividends to Preferred Stock shareholders.
MuniHoldings Insured Fund, Inc.
Financial Highlights
For the Years Ended April 30, 2005, 2004 and 2003
2005 2004 2003
Previously Previously Previously
Reported Restated Reported Restated Reported Restated
Total expenses, net of waiver and
reimbursement** 1.24% 1.60% 1.24% 1.57% 1.28% 1.69%
Total expenses** 1.35% 1.70% 1.34% 1.67% 1.38% 1.79%
Portfolio turnover 51.81% 43% 39.94% 41% 49.59% 48%
** Do not reflect the effect of dividends to Preferred Stock shareholders.
ANNUAL REPORTS APRIL 30, 2007
Report of Independent Registered Public Accounting Firm
To the Shareholders and Boards of Directors
of BlackRock MuniHoldings Fund, Inc. and
BlackRock MuniHoldings Insured Fund, Inc.:
We have audited the accompanying statements of net assets, including the
schedules of investments, of BlackRock MuniHoldings Fund, Inc. (formerly
MuniHoldings Fund, Inc.) and BlackRock MuniHoldings Insured Fund, Inc.
(formerly MuniHoldings Insured Fund, Inc.) (the "Funds") as of April 30, 2007,
and the related statements of operations for the year then ended and the
statements of changes in net assets and the financial highlights for each of
the two years in the period then ended. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on the financial statements and
financial highlights based on our audits. The financial highlights for each of
the three years in the period ended April 30, 2005 (before the restatement
described in Note 6) were audited by other auditors whose report, dated June
10, 2005, expressed a qualified opinion on the financial highlights because of
the errors described in Note 6.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Funds are not required to have, nor were we engaged to
perform, an audit of their internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. Our procedures included confirmation of securities owned as of
April 30, 2007, by correspondence with the custodians and brokers; where
replies were not received from brokers, we performed other auditing
procedures. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights of BlackRock
MuniHoldings Fund, Inc. and BlackRock MuniHoldings Insured Fund, Inc. referred
to above, present fairly, in all material respects, their financial position
as of April 30, 2007, the results of their operations for the year then ended
and the changes in their net assets and their financial highlights for each of
the two years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
We also have audited the adjustments, applied by management, to restate
certain financial highlights for each of the three years in the period ended
April 30, 2005 to correct the errors described in Note 6. These adjustments
are the responsibility of the Funds' management. The audit procedures that we
performed with respect to the adjustments included such tests as we considered
necessary in the circumstances and were designed to obtain reasonable
assurance about whether the adjustments are appropriate and have been properly
applied, in all material respects, to the restated financial highlights for
each of the three years in the period ended April 30, 2005. We did not perform
any audit procedures designed to assess whether any additional adjustments to
such financial highlights might be necessary in order for such financial
highlights to be presented in conformity with generally accepted accounting
principles. In our opinion, the adjustments to the financial highlights for
each of the three years in the period ended April 30, 2005 described in Note 6
are appropriate and have been properly applied, in all material respects.
However, we were not engaged to audit, review, or apply any procedures to such
financial highlights other than with respect to the adjustments described in
Note 6 and, accordingly, we do not express an opinion or any other form of
assurance on such financial highlights.
Deloitte & Touche LLP
Princeton, New Jersey
June 25, 2007
ANNUAL REPORTS APRIL 30, 2007
Fund Certification
In September 2006, BlackRock MuniHoldings Fund, Inc. and BlackRock
MuniHoldings Insured Fund, Inc. each filed its Chief Executive Officer
Certification for the prior year with the New York Stock Exchange pursuant to
Section 303A.12(a) of the New York Stock Exchange Corporate Governance Listing
Standards.
The Funds' Chief Executive Officer and Chief Financial Officer Certifications
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 were filed with
the Funds' Forms N-CSR and are available on the Securities and Exchange
Commission's Web site at http://www.sec.gov.
Important Tax Information
All of the net investment income distributions paid by BlackRock MuniHoldings
Fund, Inc. and BlackRock MuniHoldings Insured Fund, Inc. during the taxable
year ended April 30, 2007 qualify as tax-exempt interest dividends for federal
income tax purposes.
Change in Funds' Independent Registered Public Accounting Firm
On August 28, 2006, Ernst & Young llp ("E&Y") resigned as the Independent
Registered Public Accounting Firm of BlackRock MuniHoldings Fund, Inc. and
BlackRock MuniHoldings Insured Fund, Inc. (the "Funds") because it was
determined that E&Y is not independent of BlackRock, Inc. and the Funds.
E&Y's reports on the financial statements of the Funds for the prior two
fiscal years did not contain an adverse opinion or a disclaimer of opinion
and, except for the restatement information contained in Note 6 to the
Financial Statements, were not qualified or modified as to uncertainty, audit
scope or accounting principles.
In connection with its audits for the two most recent fiscal years and through
August 28, 2006 (1) there were no disagreements with E&Y on any matter of
accounting principle or practice, financial statement disclosure or auditing
scope or procedure, whereby such disagreements, if not resolved to the
satisfaction of E&Y, would have caused them to make reference to the subject
matter of the disagreements in connection with their report on the financial
statements for such years; and (2) there have been no reportable events (as
defined in item 304(a)(1)(v) of Regulation S-K).
The Audit Committee of each Fund's Board of Directors approved the engagement
of Deloitte & Touche llp as the Fund's Independent Registered Public
Accounting Firm for the fiscal year ended April 30, 2007.
ANNUAL REPORTS APRIL 30, 2007
Automatic Dividend Reinvestment Plan
How the Plan Works--The Funds offer a Dividend Reinvestment Plan (the "Plan")
under which income and capital gains dividends paid by each Fund are
automatically reinvested in additional shares of Common Stock of each Fund.
The Plan is administered on behalf of the shareholders by The Bank of New York
(the "Plan Agent"). Under the Plan, whenever the Funds declare a dividend,
participants in the Plan will receive the equivalent in shares of Common Stock
of each Fund. The Plan Agent will acquire the shares for the participant's
account either (i) through receipt of additional unissued but authorized
shares of each Fund ("newly issued shares") or (ii) by purchase of outstanding
shares of Common Stock on the open market on the New York Stock Exchange or
elsewhere. If, on the dividend payment date, each Fund's net asset value per
share is equal to or less than the market price per share plus estimated
brokerage commissions (a condition often referred to as a "market premium"),
the Plan Agent will invest the dividend amount in newly issued shares. If the
Funds' net asset value per share is greater than the market price per share (a
condition often referred to as a "market discount"), the Plan Agent will
invest the dividend amount by purchasing on the open market additional shares.
If the Plan Agent is unable to invest the full dividend amount in open market
purchases, or if the market discount shifts to a market premium during the
purchase period, the Plan Agent will invest any uninvested portion in newly
issued shares. The shares acquired are credited to each shareholder's account.
The amount credited is determined by dividing the dollar amount of the
dividend by either (i) when the shares are newly issued, the net asset value
per share on the date the shares are issued or (ii) when shares are purchased
in the open market, the average purchase price per share.
Participation in the Plan--Participation in the Plan is automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
shares of Common Stock of the Funds unless the shareholder specifically elects
not to participate in the Plan. Shareholders who elect not to participate will
receive all dividend distributions in cash. Shareholders who do not wish to
participate in the Plan, must advise the Plan Agent in writing (at the address
set forth below) that they elect not to participate in the Plan. Participation
in the Plan is completely voluntary and may be terminated or resumed at any
time without penalty by writing to the Plan Agent.
Benefits of the Plan--The Plan provides an easy, convenient way for
shareholders to make additional, regular investments in the Funds. The Plan
promotes a long-term strategy of investing at a lower cost. All shares
acquired pursuant to the Plan receive voting rights. In addition, if the
market price plus commissions of each Fund's shares is above the net asset
value, participants in the Plan will receive shares of the Funds for less than
they could otherwise purchase them and with a cash value greater than the
value of any cash distribution they would have received. However, there may
not be enough shares available in the market to make distributions in shares
at prices below the net asset value. Also, since each Fund does not redeem
shares, the price on resale may be more or less than the net asset value.
Plan Fees--There are no enrollment fees or brokerage fees for participating in
the Plan. The Plan Agent's service fees for handling the reinvestment of
distributions are paid for by the Funds. However, brokerage commissions may be
incurred when the Funds purchase shares on the open market and shareholders
will pay a pro rata share of any such commissions.
Tax Implications--The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income tax that
may be payable (or required to be withheld) on such dividends. Therefore,
income and capital gains may still be realized even though shareholders do not
receive cash. Participation in the Plan generally will not affect the tax-
exempt status of exempt interest dividends paid by the Fund. If, when the
Funds' shares are trading at a market premium, the Funds issue shares pursuant
to the Plan that have a greater fair market value than the amount of cash
reinvested, it is possible that all or a portion of the discount from the
market value (which may not exceed 5% of the fair market value of each Fund's
shares) could be viewed as a taxable distribution. If the discount is viewed
as a taxable distribution, it is also possible that the taxable character of
this discount would be allocable to all the shareholders, including
shareholders who do not participate in the Plan. Thus, shareholders who do not
participate in the Plan might be required to report as ordinary income a
portion of their distributions equal to their allocable share of the discount.
Contact Information--All correspondence concerning the Plan, including any
questions about the Plan, should be directed to the Plan Agent at The Bank of
New York, Church Street Station, P.O. Box 11258, New York, NY 10286-1258,
Telephone: 800-432-8224.
ANNUAL REPORTS APRIL 30, 2007
Officers and Directors
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Director Director
Interested Director
Robert C. Doll, Jr.* Fund 2005 to Vice Chairman and Director of BlackRock, Inc., 122 Funds None
P.O. Box 9011 President present Global Chief Investment Officer for Equities, 168 Portfolios
Princeton, and Chairman of the BlackRock Retail Operating
NJ 08543-9011 Director Committee, and member of the BlackRock
Age: 52 Executive Committee since 2006; President
of the funds advised by Merrill Lynch Investment
Managers, L.P. ("MLIM") and its affiliates
("MLIM/FAM-advised funds") from 2005 to
2006 and Chief Investment Officer thereof from
2001 to 2006; President of MLIM and Fund Asset
Management, L.P. ("FAM") from 2001 to 2006;
Co-Head (Americas Region) thereof from 2000
to 2001 and Senior Vice President from 1999
to 2001; President and Director of Princeton
Services, Inc. ("Princeton Services") and President
of Princeton Administrators, L.P. ("Princeton
Administrators") from 2001 to 2006; Chief
Investment Officer of OppenheimerFunds, Inc.
in 1999 and Executive Vice President thereof
from 1991 to 1999.
* Mr. Doll is a director, trustee or member of an advisory board of certain other
investment companies for which BlackRock Advisors, LLC and its affiliates act as
investment adviser. Mr. Doll is an "interested person," as defined in the
Investment Company Act, of the Fund based on his positions with BlackRock, Inc.
and its affiliates. Directors serve until their resignation, removal or death, or
until December 31 of the year in which they turn 72. As Fund President, Mr. Doll
serves at the pleasure of the respective Board of Directors.
ANNUAL REPORTS APRIL 30, 2007
Officers and Directors (continued)
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Director Director
Independent Directors*
Ronald W. Forbes** Director 1997 (MHD) Professor Emeritus of Finance, School of 47 Funds None
P.O. Box 9095 and 1998 Business, State University of New York at 49 Portfolios
Princeton, (MUS) to Albany since 2000 and Professor thereof from
NJ 08543-9095 present 1989 to 2000; International Consultant, Urban
Age: 66 Institute, Washington, D.C. from 1995 to 1999.
Cynthia A. Montgomery++ Director 1997 (MHD) Professor, Harvard Business School since 47 Funds Newell
P.O. Box 9095 and 1998 1989; Associate Professor, J.L. Kellogg 49 Portfolios Rubbermaid, Inc.
Princeton, (MUS) to Graduate School of Management, Northwestern (manufacturing)
NJ 08543-9095 present University from 1985 to 1989; Associate
Age: 54 Professor, Graduate School of Business
Administration, University of Michigan from
1979 to 1985; Director, Harvard Business
School Publishing since 2005; Director,
McLean Hospital since 2005.
Jean Margo Reid Director 2004 to Self-employed consultant since 2001; Counsel 47 Funds None
P.O. Box 9095 present of Alliance Capital Management (investment 49 Portfolios
Princeton, adviser) in 2000; General Counsel, Director and
NJ 08543-9095 Secretary of Sanford C. Bernstein & Co., Inc.
Age: 61 (investment adviser/broker-dealer) from 1997
to 2000; Secretary, Sanford C. Bernstein Fund,
Inc. from 1994 to 2000; Director and Secretary
of SCB, Inc. since 1998; Director and Secretary
of SCB Partners, Inc. since 2000; and Director of
Covenant House from 2001 to 2004.
Roscoe S. Suddarth Director 2000 to President, Middle East Institute, from 1995 47 Funds None
P.O. Box 9095 present to 2001; Foreign Service Officer, United 49 Portfolios
Princeton, States Foreign Service, from 1961 to 1995
NJ 08543-9095 and Career Minister from 1989 to 1995;
Age: 71 Deputy Inspector General, U.S. Department
of State, from 1991 to 1994; U.S. Ambassador
to the Hashemite Kingdom of Jordan from
1987 to 1990.
Richard R. West Director 1997 (MHD) Professor of Finance from 1984 to 1995, 47 Funds Bowne & Co.,
P.O. Box 9095 and 1998 Dean from 1984 to 1993 and since 1995 49 Portfolios Inc. (financial
Princeton, (MUS) to Dean Emeritus of New York University's printers);
NJ 08543-9095 present Leonard N. Stern School of Business Vornado Realty
Age: 69 Administration. Trust (real
estate company);
Alexander's, Inc.
(real estate
company)
* Directors serve until their resignation, removal or death, or until December 31 of the year in
which they turn 72.
** Chairman of the Boards of Directors and the Audit Committee.
++ Chair of the Nominating Committee.
ANNUAL REPORTS APRIL 30, 2007
Officers and Directors (concluded)
Position(s) Length of
Held with Time
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years
Fund Officers*
Donald C. Burke Vice 1997 (MHD) Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill
P.O. Box 9011 President and 1998 Lynch Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P.
Princeton, and (MUS) to ("FAM") in 2006; First Vice President of MLIM and FAM from 1997 to 2005 and
NJ 08543-9011 Treasurer present Treasurer thereof from 1999 to 2006; Vice President of MLIM and FAM from 1990
Age: 46 and 1999 to 1997.
to present
John M. Loffredo Senior 2002 to Managing Director of BlackRock, Inc. since 2006; Managing Director of MLIM from
P.O. Box 9011 Vice present 2000 to 2006; Director of MLIM from 1997 to 2000.
Princeton, President
NJ 08543-9011
Age: 43
Karen Clark Fund Chief 2007 to Managing Director of BlackRock, Inc. and Chief Compliance Officer of certain
P.O. Box 9011 Compliance present BlackRock-advised funds since 2007; Director of BlackRock, Inc. from 2005 to
Princeton, Officer 2007; Principal and Senior Compliance Officer, State Street Global Advisors,
NJ 08543-9011 from 2001 to 2005; Principal Consultant, PricewaterhouseCoopers, LLC from
Age: 42 1998 to 2001; and Branch Chief, Division of Investment Management and Office
of Compliance Inspections and Examinations, U.S. Securities and Exchange
Commission, from 1993 to 1998.
Alice A. Pellegrino Secretary 2004 to Director of BlackRock, Inc. since 2006; Director (Legal Advisory) of MLIM from
P.O. Box 9011 present 2002 to 2006; Vice President of MLIM from 1999 to 2002; Attorney associated
Princeton, with MLIM from 1997 to 1999; Secretary of MLIM, FAM, FAM Distributors, Inc.
NJ 08543-9011 and Princeton Services from 2004 to 2006.
Age: 47
* Officers of the Funds serve at the pleasure of the respective Board of Directors.
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agents
Common Stock: Preferred Stock:
The Bank of New York The Bank of New York
101 Barclay Street - 11 East 101 Barclay Street - 7 West
New York, NY 10286 New York, NY 10286
NYSE Symbols
MHD BlackRock MuniHoldings Fund, Inc.
MUS BlackRock MuniHoldings Insured Fund, Inc.
Effective January 1, 2007, Edward D. Zinbarg retired as a Director of
BlackRock MuniHoldings Fund, Inc. and BlackRock MuniHoldings Insured Fund,
Inc. The Funds' Boards of Directors wish Mr. Zinbarg well in his retirement.
ANNUAL REPORTS APRIL 30, 2007
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former
fund investors and individual clients (collectively, "Clients") and to
safeguarding their non-public personal information. The following information
is provided to help you understand what personal information BlackRock
collects, how we protect that information and why in certain cases we share
such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about
you from different sources, including the following: (i) information we
receive from you or, if applicable, your financial intermediary, on
applications, forms or other documents; (ii) information about your
transactions with us, our affiliates, or others; (iii) information we receive
from a consumer reporting agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to non-affiliated third parties any non-
public personal information about its Clients, except as permitted by law or
as is necessary to respond to regulatory requests or to service Client
accounts. These non-affiliated third parties are required to protect the
confidentiality and security of this information and to use it only for its
intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that
may be of interest to you. In addition, BlackRock restricts access to non-
public personal information about its Clients to those BlackRock employees
with a legitimate business need for the information. BlackRock maintains
physical, electronic and procedural safeguards that are designed to protect
the non-public personal information of its Clients, including procedures
relating to the proper storage and disposal of such information.
Availability of Quarterly Schedules of Investments
The Funds file their complete schedules of portfolio holdings with the
Securities and Exchange Commission ("SEC") for the first and third quarters
of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the
SEC's Web site at http://www.sec.gov. The Funds' Forms N-Q may also be
reviewed and copied at the SEC's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained
by calling 1-800-SEC-0330.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Funds' Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Funds' electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisers, banks or brokerages may offer this service.
ANNUAL REPORTS APRIL 30, 2007
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of
the end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial
officer and principal accounting officer, or persons performing
similar functions. A copy of the code of ethics is available
without charge at www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors has determined that (i) the registrant has the following
audit committee financial experts serving on its audit committee and
(ii) each audit committee financial expert is independent: (1)
Ronald W. Forbes, (2) Richard R. West, and (3) Edward D. Zinbarg
(retired as of December 31, 2006).
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ended April 30, 2007 - $29,400
Fiscal Year Ended April 30, 2006 - $57,500
(b) Audit-Related Fees - Fiscal Year Ended April 30, 2007 - $3,500
Fiscal Year Ended April 30, 2006 - $3,500
The nature of the services include assurance and related services
reasonably related to the performance of the audit of financial
statements not included in Audit Fees.
(c) Tax Fees - Fiscal Year Ended April 30, 2007 - $6,100
Fiscal Year Ended April 30, 2006 - $6,000
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ended April 30, 2007 - $0
Fiscal Year Ended April 30, 2006 - $0
(e)(1) The registrant's audit committee (the "Committee") has
adopted policies and procedures with regard to the pre-approval of
services. Audit, audit-related and tax compliance services provided
to the registrant on an annual basis require specific pre-approval
by the Committee. The Committee also must approve other non-audit
services provided to the registrant and those non-audit services
provided to the registrant's affiliated service providers that
relate directly to the operations and the financial reporting of the
registrant. Certain of these non-audit services that the Committee
believes are a) consistent with the SEC's auditor independence rules
and b) routine and recurring services that will not impair the
independence of the independent accountants may be approved by the
Committee without consideration on a specific case-by-case basis
("general pre-approval"). However, such services will only be
deemed pre-approved provided that any individual project does not
exceed $5,000 attributable to the registrant or $50,000 for all of
the registrants the Committee oversees. Any proposed services
exceeding the pre-approved cost levels will require specific pre-
approval by the Committee, as will any other services not subject to
general pre-approval (e.g., unanticipated but permissible services).
The Committee is informed of each service approved subject to
general pre-approval at the next regularly scheduled in-person board
meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ended April 30, 2007 - $2,711,583
Fiscal Year Ended April 30, 2006 - $3,439,633
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling,
controlled by, or under common control with the investment adviser
that provides ongoing services to the registrant that were not pre-
approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation
S-X is compatible with maintaining the principal accountant's
independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,739,500, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals
are members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act (15 U.S.C. 78c(a)(58)(A)):
Ronald W. Forbes
Cynthia A. Montgomery
Jean Margo Reid
Roscoe S. Suddarth
Richard R. West
Edward D. Zinbarg (retired as of December 31, 2006)
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies -
Proxy Voting Policies and Procedures Applicable to the Fund
-----------------------------------------------------------
Each Fund's Board of Directors has delegated to the Manager
authority to vote all proxies relating to the Fund's portfolio
securities. The Manager has adopted policies and procedures (the
"Proxy Voting Procedures") with respect to the voting of proxies
related to the portfolio securities held in the account of one or
more of its clients, including a Fund. Pursuant to these Proxy
Voting Procedures, the Manager's primary objective when voting
proxies is to make proxy voting decisions solely in the best
interests of each Fund and its shareholders, and to act in a manner
that the Manager believes is most likely to enhance the economic
value of the securities held by the Fund. The Proxy Voting
Procedures are designed to ensure that the Manager considers the
interests of its clients, including each Fund, and not the interests
of the Manager, when voting proxies and that real (or perceived)
material conflicts that may arise between the Manager's interest and
those of the Manager's clients are properly addressed and resolved.
In order to implement the Proxy Voting Procedures, the Manager has
formed a Proxy Voting Committee (the "Committee"). The Committee,
which is a subcommittee of the Manager's Equity Investment Policy
Oversight Committee ("EIPOC"), is comprised of a senior member of
the Manager's equity management group who is also a member of EIPOC,
one or more other senior investment professionals appointed by
EIPOC, portfolio managers and investment analysts appointed by EIPOC
and any other personnel EIPOC deems appropriate. The Committee will
also include two non-voting representatives from the Manager's Legal
Department appointed by the Manager's General Counsel. The
Committee's membership shall be limited to full-time employees of
the Manager. No person with any investment banking, trading, retail
brokerage or research responsibilities for the Manager's affiliates
may serve as a member of the Committee or participate in its
decision making (except to the extent such person is asked by the
Committee to present information to the Committee on the same basis
as other interested knowledgeable parties not affiliated with the
Manager might be asked to do so). The Committee determines how to
vote the proxies of all clients, including a Fund, that have
delegated proxy voting authority to the Manager and seeks to ensure
that all votes are consistent with the best interests of those
clients and are free from unwarranted and inappropriate influences.
The Committee establishes general proxy voting policies for the
Manager and is responsible for determining how those policies are
applied to specific proxy votes, in light of each issuer's unique
structure, management, strategic options and, in certain
circumstances, probable economic and other anticipated consequences
of alternate actions. In so doing, the Committee may determine to
vote a particular proxy in a manner contrary to its generally stated
policies. In addition, the Committee will be responsible for
ensuring that all reporting and recordkeeping requirements related
to proxy voting are fulfilled.
The Committee may determine that the subject matter of a recurring
proxy issue is not suitable for general voting policies and requires
a case-by-case determination. In such cases, the Committee may elect
not to adopt a specific voting policy applicable to that issue. The
Manager believes that certain proxy voting issues require investment
analysis - such as approval of mergers and other significant
corporate transactions - akin to investment decisions, and are,
therefore, not suitable for general guidelines. The Committee may
elect to adopt a common position for the Manager on certain proxy
votes that are akin to investment decisions, or determine to permit
the portfolio manager to make individual decisions on how best to
maximize economic value for a Fund (similar to normal buy/sell
investment decisions made by such portfolio managers). While it is
expected that the Manager will generally seek to vote proxies over
which the Manager exercises voting authority in a uniform manner for
all the Manager's clients, the Committee, in conjunction with a
Fund's portfolio manager, may determine that the Fund's specific
circumstances require that its proxies be voted differently.
To assist the Manager in voting proxies, the Committee has retained
Institutional Shareholder Services ("ISS"). ISS is an independent
adviser that specializes in providing a variety of fiduciary-level
proxy-related services to institutional investment managers, plan
sponsors, custodians, consultants, and other institutional
investors. The services provided to the Manager by ISS include in-
depth research, voting recommendations (although the Manager is not
obligated to follow such recommendations), vote execution, and
recordkeeping. ISS will also assist the Fund in fulfilling its
reporting and recordkeeping obligations under the Investment Company
Act.
The Manager's Proxy Voting Procedures also address special
circumstances that can arise in connection with proxy voting. For
instance, under the Proxy Voting Procedures, the Manager generally
will not seek to vote proxies related to portfolio securities that
are on loan, although it may do so under certain circumstances. In
addition, the Manager will vote proxies related to securities of
foreign issuers only on a best efforts basis and may elect not to
vote at all in certain countries where the Committee determines that
the costs associated with voting generally outweigh the benefits.
The Committee may at any time override these general policies if it
determines that such action is in the best interests of a Fund.
From time to time, the Manager may be required to vote proxies in
respect of an issuer where an affiliate of the Manager (each, an
"Affiliate"), or a money management or other client of the Manager,
including investment companies for which the Manager provides
investment advisory, administrative and/or other services (each, a
"Client"), is involved. The Proxy Voting Procedures and the
Manager's adherence to those procedures are designed to address such
conflicts of interest. The Committee intends to strictly adhere to
the Proxy Voting Procedures in all proxy matters, including matters
involving Affiliates and Clients. If, however, an issue representing
a non-routine matter that is material to an Affiliate or a widely
known Client is involved such that the Committee does not reasonably
believe it is able to follow its guidelines (or if the particular
proxy matter is not addressed by the guidelines) and vote
impartially, the Committee may, in its discretion for the purposes
of ensuring that an independent determination is reached, retain an
independent fiduciary to advise the Committee on how to vote or to
cast votes on behalf of the Manager's clients.
In the event that the Committee determines not to retain an
independent fiduciary, or it does not follow the advice of such an
independent fiduciary, the Committee may pass the voting power to a
subcommittee, appointed by EIPOC (with advice from the Secretary of
the Committee), consisting solely of Committee members selected by
EIPOC. EIPOC shall appoint to the subcommittee, where appropriate,
only persons whose job responsibilities do not include contact with
the Client and whose job evaluations would not be affected by the
Manager's relationship with the Client (or failure to retain such
relationship). The subcommittee shall determine whether and how to
vote all proxies on behalf of the Manager's clients or, if the proxy
matter is, in their judgment, akin to an investment decision, to
defer to the applicable portfolio managers, provided that, if the
subcommittee determines to alter the Manager's normal voting
guidelines or, on matters where the Manager's policy is case-by-
case, does not follow the voting recommendation of any proxy voting
service or other independent fiduciary that may be retained to
provide research or advice to the Manager on that matter, no proxies
relating to the Client may be voted unless the Secretary, or in the
Secretary's absence, the Assistant Secretary of the Committee
concurs that the subcommittee's determination is consistent with the
Manager's fiduciary duties.
In addition to the general principles outlined above, the Manager
has adopted voting guidelines with respect to certain recurring
proxy issues that are not expected to involve unusual circumstances.
These policies are guidelines only, and the Manager may elect to
vote differently from the recommendation set forth in a voting
guideline if the Committee determines that it is in a Fund's best
interest to do so. In addition, the guidelines may be reviewed at
any time upon the request of a Committee member and may be amended
or deleted upon the vote of a majority of Committee members present
at a Committee meeting at which there is a quorum.
The Manager has adopted specific voting guidelines with respect to
the following proxy issues:
* Proposals related to the composition of the board of directors of
issuers other than investment companies. As a general matter, the
Committee believes that a company's board of directors (rather than
shareholders) is most likely to have access to important, nonpublic
information regarding a company's business and prospects, and is,
therefore, best-positioned to set corporate policy and oversee
management. The Committee, therefore, believes that the foundation
of good corporate governance is the election of qualified,
independent corporate directors who are likely to diligently
represent the interests of shareholders and oversee management of
the corporation in a manner that will seek to maximize shareholder
value over time. In individual cases, the Committee may look at a
nominee's number of other directorships, history of representing
shareholder interests as a director of other companies or other
factors, to the extent the Committee deems relevant.
* Proposals related to the selection of an issuer's independent
auditors. As a general matter, the Committee believes that corporate
auditors have a responsibility to represent the interests of
shareholders and provide an independent view on the propriety of
financial reporting decisions of corporate management. While the
Committee will generally defer to a corporation's choice of auditor,
in individual cases, the Committee may look at an auditors' history
of representing shareholder interests as auditor of other companies,
to the extent the Committee deems relevant.
* Proposals related to management compensation and employee
benefits. As a general matter, the Committee favors disclosure of an
issuer's compensation and benefit policies and opposes excessive
compensation, but believes that compensation matters are normally
best determined by an issuer's board of directors, rather than
shareholders. Proposals to "micro-manage" an issuer's compensation
practices or to set arbitrary restrictions on compensation or
benefits will, therefore, generally not be supported.
* Proposals related to requests, principally from management, for
approval of amendments that would alter an issuer's capital
structure. As a general matter, the Committee will support requests
that enhance the rights of common shareholders and oppose requests
that appear to be unreasonably dilutive.
* Proposals related to requests for approval of amendments to an
issuer's charter or by-laws. As a general matter, the Committee
opposes poison pill provisions.
* Routine proposals related to requests regarding the formalities of
corporate meetings.
* Proposals related to proxy issues associated solely with holdings
of investment company shares. As with other types of companies, the
Committee believes that a fund's board of directors (rather than its
shareholders) is best positioned to set fund policy and oversee
management. However, the Committee opposes granting boards of
directors authority over certain matters, such as changes to a
fund's investment objective, which the Investment Company Act
envisions will be approved directly by shareholders.
* Proposals related to limiting corporate conduct in some manner
that relates to the shareholder's environmental or social concerns.
The Committee generally believes that annual shareholder meetings
are inappropriate forums for discussion of larger social issues, and
opposes shareholder resolutions "micromanaging" corporate conduct or
requesting release of information that would not help a shareholder
evaluate an investment in the corporation as an economic matter.
While the Committee is generally supportive of proposals to require
corporate disclosure of matters that seem relevant and material to
the economic interests of shareholders, the Committee is generally
not supportive of proposals to require disclosure of corporate
matters for other purposes.
Information about how a Fund voted proxies relating to securities
held in the Fund's portfolio during the most recent 12 month period
ended June 30 is available without charge (1) at www.blackrock.com
and (2) on the Commission's web site at http://www.sec.gov.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
as of April 30, 2007.
(a)(1) BlackRock MuniHoldings Insured Fund, Inc. is managed by a
team of investment professionals comprised of Robert D. Sneeden,
Director at BlackRock, Theodore R. Jaeckel, Jr., CFA, Managing
Director at BlackRock, and Walter O'Connor, Managing Director at
BlackRock. Each is a member of BlackRock's municipal tax-exempt
management group. Mr. Jaeckel and Mr. O'Connor are responsible for
setting the Fund's overall investment strategy and overseeing the
management of the Fund. Mr. Sneeden is the Fund's lead portfolio
manager and is responsible for the day-to-day management of the
Fund's portfolio and the selection of its investments. Messrs.
Jaeckel and O'Connor have been members of the Fund's management team
since 2006 and Mr. Sneeden has been the Fund's portfolio manager
since 2006.
Mr. Jaeckel joined BlackRock in 2006. Prior to joining BlackRock, he
was a Managing Director (Municipal Tax-Exempt Fund Management) of
Merrill Lynch Investment Managers, L.P. ("MLIM") from 2005 to 2006
and a Director of MLIM from 1997 to 2005. He has been a portfolio
manager with BlackRock or MLIM since 1991.
Mr. O'Connor joined BlackRock in 2006. Prior to joining BlackRock,
he was a Managing Director (Municipal Tax-Exempt Fund Management) of
MLIM from 2003 to 2006 and was a Director of MLIM from 1997 to 2002.
He has been a portfolio manager with BlackRock or MLIM since 1991.
Mr. Sneeden joined BlackRock in 2006. Prior to joining BlackRock, he
was a Director (Municipal Tax-Exempt Fund Management) of MLIM since
2006 and was a Vice President of MLIM from 1998 to 2006. Mr. Sneeden
has been a portfolio manager with BlackRock or MLIM since 1994.
(a)(2) As of April 30, 2007:
(iii) Number of Other Accounts and
(ii) Number of Other Accounts Managed Assets for Which Advisory Fee is
and Assets by Account Type Performance-Based
Other Other
(i) Name of Registered Other Pooled Registered Other Pooled
Portfolio Investment Investment Other Investment Investment Other
Manager Companies Vehicles Accounts Companies Vehicles Accounts
Theodore R.
Jaeckel, Jr. 76 1 0 0 1 0
$ 27,684,036,789 $ 29,499,496 $ 0 $ 0 $ 29,499,496 $ 0
Walter
O'Connor 76 0 0 0 0 0
$ 27,684,036,789 $ 0 $ 0 $ 0 $ 0 $ 0
Robert D.
Sneeden 12 0 0 0 0 0
$ 2,847,781,046 $ 0 $ 0 $ 0 $ 0 $ 0
(iv) Potential Material Conflicts of Interest
BlackRock has built a professional working environment, firm-wide
compliance culture and compliance procedures and systems designed to
protect against potential incentives that may favor one account over
another. BlackRock has adopted policies and procedures that address
the allocation of investment opportunities, execution of portfolio
transactions, personal trading by employees and other potential
conflicts of interest that are designed to ensure that all client
accounts are treated equitably over time. Nevertheless, BlackRock
furnishes investment management and advisory services to numerous
clients in addition to the Fund, and BlackRock may, consistent with
applicable law, make investment recommendations to other clients or
accounts (including accounts which are hedge funds or have
performance or higher fees paid to BlackRock, or in which portfolio
managers have a personal interest in the receipt of such fees),
which may be the same as or different from those made to the Fund.
In addition, BlackRock, its affiliates and any officer, director,
stockholder or employee may or may not have an interest in the
securities whose purchase and sale BlackRock recommends to the Fund.
BlackRock, or any of its affiliates, or any officer, director,
stockholder, employee or any member of their families may take
different actions than those recommended to the Fund by BlackRock
with respect to the same securities. Moreover, BlackRock may refrain
from rendering any advice or services concerning securities of
companies of which any of BlackRock's (or its affiliates') officers,
directors or employees are directors or officers, or companies as to
which BlackRock or any of its affiliates or the officers, directors
and employees of any of them has any substantial economic interest
or possesses material non-public information. Each portfolio manager
also may manage accounts whose investment strategies may at times be
opposed to the strategy utilized for the Fund. In this connection,
it should be noted that certain portfolio managers currently manage
certain accounts that are subject to performance fees. In addition,
certain portfolio managers assist in managing certain hedge funds
and may be entitled to receive a portion of any incentive fees
earned on such funds and a portion of such incentive fees may be
voluntarily or involuntarily deferred. Additional portfolio managers
may in the future manage other such accounts or funds and may be
entitled to receive incentive fees.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and
must treat each client fairly. When BlackRock purchases or sells
securities for more than one account, the trades must be allocated
in a manner consistent with its fiduciary duties. BlackRock attempts
to allocate investments in a fair and equitable manner among client
accounts, with no account receiving preferential treatment. To this
end, BlackRock has adopted a policy that is intended to ensure that
investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve
reasonable efficiency in client transactions and provide BlackRock
with sufficient flexibility to allocate investments in a manner that
is consistent with the particular investment discipline and client
base.
(a)(3) As of April 30, 2007:
Portfolio Manager Compensation
The elements of total compensation for portfolio managers on
BlackRock's municipal team include a fixed base salary, annual
performance-based cash and stock compensation (cash and stock bonus)
and other benefits. BlackRock has balanced these components of pay
to provide these portfolio managers with a powerful incentive to
achieve consistently superior investment performance. By design,
compensation levels for these portfolio managers fluctuate--both up
and down--with the relative investment performance of the portfolios
that they manage.
Base compensation. Like that of many asset management firms,
base salaries represent a relatively small portion of a portfolio
manager's total compensation. This approach serves to enhance the
motivational value of the performance-based (and therefore variable)
compensation elements of the compensation program.
Performance-Based Compensation. BlackRock believes that the best
interests of investors are served by recruiting and retaining
exceptional asset management talent and managing their compensation
within a consistent and disciplined framework that emphasizes pay
for performance in the context of an intensely competitive market
for talent. To that end, BlackRock and its affiliates portfolio
manager incentive compensation is based on a formulaic compensation
program. BlackRock's formulaic portfolio manager compensation
program includes: investment performance relative to a subset of
closed-end, leveraged, insured municipal debt funds over 1-, 3- and
5-year performance periods and a measure of operational efficiency.
Portfolio managers are compensated based on the pre-tax performance
of the products they manage. If a portfolio manager's tenure is less
than 5 years, performance periods will reflect time in position.
Portfolio managers are compensated based on products they manage. A
discretionary element of portfolio manager compensation may include
consideration of: financial results, expense control, profit
margins, strategic planning and implementation, quality of client
service, market share, corporate reputation, capital allocation,
compliance and risk control, leadership, workforce diversity,
supervision, technology and innovation. All factors are considered
collectively by BlackRock management.
Cash Bonus
Performance-based compensation is distributed to portfolio
managers in a combination of cash and stock. Typically, the cash
bonus, when combined with base salary, represents more than 60% of
total compensation for portfolio managers.
Stock Bonus
A portion of the dollar value of the total annual
performance-based bonus is paid in restricted shares of BlackRock
stock. Paying a portion of annual bonuses in stock puts compensation
earned by a portfolio manager for a given year "at risk" based on
the company's ability to sustain and improve its performance over
future periods. The ultimate value of stock bonuses is dependent on
future BlackRock stock price performance. As such, the stock bonus
aligns each portfolio manager's financial interests with those of
the BlackRock shareholders and encourages a balance between short-
term goals and long-term strategic objectives. Management strongly
believes that providing a significant portion of competitive
performance-based compensation in stock is in the best interests of
investors and shareholders. This approach ensures that portfolio
managers participate as shareholders in both the "downside risk" and
"upside opportunity" of the company's performance. Portfolio
managers therefore have a direct incentive to protect BlackRock's
reputation for integrity.
Other Compensation Programs
Portfolio managers who meet relative investment performance
and financial management objectives during a performance year are
eligible to participate in a deferred cash program. Awards under
this program are in the form of deferred cash that may be
benchmarked to a menu of BlackRock mutual funds (including their own
fund) during a five-year vesting period. The deferred cash program
aligns the interests of participating portfolio managers with the
investment results of BlackRock products and promotes continuity of
successful portfolio management teams.
Other Benefits
Portfolio managers are also eligible to participate in broad-
based plans offered generally to employees of BlackRock and its
affiliates, including broad-based retirement, 401(k), health, and
other employee benefit plans.
(a)(4) Beneficial Ownership of Securities. As of April 30, 2007,
none of Messrs. Sneeden, Jaeckel of O'Connor beneficially
owns any stock issued by the Fund.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's Nominating Committee will consider nominees to the
Board recommended by shareholders when a vacancy becomes available.
Shareholders who wish to recommend a nominee should send nominations
which include biographical information and set forth the
qualifications of the proposed nominee to the registrant's
Secretary. There have been no material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's principal executive and principal financial
officers or persons performing similar functions have concluded that
the registrant's disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940, as amended
(the "1940 Act")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
13a-15(b) under the Securities and Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that have
materially affected, or are reasonably likely to materially affect,
the registrant's internal control over financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock MuniHoldings Insured Fund, Inc.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock MuniHoldings Insured Fund, Inc.
Date: June 19, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock MuniHoldings Insured Fund, Inc.
Date: June 19, 2007
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock MuniHoldings Insured Fund, Inc.
Date: June 19, 2007