N-Q 1 d100201dnq.htm BLACKROCK MARYLAND MUNICIPAL BOND TRUST BLACKROCK MARYLAND MUNICIPAL BOND TRUST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-21051

Name of Fund: BlackRock Maryland Municipal Bond Trust (BZM)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Maryland Municipal Bond Trust, 55 East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 08/31/2016

Date of reporting period: 11/30/2015

Item 1 – Schedule of Investments

Schedule of Investments November 30, 2015 (Unaudited)

   

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

     Value  

Maryland — 136.6%

                 

Corporate — 1.7%

     

Maryland EDC, Refunding RB:

     

CNX Marine Terminals, Inc., 5.75%, 9/01/25

    $ 320      $ 248,045   

Potomac Electric Power Co., 6.20%, 9/01/22

      250        287,265   
    

 

 

  
               535,310   

County/City/Special District/School District — 25.3%

  

City of Baltimore Maryland, RB, Series C, Wastewater Project, 5.00%, 7/01/39

      1,000        1,138,390   

County of Anne Arundel Maryland Consolidated, Refunding, Special Tax, The Villages of Dorchester and Farmington Project, 5.00%, 7/01/32

      500        568,110   

County of Anne Arundel Maryland Consolidated, Special Tax District, Villages at Two Rivers Project, 5.25%, 7/01/44

      250        254,135   

County of Frederick Maryland, GO, Series A, 5.00%, 8/01/24

      275        340,934   

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

      250        280,985   

County of Howard Maryland, Tax Allocation Bonds, Annapolis Junction Town Center Project, 6.10%, 2/15/44

      250        267,265   

County of Montgomery Maryland, GO, Refunding, Consolidated Public Improvement, Series A, 5.00%, 7/01/19 (a)

      175        199,000   

County of Prince George’s Maryland, Special Obligation, Remarketing, National Harbor Project, 5.20%, 7/01/34

      1,500        1,501,065   

State of Maryland, GO, Refunding, State & Local Facilities Loan, 3rd Series C, 5.00%, 11/01/20

      500        588,870   

State of Maryland, GO:

     

State & Local Facilities Loan, 1st Series B, 5.00%, 3/15/19 (a)

      250        281,532   
Municipal Bonds   

Par  

(000)

     Value  

Maryland (continued)

                 

County/City/Special District/School District (continued)

  

State of Maryland, GO (continued):

     

State & Local Facilities Loan, 2nd Series B, 3.00%, 8/01/27

    $ 2,425      $ 2,491,566   
    

 

 

  
               7,911,852   

Education — 27.4%

     

County of Anne Arundel Maryland, Refunding RB, Maryland Economic Development, Anne Arundel Community College Project:

     

4.00%, 9/01/27

      510        548,479   

3.25%, 9/01/28

      360        366,988   

Maryland EDC, Refunding RB:

     

University of Maryland Project, 5.00%, 7/01/39

      500        529,255   

University Village at Sheppard Pratt, 5.00%, 7/01/33

      1,000        1,071,720   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

     

Goucher College, Series A, 5.00%, 7/01/34

      1,000        1,115,530   

Johns Hopkins University Project, Series A, 5.00%, 7/01/27

      1,000        1,182,560   

Johns Hopkins University Project, Series A, 4.00%, 7/01/37

      60        62,647   

Loyola University Maryland, Series A, 5.00%, 10/01/39

      900        998,721   

Maryland Institute College of Art, 5.00%, 6/01/29

      500        554,315   

Notre Dame Maryland University, 5.00%, 10/01/42

      1,000        1,062,320   

University System of Maryland, RB, Auxiliary Facility and Tuition, Series A, 5.00%, 4/01/24

      400        492,744   

University System of Maryland, Refunding RB, Series D, 5.00%, 10/01/21

      500        597,895   
    

 

 

  
               8,583,174   

Health — 43.9%

     

City of Gaithersburg Maryland, Refunding RB, Asbury Maryland Obligation, Series B, 6.00%, 1/01/23

      250        278,430   
 

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2015    1

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

 

Municipal Bonds    Par  
(000)		     Value  

Maryland (continued)

                 

Health (continued)

     

County of Howard Maryland, Refunding RB, Vantage House Facility, Series A, 5.25%, 4/01/33

    $ 550      $ 546,557   

County of Montgomery Maryland, Refunding RB, Trinity Health Credit Group, 5.00%, 12/01/40

      1,000        1,107,960   

Maryland Health & Higher Educational Facilities Authority, RB, Ascension Health Alliance, Series B, 5.00%, 11/15/51

      1,000        1,100,920   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

     

Anne Arundel Health System, 5.00%, 7/01/40

      1,000        1,068,900   

Charlestown Community Project, 6.25%, 1/01/41

      1,000        1,112,790   

Frederick Memorial Hospital, Series A, 4.00%, 7/01/38

      1,250        1,258,612   

Lifebridge Health Issue, 4.13%, 7/01/47

      500        505,270   

Medstar Health, Inc., 5.00%, 8/15/42

      1,000        1,106,370   

Meritus Medical Center Issue, 5.00%, 7/01/40

      1,000        1,082,250   

Peninsula Regional Medical Center, 5.00%, 7/01/25

      500        595,410   

Peninsula Regional Medical Center, 5.00%, 7/01/39

      1,000        1,102,580   

University of Maryland, 5.00%, 7/01/35

      200        222,868   

University of Maryland, 4.00%, 7/01/41

      500        503,155   

University of Maryland Medical System, 5.13%, 7/01/39

      1,000        1,074,180   

University of Maryland Medical System, Series A, 5.00%, 7/01/43

      1,000        1,093,670   
    

 

 

  
               13,759,922   

Housing — 12.4%

     

County of Howard Maryland, RB, Series A, 5.00%, 6/01/44

      550        592,597   

Maryland Community Development Administration, HRB, Series A, Residential:

     

4.05%, 7/01/42

      1,220        1,233,091   

Series H, AMT, 5.10%, 9/01/37

      875        886,165   
Municipal Bonds    Par  
(000)		     Value  

Maryland (continued)

                 

Housing (continued)

     

Maryland Community Development Administration, RB:

     

3.70%, 7/01/35

    $ 500      $ 498,605   

5.05%, 9/01/39

      500        517,350   

Series B, 4.75%, 9/01/39

      150        153,644   
    

 

 

  
               3,881,452   

Transportation — 15.0%

     

Maryland EDC, RB:

     

Term Project, Series B, 5.75%, 6/01/35

      500        544,750   

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

      500        545,340   

Maryland State Department of Transportation, RB, Consolidated, 4.00%, 5/15/22

      1,000        1,088,590   

Maryland State Transportation Authority, RB, Baltimore/Washington International Thurgood Marshall Airport Project, Series A, AMT, 4.00%, 6/01/29

      1,925        2,006,254   

Maryland State Transportation Authority, Refunding RB, Baltimore/Washington International Thurgood Marshall Airport Project, Series B, AMT, 5.00%, 3/01/23

      445        514,140   
    

 

 

  
               4,699,074   

Utilities — 10.9%

     

City of Baltimore Maryland, RB:

     

Wastewater Project, Series C, 5.00%, 7/01/38

      1,000        1,138,010   

Water Project, Series A, 5.00%, 7/01/43

      1,000        1,131,130   

County of Montgomery Maryland, RB, Water Quality Protection Charge, Series A:

     

5.00%, 4/01/31

      500        570,705   

5.00%, 4/01/32

      500        567,840   
    

 

 

  
               3,407,685   
Total Municipal Bonds in Maryland              42,778,469   
 

 

                
2    BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2015   

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

 

Municipal Bonds    Par  
(000)		     Value  

District of Columbia — 3.6%

                 

Transportation — 3.6%

     

Washington Metropolitan Area Transit Authority, Refunding RB, Series A, 5.13%, 7/01/32

    $ 1,000      $ 1,123,310   

Guam — 2.3%

                 

State — 2.3%

     

Territory of Guam, RB, Series A:

     

Business Privilege Tax Bonds, 5.13%, 1/01/42

      250        271,232   

Limited Obligation Bonds, Section 30, 5.63%, 12/01/29

      410        453,571   
Total Municipal Bonds in Guam              724,803   
Total Municipal Bonds — 142.5%              44,626,582   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (b)		  

Maryland — 10.4%

                 

Transportation — 10.4%

     

State of Maryland Transportation Authority, RB, Transportation Facilities Project (AGM), 5.00%, 7/01/41

      3,000        3,261,750   

Total Long-Term Investments

(Cost — $45,888,384) — 152.9%

              47,888,332   
Short-Term Securities   

 

Shares

     Value  

FFI Institutional Tax-Exempt Fund, 0.02% (c)(d)

      212,044      $ 212,044   

Total Short-Term Securities

(Cost — $212,044) — 0.7%

  

  

     212,044   
Total Investments (Cost — $46,100,428*) — 153.6%        48,100,376   
Other Assets Less Liabilities — 2.3%        724,161   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (4.8)%

   

     (1,500,447 ) 
VRDP Shares, at Liquidation Value — (51.1)%        (16,000,000 ) 
    

 

 

  
Net Assets Applicable to Common Shares — 100.0%      $ 31,324,090   
    

 

 

  

 

*   As of period end, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

   $ 44,609,269   
 

 

 

  

Gross unrealized appreciation

     2,139,626   

Gross unrealized depreciation

     (148,519 ) 
 

 

 

  

Net unrealized appreciation

   $ 1,991,107   
 

 

 

  
 

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2015    3

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

 

 

Notes to Schedule of Investments

 

*   Cost for federal income tax purposes.

 

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

 

(b)   Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Trust. These bonds serve as collateral in a secured borrowing.

 

(c)   During the period ended November 30, 2015, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate     

Shares Held
at August 31,

2015

        Net
Activity		       

Shares Held
at November 30,

2015

        Income  

FFI Institutional Tax-Exempt Fund

        334,132           (122,088 )         212,044         $ 10   

 

(d)   Represents the current yield as of period end.

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

 

Portfolio Abbreviations

 

AGM    Assured Guaranty Municipal Corp.
AMT    Alternative Minimum Tax (subject to)
EDC    Economic Development Corp.
GO    General Obligation Bonds
HRB    Housing Revenue Bonds
RB    Revenue Bonds

 

Derivative Financial Instruments Outstanding as of Period End

Financial Futures Contracts

 

Contracts

Short

     Issue   Expiration   Notional
Value		   Unrealized
Depreciation		  
  (4 )    10-Year U.S. Treasury Note   March 2016   $505,750   $ (1,006 ) 
  (1 )    Long U.S. Treasury Bond   March 2016   $154,000     (525 ) 
  (2 )    5-Year U.S. Treasury Note   March 2016   $237,359     (128 ) 
  Total            $ (1,659 ) 
       

 

 

  

 

                
4    BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2015   

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

 

 

Fair Value Hierarchy as of Period End

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

 

  •  

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

 

  •  

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

 

  •  

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

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Trust’s most recent financial statements as contained in its annual report.

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

 

     Level 1        Level 2        Level 3      Total  

Assets:

                 
Investments:                 

Long-Term Investments1

     —         $ 47,888,332         —      $ 47,888,332   

Short-Term Securities

   $ 212,044           —         —        212,044   
 

 

 

  

Total

   $ 212,044         $ 47,888,332         —      $ 48,100,376   
 

 

 

  

 

1   See above Schedule of Investments for values in each sector.

 

     
     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments1                 

Liabilities:

                 

Interest Rate Contracts

   $ (1,659 )         —         —      $ (1,659 ) 

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

      

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2015    5

Schedule of Investments (concluded)

   

BlackRock Maryland Municipal Bond Trust (BZM)

 

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial reporting purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                 

Cash pledged for financial futures contracts

   $ 11,350           —         —      $ 11,350   

Liabilities:

                 

TOB Trust Certificates

     —         $ (1,500,000 )       —        (1,500,000 ) 

VRDP Shares

     —           (16,000,000 )       —        (16,000,000 ) 
 

 

 

  

Total

   $ 11,350         $ (17,500,000 )       —      $ (17,488,650 ) 
 

 

 

  

During the period ended November 30, 2015, there were no transfers between levels.

 

                
6    BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2015   

Item 2 – Controls and Procedures

 

2(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

 

2(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3 – Exhibits

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 Maryland Municipal Bond Trust

By:    /s/ John M. Perlowski                
   John M. Perlowski
   Chief Executive Officer (principal executive officer) of
   BlackRock Maryland Municipal Bond Trust
Date:    January 22, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:    /s/ John M. Perlowski                
   John M. Perlowski
   Chief Executive Officer (principal executive officer) of
   BlackRock Maryland Municipal Bond Trust
Date:    January 22, 2016
By:    /s/ Neal J. Andrews                    
   Neal J. Andrews
   Chief Financial Officer (principal financial officer) of
   BlackRock Maryland Municipal Bond Trust
Date:    January 22, 2016