N-Q 1 d646296dnq.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: 08/31/2019

Date of reporting period: 11/30/2018


Item 1 – Schedule of Investments


Schedule of Investments  (unaudited)

November 30, 2018

  

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  

Municipal Bonds — 136.6%

 

Corporate — 1.9%

 

Maryland EDC, Refunding RB:

   

CNX Marine Terminals, Inc., 5.75%, 09/01/25

  $ 320     $ 329,853  

Potomac Electric Power Co., 6.20%, 09/01/22

    250       252,475  
   

 

 

 
      582,328  
County/City/Special District/School District — 25.1%  

City of Baltimore Maryland, Refunding RB:

   

Convention Center Hotel, 5.00%, 09/01/46

    750       784,530  

East Baltimore Research Park, Series A, 5.00%, 09/01/38

    250       260,035  

City of Baltimore Maryland, Tax Allocation Bonds, Center/West Development, Series A, 5.50%, 06/01/43

    250       249,663  

County of Anne Arundel Maryland, GOL, 5.00%, 10/01/43

    1,745       1,981,884  

County of Anne Arundel Maryland Consolidated, Refunding, Special Tax, Villages of Dorchester and Farmington Project, 5.00%, 07/01/32

    500       545,570  

County of Anne Arundel Maryland Consolidated, RB, Special Taxing District, Villages at Two Rivers Project, 5.25%, 07/01/44

    250       246,558  

County of Frederick Maryland, RB, Jefferson Technology Park Project, Series B, 7.13%, 07/01/43(a)

    250       264,462  

County of Howard Maryland, Tax Allocation Bonds:

   

Annapolis Junction Town Center Project, 6.10%, 02/15/44

    250       252,630  

Downtown Columbia Project, Series A, 4.50%, 02/15/47(a)

    500       489,790  

County of Prince George’s Maryland:

   

Special Obligation, Remarketing, National Harbor Project, 5.20%, 07/01/34

    1,347       1,351,378  

Tax Allocation Bonds, Westphalia Town Center Project, 5.25%, 07/01/48(a)

    300       294,246  
Security   Par
(000)
    Value  
County/City/Special District/School District (continued)  

Washington Suburban Sanitary Commission, GO, Consolidated Public Improvement Bonds, Second Series, 4.00%, 06/01/41

  $ 875     $ 893,182  
   

 

 

 
      7,613,928  
Education — 24.7%  

County of Anne Arundel Maryland, Refunding RB, Maryland Economic Development, Anne Arundel Community College Project, 3.25%, 09/01/28

    360       363,254  

Maryland EDC, Refunding RB:

   

Towson University Project, 5.00%, 07/01/37

    500       520,180  

University of Maryland College Park Project (AGM), 5.00%, 06/01/43

    1,350       1,485,230  

University of Maryland Project, 5.00%, 07/01/39

    500       524,220  

University Village at Sheppard Pratt, 5.00%, 07/01/33

    1,000       1,032,300  

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

   

Anne Arundel Health System, 4.00%, 07/01/39

    100       100,907  

Goucher College, Series A, 5.00%, 07/01/34

    1,000       1,071,520  

Johns Hopkins University Project, Series A, 4.00%, 07/01/37

    10       10,310  

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

    900       967,590  

Maryland Institute College of Art, 5.00%, 06/01/29

    500       535,660  

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

    855       889,927  
   

 

 

 
      7,501,098  
Health — 48.0%  

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

    250       259,463  

City of Rockville Maryland, RB, Ingleside at King Farm Project, Series B, 5.00%, 11/01/42

    500       512,990  

County of Montgomery Maryland, RB, Trinity Health Credit Group, 5.00%, 12/01/45

    750       825,292  

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

    1,000       1,078,490  
 

 

 

     1  


Schedule of Investments  (unaudited) (continued)

November 30, 2018

  

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Health (continued)  

Maryland Health & Higher Educational Facilities Authority, RB:

   

Ascension Health Alliance, Series B, 5.00%, 11/15/51

  $ 1,000     $ 1,062,450  

Medstar Health Issue, Series A, 5.00%, 05/15/42

    160       173,139  

Trinity Health Credit Group, Series 2017, 5.00%, 12/01/46

    250       276,683  

University of Maryland Medical System Issue, 4.00%, 07/01/48

    300       296,268  

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

   

Anne Arundel Health System, 5.00%, 07/01/19(b)

    1,000       1,017,510  

Charlestown Community Project, 6.25%, 01/01/21(b)

    1,000       1,083,170  

Charlestown Community, Series A, 5.00%, 01/01/45

    500       538,475  

Frederick Memorial Hospital, Series A, 4.00%, 07/01/38

    1,250       1,247,712  

Lifebridge Health Issue, 4.13%, 07/01/47

    500       503,620  

Medstar Health, Inc., 5.00%, 08/15/42

    1,000       1,075,040  

Meritus Medical Center Issue, 5.00%, 07/01/40

    1,000       1,062,290  

Peninsula Regional Medical Center, 5.00%, 07/01/45

    700       750,162  

University of Maryland, 5.00%, 07/01/35

    200       219,432  

University of Maryland, 4.00%, 07/01/41

    500       500,190  

University of Maryland Medical System, 5.13%, 07/01/19(b)

    1,000       1,018,510  

University of Maryland Medical System, Series A, 5.00%, 07/01/43

    1,000       1,065,560  
   

 

 

 
      14,566,446  
Housing — 11.3%  

County of Howard Maryland Housing Commission, RB, M/F Housing:

   

Woodfield Oxford Square Apartments, 5.00%, 12/01/42

    500       542,165  

Columbia Commons Apartments, Series A, 5.00%, 06/01/44

    550       578,534  

Gateway Village Apartments, 4.00%, 06/01/46

    500       500,320  
Security   Par
(000)
    Value  
Housing (continued)  

Maryland Community Development Administration, HRB, M/F Housing, Series A, 4.05%, 07/01/42

  $ 1,220     $ 1,226,978  

Maryland Community Development Administration, RB, M/F Housing, 3.70%, 07/01/35

    500       499,375  

Maryland Community Development Administration, Refunding RB, S/F Housing, Series A, 4.10%, 09/01/38

    100       101,021  
   

 

 

 
      3,448,393  
Transportation — 15.2%  

Maryland EDC, RB(b):

   

Term Project, Series B, 5.75%, 06/01/20

    500       527,950  

Transportation Facilities Project, Series A, 5.75%, 06/01/20

    500       527,950  

Maryland EDC, Refunding RB, Transportation Facilities Project, Series A, 5.00%, 06/01/35

    100       110,157  

Maryland State Department of Transportation, RB, Consolidated, 4.00%, 05/15/19(b)

    1,000       1,009,970  

Maryland State Transportation Authority, RB, Baltimore/Washington International Thurgood Marshall Airport Project, Series A, AMT, 4.00%, 06/01/29

    1,925       1,950,699  

Maryland State Transportation Authority, Refunding RB, Baltimore/Washington International Thurgood Marshall Airport Project, Series B, AMT, 5.00%, 03/01/23

    445       479,883  
   

 

 

 
      4,606,609  
Utilities — 9.4%  

City of Baltimore Maryland, RB:

   

Sub-Water Projects, Series A, 5.00%, 07/01/41

    100       110,915  

Sub-Water Projects, Series A, 5.00%, 07/01/46

    495       547,559  

Wastewater Project, Series C, 5.00%, 07/01/38

    1,000       1,101,400  
 

 

 

2   


Schedule of Investments  (unaudited) (continued)

November 30, 2018

  

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

 

Security

  Par
(000)
    Value  
Utilities (continued)  

City of Baltimore Maryland, RB (continued):

   

Water Project, Series A, 5.00%, 07/01/43

  $ 1,000     $ 1,096,440  
   

 

 

 
    2,856,314  
   

 

 

 

Total Municipal Bonds in Maryland

      41,175,116  
   

 

 

 
Puerto Rico — 1.0%  

Children’s Trust Fund, Refunding RB, Tobacco Settlement Asset-Backed Bonds, 5.63%, 05/15/43

    285       285,530  
   

 

 

 

Total Municipal Bonds — 136.6%
(Cost — $40,821,018)

 

    41,460,646  
   

 

 

 

Municipal Bonds Transferred to Tender Option
Bond Trusts (c) — 17.7%

 

Maryland — 10.2%

   
County/City/Special District/School District — 5.6%  

State of Maryland Stadium Authority, RB, Construction and Revitalization Program, 5.00%, 05/01/42

    1,500       1,677,720  
   

 

 

 
Utilities — 4.6%            

City of Baltimore Maryland, RB, Wastewater Project, Series A, 5.00%, 07/01/46

    1,269       1,404,014  
   

 

 

 

Total Municipal Bonds Transferred to Tender
Option Bond Trusts in Maryland

 

    3,081,734  
   

 

 

 
Security  

Par

(000)

    Value  
Washington DC — 7.5%            
Transportation — 7.5%            

Washington Metropolitan Area Transit Authority, RB, Series B, 5.00%, 07/01/42

  $ 2,045     $ 2,287,824  
   

 

 

 

Total Municipal Bonds Transferred to Tender Option
Bond Trusts — 17.7%
(Cost — $5,432,349)

 

    5,369,558  
   

 

 

 

Total Long-Term Investments — 154.3%
(Cost — $46,253,367)

 

    46,830,204  
   

 

 

 
     Shares         
Short-Term Securities — 5.5%  

BlackRock Liquidity Funds, MuniCash, Institutional
Class, 1.55%(d)(e)

    1,677,364       1,677,532  
   

 

 

 

Total Short-Term Securities — 5.5%
(Cost — $1,677,532)

 

    1,677,532  
   

 

 

 

Total Investments — 159.8%
(Cost — $47,930,899)

 

    48,507,736  

Other Assets Less Liabilities — 2.6%

 

    785,427  

Liability for TOB Trust Certificates, Including
Interest Expense and Fees Payable — (9.9)%

 

    (3,008,235

VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (52.5)%

 

    (15,928,463
   

 

 

 

Net Assets Applicable to Common
Shares — 100.0%

 

  $ 30,356,465  
   

 

 

 
 
(a) 

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

(b) 

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

(c) 

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.

(d) 

Annualized 7-day yield as of period end.

(e) 

During the period ended November 30, 2018, 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

08/31/18

    Net
Activity
    Shares
Held at
11/30/18
    Value at
11/30/18
    Income    

Net

Realized

Gain (Loss) (a)

   

Change in
Unrealized
Appreciation

(Depreciation)

 

BlackRock Liquidity Funds, MuniCash, Institutional Class

    273,831       1,403,533       1,677,364     $ 1,677,532     $ 3,771     $     $  
       

 

 

   

 

 

   

 

 

   

 

 

 

(a) Includes net capital gain distributions, if applicable.

 

 

     3  


Schedule of Investments  (unaudited) (continued)

November 30, 2018

  

BlackRock Maryland Municipal Bond Trust (BZM)

 

For Trust compliance purposes, the Trust’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. 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
M/F    Multi-Family
RB    Revenue Bonds
S/F    Single-Family

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Description    Number of
Contracts
       Expiration
Date
       Notional
Amount (000)
      

Value /
Unrealized
Appreciation

(Depreciation)

 

Short Contracts:

                 

10-Year U.S. Treasury Note

     5          03/20/19        $ 597        $ (1,339

Long U.S. Treasury Bond

     12          03/20/19          1,679          (7,340

5-Year U.S. Treasury Note

     3          03/29/19          339          (381
                 

 

 

 
                  $ (9,060
                 

 

 

 

 

 

4   


Schedule of Investments  (unaudited) (continued)

November 30, 2018

  

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. Investments classified within Level 3 have significant unobservable inputs used by the BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

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 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 disclose hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:

 

Long-Term Investments (a)

   $        $ 46,830,204        $        $ 46,830,204  

Short-Term Securities

     1,677,532                            1,677,532  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 1,677,532        $        $        $ 48,507,736  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments (b)

 

Liabilities:

 

Interest rate contracts

   $ (9,060      $        $        $ (9,060
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

See above Schedule of Investments for values in each sector.

 
  (b) 

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

 

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

 

      Level 1        Level 2        Level 3        Total  

Liabilities:

                 

TOB Trust Certificates

   $        $ (2,999,064      $        $ (2,999,064

VRDP Shares at Liquidation Value

              (16,000,000                 (16,000,000
  

 

 

      

 

 

      

 

 

      

 

 

 
   $        $ (18,999,064      $        $ (18,999,064
  

 

 

      

 

 

      

 

 

      

 

 

 

During the period ended November 30, 2018, there were no transfers between levels.

 

 

     5  


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 18, 2019

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 18, 2019

By:       /s/ Neal J. Andrews               
  Neal J. Andrews  
  Chief Financial Officer (principal financial officer) of
  BlackRock Maryland Municipal Bond Trust

Date: January 18, 2019