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: 811-07642
Name of Fund: BlackRock MuniAssets Fund, Inc. (MUA)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniAssets
Fund, Inc., 55
East 52nd Street, New York, NY 10055
Registrant’s telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 04/30/2019
Date of reporting period: 04/30/2019
Item 1 – Report to Stockholders
APRIL 30, 2019
| ANNUAL REPORT |
|
BlackRock MuniAssets Fund, Inc. (MUA)
BlackRock MuniEnhanced Fund, Inc. (MEN)
BlackRock MuniHoldings Fund, Inc. (MHD)
BlackRock MuniHoldings Fund II, Inc. (MUH)
BlackRock MuniHoldings Quality Fund, Inc. (MUS)
BlackRock Muni Intermediate Duration Fund, Inc. (MUI)
BlackRock MuniVest Fund II, Inc. (MVT)
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of each Fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from BlackRock or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
You may elect to receive all future reports in paper free of charge. If you hold accounts directly with BlackRock, you can call Computershare at (800) 699-1236 to request that you continue receiving paper copies of your shareholder reports. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds advised by BlackRock Advisors, LLC or its affiliates, or all funds held with your financial intermediary, as applicable.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive electronic delivery of shareholder reports and other communications by contacting your financial intermediary, if you hold accounts through a financial intermediary. Please note that not all financial intermediaries may offer this service.
| Not FDIC Insured • May Lose Value • No Bank Guarantee |
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Municipal Market Overview For the Reporting Period Ended April 30, 2019
Municipal Market Conditions
Municipal bonds experienced solid performance during the period, despite challenged total returns during most of 2018 as interest rates moved higher on the back of continued Fed policy normalization, fiscal stimulus, strong economic growth, and increased U.S. Treasury issuance. Performance turned stronger late in the year, with interest rates rallying as the Fed tilted more dovish and indicated a pivot from forecast based to data driven policy and a wait-and-see approach on future rate hikes. During the period, demand for the asset class remained incredibly firm, although displayed some bouts of volatility. Broadly, investors favored the tax-exempt income, diversification, quality, and value of municipal bonds given that tax reform ultimately lowered the top individual tax rate just 2.6% while eliminating deductions. During the 12 months ended April 30, 2019, municipal bond funds experienced net inflows of approximately $27.8 billion (based on data from the Investment Company Institute).
| For the same 12-month period, total new issuance underwhelmed from a historical perspective at just $321 billion (below the $385 billion issued in the prior 12-month period), a direct result of the elimination of advanced refundings through the 2017 Tax Cuts and Jobs Act. This transitioned the market to a favorable net negative supply environment in which reinvestment income (coupons, calls, and maturities) largely outstripped gross issuance and provided a powerful technical tailwind. |
S&P Municipal Bond Index Total Returns as of April 30, 2019 6 months: 5.36% 12 months: 5.84% | |
A Closer Look at Yields
|
From April 30, 2018 to April 30, 2019, yields on AAA-rated 30-year municipal bonds decreased by 54 basis points (“bps”) from 3.09% to 2.55%, while ten-year rates decreased by 63 bps from 2.49% to 1.86% and five-year rates decreased by 56 bps from 2.19% to 1.63% (as measured by Thomson Municipal Market Data). As a result, the municipal yield curve flattened over the 12-month period with the spread between two- and 30-year maturities flattening by 24 bps, led by 33 bps of flattening between two- and ten-year maturities. |
During the same time period, on a relative basis, tax-exempt municipal bonds strongly outperformed U.S. Treasuries, driven by the long end of the yield curve. The relative positive performance of municipal bonds was driven largely by a supply/demand imbalance within the municipal market as investors sought income, incremental yield, and tax shelter in an environment where opportunities became increasingly scarce. The asset class is known for its lower relative volatility and preservation of principal with an emphasis on income as tax rates rise.
Financial Conditions of Municipal Issuers
The majority of municipal credits remain strong, despite well-publicized problems among a few issuers. Four of the five states with the largest amount of debt outstanding — California, New York, Texas and Florida — continue to exhibit improved credit fundamentals. However, several states with the largest unfunded pension liabilities are faced with elevated borrowing costs and difficult budgetary decisions. Across the country on the local level, property values support credit stability. Standard & Poor’s decision to remove its “negative” outlook on New Mexico underscores the improvement in state finances as it was the only remaining state with the designation. Revenue bonds continue to drive performance as investors continue to seek higher yield bonds in the tobacco sector. BlackRock maintains the view that municipal bond defaults will remain minimal and in the periphery while the overall market is fundamentally sound. We continue to advocate careful credit research and believe that a thoughtful approach to structure and security selection remains imperative amid uncertainty in a modestly improving economic environment.
The opinions expressed are those of BlackRock as of April 30, 2019 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of any individual holdings or market sectors. Investing involves risk including loss of principal. Bond values fluctuate in price so the value of your investment can go down depending on market conditions. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to Alternative Minimum Tax (“AMT”). Capital gains distributions, if any, are taxable.
The Standard & Poor’s Municipal Bond Index, a broad, market value-weighted index, seeks to measure the performance of the U.S. municipal bond market. All bonds in the index are exempt from U.S. federal income taxes or subject to the AMT. Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index.
| 4 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
The Benefits and Risks of Leveraging
The Funds may utilize leverage to seek to enhance the distribution rate on, and net asset value (“NAV”) of, their common shares (“Common Shares”). However, there is no guarantee that these objectives can be achieved in all interest rate environments.
In general, the concept of leveraging is based on the premise that the financing cost of leverage, which is based on short-term interest rates, is normally lower than the income earned by a Fund on its longer-term portfolio investments purchased with the proceeds from leverage. To the extent that the total assets of the Funds (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, the Funds’ shareholders benefit from the incremental net income. The interest earned on securities purchased with the proceeds from leverage (after paying the leverage costs) is paid to shareholders in the form of dividends, and the value of these portfolio holdings (less the leverage liability) is reflected in the per share NAV.
To illustrate these concepts, assume a Fund’s Common Shares capitalization is $100 million and it utilizes leverage for an additional $30 million, creating a total value of $130 million available for investment in longer-term income securities. If prevailing short-term interest rates are 3% and longer-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, a Fund’s financing costs on the $30 million of proceeds obtained from leverage are based on the lower short-term interest rates. At the same time, the securities purchased by a Fund with the proceeds from leverage earn income based on longer-term interest rates. In this case, a Fund’s financing cost of leverage is significantly lower than the income earned on a Fund’s longer-term investments acquired from such leverage proceeds, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.
However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed the Funds’ return on assets purchased with leverage proceeds, income to shareholders is lower than if the Funds had not used leverage. Furthermore, the value of the Funds’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the amount of the Funds’ obligations under their respective leverage arrangements generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Funds’ NAVs positively or negatively. Changes in the future direction of interest rates are very difficult to predict accurately, and there is no assurance that the Funds’ intended leveraging strategy will be successful.
The use of leverage also generally causes greater changes in each Fund’s NAV, market price and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the NAV and market price of a Fund’s Common Shares than if the Fund were not leveraged. In addition, each Fund may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause the Fund to incur losses. The use of leverage may limit a Fund’s ability to invest in certain types of securities or use certain types of hedging strategies. Each Fund incurs expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares. Moreover, to the extent the calculation of the Funds’ investment advisory fees includes assets purchased with the proceeds of leverage, the investment advisory fees payable to the Funds’ investment adviser will be higher than if the Funds did not use leverage.
To obtain leverage, each Fund has issued Variable Rate Demand Preferred Shares (“VRDP Shares”) or Variable Rate Muni Term Preferred Shares (“VMTP Shares”) (collectively, “Preferred Shares”) and/or leveraged its assets through the use of tender option bond trusts (“TOB Trusts”) as described in the Notes to Financial Statements.
Under the Investment Company Act of 1940, as amended (the “1940 Act”), each Fund is permitted to issue debt up to 33 1/3% of its total managed assets or equity securities (e.g., Preferred Shares) up to 50% of its total managed assets. A Fund may voluntarily elect to limit its leverage to less than the maximum amount permitted under the 1940 Act. In addition, a Fund may also be subject to certain asset coverage, leverage or portfolio composition requirements imposed by the Preferred Shares’ governing instruments or by agencies rating the Preferred Shares, which may be more stringent than those imposed by the 1940 Act.
If a Fund segregates or designates on its books and records cash or liquid assets having a value not less than the value of a Fund’s obligations under the TOB Trust (including accrued interest), then the TOB Trust is not considered a senior security and is not subject to the foregoing limitations and requirements imposed by the 1940 Act.
Derivative Financial Instruments
The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.
| THE BENEFITS AND RISKS OF LEVERAGING / DERIVATIVE FINANCIAL INSTRUMENTS | 5 |
| Fund Summary as of April 30, 2019 | BlackRock MuniAssets Fund, Inc. |
Investment Objective
BlackRock MuniAssets Fund, Inc.’s (MUA) (the “Fund”) investment objective is to provide high current income exempt from U.S. federal income taxes by investing primarily in a portfolio of medium- to lower-grade or unrated municipal obligations, the interest on which, in the opinion of bond counsel to the issuer, is exempt from U.S. federal income taxes. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal bonds exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). The Fund invests at least 65% of its assets in municipal bonds that are rated in the medium to lower rating categories by nationally recognized rating services (for example, Baa or lower by Moody’s Investors Service, Inc. (“Moody’s”) or BBB or lower by S&P Global (“S&P”), or securities that are unrated but are deemed by the investment adviser to be of comparable quality at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
Fund Information
| Symbol on New York Stock Exchange (“NYSE”) |
MUA | |
| Initial Offering Date |
June 25, 1993 | |
| Yield on Closing Market Price as of April 30, 2019 ($14.98)(a) |
4.37% | |
| Tax Equivalent Yield(b) |
7.38% | |
| Current Monthly Distribution per Common Share(c) |
$0.0545 | |
| Current Annualized Distribution per Common Share(c) |
$0.6540 | |
| Leverage as of April 30, 2019(d) |
12% |
| (a) | Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| (b) | Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
| (c) | The distribution rate is not constant and is subject to change. |
| (d) | Represents TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2019 were as follows:
| Returns Based On | ||||||||
| Market Price | NAV | |||||||
| MUA(a)(b) |
19.07 | % | 5.97 | % | ||||
| Lipper High Yield Municipal Debt Funds(c) |
10.95 | 6.63 | ||||||
| (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
| (b) | The Fund moved from a discount to NAV to a premium during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
| (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the end of October, municipal bonds recovered to post a positive total return for the full 12-month period. The initial weakness was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of a more accommodative Fed policy, sparking a rally across the bond market from early November onward. Volatility in equities and uncertainty surrounding U.S. trade policy also helped fuel a “flight to quality” into the fixed-income markets.
Long-dated securities on the lower end of the investment grade spectrum (those rated BBB or unrated) were the largest contributors to performance. At the sector level, holdings in health care, transportation and tobacco issues were key contributors. The Fund’s holdings in Puerto Rico also aided results.
The Fund actively sought to manage interest rate risk using U.S. Treasury futures. Since U.S. Treasury yields fell, as price rose, this strategy had a small, negative effect on returns.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| 6 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Fund Summary as of April 30, 2019 (continued) | BlackRock MuniAssets Fund, Inc. |
Market Price and Net Asset Value Per Share Summary
| 04/30/19 | 04/30/18 |
Change | High | Low | ||||||||||||||||
| Market Price |
$ | 14.98 | $ | 13.21 | 13.40 | % | $ | 15.34 | $ | 12.51 | ||||||||||
| Net Asset Value |
14.14 | 14.01 | 0.93 | 14.14 | 13.74 | |||||||||||||||
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
| FUND SUMMARY | 7 |
| Fund Summary as of April 30, 2019 | BlackRock MuniEnhanced Fund, Inc. |
Investment Objective
BlackRock MuniEnhanced Fund, Inc.’s (MEN) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from U.S. federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). Under normal market conditions, the Fund invests primarily in long-term municipal bonds that are rated investment grade quality or, if unrated, are deemed to be of comparable quality by the investment adviser at the time of investment and invests primarily in long-term municipal bonds with maturities of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
Fund Information
| Symbol on NYSE |
MEN | |
| Initial Offering Date |
March 2, 1989 | |
| Yield on Closing Market Price as of April 30, 2019 ($10.71)(a) |
4.93% | |
| Tax Equivalent Yield(b) |
8.33% | |
| Current Monthly Distribution per Common Share(c) |
$0.0440 | |
| Current Annualized Distribution per Common Share(c) |
$0.5280 | |
| Leverage as of April 30, 2019(d) |
40% |
| (a) | Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| (b) | Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
| (c) | The distribution rate is not constant and is subject to change. |
| (d) | Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2019 were as follows:
| Returns Based On | ||||||||
| Market Price | NAV | |||||||
| MEN(a)(b) |
7.98 | % | 8.43 | % | ||||
| Lipper General & Insured Municipal Debt Funds (Leveraged)(c) |
10.02 | 6.95 | ||||||
| (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
| (b) | The Fund’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
| (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the end of October, municipal bonds recovered to post a positive total return for the full 12-month period. The initial weakness was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of a more accommodative Fed policy, sparking a rally across the bond market from early November onward. Volatility in equities and uncertainty surrounding U.S. trade policy also helped fuel a “flight to quality” into the fixed-income markets.
The rally in municipal bond prices provided a tailwind for the Fund. Portfolio income was also a key contributor to absolute returns. The use of leverage further aided results by augmenting the effect of both income and rising bond prices. However, the cost of leverage increased during the period due to the Fed’s three interest rate increases.
During the latter part of the period, municipal investors began to reach for yield amid a strong backdrop for both fundamentals and supply-and-demand factors. In this environment, the Fund benefited from allocations to the long end of the yield curve, lower-rated investment-grade bonds, and both low- and zero-coupon bonds.
At the sector level, positions in the state tax-backed, health care and transportation issues made the largest contribution to performance.
The Fund actively sought to manage interest rate risk using U.S. Treasury futures. Since U.S. Treasury yields fell, as price rose, this strategy had a small, negative effect on returns.
Reinvestment had an adverse effect on the Fund’s income, as the proceeds of higher-yielding bonds that matured or were called needed to be reinvested at lower prevailing rates.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| 8 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Fund Summary as of April 30, 2019 (continued) | BlackRock MuniEnhanced Fund, Inc. |
Market Price and Net Asset Value Per Share Summary
| 04/30/19 | 04/30/18 |
Change | High | Low | ||||||||||||||||
| Market Price |
$ | 10.71 | $ | 10.48 | 2.19 | % | $ | 10.85 | $ | 9.63 | ||||||||||
| Net Asset Value |
11.76 | 11.46 | 2.62 | 11.77 | 11.06 | |||||||||||||||
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
| FUND SUMMARY | 9 |
| Fund Summary as of April 30, 2019 | BlackRock MuniHoldings Fund, Inc. |
Investment Objective
BlackRock MuniHoldings Fund, Inc.’s (MHD) (the “Fund”) investment objective is to provide shareholders with current income exempt from U.S. federal income taxes. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds that are rated investment grade or, if unrated, are deemed to be of comparable quality by the investment adviser at the time of investment and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
Fund Information
| Symbol on NYSE |
MHD | |
| Initial Offering Date |
May 2, 1997 | |
| Yield on Closing Market Price as of April 30, 2019 ($15.92)(a) |
5.09% | |
| Tax Equivalent Yield(b) |
8.60% | |
| Current Monthly Distribution per Common Share(c) |
$0.0675 | |
| Current Annualized Distribution per Common Share(c) |
$0.8100 | |
| Leverage as of April 30, 2019(d) |
37% |
| (a) | Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| (b) | Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
| (c) | The distribution rate is not constant and is subject to change. |
| (d) | Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2019 were as follows:
| Returns Based On | ||||||||
| Market Price | NAV | |||||||
| MHD(a)(b) |
12.51 | % | 6.84 | % | ||||
| Lipper General & Insured Municipal Debt Funds (Leveraged)(c) |
10.02 | 6.95 | ||||||
| (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
| (b) | The Fund’s discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
| (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the end of October, municipal bonds recovered to post a positive total return for the full 12-month period. The initial weakness was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of a more accommodative Fed policy, sparking a rally across the bond market from early November onward. Volatility in equities and uncertainty surrounding U.S. trade policy also helped fuel a “flight to quality” into the fixed-income markets.
Long-dated securities on the lower end of the investment grade spectrum (those rated A and BBB) were the largest contributors to performance. At the sector level, holdings in tax-backed, transportation and health care issues were key contributors.
The Fund actively sought to manage interest rate risk using U.S. Treasury futures. Since U.S. Treasury yields fell, as price rose, this strategy had a small, negative effect on returns.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| 10 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Fund Summary as of April 30, 2019 (continued) | BlackRock MuniHoldings Fund, Inc. |
Market Price and Net Asset Value Per Share Summary
| 04/30/19 | 04/30/18 |
Change | High | Low | ||||||||||||||||
| Market Price |
$ | 15.92 | $ | 14.98 | 6.28 | % | $ | 16.38 | $ | 13.89 | ||||||||||
| Net Asset Value |
16.56 | 16.41 | 0.91 | 16.58 | 15.92 | |||||||||||||||
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
| FUND SUMMARY | 11 |
| Fund Summary as of April 30, 2019 | BlackRock MuniHoldings Fund II, Inc. |
Investment Objective
BlackRock MuniHoldings Fund II, Inc.’s (MUH) (the “Fund”) investment objective is to provide shareholders with current income exempt from U.S. federal income taxes. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal bonds exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds that are rated investment grade or, if unrated, are deemed to be of comparable quality by the investment adviser at the time of investment and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
Fund Information
| Symbol on NYSE |
MUH | |
| Initial Offering Date |
February 27, 1998 | |
| Yield on Closing Market Price as of April 30, 2019 ($15.05)(a) |
4.90% | |
| Tax Equivalent Yield(b) |
8.28% | |
| Current Monthly Distribution per Common Share(c) |
$0.0615 | |
| Current Annualized Distribution per Common Share(c) |
$0.7380 | |
| Leverage as of April 30, 2019(d) |
38% |
| (a) | Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| (b) | Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
| (c) | The distribution rate is not constant and is subject to change. |
| (d) | Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2019 were as follows:
| Returns Based On | ||||||||
| Market Price | NAV | |||||||
| MUH(a)(b) |
16.00 | % | 7.46 | % | ||||
| Lipper General & Insured Municipal Debt Funds (Leveraged)(c) |
10.02 | 6.95 | ||||||
| (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
| (b) | The Fund’s discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
| (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the end of October, municipal bonds recovered to post a positive total return for the full 12-month period. The initial weakness was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of a more accommodative Fed policy, sparking a rally across the bond market from early November onward. Volatility in equities and uncertainty surrounding U.S. trade policy also helped fuel a “flight to quality” into the fixed-income markets.
The rally in municipal bond prices provided a tailwind for the Fund. Portfolio income was also a key contributor to absolute returns. The use of leverage further aided results by augmenting the effect of both income and rising bond prices. However, the cost of leverage increased during the period due to the Fed’s three interest rate increases.
During the latter part of the period, municipal investors began to reach for yield amid a strong backdrop for both fundamentals and supply-and-demand factors. In this environment, the Fund benefited from allocations to the long end of the yield curve, lower-rated investment-grade bonds, and both low- and zero-coupon bonds.
At the sector level, positions in the state tax-backed, health care and transportation issues made the largest contribution to performance.
The Fund actively sought to manage interest rate risk using U.S. Treasury futures. Since U.S. Treasury yields fell, as price rose, this strategy had a small, negative effect on returns.
The Fund’s allocation to pre-refunded bonds, while providing income and dampening risk, produced more muted returns than the overall market due to their lower sensitivity to yield movements.
Reinvestment had an adverse effect on the Fund’s income, as the proceeds of higher-yielding bonds that matured or were called needed to be reinvested at lower prevailing rates.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| 12 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Fund Summary as of April 30, 2019 (continued) | BlackRock MuniHoldings Fund II, Inc. |
Market Price and Net Asset Value Per Share Summary
| 04/30/19 | 04/30/18 |
Change | High | Low | ||||||||||||||||
| Market Price |
$ | 15.05 | $ | 13.75 | 9.45 | % | $ | 15.20 | $ | 12.62 | ||||||||||
| Net Asset Value |
15.32 | 15.11 | 1.39 | 15.32 | 14.63 | |||||||||||||||
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
| FUND SUMMARY | 13 |
| Fund Summary as of April 30, 2019 | BlackRock MuniHoldings Quality Fund, Inc. |
Investment Objective
BlackRock MuniHoldings Quality Fund, Inc.’s (MUS) (the “Fund”) investment objective is to provide shareholders with current income exempt from U.S. federal income taxes. The Fund seeks to achieve its investment objective by investing primarily in long-term, investment grade municipal obligations exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). Under normal market conditions, the Fund invests at least 80% of its assets in investment grade municipal obligations, and obligations deemed to be of comparable quality by the investment adviser at the time of investment, with remaining maturities of one year or more at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
Fund Information
| Symbol on NYSE |
MUS | |
| Initial Offering Date |
May 1, 1998 | |
| Yield on Closing Market Price as of April 30, 2019 ($12.01)(a) |
4.45% | |
| Tax Equivalent Yield(b) |
7.52% | |
| Current Monthly Distribution per Common Share(c) |
$0.0445 | |
| Current Annualized Distribution per Common Share(c) |
$0.5340 | |
| Leverage as of April 30, 2019(d) |
39% |
| (a) | Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| (b) | Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
| (c) | The distribution rate is not constant and is subject to change. |
| (d) | Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2019 were as follows:
| Returns Based On | ||||||||
| Market Price | NAV | |||||||
| MUS(a)(b) |
2.02 | % | 6.59 | % | ||||
| Lipper General & Insured Municipal Debt Funds (Leveraged)(c) |
10.02 | 6.95 | ||||||
| (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
| (b) | The Fund’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
| (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the end of October, municipal bonds recovered to post a positive total return for the full 12-month period. The initial weakness was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of a more accommodative Fed policy, sparking a rally across the bond market from early November onward. Volatility in equities and uncertainty surrounding U.S. trade policy also helped fuel a “flight to quality” into the fixed-income markets.
The rally in municipal bond prices provided a tailwind for the Fund. Portfolio income was also a key contributor to absolute returns. The use of leverage further aided results by augmenting the effect of both income and rising bond prices. However, the cost of leverage increased during the period due to the Fed’s three interest rate increases.
The Fund’s positions in the state tax-backed and transportation sectors contributed to performance. Holdings in longer-term bonds, which outperformed short- and intermediate-term issues, also added value.
The Fund actively sought to manage interest rate risk using U.S. Treasury futures. Since U.S. Treasury yields fell, as price rose, this strategy had a small, negative effect on returns.
Reinvestment had an adverse effect on the Fund’s income, as the proceeds of higher-yielding bonds that matured or were called needed to be reinvested at lower prevailing rates.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| 14 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Fund Summary as of April 30, 2019 (continued) | BlackRock MuniHoldings Quality Fund, Inc. |
Market Price and Net Asset Value Per Share Summary
| 04/30/19 | 04/30/18 |
Change | High | Low | ||||||||||||||||
| Market Price |
$ | 12.01 | $ | 12.40 | (3.15 | )% | $ | 12.57 | $ | 11.09 | ||||||||||
| Net Asset Value |
13.51 | 13.35 | 1.20 | 13.52 | 12.92 | |||||||||||||||
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
| FUND SUMMARY | 15 |
| Fund Summary as of April 30, 2019 | BlackRock Muni Intermediate Duration Fund, Inc. |
Investment Objective
BlackRock Muni Intermediate Duration Fund, Inc.’s (MUI) (the “Fund”) investment objective is to provide common shareholders with high current income exempt from U.S. federal income taxes. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). Under normal market conditions, the Fund invests at least 75% of its assets in municipal bonds that are rated investment grade or, if unrated, are deemed to be of comparable quality by the investment adviser at the time of investment and invests at least 80% of its assets in municipal bonds with a duration of three to ten years at the time of investment. The Fund expects to maintain a dollar-weighted average portfolio duration, as calculated by the investment adviser, of three to ten years. The Fund may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
Fund Information
| Symbol on NYSE |
MUI | |
| Initial Offering Date |
August 1, 2003 | |
| Yield on Closing Market Price as of April 30, 2019 ($13.85)(a) |
3.86% | |
| Tax Equivalent Yield(b) |
6.52% | |
| Current Monthly Distribution per Common Share(c) |
$0.0445 | |
| Current Annualized Distribution per Common Share(c) |
$0.5340 | |
| Leverage as of April 30, 2019(d) |
39% |
| (a) | Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| (b) | Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
| (c) | The distribution rate is not constant and is subject to change. |
| (d) | Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2019 were as follows:
| Returns Based On | ||||||||
| Market Price | NAV | |||||||
| MUI(a)(b) |
11.13 | % | 7.68 | % | ||||
| Lipper Intermediate Municipal Debt Funds(c) |
7.21 | 5.41 | ||||||
| (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
| (b) | The Fund’s discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
| (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the end of October, municipal bonds recovered to post a positive total return for the full 12-month period. The initial weakness was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of a more accommodative Fed policy, sparking a rally across the bond market from early November onward. Volatility in equities and uncertainty surrounding U.S. trade policy also helped fuel a “flight to quality” into the fixed-income markets.
The rally in municipal bond prices provided a tailwind for the Fund. Portfolio income was also a key contributor to absolute returns. The use of leverage further aided results by augmenting the effect of both income and rising bond prices. However, the cost of leverage increased during the period due to the Fed’s three interest rate increases.
The Fund’s positions in the transportation and state tax-backed sectors contributed to performance. Holdings in bonds with maturities of 10 to 18 years, which outperformed shorter-term issues, also added value.
Lower-quality bonds outpaced higher-quality issues during the period. As a result, positions in A and BBB rated securities were key contributors.
The Fund actively sought to manage interest rate risk using U.S. Treasury futures. Since U.S. Treasury yields fell, as price rose, this strategy had a small, negative effect on returns.
Reinvestment had an adverse impact on the Fund’s income, as the proceeds of higher-yielding bonds that matured or were called needed to be reinvested at lower prevailing rates.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| 16 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Fund Summary as of April 30, 2019 (continued) | BlackRock Muni Intermediate Duration Fund, Inc. |
Market Price and Net Asset Value Per Share Summary
| 04/30/19 | 04/30/18 |
Change | High | Low | ||||||||||||||||
| Market Price |
$ | 13.85 | $ | 13.01 | 6.46 | % | $ | 13.92 | $ | 12.30 | ||||||||||
| Net Asset Value |
15.40 | 14.93 | 3.15 | 15.41 | 14.63 | |||||||||||||||
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
| FUND SUMMARY | 17 |
| Fund Summary as of April 30, 2019 | BlackRock MuniVest Fund II, Inc. |
Investment Objective
BlackRock MuniVest Fund II, Inc.’s (MVT) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from U.S. federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds that are rated investment grade or, if unrated, are deemed to be of comparable quality by the investment adviser at the time of investment and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
Fund Information
| Symbol on NYSE |
MVT | |
| Initial Offering Date |
March 29, 1993 | |
| Yield on Closing Market Price as of April 30, 2019 ($14.29)(a) |
5.00% | |
| Tax Equivalent Yield(b) |
8.45% | |
| Current Monthly Distribution per Common Share(c) |
$0.0595 | |
| Current Annualized Distribution per Common Share(c) |
$0.7140 | |
| Leverage as of April 30, 2019(d) |
37% |
| (a) | Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| (b) | Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.8%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
| (c) | The distribution rate is not constant and is subject to change. |
| (d) | Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments on page 5. |
Performance
Returns for the 12 months ended April 30, 2019 were as follows:
| Returns Based On | ||||||||
| Market Price | NAV | |||||||
| MVT(a)(b) |
7.78 | % | 6.83 | % | ||||
| Lipper General & Insured Municipal Debt Funds (Leveraged)(c) |
10.02 | 6.95 | ||||||
| (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. |
| (b) | The Fund’s discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV. |
| (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper. |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the end of October, municipal bonds recovered to post a positive total return for the full 12-month period. The initial weakness was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of a more accommodative Fed policy, sparking a rally across the bond market from early November onward. Volatility in equities and uncertainty surrounding U.S. trade policy also helped fuel a “flight to quality” into the fixed-income markets.
Long-dated securities on the lower end of the investment grade spectrum (those rated A and BBB) were the largest contributors to performance. At the sector level, holdings in transportation, health care and tax-backed issues were key contributors.
The Fund actively sought to manage interest rate risk using U.S. Treasury futures. Since U.S. Treasury yields fell, as price rose, this strategy had a small, negative effect on returns.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| 18 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Fund Summary as of April 30, 2019 (continued) | BlackRock MuniVest Fund II, Inc. |
Market Price and Net Asset Value Per Share Summary
| 04/30/19 | 04/30/18 |
Change | High | Low | ||||||||||||||||
| Market Price |
$ | 14.29 | $ | 14.05 | 1.71 | % | $ | 14.95 | $ | 12.75 | ||||||||||
| Net Asset Value |
14.87 | 14.75 | 0.81 | 14.88 | 14.29 | |||||||||||||||
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
| FUND SUMMARY | 19 |
|
April 30, 2019 |
BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets) |
| 20 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 21 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets) |
| 22 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 23 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets) |
| 24 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 25 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniAssets Fund, Inc. (MUA) (Percentages shown are based on Net Assets) |
| (l) | During the year ended April 30, 2019, investments in issuers considered to be an /affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| Affiliate | Shares Held at 04/30/18 |
Net Activity |
Shares Held at 04/30/19 |
Value at 04/30/19 |
Income | Net Realized Gain (Loss) (a) |
Change in Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
| BlackRock Liquidity Funds, MuniCash, Institutional Class |
2,226,571 | (1,459,184 | ) | 767,387 | $ | 767,464 | $ | 38,707 | $ | 1,044 | $ | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (a) | Includes net capital gain distributions, if applicable. |
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 |
30 | 06/19/19 | $ | 3,710 | $ | (17,614 | ) | |||||||||
| Long U.S. Treasury Bond |
120 | 06/19/19 | 17,696 | (74,235 | ) | |||||||||||
| 5-Year U.S. Treasury Note |
22 | 06/28/19 | 2,544 | (9,994 | ) | |||||||||||
|
|
|
|||||||||||||||
| $ | (101,843 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| 26 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniAssets Fund, Inc. (MUA) |
Derivative Financial Instruments Categorized by Risk Exposure
As of year end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Liabilities — Derivative Financial Instruments |
||||||||||||||||||||||||||||
| Futures contracts |
||||||||||||||||||||||||||||
| Unrealized depreciation on futures contracts(a) |
$ | — | $ | — | $ | — | $ | — | $ | 101,843 | $ | — | $ | 101,843 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (a) | Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedule of Investments. In the Statement of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the year ended April 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (612,875 | ) | $ | — | $ | (612,875 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net Change in Unrealized Appreciation (Depreciation) on: | ||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (141,425 | ) | $ | — | $ | (141,425 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| Futures contracts: |
||||
| Average notional value of contracts — short |
$ | 19,685,354 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
| |||||||||||||||
| Investments: |
| |||||||||||||||
| Long-Term Investments(a) |
$ | — | $ | 574,535,914 | $ | — | $ | 574,535,914 | ||||||||
| Short-Term Securities |
767,464 | — | — | 767,464 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 767,464 | $ | 574,535,914 | $ | — | $ | 575,303,378 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Derivative Financial Instruments(b) |
||||||||||||||||
| Liabilities: |
||||||||||||||||
| Interest rate contracts |
$ | (101,843 | ) | $ | — | $ | — | $ | (101,843 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | See above Schedule of Investments for values in each state or political subdivision |
| (b) | Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, TOB Trust Certificates of $71,659,281 are categorized as Level 2 within the disclosure hierarchy.
See notes to financial statements.
| SCHEDULES OF INVESTMENTS | 27 |
| Schedule of Investments April 30, 2019 |
BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets) |
| 28 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 29 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets) |
| 30 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 31 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets) |
| 32 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 33 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniEnhanced Fund, Inc. (MEN) (Percentages shown are based on Net Assets) |
| (h) | During the year ended April 30, 2019, investments in issuers considered to be an affiliate/affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| Affiliate | Shares Held at 04/30/18 |
Net Activity |
Shares Held at 04/30/19 |
Value at 04/30/19 |
Income | Net Realized Gain (Loss) (a) |
Change in Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
| BlackRock Liquidity Funds, MuniCash, Institutional Class |
— | 580,450 | 580,450 | $ | 580,508 | $ | 21,238 | $ | 747 | $ | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (a) | Includes net capital gain distributions, if applicable. |
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 |
87 | 06/19/19 | $ | 10,759 | $ | (59,851 | ) | |||||||||
| Long U.S. Treasury Bond |
201 | 06/19/19 | 29,641 | (148,159 | ) | |||||||||||
| 5-Year U.S. Treasury Note |
16 | 06/28/19 | 1,850 | (8,234 | ) | |||||||||||
|
|
|
|||||||||||||||
| $ | (216,244 | ) | ||||||||||||||
|
|
|
|||||||||||||||
Derivative Financial Instruments Categorized by Risk Exposure
As of year end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Liabilities — Derivative Financial Instruments |
||||||||||||||||||||||||||||
| Futures contracts |
||||||||||||||||||||||||||||
| Unrealized depreciation on futures contracts(a) |
$ | — | $ | — | $ | — | $ | — | $ | 216,244 | $ | — | $ | 216,244 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (a) | Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedule of Investments. In the Statement of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
| 34 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniEnhanced Fund, Inc. (MEN) |
Derivative Financial Instruments Categorized by Risk Exposure (continued)
For the year ended April 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (1,067,315 | ) | $ | — | $ | (1,067,315 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net Change in Unrealized Appreciation (Depreciation) on: | ||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (268,871 | ) | $ | — | $ | (268,871 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| Futures contracts: |
| |||
| Average notional value of contracts — short |
$ | 32,339,031 | ||
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
| |||||||||||||||
| Investments: |
| |||||||||||||||
| Long-Term Investments(a) |
$ | — | $ | 577,290,166 | $ | — | $ | 577,290,166 | ||||||||
| Short-Term Securities |
580,508 | — | — | 580,508 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 580,508 | $ | 577,290,166 | $ | — | $ | 577,870,674 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Derivative Financial Instruments(b) |
| |||||||||||||||
| Liabilities: |
| |||||||||||||||
| Interest rate contracts |
$ | (216,244 | ) | $ | — | $ | — | $ | (216,244 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | See above Schedule of Investments for values in each state or political subdivision. |
| (b) | Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of 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 |
$ | — | $ | (91,348,628 | ) | $ | — | $ | (91,348,628 | ) | ||||||
| VRDP Shares at Liquidation Value |
— | (142,500,000 | ) | — | (142,500,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | — | $ | (233,848,628 | ) | $ | — | $ | (233,848,628 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
See notes to financial statements.
| SCHEDULES OF INVESTMENTS | 35 |
| Schedule of Investments April 30, 2019 |
BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets) |
| 36 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 37 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets) |
| 38 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 39 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets) |
| 40 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund, Inc. (MHD) (Percentages shown are based on Net Assets) |
| (i) | During the year ended April 30, 2019, investments in issuers considered to be an affiliate/affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| Affiliate | Shares Held at 04/30/18 |
Net Activity |
Shares Held at 04/30/19 |
Value at 04/30/19 |
Income | Net Realized Gain (Loss) (a) |
Change in Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
| BlackRock Liquidity Funds, MuniCash, Institutional Class |
733,990 | 6,146,509 | 6,880,499 | $ | 6,881,187 | $ | 46,085 | $ | 411 | $ | (685 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (a) | Includes net capital gain distributions, if applicable. |
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 |
24 | 06/19/19 | $ | 2,968 | $ | (15,931 | ) | |||||||||
| Long U.S. Treasury Bond |
104 | 06/19/19 | 15,337 | (60,844 | ) | |||||||||||
| 5-Year U.S. Treasury Note |
7 | 06/28/19 | 809 | (2,496 | ) | |||||||||||
|
|
|
|||||||||||||||
| $ | (79,271 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| SCHEDULES OF INVESTMENTS | 41 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund, Inc. (MHD) |
Derivative Financial Instruments Categorized by Risk Exposure
As of year end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Liabilities — Derivative Financial Instruments |
|
|||||||||||||||||||||||||||
| Futures contracts |
||||||||||||||||||||||||||||
| Unrealized depreciation on futures contracts(a) |
$ | — | $ | — | $ | — | $ | — | $ | 79,271 | $ | — | $ | 79,271 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (a) | Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedule of Investments. In the Statement of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the year ended April 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (411,161 | ) | $ | — | $ | (411,161 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net Change in Unrealized Appreciation (Depreciation) on: | ||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (91,864 | ) | $ | — | $ | (91,864 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| Futures contracts: |
||||
| Average notional value of contracts — short |
$ | 14,636,115 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Long-Term Investments(a) |
$ | — | $ | 360,403,537 | $ | — | $ | 360,403,537 | ||||||||
| Short-Term Securities |
6,881,187 | — | — | 6,881,187 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 6,881,187 | $ | 360,403,537 | $ | — | $ | 367,284,724 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Derivative Financial Instruments(b) |
||||||||||||||||
| Liabilities: |
||||||||||||||||
| Interest rate contracts |
$ | (79,271 | ) | $ | — | $ | — | $ | (79,271 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | See above Schedule of Investments for values in each state or political subdivision. |
| (b) | Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of 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 |
$ | — | $ | (52,673,965 | ) | $ | — | $ | (52,673,965 | ) | ||||||
| VMTP Shares at Liquidation Value |
— | (83,700,000 | ) | — | (83,700,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | — | $ | (136,373,965 | ) | $ | — | $ | (136,373,965 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
See notes to financial statements.
| 42 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments April 30, 2019 |
BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 43 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets) |
| 44 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 45 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets) |
| 46 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 47 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund II, Inc. (MUH) (Percentages shown are based on Net Assets) |
| (i) | During the year ended April 30, 2019, investments in issuers considered to be an affiliate/affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| Affiliate | Shares Held at 04/30/18 |
Net Activity |
Shares Held at 04/30/19 |
Value at 04/30/19 |
Income | Net Realized Gain (Loss) (a) |
Change in Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
| BlackRock Liquidity Funds, MuniCash, Institutional Class |
978,065 | (924,120 | ) | 53,945 | $ | 53,950 | $ | 9,978 | $ | 254 | $ | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (a) | Includes net capital gain distributions, if applicable. |
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 |
18 | 06/19/19 | $ | 2,226 | $ | (12,627 | ) | |||||||||
| Long U.S. Treasury Bond |
98 | 06/19/19 | 14,452 | (76,713 | ) | |||||||||||
| 5-Year U.S. Treasury Note |
3 | 06/28/19 | 347 | (2,247 | ) | |||||||||||
|
|
|
|||||||||||||||
| $ | (91,587 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| 48 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Fund II, Inc. (MUH) |
Derivative Financial Instruments Categorized by Risk Exposure
As of year ended, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Liabilities — Derivative Financial Instruments |
|
|||||||||||||||||||||||||||
| Futures contracts |
||||||||||||||||||||||||||||
| Unrealized depreciation on futures contracts(a) |
$ | — | $ | — | $ | — | $ | — | $ | 91,587 | $ | — | $ | 91,587 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (a) | Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedule of Investments. In the Statement of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the year ended April 30, 2019, the effect of derivative financial instruments in the Statements of Operation was as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (438,606 | ) | $ | — | $ | (438,606 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net Change in Unrealized Appreciation (Depreciation) on: | ||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (98,539 | ) | $ | — | $ | (98,539 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| Futures contracts: |
||||
| Average notional value of contracts — short |
$ | 12,275,158 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
| |||||||||||||||
| Investments: |
| |||||||||||||||
| Long-Term Investments(a) |
$ | — | $ | 279,101,606 | $ | — | $ | 279,101,606 | ||||||||
| Short-Term Securities |
53,950 | — | — | 53,950 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 53,950 | $ | 279,101,606 | $ | — | $ | 279,155,556 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Derivative Financial Instruments(b) |
| |||||||||||||||
| Liabilities: |
| |||||||||||||||
| Interest rate contracts |
$ | (91,587 | ) | $ | — | $ | — | $ | (91,587 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | See above Schedule of Investments for values in each state or political subdivision. |
| (b) | Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of 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 |
$ | — | $ | (53,408,501 | ) | $ | — | $ | (53,408,501 | ) | ||||||
| VMTP Shares at Liquidation Value |
— | (55,000,000 | ) | — | (55,000,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | — | $ | (108,408,501 | ) | $ | — | $ | (108,408,501 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
See notes to financial statements.
| SCHEDULES OF INVESTMENTS | 49 |
| Schedule of Investments April 30, 2019 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets) |
| 50 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 51 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets) |
| 52 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets) |
| (f) | During the year ended April 30, 2019, investments in issuers considered to be an affiliate/affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| Affiliate | Shares Held at 04/30/18 |
Net Activity |
Shares Held at 04/30/19 |
Value at 04/30/19 |
Income | Net Realized Gain (Loss) (a) |
Change in Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
| BlackRock Liquidity Funds, MuniCash, Institutional Class |
2,822,221 | (367,237 | ) | 2,454,984 | $ | 2,455,229 | $ | 40,640 | $ | 2,931 | $ | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (a) | Includes net capital gain distributions, if applicable. |
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 |
32 | 06/19/19 | $3,958 | $ | (11,971 | ) | ||||||||
| Long U.S. Treasury Bond |
72 | 06/19/19 | 10,618 | (42,335 | ) | |||||||||
| 5-Year U.S. Treasury Note |
15 | 06/28/19 | 1,735 | (6,612 | ) | |||||||||
|
|
|
|||||||||||||
| $ | (60,918 | ) | ||||||||||||
|
|
|
|||||||||||||
| SCHEDULES OF INVESTMENTS | 53 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) |
Derivative Financial Instruments Categorized by Risk Exposure
As of year end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Liabilities — Derivative Financial Instruments |
||||||||||||||||||||||||||||
| Futures contracts |
||||||||||||||||||||||||||||
| Unrealized depreciation on futures contracts(a) |
$ | — | $ | — | $ | — | $ | — | $ | 60,918 | $ | — | $ | 60,918 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (a) | Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedule of Investments. In the Statement of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the year ended April 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (434,638 | ) | $ | — | $ | (434,638 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net Change in Unrealized Appreciation (Depreciation) on: | ||||||||||||||||||||||||||||
| Futures Contracts |
$ | — | $ | — | $ | — | $ | — | $ | (110,095 | ) | $ | — | $ | (110,095 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| Futures contracts: |
||||
| Average notional value of contracts — short |
$ | 12,598,779 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
| |||||||||||||||
| Investments: |
| |||||||||||||||
| Long-Term Investments(a) |
$ | — | $ | 282,003,288 | $ | — | $ | 282,003,288 | ||||||||
| Short-Term Securities |
2,455,229 | — | — | 2,455,229 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 2,455,229 | $ | 282,003,288 | $ | — | $ | 284,458,517 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Derivative Financial Instruments(b) |
| |||||||||||||||
| Liabilities: |
| |||||||||||||||
| Interest rate contracts |
$ | (60,918 | ) | $ | — | $ | — | $ | (60,918 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | See above Schedule of Investments for values in each state or political subdivision. |
| (b) | Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities: |
| |||||||||||||||
| TOB Trust Certificates |
$ | — | $ | (23,917,620 | ) | $ | — | $ | (23,917,620 | ) | ||||||
| VMTP Shares at Liquidation Value |
— | (87,000,000 | ) | — | (87,000,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | — | $ | (110,917,620 | ) | $ | — | $ | (110,917,620 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
See notes to financial statements.
| 54 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments April 30, 2019 |
BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 55 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets) |
| 56 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 57 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets) |
| 58 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 59 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets) |
| 60 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock Muni Intermediate Duration Fund, Inc. (MUI) (Percentages shown are based on Net Assets) |
| (k) | During the year ended April 30, 2019, investments in issuers considered to be an affiliate/affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| Affiliate | Shares Held at 04/30/18 |
Net Activity |
Shares Held at 04/30/19 |
Value at 04/30/19 |
Income | Net Realized Gain (Loss) (a) |
Change in Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
| BlackRock Liquidity Funds, MuniCash, Institutional Class |
— | 3,435,688 | 3,435,688 | $ | 3,436,032 | $ | 43,478 | $ | (1,081 | ) | $ | (343 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (a) | Includes net capital gain distributions, if applicable. |
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 |
253 | 06/19/19 | $ | 31,289 | $ | (142,235 | ) | |||||||||
| Long U.S. Treasury Bond |
94 | 06/19/19 | 13,862 | (66,609 | ) | |||||||||||
| 5-Year U.S. Treasury Note |
70 | 06/28/19 | 8,095 | (38,237 | ) | |||||||||||
|
|
|
|||||||||||||||
| $ | (247,081 | ) | ||||||||||||||
|
|
|
|||||||||||||||
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Liabilities — Derivative Financial Instruments |
||||||||||||||||||||||||||||
| Futures contracts |
||||||||||||||||||||||||||||
| Unrealized depreciation on futures contracts(a) |
$ | — | $ | — | $ | — | $ | — | $ | 247,081 | $ | — | $ | 247,081 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (a) | Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedule of Investments. In the Statement of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
| SCHEDULES OF INVESTMENTS | 61 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock Muni Intermediate Duration Fund, Inc. (MUI) |
For the year ended April 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (960,803 | ) | $ | — | $ | (960,803 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net Change in Unrealized Appreciation (Depreciation) on: | ||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (435,561 | ) | $ | — | $ | (435,561 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| Futures contracts: |
| |||
| Average notional value of contracts — short |
$ | 44,382,059 | ||
For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
| |||||||||||||||
| Investments: |
| |||||||||||||||
| Long-Term Investments(a) |
$ | — | $ | 954,872,589 | $ | — | $ | 954,872,589 | ||||||||
| Short-Term Securities |
3,436,032 | — | — | 3,436,032 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 3,436,032 | $ | 954,872,589 | $ | — | $ | 958,308,621 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Derivative Financial Instruments(b) |
| |||||||||||||||
| Liabilities: |
| |||||||||||||||
| Interest rate contracts |
$ | (247,081 | ) | $ | — | $ | — | $ | (247,081 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | See above Schedule of Investments for values in each sector or political subdivision. |
| (b) | Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of 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 |
$ | — | $ | (93,420,751 | ) | $ | — | $ | (93,420,751 | ) | ||||||
| VMTP Shares at Liquidation Value |
— | (287,100,000 | ) | — | (287,100,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | — | $ | (380,520,751 | ) | $ | — | $ | (380,520,751 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
See notes to financial statements.
| 62 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments April 30, 2019 |
BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 63 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets) |
| 64 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 65 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets) |
| 66 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets) |
| SCHEDULES OF INVESTMENTS | 67 |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniVest Fund II, Inc. (MVT) (Percentages shown are based on Net Assets) |
| (j) | During the year ended April 30, 2019, investments in issuers considered to be affiliates/an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| Affiliate | Shares Held at |
Net Activity |
Shares Held at |
Value at 04/30/19 |
Income | Net Realized Gain (Loss) (a) |
Change in Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
| BlackRock Liquidity Funds, MuniCash, Institutional Class |
986,303 | 9,517,636 | 10,503,939 | $ | 10,504,989 | $ | 96,235 | $ | 2,784 | $ | (1,045 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (a) | Includes net capital gain distributions, if applicable. |
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 |
38 | 06/19/19 | $ | 4,700 | $ | (22,996 | ) | |||||||||
| Long U.S. Treasury Bond |
151 | 06/19/19 | 22,268 | (88,632 | ) | |||||||||||
| 5-Year U.S. Treasury Note |
11 | 06/28/19 | 1,272 | (8,095 | ) | |||||||||||
|
|
|
|||||||||||||||
| $ | (119,723 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| 68 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| Schedule of Investments (continued) April 30, 2019 |
BlackRock MuniVest Fund II, Inc. (MVT) |
Derivative Financial Instruments Categorized by Risk Exposure
As of year end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Liabilities — Derivative Financial Instruments |
||||||||||||||||||||||||||||
| Futures contracts |
||||||||||||||||||||||||||||
| Unrealized depreciation on futures contracts(a) |
$ | — | $ | — | $ | — | $ | — | $ | 119,723 | $ | — | $ | 119,723 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (a) | Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedule of Investments. In the Statement of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the year ended April 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (601,670 | ) | $ | — | $ | (601,670 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net Change in Unrealized Appreciation (Depreciation) on: |
||||||||||||||||||||||||||||
| Futures contracts |
$ | — | $ | — | $ | — | $ | — | $ | (142,212 | ) | $ | — | $ | (142,212 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| Futures contracts: |
||||
| Average notional value of contracts — short |
$ | 20,090,104 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Long-Term Investments(a) |
$ | — | $ | 488,138,084 | $ | — | $ | 488,138,084 | ||||||||
| Short-Term Securities |
10,504,989 | — | — | 10,504,989 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 10,504,989 | $ | 488,138,084 | $ | — | $ | 498,643,073 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Derivative Financial Instruments(b) |
||||||||||||||||
| Liabilities: |
||||||||||||||||
| Interest rate contracts |
$ | (119,723 | ) | $ | — | $ | — | $ | (119,723 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | See above Schedule of Investments for values in each state or political subdivision. |
| (b) | Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument. |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of year 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 |
$ | — | $ | (47,982,013 | ) | $ | — | $ | (47,982,013 | ) | ||||||
| VMTP Shares at Liquidation Value |
— | (140,000,000 | ) | — | (140,000,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | — | $ | (187,982,013 | ) | $ | — | $ | (187,982,013 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
See notes to financial statements.
| SCHEDULES OF INVESTMENTS | 69 |
Statements of Assets and Liabilities
April 30, 2019
| MUA | MEN | MHD | MUH | |||||||||||||
| ASSETS |
||||||||||||||||
| Investments at value — unaffiliated(a) |
$ | 574,535,914 | $ | 577,290,166 | $ | 360,403,537 | $ | 279,101,606 | ||||||||
| Investments at value — affiliated(b) |
767,464 | 580,508 | 6,881,187 | 53,950 | ||||||||||||
| Cash |
84,438 | 147,766 | 71,745 | 66,054 | ||||||||||||
| Cash pledged for futures contracts |
359,950 | 629,900 | 301,550 | 276,200 | ||||||||||||
| Receivables: |
||||||||||||||||
| Investments sold |
782,915 | — | 10,000 | 10,000 | ||||||||||||
| Dividends — affiliated |
1,365 | 1,443 | 9,646 | 1,321 | ||||||||||||
| Interest — unaffiliated |
9,635,134 | 7,066,115 | 5,295,270 | 3,773,191 | ||||||||||||
| Prepaid expenses |
12,744 | 71,078 | 21,392 | 20,928 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets |
586,179,924 | 585,786,976 | 372,994,327 | 283,303,250 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| ACCRUED LIABILITIES |
||||||||||||||||
| Payables: |
||||||||||||||||
| Investments purchased |
1,934,600 | 597,832 | — | — | ||||||||||||
| Income dividend distributions — Common Shares |
1,963,762 | 1,305,985 | 957,907 | 697,181 | ||||||||||||
| Interest expense and fees |
442,038 | 453,505 | 253,186 | 253,653 | ||||||||||||
| Investment advisory fees |
262,132 | 237,696 | 167,045 | 126,552 | ||||||||||||
| Directors’ and Officer’s fees |
4,196 | 2,861 | 2,016 | 1,507 | ||||||||||||
| Other accrued expenses |
198,821 | 195,546 | 152,671 | 134,610 | ||||||||||||
| Variation margin on futures contracts |
70,469 | 123,392 | 58,727 | 53,688 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total accrued liabilities |
4,876,018 | 2,916,817 | 1,591,552 | 1,267,191 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| OTHER LIABILITIES |
||||||||||||||||
| TOB Trust Certificates |
71,659,281 | 91,348,628 | 52,673,965 | 53,408,501 | ||||||||||||
| VRDP Shares, at liquidation value of $100,000 per share, net of deferred offering costs(c)(d) |
— | 142,327,121 | — | — | ||||||||||||
| VMTP Shares, at liquidation value of $100,000 per share(c)(d) |
— | — | 83,700,000 | 55,000,000 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other liabilities |
71,659,281 | 233,675,749 | 136,373,965 | 108,408,501 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities |
76,535,299 | 236,592,566 | 137,965,517 | 109,675,692 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS |
$ | 509,644,625 | $ | 349,194,410 | $ | 235,028,810 | $ | 173,627,558 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS CONSIST OF |
||||||||||||||||
| Paid-in capital(e)(f)(g) |
$ | 478,975,827 | $ | 311,656,850 | $ | 211,660,385 | $ | 155,975,320 | ||||||||
| Accumulated earnings |
30,668,798 | 37,537,560 | 23,368,425 | 17,652,238 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS |
$ | 509,644,625 | $ | 349,194,410 | $ | 235,028,810 | $ | 173,627,558 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net asset value, offering and redemption price per share |
$ | 14.14 | $ | 11.76 | $ | 16.56 | $ | 15.32 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) Investments at cost — unaffiliated |
$ | 544,914,332 | $ | 537,563,790 | $ | 335,964,625 | $ | 261,707,486 | ||||||||
| (b) Investments at cost — affiliated |
$ | 767,464 | $ | 580,508 | $ | 6,881,872 | $ | 53,950 | ||||||||
| (c) Preferred Shares outstanding, par value $0.10 per share |
— | 1,425 | 837 | 550 | ||||||||||||
| (d) Preferred Shares authorized |
— | 8,905 | 5,837 | 4,030 | ||||||||||||
| (e) Par value per Common Share |
$ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | ||||||||
| (f) Common Shares outstanding |
36,032,338 | 29,681,476 | 14,191,210 | 11,336,282 | ||||||||||||
| (g) Common Shares authorized |
200,000,000 | 199,991,095 | 199,994,163 | 199,995,970 | ||||||||||||
See notes to financial statements.
| 70 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Statements of Assets and Liabilities (continued)
April 30, 2019
| MUS | MUI | MVT | ||||||||||
| ASSETS |
||||||||||||
| Investments at value — unaffiliated(a) |
$ | 282,003,288 | $ | 954,872,589 | $ | 488,138,084 | ||||||
| Investments at value — affiliated(b) |
2,455,229 | 3,436,032 | 10,504,989 | |||||||||
| Cash |
54,849 | 125,704 | 104,969 | |||||||||
| Cash pledged for futures contracts |
233,150 | 584,900 | 441,050 | |||||||||
| Receivables: |
||||||||||||
| Investments sold |
681,082 | 1,175,000 | 520,000 | |||||||||
| Dividends — affiliated |
3,467 | 9,830 | 14,148 | |||||||||
| Interest — unaffiliated |
4,092,688 | 13,423,922 | 7,381,908 | |||||||||
| Prepaid expenses |
20,963 | 27,504 | 21,975 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
289,544,716 | 973,655,481 | 507,127,123 | |||||||||
|
|
|
|
|
|
|
|||||||
| ACCRUED LIABILITIES |
||||||||||||
| Payables: |
||||||||||||
| Investments purchased |
1,736,312 | — | — | |||||||||
| Income dividend distributions — Common Shares |
579,313 | 1,704,184 | 1,268,797 | |||||||||
| Investment advisory fees |
121,494 | 437,146 | 206,281 | |||||||||
| Interest expense and fees |
96,155 | 373,155 | 227,211 | |||||||||
| Directors’ and Officer’s fees |
1,538 | 325,982 | 2,657 | |||||||||
| Other accrued expenses |
136,145 | 290,348 | 179,479 | |||||||||
| Variation margin on futures contracts |
45,844 | 117,232 | 86,126 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total accrued liabilities |
2,716,801 | 3,248,047 | 1,970,551 | |||||||||
|
|
|
|
|
|
|
|||||||
| OTHER LIABILITIES |
||||||||||||
| TOB Trust Certificates |
23,917,620 | 93,420,751 | 47,982,013 | |||||||||
| VMTP Shares, at liquidation value of $100,000 per share(c)(d) |
87,000,000 | 287,100,000 | 140,000,000 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total other liabilities |
110,917,620 | 380,520,751 | 187,982,013 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities |
113,634,421 | 383,768,798 | 189,952,564 | |||||||||
|
|
|
|
|
|
|
|||||||
| NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS |
$ | 175,910,295 | $ | 589,886,683 | $ | 317,174,559 | ||||||
|
|
|
|
|
|
|
|||||||
| NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS CONSIST OF |
||||||||||||
| Paid-in capital(e)(f)(g) |
$ | 168,134,858 | $ | 543,452,920 | $ | 289,726,481 | ||||||
| Accumulated earnings |
7,775,437 | 46,433,763 | 27,448,078 | |||||||||
|
|
|
|
|
|
|
|||||||
| NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS |
$ | 175,910,295 | $ | 589,886,683 | $ | 317,174,559 | ||||||
|
|
|
|
|
|
|
|||||||
| Net asset value, offering and redemption price per share |
$ | 13.51 | $ | 15.40 | $ | 14.87 | ||||||
|
|
|
|
|
|
|
|||||||
| (a) Investments at cost — unaffiliated |
$ | 266,901,003 | $ | 908,045,757 | $ | 459,863,479 | ||||||
| (b) Investments at cost — affiliated |
$ | 2,455,229 | $ | 3,436,375 | $ | 10,506,034 | ||||||
| (c) Preferred Shares outstanding, par value $0.10 per share |
870 | 2,871 | 1,400 | |||||||||
| (d) Preferred Shares authorized |
6,230 | 15,671 | 8,400 | |||||||||
| (e) Par value per Common Share |
$ | 0.10 | $ | 0.10 | $ | 0.10 | ||||||
| (f) Common Shares outstanding |
13,018,276 | 38,296,266 | 21,324,323 | |||||||||
| (g) Common Shares authorized |
199,993,770 | 199,984,329 | 199,991,600 | |||||||||
See notes to financial statements.
| FINANCIAL STATEMENTS | 71 |
Year Ended April 30, 2019
| MUA | MEN | MHD | MUH | |||||||||||||
| INVESTMENT INCOME |
||||||||||||||||
| Interest — unaffiliated |
$ | 29,051,690 | $ | 24,422,286 | $ | 17,187,773 | $ | 12,958,431 | ||||||||
| Dividends — affiliated |
38,707 | 21,238 | 46,085 | 9,978 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total investment income |
29,090,397 | 24,443,524 | 17,233,858 | 12,968,409 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| EXPENSES |
||||||||||||||||
| Investment advisory |
3,169,074 | 2,861,079 | 2,055,135 | 1,546,264 | ||||||||||||
| Accounting services |
90,771 | 90,621 | 64,123 | 53,272 | ||||||||||||
| Professional |
86,867 | 90,148 | 77,257 | 65,622 | ||||||||||||
| Transfer agent |
53,363 | 37,834 | 26,196 | 23,559 | ||||||||||||
| Directors and Officer |
45,041 | 30,366 | 21,062 | 15,713 | ||||||||||||
| Registration |
13,877 | 11,549 | 9,483 | 9,466 | ||||||||||||
| Printing |
10,450 | 11,519 | 9,335 | 8,481 | ||||||||||||
| Custodian |
9,526 | 11,458 | 7,079 | 7,825 | ||||||||||||
| Rating agency |
— | 43,550 | 43,438 | 43,382 | ||||||||||||
| Miscellaneous |
30,622 | 17,654 | 6,964 | 6,151 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses excluding interest expense, fees and amortization of offering costs |
3,509,591 | 3,205,778 | 2,320,072 | 1,779,735 | ||||||||||||
| Interest expense, fees and amortization of offering costs(a) |
1,580,939 | 5,349,177 | 3,391,975 | 2,603,777 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses |
5,090,530 | 8,554,955 | 5,712,047 | 4,383,512 | ||||||||||||
| Less fees waived and/or reimbursed by the Manager |
(2,715 | ) | (1,501 | ) | (3,099 | ) | (714 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses after fees waived and/or reimbursed |
5,087,815 | 8,553,454 | 5,708,948 | 4,382,798 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net investment income |
24,002,582 | 15,890,070 | 11,524,910 | 8,585,611 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments — unaffiliated |
3,848,659 | (584,652 | ) | (21,007 | ) | 471,274 | ||||||||||
| Investments — affiliated |
905 | 718 | 273 | 232 | ||||||||||||
| Futures contracts |
(612,875 | ) | (1,067,315 | ) | (411,161 | ) | (438,606 | ) | ||||||||
| Capital gain distributions from investment companies — affiliated |
139 | 29 | 138 | 22 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 3,236,828 | (1,651,220 | ) | (431,757 | ) | 32,922 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments — unaffiliated |
1,441,539 | 11,949,296 | 3,604,988 | 2,876,403 | ||||||||||||
| Investments — affiliated |
— | — | (685 | ) | — | |||||||||||
| Futures contracts |
(141,425 | ) | (268,871 | ) | (91,864 | ) | (98,539 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 1,300,114 | 11,680,425 | 3,512,439 | 2,777,864 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net realized and unrealized gain |
4,536,942 | 10,029,205 | 3,080,682 | 2,810,786 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS RESULTING FROM OPERATIONS |
$ | 28,539,524 | $ | 25,919,275 | $ | 14,605,592 | $ | 11,396,397 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | Related to TOB Trusts, VRDP Shares and/or VMTP Shares. |
See notes to financial statements.
| 72 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Statements of Operations (continued)
Year Ended April 30, 2019
| MUS | MUI | MVT | ||||||||||
| INVESTMENT INCOME |
||||||||||||
| Interest — unaffiliated |
$ | 11,977,222 | $ | 36,493,888 | $ | 23,397,199 | ||||||
| Dividends — affiliated |
40,640 | 43,478 | 96,235 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total investment income |
12,017,862 | 36,537,366 | 23,493,434 | |||||||||
|
|
|
|
|
|
|
|||||||
| EXPENSES |
||||||||||||
| Investment advisory |
1,554,248 | 5,253,912 | 2,541,668 | |||||||||
| Accounting services |
52,951 | 128,987 | 83,545 | |||||||||
| Professional |
66,821 | 117,728 | 79,606 | |||||||||
| Rating agency |
43,444 | 43,824 | 43,541 | |||||||||
| Transfer agent |
22,563 | 47,425 | 32,524 | |||||||||
| Directors and Officer |
15,901 | 64,267 | 28,058 | |||||||||
| Registration |
9,410 | 14,762 | 9,829 | |||||||||
| Printing |
8,780 | 14,861 | 10,512 | |||||||||
| Custodian |
6,840 | 19,593 | 9,014 | |||||||||
| Miscellaneous |
10,849 | 83,038 | 11,511 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total expenses excluding interest expense, fees and amortization of offering costs |
1,791,807 | 5,788,397 | 2,849,808 | |||||||||
| Interest expense, fees and amortization of offering costs(a) |
2,686,690 | 9,312,157 | 4,797,406 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total expenses |
4,478,497 | 15,100,554 | 7,647,214 | |||||||||
| Less fees waived and/or reimbursed by the Manager |
(96,934 | ) | (2,775 | ) | (6,799 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total expenses after fees waived and/or reimbursed |
4,381,563 | 15,097,779 | 7,640,415 | |||||||||
|
|
|
|
|
|
|
|||||||
| Net investment income |
7,636,299 | 21,439,587 | 15,853,019 | |||||||||
|
|
|
|
|
|
|
|||||||
| REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
| Net realized gain (loss) from: |
||||||||||||
| Investments — unaffiliated |
(155,735 | ) | (293,007 | ) | 1,252,436 | |||||||
| Investments — affiliated |
2,652 | (1,262 | ) | 2,364 | ||||||||
| Futures contracts |
(434,638 | ) | (960,803 | ) | (601,670 | ) | ||||||
| Capital gain distributions from investment companies — affiliated |
279 | 181 | 420 | |||||||||
|
|
|
|
|
|
|
|||||||
| (587,442 | ) | (1,254,891 | ) | 653,550 | ||||||||
|
|
|
|
|
|
|
|||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||
| Investments — unaffiliated |
3,224,694 | 20,120,178 | 3,557,081 | |||||||||
| Investments — affiliated |
— | (343 | ) | (1,045 | ) | |||||||
| Futures contracts |
(110,095 | ) | (435,561 | ) | (142,212 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| 3,114,599 | 19,684,274 | 3,413,824 | ||||||||||
|
|
|
|
|
|
|
|||||||
| Net realized and unrealized gain |
2,527,157 | 18,429,383 | 4,067,374 | |||||||||
|
|
|
|
|
|
|
|||||||
| NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS RESULTING FROM OPERATIONS |
$ | 10,163,456 | $ | 39,868,970 | $ | 19,920,393 | ||||||
|
|
|
|
|
|
|
|||||||
(a) Related to TOB Trusts, VRDP Shares and/or VMTP Shares.
See notes to financial statements.
| FINANCIAL STATEMENTS | 73 |
Statements of Changes in Net Assets
| MUA | MEN | |||||||||||||||||||
| Year Ended April 30, | Year Ended April 30, | |||||||||||||||||||
| 04/30/19 | 04/30/18 | 2019 | 2018 | |||||||||||||||||
| INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS |
||||||||||||||||||||
| OPERATIONS |
||||||||||||||||||||
| Net investment income |
$ | 24,002,582 | $ | 24,585,086 | $ | 15,890,070 | $ | 17,481,665 | ||||||||||||
| Net realized gain (loss) |
3,236,828 | 3,861,385 | (1,651,220 | ) | 1,316,883 | |||||||||||||||
| Net change in unrealized appreciation (depreciation) |
1,300,114 | (6,115,970 | ) | 11,680,425 | (8,990,694 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase in net assets applicable to Common Shareholders resulting from operations |
28,539,524 | 22,330,501 | 25,919,275 | 9,807,854 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)(b) |
||||||||||||||||||||
| Decrease in net assets resulting from distributions to Common Shareholders |
(23,709,465 | ) | (24,403,775 | ) | (17,010,899 | ) | (19,006,534 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| CAPITAL SHARE TRANSACTIONS |
||||||||||||||||||||
| Reinvestment of common distributions |
344,118 | 1,238,029 | — | 447,450 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS(b) |
||||||||||||||||||||
| Total increase (decrease) in net assets applicable to Common Shareholders |
5,174,177 | (835,245 | ) | 8,908,376 | (8,751,230 | ) | ||||||||||||||
| Beginning of year |
504,470,448 | 505,305,693 | 340,286,034 | 349,037,264 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| End of year |
$ | 509,644,625 | $ | 504,470,448 | $ | 349,194,410 | $ | 340,286,034 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (b) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
| 74 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (continued)
| MHD | MUH | |||||||||||||||||||
| Year Ended April 30, | Year Ended April 30, | |||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
| INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS |
||||||||||||||||||||
| OPERATIONS |
||||||||||||||||||||
| Net investment income |
$ | 11,524,910 | $ | 12,456,818 | $ | 8,585,611 | $ | 9,097,811 | ||||||||||||
| Net realized gain (loss) |
(431,757 | ) | 275,314 | 32,922 | 349,549 | |||||||||||||||
| Net change in unrealized appreciation (depreciation) |
3,512,439 | (5,682,277 | ) | 2,777,864 | (4,335,638 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase in net assets applicable to Common Shareholders resulting from operations |
14,605,592 | 7,049,855 | 11,396,397 | 5,111,722 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)(b) |
||||||||||||||||||||
| Decrease in net assets resulting from distributions to Common Shareholders |
(12,498,142 | ) | (13,224,063 | ) | (9,114,553 | ) | (9,693,560 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| CAPITAL SHARE TRANSACTIONS |
||||||||||||||||||||
| Reinvestment of common distributions |
— | 411,605 | — | 290,507 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS(b) |
||||||||||||||||||||
| Total increase (decrease) in net assets applicable to Common Shareholders |
2,107,450 | (5,762,603 | ) | 2,281,844 | (4,291,331 | ) | ||||||||||||||
| Beginning of year |
232,921,360 | 238,683,963 | 171,345,714 | 175,637,045 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| End of year |
$ | 235,028,810 | $ | 232,921,360 | $ | 173,627,558 | $ | 171,345,714 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (b) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
| FINANCIAL STATEMENTS | 75 |
Statements of Changes in Net Assets (continued)
| MUS | MUI | |||||||||||||||||||
| Year Ended April 30, | Year Ended April 30, | |||||||||||||||||||
| 2019 | 2018 | 04/30/19 | 04/30/18 | |||||||||||||||||
| INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS |
||||||||||||||||||||
| OPERATIONS |
||||||||||||||||||||
| Net investment income |
$ | 7,636,299 | $ | 9,174,345 | $ | 21,439,587 | $ | 22,724,306 | ||||||||||||
| Net realized gain (loss) |
(587,442 | ) | 291,275 | (1,254,891 | ) | 2,650,231 | ||||||||||||||
| Net change in unrealized appreciation (depreciation) |
3,114,599 | (7,382,682 | ) | 19,684,274 | (11,610,455 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase in net assets applicable to Common Shareholders resulting from operations |
10,163,456 | 2,082,938 | 39,868,970 | 13,764,082 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)(b) |
||||||||||||||||||||
| Decrease in net assets resulting from distributions to Common Shareholders |
(8,071,331 | ) | (9,919,384 | ) | (21,750,977 | ) | (22,940,382 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| CAPITAL SHARE TRANSACTIONS |
||||||||||||||||||||
| Reinvestment of common distributions |
— | 40,885 | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS(b) |
||||||||||||||||||||
| Total increase (decrease) in net assets applicable to Common Shareholders |
2,092,125 | (7,795,561 | ) | 18,117,993 | (9,176,300 | ) | ||||||||||||||
| Beginning of year |
173,818,170 | 181,613,731 |
|
571,768,690 |
|
|
580,944,990 |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| End of year |
$ | 175,910,295 | $ | 173,818,170 | $ | 589,886,683 | $ | 571,768,690 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (b) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
| 76 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (continued)
| MVT | ||||||||
| Year Ended April 30, | ||||||||
| 2019 | 2018 | |||||||
| INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS |
||||||||
| OPERATIONS |
||||||||
| Net investment income |
$ | 15,853,019 | $ | 17,559,402 | ||||
| Net realized gain |
653,550 | 910,384 | ||||||
| Net change in unrealized appreciation (depreciation) |
3,413,824 | (9,581,981 | ) | |||||
|
|
|
|
|
|||||
| Net increase in net assets applicable to Common Shareholders resulting from operations |
19,920,393 | 8,887,805 | ||||||
|
|
|
|
|
|||||
| DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)(b) |
||||||||
| Decrease in net assets resulting from distributions to Common Shareholders |
(17,281,902 | ) | (18,273,763 | ) | ||||
|
|
|
|
|
|||||
| CAPITAL SHARE TRANSACTIONS |
||||||||
| Reinvestment of common distributions |
274,917 | 1,708,157 | ||||||
|
|
|
|
|
|||||
| NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS(b) |
||||||||
| Total increase (decrease) in net assets applicable to Common Shareholders |
2,913,408 | (7,677,801 | ) | |||||
| Beginning of year |
314,261,151 | 321,938,952 | ||||||
|
|
|
|
|
|||||
| End of year |
$ | 317,174,559 | $ | 314,261,151 | ||||
|
|
|
|
|
|||||
| (a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (b) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
| FINANCIAL STATEMENTS | 77 |
Year Ended April 30, 2019
| MUA | MEN | MHD | MUH | |||||||||||||
| CASH PROVIDED BY OPERATING ACTIVITIES |
||||||||||||||||
| Net increase in net assets resulting from operations |
$ | 28,539,524 | $ | 25,919,275 | $ | 14,605,592 | $ | 11,396,397 | ||||||||
| Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: |
||||||||||||||||
| Proceeds from sales of long-term investments |
106,607,161 | 136,603,910 | 84,857,081 | 88,853,461 | ||||||||||||
| Purchases of long-term investments |
(109,391,354 | ) | (140,165,645 | ) | (67,643,846 | ) | (89,036,949 | ) | ||||||||
| Net (purchases)/proceeds from sales of short-term securities |
1,460,013 | (579,790 | ) | (6,147,609 | ) | 924,347 | ||||||||||
| Amortization of premium and accretion of discount on investments and other fees |
236,763 | (130,324 | ) | 331,276 | (114 | ) | ||||||||||
| Net realized (gain)/loss on investments |
(3,849,564 | ) | 583,934 | 20,734 | (471,506 | ) | ||||||||||
| Net unrealized (appreciation) on investments |
(1,441,539 | ) | (11,949,296 | ) | (3,604,303 | ) | (2,876,403 | ) | ||||||||
| (Increase) Decrease in Assets: |
||||||||||||||||
| Receivables: |
||||||||||||||||
| Dividends — affiliated |
582 | (461 | ) | (9,057 | ) | 209 | ||||||||||
| Interest — unaffiliated |
54,759 | 264,509 | 314,834 | 211,817 | ||||||||||||
| Prepaid expenses |
4,382 | 1,589 | 601 | 71 | ||||||||||||
| Other assets |
374 | 2,408 | 617 | 657 | ||||||||||||
| Increase (Decrease) in Liabilities: |
||||||||||||||||
| Payables: |
||||||||||||||||
| Interest expense and fees |
133,957 | 128,874 | 18,351 | 64,765 | ||||||||||||
| Investment advisory fees |
2,653 | 4,989 | (4,971 | ) | 775 | |||||||||||
| Directors’ and Officer’s fees |
(27 | ) | (262 | ) | (60 | ) | (18 | ) | ||||||||
| Variation margin on futures contracts |
33,938 | 47,673 | 25,602 | 27,813 | ||||||||||||
| Other accrued expenses |
12,524 | 12,369 | 4,280 | 6,046 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by operating activities |
22,404,146 | 10,743,752 | 22,769,122 | 9,101,368 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| CASH (USED FOR) FINANCING ACTIVITIES |
||||||||||||||||
| Proceeds from TOB Trust Certificates |
10,294,792 | 15,842,024 | 11,691,258 | 17,734,829 | ||||||||||||
| Repayments of TOB Trust Certificates |
(9,045,495 | ) | (8,603,541 | ) | (21,696,784 | ) | (17,421,203 | ) | ||||||||
| Proceeds from Loan for TOB Trust Certificates |
1,545,495 | — | 508,002 | 1,337,595 | ||||||||||||
| Repayments of Loan for TOB Trust Certificates |
(1,545,495 | ) | — | (508,002 | ) | (1,337,595 | ) | |||||||||
| Cash dividends paid to Common Shareholders |
(23,364,005 | ) | (17,129,625 | ) | (12,533,620 | ) | (9,182,571 | ) | ||||||||
| Decrease in bank overdraft |
— | (395,816 | ) | — | — | |||||||||||
| Amortization of deferred offering costs |
— | 9,972 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash (used for) financing activities |
(22,114,708 | ) | (10,276,986 | ) | (22,539,146 | ) | (8,868,945 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| CASH |
||||||||||||||||
| Net increase in restricted and unrestricted cash |
289,438 | 466,766 | 229,976 | 232,423 | ||||||||||||
| Restricted and unrestricted cash at beginning of year |
154,950 | 310,900 | 143,319 | 109,831 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Restricted and unrestricted cash at end of year |
$ | 444,388 | $ | 777,666 | $ | 373,295 | $ | 342,254 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
||||||||||||||||
| Cash paid during the year for interest expense |
$ | 1,446,982 | $ | 5,257,888 | $ | 3,373,624 | $ | 2,539,012 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NON-CASH FINANCING ACTIVITIES |
||||||||||||||||
| Capital shares issued in reinvestment of distributions paid to Common Shareholders |
$ | 344,118 | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AT THE END OF YEAR TO THE |
| |||||||||||||||
| Cash |
$ | 84,438 | $ | 147,766 | $ | 71,745 | $ | 66,054 | ||||||||
| Cash pledged: |
| |||||||||||||||
| Futures contracts |
359,950 | 629,900 | 301,550 | 276,200 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 444,388 | $ | 777,666 | $ | 373,295 | $ | 342,254 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AT THE BEGINNING OF YEAR TO |
| |||||||||||||||
| Cash |
$ | — | $ | — | $ | 7,769 | $ | 5,631 | ||||||||
| Cash pledged: |
| |||||||||||||||
| Futures contracts |
154,950 | 310,900 | 135,550 | 104,200 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 154,950 | $ | 310,900 | $ | 143,319 | $ | 109,831 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 78 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Statements of Cash Flows (continued)
Year Ended April 30, 2019
| MUS | MUI | MVT | ||||||||||
| CASH PROVIDED BY OPERATING ACTIVITIES |
||||||||||||
| Net increase in net assets resulting from operations |
$ | 10,163,456 | $ | 39,868,970 | $ | 19,920,393 | ||||||
| Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: |
||||||||||||
| Proceeds from sales of long-term investments |
78,568,179 | 252,653,557 | 149,887,098 | |||||||||
| Purchases of long-term investments |
(76,813,218 | ) | (259,135,309 | ) | (128,076,784 | ) | ||||||
| Net (purchases)/proceeds from sales of short-term securities |
369,643 | (3,437,637 | ) | (9,517,367 | ) | |||||||
| Amortization of premium and accretion of discount on investments and other fees |
1,511,549 | 6,854,237 | 1,175,406 | |||||||||
| Net realized (gain)/loss on investments |
153,083 | 294,269 | (1,254,800 | ) | ||||||||
| Net unrealized (appreciation) on investments |
(3,224,694 | ) | (20,119,835 | ) | (3,556,036 | ) | ||||||
| (Increase) Decrease in Assets: |
||||||||||||
| Receivables: |
||||||||||||
| Dividends — affiliated |
(1,623 | ) | (79 | ) | (9,048 | ) | ||||||
| Interest — unaffiliated |
59,657 | (953,877 | ) | 870,651 | ||||||||
| Prepaid expenses |
59 | 3,426 | 1,555 | |||||||||
| Other assets |
398 | 2,879 | 2,609 | |||||||||
| Increase (Decrease) in Liabilities: |
||||||||||||
| Payables: |
||||||||||||
| Investment advisory fees |
(9 | ) | 9,141 | (4,698 | ) | |||||||
| Interest expense and fees |
(3,227 | ) | 157,537 | (7,375 | ) | |||||||
| Directors’ and Officer’s fees |
(42 | ) | 9,215 | (129 | ) | |||||||
| Variation margin on futures contracts |
24,844 | 60,607 | 48,720 | |||||||||
| Other accrued expenses |
7,335 | 58,608 | 6,486 | |||||||||
|
|
|
|
|
|
|
|||||||
| Net cash provided by operating activities |
10,815,390 | 16,325,709 | 29,486,681 | |||||||||
|
|
|
|
|
|
|
|||||||
| CASH (USED FOR) FINANCING ACTIVITIES |
||||||||||||
| Proceeds from TOB Trust Certificates |
7,770,609 | 31,540,108 | 15,100,155 | |||||||||
| Repayments of TOB Trust Certificates |
(10,091,363 | ) | (24,566,337 | ) | (27,105,793 | ) | ||||||
| Proceeds from Loan for TOB Trust Certificates |
— | — | 744,282 | |||||||||
| Repayments of Loan for TOB Trust Certificates |
— | — | (744,282 | ) | ||||||||
| Cash dividends paid to Common Shareholders |
(8,318,679 | ) | (21,750,977 | ) | (17,091,074 | ) | ||||||
| Decrease in bank overdraft |
— | (1,152,799 | ) | — | ||||||||
|
|
|
|
|
|
|
|||||||
| Net cash (used for) financing activities |
(10,639,433 | ) | (15,930,005 | ) | (29,096,712 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| CASH |
||||||||||||
| Net increase in restricted and unrestricted cash |
175,957 | 395,704 | 389,969 | |||||||||
| Restricted and unrestricted cash at beginning of year |
112,042 | 314,900 | 156,050 | |||||||||
|
|
|
|
|
|
|
|||||||
| Restricted and unrestricted cash at end of year |
$ | 287,999 | $ | 710,604 | $ | 546,019 | ||||||
|
|
|
|
|
|
|
|||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
||||||||||||
| Cash paid during the year for interest expense |
$ | 2,689,917 | $ | 9,154,620 | $ | 4,804,781 | ||||||
|
|
|
|
|
|
|
|||||||
| NON-CASH FINANCING ACTIVITIES |
||||||||||||
| Capital shares issued in reinvestment of distributions paid to Common Shareholders |
$ | — | $ | — | $ | 274,917 | ||||||
|
|
|
|
|
|
|
|||||||
| RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AT THE END OF YEAR TO THE STATEMENTS
OF |
| |||||||||||
| Cash |
$ | 54,849 | $ | 125,704 | $ | 104,969 | ||||||
| Cash pledged: |
| |||||||||||
| Futures contracts |
233,150 | 584,900 | 441,050 | |||||||||
|
|
|
|
|
|
|
|||||||
| $ | 287,999 | $ | 710,604 | $ | 546,019 | |||||||
|
|
|
|
|
|
|
|||||||
| RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AT THE BEGINNING OF YEAR TO
THE |
| |||||||||||
| Cash |
$ | 16,892 | $ | — | $ | — | ||||||
| Cash pledged: |
| |||||||||||
| Futures contracts |
95,150 | 314,900 | 156,050 | |||||||||
|
|
|
|
|
|
|
|||||||
| $ | 112,042 | $ | 314,900 | $ | 156,050 | |||||||
|
|
|
|
|
|
|
|||||||
| FINANCIAL STATEMENTS | 79 |
(For a share outstanding throughout each period)
| MUA | ||||||||||||||||||||
| Year Ended April 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
| Net asset value, beginning of year |
$ | 14.01 | $ | 14.07 | $ | 14.45 | $ | 14.12 | $ | 13.56 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income(a) |
0.67 | 0.68 | 0.70 | 0.72 | 0.73 | |||||||||||||||
| Net realized and unrealized gain (loss) |
0.12 | (0.06 | ) | (0.38 | ) | 0.35 | 0.59 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net increase (decrease) from investment operations |
0.79 | 0.62 | 0.32 | 1.07 | 1.32 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Distributions to Common Shareholders from net investment income(b) |
(0.66 | ) | (0.68 | ) | (0.70 | ) | (0.74 | ) | (0.76 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net asset value, end of year |
$ | 14.14 | $ | 14.01 | $ | 14.07 | $ | 14.45 | $ | 14.12 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Market price, end of year |
$ | 14.98 | $ | 13.21 | $ | 14.82 | $ | 14.74 | $ | 14.22 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Return Applicable to Common Shareholders(c) |
| |||||||||||||||||||
| Based on net asset value |
5.97 | % | 4.47 | % | 2.23 | % | 7.90 | % | 10.11 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Based on market price |
19.07 | % | (6.48 | )% | 5.56 | % | 9.30 | % | 17.02 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ratios to Average Net Assets Applicable to Common Shareholders |
| |||||||||||||||||||
| Total expenses |
1.01 | % | 0.93 | % | 0.87 | % | 0.81 | % | 0.82 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and paid indirectly |
1.01 | % | 0.93 | % | 0.87 | % | 0.81 | % | 0.82 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and/or reimbursed and paid indirectly and excluding interest expense, fees, and amortization of offering costs(d) |
0.70 | % | 0.69 | % | 0.69 | % | 0.70 | % | 0.71 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income to Common Shareholders |
4.77 | % | 4.83 | % | 4.93 | % | 5.09 | % | 5.24 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Supplemental Data |
| |||||||||||||||||||
| Net assets applicable to Common Shareholders, end of year (000) |
$ | 509,645 | $ | 504,470 | $ | 505,306 | $ | 517,697 | $ | 505,341 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Borrowings outstanding, end of year (000) |
$ | 71,659 | $ | 71,925 | $ | 67,507 | $ | 66,087 | $ | 61,066 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Portfolio turnover rate |
19 | % | 15 | % | 11 | % | 18 | % | 22 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
| (d) | Interest expense and fees relate to TOB Trusts. See Note 4 of the Notes to Financial Statements for details. |
| 80 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| MEN | ||||||||||||||||||||
| Year Ended April 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
| Net asset value, beginning of year |
$ | 11.46 | $ | 11.77 | $ | 12.52 | $ | 12.27 | $ | 11.94 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income(a) |
0.54 | 0.59 | 0.65 | 0.70 | 0.71 | |||||||||||||||
| Net realized and unrealized gain (loss) |
0.33 | (0.26 | ) | (0.72 | ) | 0.28 | 0.35 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net increase (decrease) from investment operations |
0.87 | 0.33 | (0.07 | ) | 0.98 | 1.06 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Distributions to Common Shareholders(b) |
||||||||||||||||||||
| From net investment income |
(0.57 | ) | (0.64 | ) | (0.68 | ) | (0.73 | ) | (0.73 | ) | ||||||||||
| From net realized gain |
(0.00 | )(c) | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total distributions to Common Shareholders . . . . . . . . . . . . . . . . . . |
(0.57 | ) | (0.64 | ) | (0.68 | ) | (0.73 | ) | (0.73 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net asset value, end of year |
$ | 11.76 | $ | 11.46 | $ | 11.77 | $ | 12.52 | $ | 12.27 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Market price, end of year |
$ | 10.71 | $ | 10.48 | $ | 11.69 | $ | 12.55 | $ | 11.67 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Return Applicable to Common Shareholders(d) |
| |||||||||||||||||||
| Based on net asset value |
8.43 | % | 2.93 | % | (0.51 | )% | 8.50 | % | 9.49 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Based on market price |
7.98 | % | (5.23 | )% | (1.42 | )% | 14.35 | % | 10.33 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ratios to Average Net Assets Applicable to Common Shareholders |
| |||||||||||||||||||
| Total expenses |
2.52 | % | 2.06 | % | 1.73 | % | 1.44 | % | 1.44 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and/or reimbursed and paid indirectly |
2.52 | % | 2.06 | % | 1.73 | % | 1.44 | % | 1.43 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and/or reimbursed and paid indirectly and excluding interest expense, fees, and amortization of offering costs(e) |
0.94 | % | 0.92 | % | 0.89 | % | 0.90 | % | 0.91 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income to Common Shareholders |
4.68 | % | 4.97 | % | 5.29 | % | 5.71 | % | 5.76 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Supplemental Data |
| |||||||||||||||||||
| Net assets applicable to Common Shareholders, end of year (000) |
$ | 349,194 | $ | 340,286 | $ | 349,037 | $ | 370,342 | $ | 362,703 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| VRDP Shares outstanding at $100,000 liquidation value, end of year (000) |
$ | 142,500 | $ | 142,500 | $ | 142,500 | $ | 142,500 | $ | 142,500 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Asset coverage per VRDP Shares at $100,000 liquidation value, end of year |
$ | 345,049 | $ | 338,797 | $ | 344,938 | $ | 359,889 | $ | 354,528 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Borrowings outstanding, end of year (000) |
$ | 91,349 | $ | 87,395 | $ | 70,823 | $ | 67,160 | $ | 76,094 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Portfolio turnover rate |
22 | % | 21 | % | 12 | % | 10 | % | 12 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Amount is greater than $(0.005) per share. |
| (d) | Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
| (e) | Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VRDP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
| FINANCIAL HIGHLIGHTS | 81 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| MHD | ||||||||||||||||||||
| Year Ended April 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
| Net asset value, beginning of year |
$ | 16.41 | $ | 16.85 | $ | 17.95 | $ | 17.59 | $ | 16.85 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income(a) |
0.81 | 0.88 | 0.95 | 1.00 | 1.03 | |||||||||||||||
| Net realized and unrealized gain (loss) |
0.22 | (0.39 | ) | (1.07 | ) | 0.42 | 0.77 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net increase (decrease) from investment operations |
1.03 | 0.49 | (0.12 | ) | 1.42 | 1.80 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Distributions to Common Shareholders(b) |
| |||||||||||||||||||
| From net investment income |
(0.83 | ) | (0.92 | ) | (0.98 | ) | (1.06 | ) | (1.06 | ) | ||||||||||
| From net realized gain |
(0.05 | ) | (0.01 | ) | — | — | — | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total distributions to Common Shareholders |
(0.88 | ) | (0.93 | ) | (0.98 | ) | (1.06 | ) | (1.06 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net asset value, end of year |
$ | 16.56 | $ | 16.41 | $ | 16.85 | $ | 17.95 | $ | 17.59 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Market price, end of year |
$ | 15.92 | $ | 14.98 | $ | 16.65 | $ | 18.14 | $ | 17.25 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Return Applicable to Common Shareholders(c) |
| |||||||||||||||||||
| Based on net asset value |
6.84 | % | 3.07 | % | (0.67 | )% | 8.65 | % | 11.22 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Based on market price |
12.51 | % | (4.79 | )% | (2.87 | )% | 11.91 | % | 14.80 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ratios to Average Net Assets Applicable to Common Shareholders |
| |||||||||||||||||||
| Total expenses |
2.47 | % | 2.16 | % | 1.87 | % | 1.53 | % | 1.50 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and paid indirectly |
2.47 | % | 2.16 | % | 1.87 | % | 1.53 | % | 1.50 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and/or reimbursed and paid indirectly and excluding interest expense, fees, and amortization of offering costs(d) |
1.00 | % | 1.01 | % | 0.99 | % | 0.99 | % | 0.99 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income to Common Shareholders |
4.98 | % | 5.19 | % | 5.42 | % | 5.75 | % | 5.86 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Supplemental Data |
| |||||||||||||||||||
| Net assets applicable to Common Shareholders, end of year (000) |
$ | 235,029 | $ | 232,921 | $ | 238,684 | $ | 253,864 | $ | 248,646 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| VMTP Shares outstanding at $100,000 liquidation value, end of year (000) |
$ | 83,700 | $ | 83,700 | $ | 83,700 | $ | 83,700 | $ | 83,700 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Asset coverage per VMTP Shares at $100,000 liquidation value, end of year |
$ | 380,799 | $ | 378,281 | $ | 385,166 | $ | 403,302 | $ | 397,068 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Borrowings outstanding, end of year (000) |
$ | 52,674 | $ | 63,166 | $ | 62,233 | $ | 60,289 | $ | 56,784 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Portfolio turnover rate |
17 | % | 12 | % | 9 | % | 7 | % | 11 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
| (d) | Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
| 82 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| MUH | ||||||||||||||||||||
| Year Ended April 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
| Net asset value, beginning of year |
$ | 15.11 | $ | 15.52 | $ | 16.51 | $ | 16.21 | $ | 15.61 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income(a) |
0.76 | 0.80 | 0.86 | 0.91 | 0.93 | |||||||||||||||
| Net realized and unrealized gain (loss) |
0.25 | (0.35 | ) | (0.95 | ) | 0.33 | 0.64 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net increase (decrease) from investment operations |
1.01 | 0.45 | (0.09 | ) | 1.24 | 1.57 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Distributions to Common Shareholders(b) |
| |||||||||||||||||||
| From net investment income |
(0.75 | ) | (0.85 | ) | (0.90 | ) | (0.94 | ) | (0.97 | ) | ||||||||||
| From net realized gain |
(0.05 | ) | (0.01 | ) | — | — | — | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total distributions to Common Shareholders |
(0.80 | ) | (0.86 | ) | (0.90 | ) | (0.94 | ) | (0.97 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net asset value, end of year |
$ | 15.32 | $ | 15.11 | $ | 15.52 | $ | 16.51 | $ | 16.21 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Market price, end of year |
$ | 15.05 | $ | 13.75 | $ | 15.59 | $ | 16.23 | $ | 15.28 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Return Applicable to Common Shareholders(c) |
| |||||||||||||||||||
| Based on net asset value |
7.46 | % | 3.09 | % | (0.52 | )% | 8.25 | % | 10.64 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Based on market price |
16.00 | % | (6.61 | )% | 1.65 | % | 12.90 | % | 9.71 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ratios to Average Net Assets Applicable to Common Shareholders |
| |||||||||||||||||||
| Total expenses |
2.58 | % | 2.12 | % | 1.83 | % | 1.50 | % | 1.48 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and/or reimbursed and paid indirectly |
2.58 | % | 2.12 | % | 1.83 | % | 1.50 | % | 1.48 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and/or reimbursed and paid indirectly and excluding interest expense, fees, and amortization of offering costs(d) |
1.05 | % | 1.02 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income to Common Shareholders |
5.05 | % | 5.16 | % | 5.37 | % | 5.66 | % | 5.76 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Supplemental Data |
| |||||||||||||||||||
| Net assets applicable to Common Shareholders, end of year (000) |
$ | 173,628 | $ | 171,346 | $ | 175,637 | $ | 186,553 | $ | 183,214 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| VMTP Shares outstanding at $100,000 liquidation value, end of year (000) |
$ | 55,000 | $ | 55,000 | $ | 55,000 | $ | 55,000 | $ | 55,000 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Asset coverage per VMTP Shares at $100,000 liquidation value, end of year |
$ | 415,686 | $ | 411,538 | $ | 419,340 | $ | 439,188 | $ | 433,117 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Borrowings outstanding, end of year (000) |
$ | 53,409 | $ | 54,100 | $ | 47,507 | $ | 46,103 | $ | 43,568 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Portfolio turnover rate |
30 | % | 16 | % | 10 | % | 7 | % | 11 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
| (d) | Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
| FINANCIAL HIGHLIGHTS | 83 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| MUS | ||||||||||||||||||||
| Year Ended April 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
| Net asset value, beginning of year |
$ | 13.35 | $ | 13.95 | $ | 14.84 | $ | 14.57 | $ | 14.18 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income(a) |
0.59 | 0.70 | 0.75 | 0.80 | 0.80 | |||||||||||||||
| Net realized and unrealized gain (loss) |
0.19 | (0.54 | ) | (0.84 | ) | 0.28 | 0.40 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net increase (decrease) from investment operations |
0.78 | 0.16 | (0.09 | ) | 1.08 | 1.20 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Distributions to Common Shareholders from net investment income(b) |
(0.62 | ) | (0.76 | ) | (0.80 | ) | (0.81 | ) | (0.81 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net asset value, end of year |
$ | 13.51 | $ | 13.35 | $ | 13.95 | $ | 14.84 | $ | 14.57 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Market price, end of year |
$ | 12.01 | $ | 12.40 | $ | 13.38 | $ | 14.31 | $ | 13.32 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Return Applicable to Common Shareholders(c) |
| |||||||||||||||||||
| Based on net asset value |
6.59 | % | 1.33 | % | (0.47 | )% | 8.24 | % | 9.20 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Based on market price |
2.02 | % | (1.88 | )% | (1.00 | )% | 14.09 | % | 9.91 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ratios to Average Net Assets Applicable to Common Shareholders |
| |||||||||||||||||||
| Total expenses |
2.60 | % | 2.30 | % | 1.95 | % | 1.60 | % | 1.59 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and/or reimbursed and paid indirectly |
2.54 | % | 2.24 | % | 1.91 | % | 1.58 | % | 1.57 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and/or reimbursed and/or paid indirectly and excluding interest expense, fees and amortization of offering costs(d) |
0.98 | % | 0.99 | % | 0.98 | % | 0.99 | % | 0.99 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income to Common Shareholders |
4.43 | % | 5.08 | % | 5.22 | % | 5.49 | % | 5.49 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Supplemental Data |
| |||||||||||||||||||
| Net assets applicable to Common Shareholders, end of year (000) |
$ | 175,910 | $ | 173,818 | $ | 181,614 | $ | 193,110 | $ | 189,594 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| VMTP Shares outstanding at $100,000 liquidation value, end of year (000) |
$ | 87,000 | $ | 87,000 | $ | 87,000 | $ | 87,000 | $ | 87,000 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Asset coverage per VMTP Shares at $100,000 liquidation value, end of year |
$ | 302,196 | $ | 299,791 | $ | 308,751 | $ | 321,966 | $ | 317,924 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Borrowings outstanding, end of year (000) |
$ | 23,918 | $ | 26,238 | $ | 29,150 | $ | 24,429 | $ | 21,937 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Portfolio turnover rate |
27 | % | 21 | % | 18 | % | 25 | % | 11 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
| (d) | Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
| 84 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| MUI | ||||||||||||||||||||
| Year Ended April 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
| Net asset value, beginning of year |
$ | 14.93 | $ | 15.17 | $ | 16.16 | $ | 15.86 | $ | 15.64 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income(a) |
0.56 | 0.59 | 0.65 | 0.73 | 0.77 | |||||||||||||||
| Net realized and unrealized gain (loss) |
0.47 | (0.23 | ) | (0.83 | ) | 0.53 | 0.27 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net increase (decrease) from investment operations |
1.03 | 0.36 | (0.18 | ) | 1.26 | 1.04 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Distributions to Common Shareholders(b) |
| |||||||||||||||||||
| From net investment income |
(0.53 | ) | (0.60 | ) | (0.67 | ) | (0.78 | ) | (0.82 | ) | ||||||||||
| From net realized gain |
(0.03 | ) | (0.00 | )(c) | (0.14 | ) | (0.18 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total distributions to Common Shareholders |
(0.56 | ) | (0.60 | ) | (0.81 | ) | (0.96 | ) | (0.82 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net asset value, end of year |
$ | 15.40 | $ | 14.93 | $ | 15.17 | $ | 16.16 | $ | 15.86 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Market price, end of year |
$ | 13.85 | $ | 13.01 | $ | 13.96 | $ | 15.19 | $ | 14.47 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Return Applicable to Common Shareholders(d) |
| |||||||||||||||||||
| Based on net asset value |
7.68 | % | 2.76 | % | (0.69 | )% | 9.04 | % | 7.27 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Based on market price |
11.13 | % | (2.69 | )% | (2.77 | )% | 12.27 | % | 5.20 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ratios to Average Net Assets Applicable to Common Shareholders |
| |||||||||||||||||||
| Total expenses |
2.63 | % | 2.17 | % | 1.90 | % | 1.57 | % | 1.52 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and/or reimbursed and paid indirectly |
2.63 | % | 2.17 | % | 1.89 | % | 1.57 | % | 1.52 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total expenses after fees waived and/or reimbursed and paid indirectly and excluding interest expense, fees and amortization of offering costs(e) |
1.01 | % | 0.97 | % | 0.96 | % | 0.94 | % | 0.96 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net investment income to Common Shareholders |
3.73 | % | 3.87 | % | 4.12 | % | 4.61 | % | 4.82 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Supplemental Data |
| |||||||||||||||||||
| Net assets applicable to Common Shareholders, end of year (000) |
$ | 589,887 | $ | 571,769 | $ | 580,945 | $ | 618,971 | $ | 607,440 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| VMTP Shares outstanding at $100,000 liquidation value, end of year (000) |
$ | 287,100 | $ | 287,100 | $ | 287,100 | $ | 287,100 | $ | 287,100 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Asset coverage per VMTP Shares at $100,000 liquidation value, end of year |
$ | 305,464 | $ | 299,153 | $ | 302,349 | $ | 315,594 | $ | 311,578 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Borrowings outstanding, end of year (000) |
$ | 93,421 | $ | 79,136 | $ | 58,337 | $ | 63,102 | $ | 52,932 | ||||||||||
|
|
|
|
|
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| Portfolio turnover rate |
24 | % | 34 | % | 12 | % | 20 | % | 18 | % | ||||||||||
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| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Amount is greater than $(0.005) per share. |
| (d) | Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
| (e) | Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
| FINANCIAL HIGHLIGHTS | 85 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| MVT | ||||||||||||||||||||
| Year Ended April 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
| Net asset value, beginning of year |
$ | 14.75 | $ | 15.19 | $ | 16.17 | $ | 16.01 | $ | 15.45 | ||||||||||
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| Net investment income(a) |
0.74 | 0.83 | 0.91 | 0.98 | 0.99 | |||||||||||||||
| Net realized and unrealized gain (loss) |
0.20 | (0.41 | ) | (0.95 | ) | 0.18 | 0.61 | |||||||||||||
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| Net increase (decrease) from investment operations |
0.94 | 0.42 | (0.04 | ) | 1.16 | 1.60 | ||||||||||||||
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| Distributions to Common Shareholders(b) |
| |||||||||||||||||||
| From net investment income |
(0.76 | ) | (0.86 | ) | (0.94 | ) | (1.00 | ) | (1.04 | ) | ||||||||||
| From net realized gain |
(0.06 | ) | — | — | — | — | ||||||||||||||
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| Total distributions to Common Shareholders |
(0.82 | ) | (0.86 | ) | (0.94 | ) | (1.00 | ) | (1.04 | ) | ||||||||||
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| Net asset value, end of year |
$ | 14.87 | $ | 14.75 | $ | 15.19 | $ | 16.17 | $ | 16.01 | ||||||||||
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| Market price, end of year |
$ | 14.29 | $ | 14.05 | $ | 15.45 | $ | 17.38 | $ | 16.26 | ||||||||||
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| Total Return Applicable to Common Shareholders(c) |
| |||||||||||||||||||
| Based on net asset value |
6.83 | % | 2.79 | % | (0.34 | )% | 7.61 | % | 10.65 | % | ||||||||||
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|||||||||||
| Based on market price |
7.78 | % | (3.74 | )% | (5.68 | )% | 13.88 | % | 14.52 | % | ||||||||||
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|||||||||||
| Ratios to Average Net Assets Applicable to Common Shareholders |
| |||||||||||||||||||
| Total expenses |
2.45 | % | 2.11 | % | 1.88 | % | 1.52 | % | 1.50 | % | ||||||||||
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| Total expenses after fees waived and/or reimbursed and paid indirectly |
2.45 | % | 2.11 | % | 1.87 | % | 1.52 | % | 1.50 | % | ||||||||||
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| Total expenses after fees waived and/or reimbursed and paid indirectly and excluding interest expense, fees and amortization of offering costs(d) |
0.91 | % | 0.91 | % | 0.92 | % | 0.92 | % | 0.92 | % | ||||||||||
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| Net investment income to Common Shareholders |
5.09 | % | 5.44 | % | 5.78 | % | 6.15 | % | 6.17 | % | ||||||||||
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| Supplemental Data |
| |||||||||||||||||||
| Net assets applicable to Common Shareholders, end of year (000) |
$ | 317,175 | $ | 314,261 | $ | 321,939 | $ | 340,753 | $ | 336,320 | ||||||||||
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| VMTP Shares outstanding at $100,000 liquidation value, end of year (000) |
$ | 140,000 | $ | 140,000 | $ | 140,000 | $ | 140,000 | $ | 140,000 | ||||||||||
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| Asset coverage per VMTP Shares at $100,000 liquidation value, end of year |
$ | 326,553 | $ | 324,472 | $ | 329,956 | $ | 343,395 | $ | 340,229 | ||||||||||
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| Borrowings outstanding, end of year (000) |
$ | 47,982 | $ | 61,343 | $ | 60,575 | $ | 69,195 | $ | 66,439 | ||||||||||
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| Portfolio turnover rate |
25 | % | 11 | % | 9 | % | 6 | % | 10 | % | ||||||||||
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| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices. |
| (d) | Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
| 86 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
| 1. | ORGANIZATION |
The following are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as closed-end management investment companies and are referred to herein collectively as the “Funds”, or individually as a “Fund”:
| Fund Name | Herein Referred To As | Organized | Diversification Classification | |||
| BlackRock MuniAssets Fund, Inc. |
MUA | Maryland | Diversified | |||
| BlackRock MuniEnhanced Fund, Inc. |
MEN | Maryland | Diversified | |||
| BlackRock MuniHoldings Fund, Inc. |
MHD | Maryland | Diversified | |||
| BlackRock MuniHoldings Fund II, Inc. |
MUH | Maryland | Diversified | |||
| BlackRock MuniHoldings Quality Fund, Inc. |
MUS | Maryland | Diversified | |||
| BlackRock Muni Intermediate Duration Fund, Inc. |
MUI | Maryland | Diversified | |||
| BlackRock MuniVest Fund II, Inc. |
MVT | Maryland | Diversified |
The Boards of Directors of the Funds are collectively referred to throughout this report as the “Board of Directors” or the “Board”, and the directors thereof are collectively referred to throughout this report as “Directors”. The Funds determine and make available for publication the net asset values (“NAVs”) of their Common Shares on a daily basis.
The Funds, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, are included in a complex of non-index fixed-income mutual funds and all BlackRock-advised closed-end funds referred to as the BlackRock Fixed-Income Complex.
| 2. | SIGNIFICANT ACCOUNTING POLICIES |
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed (the “trade dates”). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on an accrual basis.
Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., futures contracts) or certain borrowings (e.g., TOB Trust transactions) that would be treated as “senior securities” for 1940 Act purposes, a Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments or borrowings. Doing so allows the investment or borrowing to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.
Distributions: Distributions from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.
Distributions to Preferred Shareholders are accrued and determined as described in Note 10.
Deferred Compensation Plan: Under the Deferred Compensation Plan (the “Plan”) approved by each Fund’s Board, the independent Directors (“Independent Directors”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain funds in the BlackRock Fixed-Income Complex selected by the Independent Directors. This has the same economic effect for the Independent Directors as if the Independent Directors had invested the deferred amounts directly in certain funds in the BlackRock Fixed-Income Complex.
The Plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Fund, as applicable. Deferred compensation liabilities are included in the Directors’ and Officer’s fees payable in the Statements of Assets and Liabilities and will remain as a liability of the Funds until such amounts are distributed in accordance with the Plan.
Recent Accounting Standards: In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update “Premium Amortization of Purchased Callable Debt Securities” which amends the amortization period for certain purchased callable debt securities. Under the new guidance, the premium amortization of purchased callable debt securities that have explicit, non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. The guidance will be applied on a modified retrospective basis and is effective for fiscal years, and their interim periods, beginning after December 15, 2018. Management continues to evaluate the impact of this guidance to the Funds.
Indemnifications: In the normal course of business, a Fund enters into contracts that contain a variety of representations that provide general indemnification. A Fund’s maximum exposure under these arrangements is unknown because it involves future potential claims against a Fund, which cannot be predicted with any certainty.
Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.
| NOTES TO FINANCIAL STATEMENTS | 87 |
Notes to Financial Statements (continued)
| 3. | INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: The Funds’ investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds determine the fair values of their financial instruments using various independent dealers or pricing services under policies approved by each Board. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
| • | Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. |
| • | Investments in open-end U.S. mutual funds are valued at NAV each business day. |
| • | Futures contracts traded on exchanges are valued at their last sale price. |
If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such investments, or in the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee will include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.
Fair Value Hierarchy: 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 statement purposes as follows:
| • | Level 1 — Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Fund 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 each Fund’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 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.
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.
| 4. | SECURITIES AND OTHER INVESTMENTS |
Zero-Coupon Bonds: Zero-coupon bonds are normally issued at a significant discount from face value and do not provide for periodic interest payments. These bonds may experience greater volatility in market value than other debt obligations of similar maturity which provide for regular interest payments.
Forward Commitments and When-Issued Delayed Delivery Securities: Certain funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. A fund may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, a fund may be required to pay more at settlement than the security is worth. In addition, a fund is not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, a fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, a fund’s maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions.
| 88 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (continued)
Municipal Bonds Transferred to TOB Trusts: Certain funds leverage their assets through the use of “TOB Trust” transactions. The funds transfer municipal bonds into a special purpose trust (a “TOB Trust”). A TOB Trust issues two classes of beneficial interests: short-term floating rate interests (“TOB Trust Certificates”), which are sold to third party investors, and residual inverse floating rate interests (“TOB Residuals”), which are issued to the participating funds that contributed the municipal bonds to the TOB Trust. The TOB Trust Certificates have interest rates that reset weekly and their holders have the option to tender such certificates to the TOB Trust for redemption at par and any accrued interest at each reset date. The TOB Residuals held by a fund provide the fund with the right to cause the holders of a proportional share of the TOB Trust Certificates to tender their certificates to the TOB Trust at par plus accrued interest. The funds may withdraw a corresponding share of the municipal bonds from the TOB Trust. Other funds managed by the investment adviser may also contribute municipal bonds to a TOB Trust into which a fund has contributed bonds. If multiple BlackRock-advised funds participate in the same TOB Trust, the economic rights and obligations under the TOB Residuals will be shared among the funds ratably in proportion to their participation in the TOB Trust.
TOB Trusts are supported by a liquidity facility provided by a third party bank or other financial institution (the “Liquidity Provider”) that allows the holders of the TOB Trust Certificates to tender their certificates in exchange for payment of par plus accrued interest on any business day. The tendered TOB Trust Certificates are remarketed by a Remarketing Agent. In the event of a failed remarketing, the TOB Trust may draw upon a loan from the Liquidity Provider to purchase the tendered TOB Trust Certificates. Any loans made by the Liquidity Provider will be secured by the purchased TOB Trust Certificates held by the TOB Trust and will be subject to an increased interest rate based on number of days the loan is outstanding.
The TOB Trust may be collapsed without the consent of a fund, upon the occurrence of a termination event, as defined in the TOB Trust agreement. Upon the occurrence of a termination event, a TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee of the TOB Trust, the Remarketing Agent and the Liquidity Provider. Upon certain termination events, TOB Trust Certificates holders will be paid before the TOB Residuals holders (i.e., the Funds) whereas in other termination events, TOB Trust Certificates holders and TOB Residuals holders will be paid pro rata.
While a fund’s investment policies and restrictions expressly permit investments in inverse floating rate securities, such as TOB Residuals, they restrict the ability of a fund to borrow money for purposes of making investments. MUA, MEN and MVT management believes that a fund’s restrictions on borrowings do not apply to the Funds’ TOB Trust transactions. Each fund’s transfer of the municipal bonds to a TOB Trust is considered a secured borrowing for financial reporting purposes. The cash received by the TOB Trust from the sale of the TOB Trust Certificates, less certain transaction expenses, is paid to a fund. A fund typically invests the cash received in additional municipal bonds.
Accounting for TOB Trusts: The municipal bonds deposited into a TOB Trust are presented in a fund’s Schedule of Investments and the TOB Trust Certificates are shown in Other Liabilities in the Statements of Assets and Liabilities. Any loans drawn by the TOB Trust pursuant to the liquidity facility to purchase tendered TOB Trust Certificates are shown as Loan for TOB Trust Certificates. The carrying amount of a fund’s payable to the holder of the TOB Trust Certificates, as reported in the Statements of Assets and Liabilities as TOB Trust Certificates, approximates its fair value.
Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by a fund on an accrual basis. Interest expense incurred on the TOB Trust transaction and other expenses related to remarketing, administration, trustee, liquidity and other services to a TOB Trust are shown as interest expense, fees and amortization of offering costs in the Statements of Operations. Fees paid upon creation of the TOB Trust are recorded as debt issuance costs and are amortized to interest expense, fees and amortization of offering costs in the Statements of Operations to the expected maturity of the TOB Trust. In connection with the restructurings of the TOB Trusts to non-bank sponsored TOB Trusts, the Funds incurred non-recurring, legal and restructuring fees, which are recorded as interest expense, fees and amortization of deferred offering costs in the Statements of Operations. Amounts recorded within interest expense, fees and amortization of offering costs in the Statements of Operations are:
| Interest Expense | Liquidity Fees | Other Expenses | Total | |||||||||||||
| MUA |
$ | 1,137,048 | $ | 313,388 | $ | 130,503 | $ | 1,580,939 | ||||||||
| MEN |
1,426,853 | 388,176 | 132,851 | 1,947,880 | ||||||||||||
| MHD |
901,571 | 250,750 | 94,002 | 1,246,323 | ||||||||||||
| MUH |
864,060 | 241,361 | 85,249 | 1,190,670 | ||||||||||||
| MUS |
352,541 | 102,340 | 37,390 | 492,271 | ||||||||||||
| MUI |
1,431,604 | 431,318 | 111,472 | 1,974,394 | ||||||||||||
| MVT |
872,718 | 239,145 | 96,087 | 1,207,950 | ||||||||||||
For the year ended April 30, 2019, the following table is a summary of each Fund’s TOB Trusts:
| Underlying Municipal Bonds Transferred to TOB Trusts (a) |
Liability for TOB Trust Certificates (b) |
Range of Interest Rates on TOB Trust Certificates at Period End |
Average TOB Trust Certificates Outstanding |
Daily Weighted Average Rate of Interest and Other Expenses on TOB Trusts |
||||||||||||||||
| MUA |
$ | 120,421,097 | $ | 71,659,281 | 2.32% — 2.50 | % | $ | 72,745,522 | 2.17 | % | ||||||||||
| MEN |
157,978,964 | 91,348,628 | 2.26 — 2.65 | 90,453,065 | 2.15 | |||||||||||||||
| MHD |
88,406,503 | 52,673,965 | 2.26 — 2.48 | 58,450,386 | 2.13 | |||||||||||||||
| MUH |
90,223,779 | 53,408,501 | 2.26 — 2.48 | 55,967,207 | 2.12 | |||||||||||||||
| MUS |
44,193,345 | 23,917,620 | 2.30 — 2.48 | 22,947,696 | 2.14 | |||||||||||||||
| MUI |
158,350,954 | 93,420,751 | 2.30 — 2.38 | 93,636,179 | 2.11 | |||||||||||||||
| MVT |
82,646,701 | 47,982,013 | 2.26 — 2.48 | 56,455,643 | 2.14 | |||||||||||||||
| (a) | The municipal bonds transferred to a TOB Trust are generally high grade municipal bonds. In certain cases, when municipal bonds transferred are lower grade municipal bonds, the TOB Trust transaction may include a credit enhancement feature that provides for the timely payment of principal and interest on the bonds to the TOB Trust by a credit |
| NOTES TO FINANCIAL STATEMENTS | 89 |
Notes to Financial Statements (continued)
| enhancement provider in the event of default of the municipal bond. The TOB Trust would be responsible for the payment of the credit enhancement fee and the funds, as TOB Residuals holders, would be responsible for reimbursement of any payments of principal and interest made by the credit enhancement provider. The maximum potential amounts owed by the fund, for such reimbursements, as applicable, are included in the maximum potential amounts disclosed for recourse TOB Trusts. |
| (b) | TOB Trusts may be structured on a non-recourse or recourse basis. When a Fund invests in TOB Trusts on a non-recourse basis, the Liquidity Provider may be required to make a payment under the liquidity facility to allow the TOB Trust to repurchase TOB Trust Certificates. The Liquidity Provider will be reimbursed from the liquidation of bonds held in the TOB Trust. If a fund invests in a TOB Trust on a recourse basis, a fund enters into a reimbursement agreement with the Liquidity Provider where a fund is required to reimburse the Liquidity Provider for any shortfall between the amount paid by the Liquidity Provider and proceeds received from liquidation of municipal bonds held in the TOB Trust (the “Liquidation Shortfall”). As a result, if a fund invests in a recourse TOB Trust, a fund will bear the risk of loss with respect to any Liquidation Shortfall. If multiple funds participate in any such TOB Trust, these losses will be shared ratably, including the maximum potential amounts owed by a Fund at April 30, 2019, in proportion to their participation in the TOB Trust. The recourse TOB Trusts are identified in the Schedules of Investments including the maximum potential amounts owed by a Fund at April 30, 2019. |
For the year ended April 30, 2019, the following table is a summary of each Fund’s Loan for TOB Trust Certificates:
| Loans Outstanding |
Range of Interest Rates Period End |
Average Loans Outstanding |
Daily Weighted Average Rate of Interest and Other Expenses on Loans |
|||||||||||||
| MUA |
$ | — | — | % | $ | 49,851 | 0.78 | % | ||||||||
| MHD |
— | — | 1,392 | 0.78 | ||||||||||||
| MUH |
— | — | 27,470 | 0.68 | ||||||||||||
| MVT |
— | — | 2,039 | 0.78 | ||||||||||||
| 5. | DERIVATIVE FINANCIAL INSTRUMENTS |
The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to manage their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange or over-the-counter (“OTC”).
Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.
Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited, if any, is shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest, foreign currency exchange rates or underlying assets.
| 6. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory: Each Fund entered into an Investment Advisory Agreement with the Manager, the Funds’ investment adviser and an indirect, wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”), to provide investment advisory and administrative services. The Manager is responsible for the management of each Fund’s portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of each Fund.
For such services, each Fund, except MUI, pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of each Fund’s net assets:
| MUA | MEN | MHD | MUH | MUS | MVT | |||||||||||||||||||
| Investment advisory fees |
0.55 | % | 0.50 | % | 0.55 | % | 0.55 | % | 0.55 | % | 0.50 | % | ||||||||||||
For such services, MUI pays the Manager a monthly fee of 0.55% of (i) the average daily value of MUI’s net assets and (ii) the proceeds of any outstanding debt securities and borrowings used for leverage.
For purposes of calculating these fees, “net assets” mean the total assets of a Fund minus the sum of its accrued liabilities (which does not include liabilities represented by TOB Trusts and the liquidation preference of any outstanding preferred shares). It is understood that the liquidation preference of any outstanding preferred stock (other than accumulated dividends) and TOB Trusts is not considered a liability in determining a Fund’s NAV.
| 90 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (continued)
Waiver: The Manager, for MUS, voluntarily agreed to waive its investment advisory fee on the proceeds of the Preferred Shares and TOB Trusts that exceed 35% of total assets minus the sum of its accrued liabilities (which does not include liabilities represented by TOB Trusts and the liquidation preference of any outstanding preferred shares). The voluntary waiver may be reduced or discontinued at any time without notice. This amount is included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended April 30, 2019 the waiver was $94,126.
The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”). These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended April 30, 2019, the amounts waived were as follows:
| MUA | MEN | MHD | MUH | MUS | MUI | MVT | ||||||||||||||||||||||
| Amounts waived |
$ | 2,715 | $ | 1,501 | $ | 3,099 | $ | 714 | $ | 2,808 | $ | 2,775 | $ | 6,799 | ||||||||||||||
The Manager contractually agreed to waive its investment advisory fee with respect to any portion of each Fund’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through June 30, 2019. The agreement can be renewed for annual periods thereafter, and may be terminated on 90 days’ notice, each subject to approval by a majority of the Funds’ Independent Directors. For the year ended April 30, 2019, there were no fees waived and/or reimbursed by the Manager pursuant to this agreement.
Directors and Officers: Certain directors and/or officers of the Funds are directors and/or officers of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Funds’ Chief Compliance Officer, which is included in Directors and Officer in the Statements of Operations.
Other Transactions: The Funds may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common directors. For the year ended April 30, 2019, the purchase and sale transactions and any net realized gains (losses) with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act were as follows:
| Purchases | Sales | Net Realized Gain (Loss) |
||||||||||
| MHD |
$ | — | $ | 1,755,194 | $ | (130,082 | ) | |||||
| MVT |
— | 2,605,194 | (193,504 | ) | ||||||||
| 7. | PURCHASES AND SALES |
For the year ended April 30, 2019, purchases and sales of investments, excluding short-term securities, were as follows:
| MUA | MEN | MHD | MUH | MUS | MUI | MVT | ||||||||||||||||||||||
| Purchases |
$ | 109,186,417 | $ | 127,723,561 | $ | 61,626,579 | $ | 83,422,601 | $ | 76,057,831 | $ | 244,801,290 | $ | 123,379,515 | ||||||||||||||
| Sales |
106,935,035 | 135,280,566 | 84,651,296 | 88,666,495 | 79,249,261 | 229,064,953 | 149,732,098 | |||||||||||||||||||||
| 8. | INCOME TAX INFORMATION |
It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.
Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Fund’s U.S. federal tax returns generally remains open for each of the four years ended April 30, 2019. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.
Management has analyzed tax laws and regulations and their application to the Funds as of April 30, 2019, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’s financial statements.
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. As of period end, the following permanent differences attributable to non-deductible expenses and the expiration of capital loss carryforwards were reclassified to the following accounts:
| MUA | MEN | |||||||
| Paid-in capital |
$ | (1,332,214 | ) | $ | (9,972 | ) | ||
| Accumulated earning |
1,332,214 | 9,972 | ||||||
| NOTES TO FINANCIAL STATEMENTS | 91 |
Notes to Financial Statements (continued)
The tax character of distributions paid was as follows:
| MUA | MEN | MHD | MUH | MUS | MUI | MVT | ||||||||||||||||||||||
| Tax-exempt income(a) |
||||||||||||||||||||||||||||
| 04/30/2019 |
$ | 23,551,751 | $ | 20,223,865 | $ | 13,771,349 | $ | 9,829,684 | $ | 10,264,197 | $ | 27,386,865 | $ | 19,429,884 | ||||||||||||||
| 04/30/2018 |
24,283,507 | 21,572,138 | 14,704,730 | 10,689,353 | 11,690,466 | 28,655,443 | 21,067,211 | |||||||||||||||||||||
| Ordinary income(b) |
||||||||||||||||||||||||||||
| 04/30/2019 |
157,714 | 5,562 | 283,540 | 261,013 | 1,553 | 21,651 | 157,896 | |||||||||||||||||||||
| 04/30/2018 |
120,268 | 170,131 | 92,030 | 67,697 | — | 67,384 | 59,503 | |||||||||||||||||||||
| Long-term capital gains(c) |
||||||||||||||||||||||||||||
| 04/30/2019 |
— | 172,797 | 588,905 | 436,963 | — | 1,680,224 | 1,283,578 | |||||||||||||||||||||
| 04/30/2018 |
— | — | 139,787 | 60,571 | — | 70,580 | — | |||||||||||||||||||||
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|
|
|
|
|
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|
|
|
|||||||||||||||
| Total |
||||||||||||||||||||||||||||
| 04/30/2019 |
$ | 23,709,465 | $ | 20,402,224 | $ | 14,643,794 | $ | 10,527,660 | $ | 10,265,750 | $ | 29,088,740 | $ | 20,871,358 | ||||||||||||||
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| 04/30/2018 |
$ | 24,403,775 | $ | 21,742,269 | $ | 14,936,547 | $ | 10,817,621 | $ | 11,690,466 | $ | 28,793,407 | $ | 21,126,714 | ||||||||||||||
|
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|
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|
|
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| (a) | The Funds designate these amounts paid during the fiscal year ended April 30, 2019, as exempt-interest dividends. |
| (b) | Ordinary income consists primarily of taxable income recognized from market discount and net short-term capital gains. Additionally, all ordinary income distributions are comprised of interest related dividends for non-U.S. residents and are eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations. |
| (c) | The Funds designate these amounts paid during the fiscal year ended April 30, 2019 as 20% rate long-term capital gain dividends. |
As of period end, the tax components of accumulated earnings were as follows:
| MUA | MEN | MHD | MUH | MUS | MUI | MVT | ||||||||||||||||||||||
| Undistributed tax-exempt income |
$ | 403,640 | $ | 547,612 | $ | 113,556 | $ | 31,316 | $ | 453,615 | $ | 1,840,148 | $ | 119,186 | ||||||||||||||
| Undistributed ordinary income |
3,834 | 4,051 | 1,617 | 15,595 | 2,724 | 3,124 | 30,463 | |||||||||||||||||||||
| Non-expiring capital loss carryforwards(a) |
— | — | — | — | (7,833,477 | ) | (1,809,176 | ) | — | |||||||||||||||||||
| Net unrealized gains(b) |
30,364,714 | 39,116,923 | 24,410,057 | 18,314,445 | 15,152,575 | 46,399,667 | 28,105,430 | |||||||||||||||||||||
| Qualified late-year losses(c) |
(103,390 | ) | (2,131,026 | ) | (1,156,805 | ) | (709,118 | ) | — | — | (807,001 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| $ | 30,668,798 | $ | 37,537,560 | $ | 23,368,425 | $ | 17,652,238 | $ | 7,775,437 | $ | 46,433,763 | $ | 27,448,078 | |||||||||||||||
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|
|
|||||||||||||||
| (a) | Amounts available to offset future realized capital gains. |
| (b) | The differences between book-basis and tax-basis net unrealized gains were attributable primarily to the tax deferral of losses on wash sales and straddles, amortization and accretion methods of premiums and discounts on fixed income securities, the accrual of income on securities in default, the realization for tax purposes of unrealized gains/losses on certain futures contracts, the treatment of residual interests in tender option bond trusts and the deferral of compensation to Directors. |
| (c) | The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next taxable year. |
During the year ended April 30, 2019, the Funds listed below utilized the following amounts of their respective capital loss carryforward:
| MUA |
$ | 3,210,013 | ||
| MEN |
76,432 |
As of April 30, 2019, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
| MUA | MEN | MHD | MUH | MUS | MUI | MVT | ||||||||||||||||||||||
| Tax cost |
$ | 473,221,821 | $ | 447,328,098 | $ | 290,200,702 | $ | 207,432,610 | $ | 245,388,324 | $ | 818,169,972 | $ | 422,468,153 | ||||||||||||||
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|
|
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|
|
|||||||||||||||
| Gross unrealized appreciation |
$ | 37,288,006 | $ | 39,800,479 | $ | 24,476,122 | $ | 18,455,194 | $ | 15,231,774 | $ | 46,884,691 | $ | 28,294,740 | ||||||||||||||
| Gross unrealized depreciation |
(6,865,730 | ) | (606,529 | ) | (66,065 | ) | (140,749 | ) | (79,199 | ) | (166,797 | ) | (101,832 | ) | ||||||||||||||
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| Net unrealized appreciation |
$ | 30,422,276 | $ | 39,193,950 | $ | 24,410,057 | $ | 18,314,445 | $ | 15,152,575 | $ | 46,717,894 | $ | 28,192,908 | ||||||||||||||
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| 9. | PRINCIPAL RISKS |
Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.
Inventories of municipal bonds held by brokers and dealers may decrease, which would lessen their ability to make a market in these securities. Such a reduction in market making capacity could potentially decrease a Fund’s ability to buy or sell bonds. As a result, a Fund may sell a security at a lower price, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative impact on performance. If a Fund needed to sell large blocks of bonds, those sales could further reduce the bonds’ prices and impact performance.
In the normal course of business, certain Funds invest in securities or other instruments and may enter into certain transactions, and such activities subject each Fund to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations.
| 92 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (continued)
Each Fund may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force each Fund to reinvest in lower yielding securities. Each Fund may also be exposed to reinvestment risk, which is the risk that income from each Fund’s portfolio will decline if each Fund invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below each Fund portfolio’s current earnings rate.
The Funds may hold a significant amount of bonds subject to calls by the issuers at defined dates and prices. When bonds are called by issuers and the Funds reinvest the proceeds received, such investments may be in securities with lower yields than the bonds originally held, and correspondingly, could adversely impact the yield and total return performance of a Fund.
A Fund structures and “sponsors” the TOB Trusts in which it holds TOB Residuals and has certain duties and responsibilities, which may give rise to certain additional risks including, but not limited to, compliance, securities law and operational risks.
Should short-term interest rates rise, the Funds’ investments in the TOB Trusts may adversely affect the Funds’ net investment income and dividends to Shareholders. Also, fluctuations in the market value of municipal bonds deposited into the TOB Trust may adversely affect the Funds’ NAVs per share.
The SEC and various federal banking and housing agencies have adopted credit risk retention rules for securitizations (the “Risk Retention Rules”). The Risk Retention Rules would require the sponsor of a TOB Trust to retain at least 5% of the credit risk of the underlying assets supporting the TOB Trust’s municipal bonds. The Risk Retention Rules may adversely affect the Funds’ ability to engage in TOB Trust transactions or increase the costs of such transactions in certain circumstances.
TOB Trusts constitute an important component of the municipal bond market. Any modifications or changes to rules governing TOB Trusts may adversely impact the municipal market and the Funds, including through reduced demand for and liquidity of municipal bonds and increased financing costs for municipal issuers. The ultimate impact of any potential modifications on the TOB Trust market and the overall municipal market is not yet certain.
Counterparty Credit Risk: The Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions. The Funds manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.
Concentration Risk: MUI invests a substantial amount of its assets in issuers located in a single state or limited number of states. This may subject the Fund to the risk that economic, political or social issues impacting a particular state or group of states could have an adverse and disproportionate impact on the income from, or the value or liquidity of, the Fund’s portfolio. Investment percentages in specific states or U.S. territories are presented in the Schedule of Investments.
As of period end, MHD, MUS and MUI invested a significant portion of their assets in securities in the Transportation sector. Changes in economic conditions affecting such sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.
The Funds invest a significant portion of their assets in fixed-income securities and/or use derivatives tied to the fixed-income markets. Changes in market interest rates or economic conditions may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Funds may be subject to a greater risk of rising interest rates due to the current period of historically low rates.
| 10. | CAPITAL SHARE TRANSACTIONS |
Each Fund is authorized to issue 200 million shares, all of which were initially classified as Common Shares. The par value for each Fund’s Common Shares is $0.10. The par value for each of MEN’s, MHD’s, MUH’s, MUS’s, MUI’s and MVT’s Preferred Shares outstanding is $0.10. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without the approval of Common Shareholders.
Common Shares
For the years shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:
| Year ended April 30, | MUA | MEN | MHD | MUH | MUS | MVT | ||||||||||||||||||
| 2019 |
24,627 | — | — | — | — | 18,940 | ||||||||||||||||||
| 2018 |
86,656 | 37,435 | 24,051 | 18,533 | 2,901 | 111,960 | ||||||||||||||||||
For the year ended April 30, 2019 and for the year ended April 30, 2018, shares issued and outstanding remained constant for MUI.
| NOTES TO FINANCIAL STATEMENTS | 93 |
Notes to Financial Statements (continued)
On November 15, 2018, the Board authorized each Fund to participate in an open market share repurchase program (the “Repurchase Program”). Under the Repurchase Program, each Fund may repurchase up to 5% of its outstanding common shares through November 30, 2019, based on common shares outstanding as of the close of business on November 30, 2018, subject to certain conditions. There is no assurance that the Funds will purchase shares in any particular amounts. For the year ended April 30, 2019, the Funds did not repurchase any shares.
Preferred Shares
A Fund’s Preferred Shares rank prior to its Common Shares as to the payment of dividends by the Fund and distribution of assets upon dissolution or liquidation of the Fund. The 1940 Act prohibits the declaration of any dividend on Common Shares or the repurchase of Common Shares if the Fund fails to maintain asset coverage of at least 200% of the liquidation preference of the Fund’s outstanding Preferred Shares. In addition, pursuant to the Preferred Shares’ governing instruments, a Fund is restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with its Preferred Shares or repurchasing such shares if the Fund fails to declare and pay dividends on the Preferred Shares, redeem any Preferred Shares required to be redeemed under the Preferred Shares’ governing instruments or comply with the basic maintenance amount requirement of the ratings agencies rating the Preferred Shares.
Holders of Preferred Shares have voting rights equal to the voting rights of holders of Common Shares (one vote per share) and vote together with holders of Common Shares (one vote per share) as a single class on certain matters. Holders of Preferred Shares, voting as a separate class, are also entitled to (i) elect two members of the Board, (ii) elect the full Board if dividends on the Preferred Shares are not paid for a period of two years and (iii) a separate class vote to amend the Preferred Share governing documents. In addition, the 1940 Act requires the approval of the holders of a majority of any outstanding Preferred Shares, voting as a separate class, to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Fund’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.
VRDP Shares
MEN has issued Series W-7 VRDP Shares, $100,000 liquidation preference per share, in one or more privately negotiated offerings to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The VRDP Shares include a liquidity feature and may be subject to a special rate period. As of period end, the VRDP Shares outstanding were as follows:
| Issue Date |
Shares Issued |
Aggregate Principal |
Maturity Date |
|||||||||||||
| MEN |
05/19/11 | 1,425 | $ | 142,500,000 | 06/01/41 | |||||||||||
Redemption Terms: MEN is required to redeem its VRDP Shares on the maturity date, unless earlier redeemed or repurchased. Six months prior to the maturity date, MEN is required to begin to segregate liquid assets with the Fund’s custodian to fund the redemption. In addition, MEN is required to redeem certain of its outstanding VRDP Shares if it fails to comply with certain asset coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, the VRDP Shares may also be redeemed, in whole or in part, at any time at the option of MEN. The redemption price per VRDP Share is equal to the liquidation preference per share plus any outstanding unpaid dividends.
Liquidity Feature: VRDP Shares are subject to a fee agreement between MEN and the liquidity provider that requires a per annum liquidity fee and, in some cases, an upfront or initial commitment fee, payable to the liquidity provider. These fees, if applicable, are shown as liquidity fees in the Statements of Operations. As of period end, the fee agreement between MEN and the liquidity provider is scheduled to expire on July 4, 2019 unless renewed or terminated in advance.
In the event a fee agreement is not renewed or is terminated in advance, and MEN does not enter into a fee agreement with an alternate liquidity provider, the VRDP Shares will be subject to mandatory purchase by the liquidity provider prior to the termination of the fee agreement. In the event of such mandatory purchase, MEN is required to redeem the VRDP Shares six months after the purchase date. Immediately after such mandatory purchase, MEN is required to begin to segregate liquid assets with its custodian to fund the redemption. There is no assurance that MEN will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.
Remarketing: MEN may incur remarketing fees on the aggregate principal amount of all its VRDP Shares, which, if any, are included in remarketing fees on Preferred Shares in the Statements of Operations. During any special rate period (as described below), MEN may incur nominal or no remarketing fees.
Ratings: As of period end, the VRDP Shares were assigned the following assigned ratings:
| Long-Term Moody’s Rating |
Long-Term Fitch Rating |
|||||||
| MEN |
Aa1 | AAA | ||||||
Special Rate Period: MEN may commence a “special rate period” with respect to its VRDP Shares, during which the VRDP Shares will not be subject to any remarketing and the dividend rate will be based on a predetermined methodology. During a special rate period, short-term ratings on VRDP Shares are withdrawn. MEN has commenced or is set to commence a special rate period:
| Commencement Date |
Expiration Date as of Period Ended 04/30/2019 |
|||||||
| MEN |
06/21/12 | 07/04/19 | ||||||
| 94 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (continued)
Prior to the expiration date, MEN and the VRDP Shares holder may mutually agree to extend the special rate period. If a special rate period is not extended, the VRDP Shares will revert to remarketable securities upon the termination of the special rate period and will be remarketed and available for purchase by qualified institutional investors.
During the special rate period: (i) the liquidity and fee agreements remain in effect, (ii) VRDP Shares remain subject to mandatory redemption by MEN on the maturity date, (iii) VRDP Shares will not be remarketed or subject to optional or mandatory tender events, (iv) MEN is required to comply with the same asset coverage, basic maintenance amount and leverage requirements for the VRDP Shares as is required when the VRDP Shares are not in a special rate period, (v) MEN will pay dividends monthly based on the sum of the Securities Industry and Financial Markets Association (“SIFMA”) Municipal Swap Index rate and a percentage per annum based on the long-term ratings assigned to the VRDP Shares and (vi) MEN will pay nominal or no fees to the liquidity provider and remarketing agent.
If MEN redeems its VRDP Shares prior to end of the special rate period and the VRDP Shares have long-term ratings above A1/A+ and its equivalent by all ratings agencies then rating the VRDP Shares, then such redemption may be subject to a redemption premium payable to the holder of the VRDP Shares based on the time remaining in the special rate period, subject to certain exceptions for redemptions that are required to comply with minimum asset coverage requirements.
Dividends: Except during the Special Rate Period as described above, dividends on the VRDP Shares are payable monthly at a variable rate set weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum rate. A change in the short-term credit rating of the liquidity provider or the VRDP Shares may adversely affect the dividend rate paid on such shares, although the dividend rate paid on the VRDP Shares is not directly based upon either short-term rating. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the length of time that the VRDP Shares fail to be remarketed.
For the year ended April 30, 2019, the annualized dividend rate for the VRDP Shares was 2.38%
During the year ended April 30, 2019, VRDP Shares issued and outstanding of MEN remained constant.
VMTP Shares
MHD, MUH, MUS, MUI and MVT (for purposes of this section, a “VMTP Fund”) have issued Series W-7 VMTP Shares, $100,000 liquidation preference per share, in one or more privately negotiated offerings to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act. The VMTP Shares are subject to certain restrictions on transfer, and a VMTP Fund may also be required to register its VMTP Shares for sale under the Securities Act under certain circumstances.
As of period end, the VMTP Shares outstanding and assigned long-term ratings were as follows:
| Issue Date |
Shares Issued |
Aggregate Principal |
Term Redemption Date |
Moody’s | Fitch | |||||||||||||||||||
| MHD |
12/16/11 | 837 | $ | 83,700,000 | 07/02/20 | Aa1 | AAA | |||||||||||||||||
| MUH |
12/16/11 | 550 | 55,000,000 | 07/02/20 | Aa1 | AAA | ||||||||||||||||||
| MUS |
12/16/11 | 870 | 87,000,000 | 07/02/20 | Aa1 | AAA | ||||||||||||||||||
| MUI |
12/07/12 | 2,871 | 287,100,000 | 07/02/20 | Aa1 | AAA | ||||||||||||||||||
| MVT |
12/16/11 | 1,400 | 140,000,000 | 07/02/20 | Aa1 | AAA | ||||||||||||||||||
Redemption Terms: A VMTP Fund is required to redeem its VMTP Shares on the term redemption date, unless earlier redeemed or repurchased or unless extended. In April, 2019, the term redemption date for VMTP Shares was extended until July 2, 2020.There is no assurance that a term will be extended further or that any VMTP Shares will be replaced with any other preferred shares or other form of leverage upon the redemption or repurchase of the VMTP Shares. Six months prior to the term redemption date, a VMTP Fund is required to begin to segregate liquid assets with its custodian to fund the redemption. In addition, a VMTP Fund is required to redeem certain of its outstanding VMTP Shares if it fails to comply with certain asset coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, VMTP Shares may be redeemed, in whole or in part, at any time at the option of the VMTP Fund. The redemption price per VMTP Share is equal to the liquidation preference per share plus any outstanding unpaid dividends and applicable redemption premium. If a VMTP Fund redeems its VMTP Shares prior to the term redemption date and the VMTP Shares have long-term ratings above A1/A+ or its equivalent by the ratings agencies then rating the VMTP Shares, then such redemption may be subject to a prescribed redemption premium (up to 3% of the liquidation preference) payable to the holder of the VMTP Shares based on the time remaining until the term redemption date, subject to certain exceptions for redemptions that are required to comply with minimum asset coverage requirements.
Dividends: Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread to the SIFMA Municipal Swap Index or to a percentage of the one-month LIBOR rate, as set forth in the VMTP Shares governing instrument. The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by the ratings agencies then rating the VMTP Shares.
The dividend rate on VMTP Shares is subject to a step-up spread if the VMTP Fund fails to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions or gross-up payments, and complying with certain asset coverage and leverage requirements.
For the year ended April 30, 2019, the average annualized dividend rates for the VMTP Shares were as follows:
| MHD | MUH | MUS | MUI | MVT | ||||||||||||||||
| Rate |
2.56 | % | 2.57 | % | 2.52 | % | 2.56 | % | 2.56 | % | ||||||||||
For the year ended April 30, 2019, VMTP Shares issued and outstanding of each Fund remained constant.
| NOTES TO FINANCIAL STATEMENTS | 95 |
Notes to Financial Statements (continued)
Offering Costs: MEN, MHD, MUH, MUS, MUI and MVT incurred costs in connection with the issuance of VRDP and VMTP Shares, which were recorded as a direct deduction from the carrying value of the related debt liability and will be amortized over the life of the VRDP and VMTP Shares with the exception of any upfront fees paid by MEN to the liquidity provider which, if any, were amortized over the life of the liquidity agreement. Amortization of these costs is included in interest expense, fees and amortization of offering costs in the Statements of Operations.
Financial Reporting: The VRDP and VRDP Shares are considered debt of the issuer; therefore, the liquidation preference, which approximates fair value of the VRDP and VMTP Shares, is recorded as a liability in the Statements of Assets and Liabilities net of deferred offering costs. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VRDP and VMTP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VRDP and VMTP Shares are treated as equity for tax purposes. Dividends paid to holders of the VRDP and VMTP Shares are generally classified as tax-exempt income for tax-reporting purposes. Dividends and amortization of deferred offering costs on VRDP and VMTP Shares are included in interest expense, fees and amortization of offering costs in the Statements of Operations:
| Dividends Accrued | Deferred Offering Costs Amortization |
|||||||
| MEN |
$ | 3,391,325 | $ | 9,972 | ||||
| MHD |
2,145,652 | — | ||||||
| MUH |
1,413,107 | — | ||||||
| MUS |
2,194,419 | — | ||||||
| MUI |
7,337,763 | — | ||||||
| MVT |
3,589,456 | — | ||||||
| 11. | REGULATION S-X AMENDMENTS |
On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. The Funds have adopted the amendments pertinent to Regulation S-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statements of Assets and Liabilities, Statements of Changes in Net Assets and Notes to the Financial Statements.
Prior year distribution information and undistributed net investment income in the Statements of Changes in Net Assets has been modified to conform to the current year presentation in accordance with the Regulation S-X changes.
Distributions for the year ended April 30, 2018, were classified as follows:
| Net Investment Income | Net Realized Gain | |||||||
| MUA |
$ | 24,403,775 | $ | — | ||||
| MEN |
19,006,534 | — | ||||||
| MHD |
13,034,780 | 189,283 | ||||||
| MUH |
9,599,378 | 94,182 | ||||||
| MUS |
9,919,384 | — | ||||||
| MUI |
22,880,908 | 59,474 | ||||||
| MVT |
18,273,763 | — | ||||||
Undistributed net investment income as of April 30, 2018, is as follows:
| Undistributed Net Investment Income |
||||
| MUA |
$ | 964,175 | ||
| MEN |
2,730,008 | |||
| MHD |
797,480 | |||
| MUH |
1,379,268 | |||
| MUS |
1,190,147 | |||
| MUI |
1,116,863 | |||
| MVT |
1,315,017 | |||
| 96 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (continued)
| 12. | SUBSEQUENT EVENTS |
Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:
| Common Dividend Per Share |
Preferred Shares (c) | |||||||||||||||||||||||
| Paid (a) | Declared (b) | Shares | Series | Declared | ||||||||||||||||||||
| MUA |
$ | 0.054500 | $ | 0.054500 | — | — | $ | — | ||||||||||||||||
| MEN |
0.044000 | 0.044000 | VRDP | W-7 | 317,599 | |||||||||||||||||||
| MHD |
0.067500 | 0.067500 | VMTP | W-7 | 186,884 | |||||||||||||||||||
| MUH |
0.061500 | 0.061500 | VMTP | W-7 | 122,803 | |||||||||||||||||||
| MUS |
0.044500 | 0.044500 | VMTP | W-7 | 194,252 | |||||||||||||||||||
| MUI |
0.044500 | 0.044500 | VMTP | W-7 | 641,033 | |||||||||||||||||||
| MVT |
0.059500 | 0.059500 | VMTP | W-7 | 312,590 | |||||||||||||||||||
| (a) | Net investment income dividend paid on June 3, 2019 to Common Shareholders of record on May 15, 2019. |
| (b) | Net investment income dividend declared on June 3, 2019, payable to Common Shareholders of record on June 14, 2019. |
| (c) | Dividends declared for period May 1, 2019 to May 31, 2019. |
| NOTES TO FINANCIAL STATEMENTS | 97 |
| Report of Independent Registered Public Accounting Firm | ||
To the Shareholders and Board of Directors of BlackRock MuniAssets Fund, Inc., BlackRock MuniEnhanced Fund, Inc., BlackRock MuniHoldings Fund, Inc., BlackRock MuniHoldings Fund II, Inc., BlackRock MuniHoldings Quality Fund, Inc., BlackRock Muni Intermediate Duration Fund, Inc., and BlackRock MuniVest Fund II, Inc.:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of BlackRock MuniAssets Fund, Inc., BlackRock MuniEnhanced Fund, Inc., BlackRock MuniHoldings Fund, Inc., BlackRock MuniHoldings Fund II, Inc., BlackRock MuniHoldings Quality Fund, Inc., BlackRock Muni Intermediate Duration Fund, Inc., and BlackRock MuniVest Fund II, Inc. (the “Funds”), including the schedules of investments, as of April 30, 2019, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of April 30, 2019, and the results of their operations and cash flows for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of April 30, 2019, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Boston, Massachusetts
June 21, 2019
We have served as the auditor of one or more BlackRock investment companies since 1992.
| 98 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Automatic Dividend Reinvestment Plan
Pursuant to each Fund’s Dividend Reinvestment Plan (the “Reinvestment Plan”), Common Shareholders are automatically enrolled to have all distributions of dividends and capital gains and other distributions reinvested by Computershare Trust Company, N.A. (the “Reinvestment Plan Agent”) in the respective Fund’s Common Shares pursuant to the Reinvestment Plan. Shareholders who do not participate in the Reinvestment Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street name or other nominee name, then to the nominee) by the Reinvestment Plan Agent, which serves as agent for the shareholders in administering the Reinvestment Plan.
After the Funds declare a dividend or determine to make a capital gain or other distribution, the Reinvestment Plan Agent will acquire shares for the participants’ accounts, depending upon the following circumstances, either (i) through receipt of unissued but authorized shares from the Funds (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market or on the Fund’s primary exchange (“open-market purchases”). If, on the dividend payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition often referred to as a “market premium”), the Reinvestment Plan Agent will invest the dividend amount in newly issued shares acquired on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the dividend payment date, the dollar amount of the dividend will be divided by 95% of the market price on the dividend payment date. If, on the dividend payment date, the NAV is greater than the market price per share plus estimated brokerage commissions (such condition often referred to as a “market discount”), the Reinvestment Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. If the Reinvestment 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 Reinvestment Plan Agent will invest any un-invested portion in newly issued shares. Investments in newly issued shares made in this manner would be made pursuant to the same process described above and the date of issue for such newly issued shares will substitute for the dividend payment date.
You may elect not to participate in the Reinvestment Plan and to receive all dividends in cash by contacting the Reinvestment Plan Agent, at the address set forth below.
Participation in the Reinvestment Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Reinvestment Plan Agent prior to the dividend record date. Additionally, the Reinvestment Plan Agent seeks to process notices received after the record date but prior to the payable date and such notices often will become effective by the payable date. Where late notices are not processed by the applicable payable date, such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.
The Reinvestment Plan Agent’s fees for the handling of the reinvestment of distributions will be paid by each Fund. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Reinvestment Plan Agent’s open-market purchases in connection with the reinvestment of all distributions. The automatic reinvestment of all distributions will not relieve participants of any U.S. federal, state or local income tax that may be payable on such dividends or distributions.
Each Fund reserves the right to amend or terminate the Reinvestment Plan. There is no direct service charge to participants in the Reinvestment Plan; however, each Fund reserves the right to amend the Reinvestment Plan to include a service charge payable by the participants. Participants in MEN and MUI that request a sale of shares are subject to a $2.50 sales fee and a $0.15 per share fee. Per share fees include any applicable brokerage commissions the Reinvestment Plan Agent is required to pay. Participants in MUA, MHD, MUH, MUS and MVT that request a sale of shares are subject to a $0.02 per share sold brokerage commission. All correspondence concerning the Reinvestment Plan should be directed to Computershare Trust Company, N.A. through the internet at http://www.computershare.com/blackrock, or in writing to Computershare, P.O. Box 505000, Louisville, KY 40233, Telephone: (800) 699-1236. Overnight correspondence should be directed to the Reinvestment Plan Agent at Computershare, 462 South 4th Street, Suite 1600, Louisville, KY 40202.
| AUTOMATIC DIVIDEND REINVESTMENT PLAN | 99 |
Director and Officer Information
| Independent Directors (a) | ||||||||
| Name Year of Birth (b) |
Position(s) Held (Length of Service) (c) |
Principal Occupation(s) During Past Five Years | Number of BlackRock-Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen (d) |
Public Company and Other Investment Company Directorships Held During Past Five Years | ||||
| Richard E. Cavanagh 1946 |
Co-Chair of the Board and Director (Since 2007) |
Director, The Guardian Life Insurance Company of America since 1998; Board Chair, Volunteers of America (a not-for-profit organization) from 2015 to 2018 (board member since 2009); Director, Arch Chemicals (chemical and allied products) from 1999 to 2011; Trustee, Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005 to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof since 1996; Faculty Member/Adjunct Lecturer, Harvard University since 2007 and Executive Dean from 1987 to 1995; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007. | 88 RICs consisting of 112 Portfolios | None | ||||
| Karen P. Robards 1950 |
Co-Chair of the Board and Director (Since 2007) |
Principal of Robards & Company, LLC (consulting and private investing) since 1987; Co-founder and Director of the Cooke Center for Learning and Development (a not-for-profit organization) since 1987; Director of Enable Injections, LLC (medical devices) since 2019; Investment Banker at Morgan Stanley from 1976 to 1987. | 88 RICs consisting of 112 Portfolios | Greenhill & Co., Inc.; AtriCure, Inc. (medical devices) from 2000 until 2017 | ||||
| Michael J. Castellano 1946 |
Director (Since 2011) |
Chief Financial Officer of Lazard Group LLC from 2001 to 2011; Chief Financial Officer of Lazard Ltd from 2004 to 2011; Director, Support Our Aging Religious (non-profit) from 2009 to June 2015 and since 2017; Director, National Advisory Board of Church Management at Villanova University since 2010; Trustee, Domestic Church Media Foundation since 2012; Director, CircleBlack Inc. (financial technology company) since 2015. | 88 RICs consisting of 112 Portfolios | None | ||||
| Cynthia L. Egan 1955 |
Director (Since 2016) |
Advisor, U.S. Department of the Treasury from 2014 to 2015; President, Retirement Plan Services, for T. Rowe Price Group, Inc. from 2007 to 2012; executive positions within Fidelity Investments from 1989 to 2007. | 88 RICs consisting of 112 Portfolios | Unum (insurance); The Hanover Insurance Group (insurance); Envestnet (investment platform) from 2013 until 2016 | ||||
| Frank J. Fabozzi 1948 |
Director (Since 2007) |
Editor of The Journal of Portfolio Management since 1986; Professor of Finance, EDHEC Business School (France) since 2011; Visiting Professor, Princeton University for the 2013 to 2014 academic year and Spring 2017 semester; Professor in the Practice of Finance, Yale University School of Management from 1994 to 2011 and currently a Teaching Fellow in Yale’s Executive Programs; Board Member, BlackRock Equity-Liquidity Funds from 2014 to 2016; affiliated professor Karlsruhe Institute of Technology from 2008 to 2011. | 88 RICs consisting of 112 Portfolios | None | ||||
| Henry Gabbay 1947 |
Director (Since 2019) |
Board Member, BlackRock Equity-Bond Board from 2007 to 2018; Board Member, BlackRock Equity-Liquidity and BlackRock Closed-End Fund Boards from 2007 through 2014; Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Allocation Target Shares (formerly, BlackRock Bond Allocation Target Shares) from 2005 to 2007 and Treasurer of certain closed-end funds in the BlackRock fund complex from 1989 to 2006. | 88 RICs consisting of 112 Portfolios | None | ||||
| 100 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Director and Officer Information (continued)
| Independent Directors (a) (continued) | ||||||||
| Name Year of Birth (b) |
Position(s) Held (Length of Service) (c) |
Principal Occupation(s) During Past Five Years | Number of BlackRock-Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen (d) |
Public Company and Other Investment Company Directorships Held During Past Five Years | ||||
| R. Glenn Hubbard 1958 |
Director (Since 2007) |
Dean, Columbia Business School since 2004; Faculty member, Columbia Business School since 1988. | 88 RICs consisting of 112 Portfolios | ADP (data and information services); Metropolitan Life Insurance Company (insurance); KKR Financial Corporation (finance) from 2004 until 2014 | ||||
| W. Carl Kester 1951 |
Director (Since 2007) |
George Fisher Baker Jr. Professor of Business Administration, Harvard Business School since 2008; Deputy Dean for Academic Affairs from 2006 to 2010; Chairman of the Finance Unit, from 2005 to 2006; Senior Associate Dean and Chairman of the MBA Program from 1999 to 2005; Member of the faculty of Harvard Business School since 1981. | 88 RICs consisting of 112 Portfolios | None | ||||
| Catherine A. Lynch 1961 |
Director (Since 2016) |
Chief Executive Officer, Chief Investment Officer and various other positions, National Railroad Retirement Investment Trust from 2003 to 2016; Associate Vice President for Treasury Management, The George Washington University from 1999 to 2003; Assistant Treasurer, Episcopal Church of America from 1995 to 1999. | 88 RICs consisting of 112 Portfolios | None | ||||
| Interested Directors (a)(d) | ||||||||
| Name Year of Birth (b) |
Position(s) Held (Length of Service) (c) |
Principal Occupation(s) During Past Five Years | Number of BlackRock-Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen (d) |
Public Company and Other Investment Company Directorships Held During Past Five Years | ||||
| Robert Fairbairn 1965 |
Director (Since 2018) |
Vice Chairman of BlackRock, Inc. since 2019; Member of BlackRock’s Global Executive and Global Operating Committees; Co-Chair of BlackRock’s Human Capital Committee; Senior Managing Director of BlackRock, Inc. from 2010 to 2019; oversaw BlackRock’s Strategic Partner Program and Strategic Product Management Group from 2012 to 2019; Member of the Board of Managers of BlackRock Investments, LLC from 2011 to 2018; Global Head of BlackRock’s Retail and iShares® businesses from 2012 to 2016. | 126 RICs consisting of 295 Portfolios | None | ||||
| John M. Perlowski 1964 |
Director (Since 2015); President and Chief Executive Officer (Since 2010) |
Managing Director of BlackRock, Inc. since 2009; Head of BlackRock Global Accounting and Product Services since 2009; Advisory Director of Family Resource Network (charitable foundation) since 2009. | 126 RICs consisting of 295 Portfolios | None | ||||
| (a) The address of each Director is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. | ||||||||
| (b) Each Independent Director holds office until his or her successor is duly elected and qualifies or until his or her earlier death, resignation, retirement or removal as provided by the Funds’ by-laws or charter or statute, or until December 31 of the year in which he or she turns 75. Directors who are “interested persons,” as defined in the Investment Company Act serve until their successor is duly elected and qualifies or until their earlier death, resignation, retirement or removal as provided by the Funds’ by-laws or statute, or until December 31 of the year in which they turn 72. The Board may determine to extend the terms of Independent Directors on a case-by-case basis, as appropriate. | ||||||||
| (c) Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. Certain Independent Directors first became members of the boards of other legacy MLIM or legacy BlackRock funds as follows: Richard E. Cavanagh, 1994; Frank J. Fabozzi, 1988; R. Glenn Hubbard, 2004; W. Carl Kester, 1995; and Karen P. Robards, 1998. Mr. Gabbay became a member of the boards of the open-end funds in the Fixed-Income Complex in 2007. | ||||||||
| (d) Mr. Fairbairn and Mr. Perlowski are both “interested persons,” as defined in the 1940 Act, of the Funds based on their positions with BlackRock, Inc. and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Multi-Asset Complex. | ||||||||
| DIRECTOR AND OFFICER INFORMATION | 101 |
Director and Officer Information (continued)
| Officers Who Are Not Directors (a) | ||||
| Name Year of Birth (b) |
Position(s) Held (Length of Service) |
Principal Occupation(s) During Past Five Years | ||
| Jonathan Diorio 1980 |
Vice President (Since 2015) |
Managing Director of BlackRock, Inc. since 2015; Director of BlackRock, Inc. from 2011 to 2015. | ||
| Neal J. Andrews 1966 |
Chief Financial Officer (Since 2007) |
Chief Financial Officer of the iShares® exchange traded funds since 2019; Managing Director of BlackRock, Inc. since 2006. | ||
| Jay M. Fife 1970 |
Treasurer (Since 2007) |
Managing Director of BlackRock, Inc. since 2007. | ||
| Charles Park 1967 |
Chief Compliance Officer (Since 2014) |
Anti-Money Laundering Compliance Officer for certain BlackRock-advised Funds from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the BlackRock Multi-Asset Complex and the BlackRock Fixed-Income Complex since 2014; Principal of and Chief Compliance Officer for iShares® Delaware Trust Sponsor LLC since 2012 and BlackRock Fund Advisors (“BFA”) since 2006; Chief Compliance Officer for the BFA-advised iShares® exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. since 2012. | ||
| Janey Ahn 1975 |
Secretary (Since 2012) |
Managing Director of BlackRock, Inc. since 2018; Director of BlackRock, Inc. from 2009 to 2017. | ||
| (a) The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. (b) Officers of the Funds serve at the pleasure of the Board. | ||||
Effective January 1, 2019, Richard E. Cavanagh and Karen P. Robards were appointed as a Co-Chair of the Board. Prior to January 1, 2019, Mr. Cavanagh served as Chair of the Board and Ms. Robards served as Vice Chair of the Board.
| (a) | For MEN. |
| 102 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Fund Certification
The Funds are listed for trading on the NYSE and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. The Funds filed with the SEC the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.
Dividend Policy
Each Fund’s dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of 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 distributions 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 as accumulated earnings (loss) in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.
General Information
The Funds do not make available copies of their Statements of Additional Information because the Funds’ shares are not continuously offered, which means that the Statement of Additional Information of each Fund has not been updated after completion of the respective Fund’s offerings and the information contained in each Fund’s Statement of Additional Information may have become outdated.
During the period, there were no material changes in the Funds’ investment objectives or policies or to the Funds’ charters or by-laws that would delay or prevent a change of control of the Funds that were not approved by the shareholders or in the principal risk factors associated with investment in the Funds. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Funds’ portfolios.
In accordance with Section 23(c) of the Investment Company Act of 1940, each Fund may from time to time purchase shares of its common stock in the open market or in private transactions.
Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Funds may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. Any reference to BlackRock’s website in this report is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.
Electronic Delivery
Shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual shareholder reports by enrolling in the electronic delivery program. Electronic copies of shareholder reports are available on BlackRock’s website.
To enroll in electronic delivery:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment advisers, banks or brokerages may offer this service.
Householding
The Funds will mail only one copy of shareholder documents, annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (800) 882-0052.
Availability of Quarterly Schedule of Investments
The Funds file their complete schedule of portfolio holdings with the 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 website at http://www.sec.gov. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 882-0052.
Availability of Proxy Voting Policies and Procedures
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800) 882-0052; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.
Availability of Proxy Voting Record
Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com; or by calling (800) 882-0052; and (2) on the SEC’s website at http://www.sec.gov.
| ADDITIONAL INFORMATION | 103 |
Additional Information (continued)
Availability of Fund Updates
BlackRock will update performance and certain other data for the Funds on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to check the website for updated performance information and the release of other material information about the Funds. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.
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 websites.
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.
| 104 | 2019 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS |
Glossary of Terms Used in this Report
| GLOSSARY OF TERMS USED IN THIS REPORT | 105 |
This report is intended for current holders. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Funds have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in short-term interest rates may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.
| CEMUNI7-4/19-AR |
|
| Item 2 – | Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, the code of ethics was amended to update certain information and to make other non-material changes. During the period covered by this report, there have been no waivers granted under the code of ethics. The registrant undertakes to provide a copy of the code of ethics to any person upon request, without charge, who calls 1-800-882-0052, option 4. |
| Item 3 – | Audit Committee Financial Expert – The registrant’s board of directors (the “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: |
Michael Castellano
Frank J. Fabozzi
Henry Gabbay
Catherine A. Lynch
Karen P. Robards
The registrant’s board of directors has determined that Karen P. Robards qualifies as an audit committee financial expert pursuant to Item 3(c)(4) of Form N-CSR.
Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.
Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.
| Item 4 – | Principal Accountant Fees and Services |
The following table presents fees billed by Deloitte & Touche LLP (“D&T”) in each of the last two fiscal years for the services rendered to the Fund:
| (a) Audit Fees | (b) Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees | |||||||||||||
| Entity Name | Current Fiscal Year End |
Previous Fiscal Year End |
Current Fiscal Year End |
Previous Fiscal Year End |
Current Fiscal Year End |
Previous Fiscal Year End |
Current Fiscal Year End |
Previous Fiscal Year End | ||||||||
| BlackRock MuniAssets Fund, Inc. | $31,110 | $31,110 | $0 | $0 | $12,400 | $12,400 | $0 | $0 | ||||||||
2
The following table presents fees billed by D&T that were required to be approved by the registrant’s audit committee (the “Committee”) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (the “Investment Adviser” or “BlackRock”) and entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (“Affiliated Service Providers”):
| Current Fiscal Year End | Previous Fiscal Year End | |||
|
(b) Audit-Related Fees1 |
$0 | $0 | ||
|
(c) Tax Fees2 |
$0 | $0 | ||
|
(d) All Other Fees3 |
$2,050,500 | $2,274,000 |
1 The nature of the services includes assurance and related services reasonably related to the performance of the audit or review of financial statements not included in Audit Fees, including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters, out-of-pocket expenses and internal control reviews not required by regulators.
2 The nature of the services includes tax compliance and/or tax preparation, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews, taxable income and tax distribution calculations.
3 Non-audit fees of $2,050,500 and $2,274000 for the current fiscal year and previous fiscal year, respectively, were paid to the Fund’s principal accountant in their entirety by BlackRock, in connection with services provided to the Affiliated Service Providers of the Fund and of certain other funds sponsored and advised by BlackRock or its affiliates for a service organization review and an accounting research tool subscription. These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
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 Investment Adviser and 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”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.
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. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.
3
(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) The aggregate non-audit fees, defined as the sum of the fees shown under “Audit-Related Fees,” “Tax Fees” and “All Other Fees,” paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Affiliated Service Providers were:
| Entity Name | Current Fiscal Year End |
Previous Fiscal Year End | ||||
| BlackRock MuniAssets Fund, Inc. | $12,400 | $12,400 |
Additionally, the amounts billed by D&T in connection with services provided to the Affiliated Service Providers of the Fund and of other funds sponsored or advised by BlackRock or its affiliates during the current and previous fiscal years for a service organization review and an accounting research tool subscription were:
| Current Fiscal Year End |
Previous Fiscal Year End | |
| $2,050,500 | $2,274,000 |
These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.
(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser, and the Affiliated Service Providers 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.
| Item 5 – | Audit Committee of Listed Registrants |
| (a) | 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 Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)): |
Michael Castellano
Frank J. Fabozzi
Henry Gabbay
Catherine A. Lynch
Karen P. Robards
| (b) | Not Applicable |
4
| Item 6 – | Investments |
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
| Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The board of directors has delegated the voting of proxies for the Fund’s portfolio securities to the Investment Adviser pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov. |
| Item 8 – | Portfolio Managers of Closed-End Management Investment Companies |
| (a)(1) | As of the date of filing this Report: |
The registrant is managed by a team of investment professionals comprised of 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. Each is jointly responsible for the day-to-day management of the registrant’s portfolio, which includes setting the registrant’s overall investment strategy, overseeing the management of the registrant and the selection of its investments. Messrs. Jaeckel and O’Connor have both been members of the registrant’s portfolio management team since 2006.
| Portfolio Manager | Biography | |||
| Theodore R. Jaeckel, Jr. |
Managing Director of BlackRock since 2006; Managing Director of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2005 to 2006; Director of MLIM from 1997 to 2005. | |||
| Walter O’Connor |
Managing Director of BlackRock since 2006; Managing Director of MLIM from 2003 to 2006; Director of MLIM from 1998 to 2003. |
5
| (a)(2) | As of April 30, 2019: |
|
(ii) Number of Other Accounts Managed and Assets by Account Type |
(iii) Number of Other Accounts and Assets for Which Advisory Fee is Performance-Based | |||||||||||
|
(i) Name of Portfolio Manager |
Other Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
Other Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts | ||||||
|
Theodore R. Jaeckel, Jr. |
33 |
0 |
0 |
0 |
0 |
0 | ||||||
| $27.64 Billion
|
$0 |
$0 |
$0 |
$0 |
$0 | |||||||
|
Walter O’Connor |
29 |
0 |
0 |
0 |
0 |
0 | ||||||
| $24.87 Billion
|
$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, Inc., its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, Inc., or any of its affiliates or significant shareholders, or any officer, director, shareholder, 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, Inc.’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock, Inc. or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Certain portfolio managers also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. It should also be noted that a portfolio manager may be managing certain hedge fund and/or long only accounts, or may be part of a team managing certain hedge fund and/or long only accounts, subject to incentive fees. Such portfolio managers may therefore be entitled to receive a portion of any incentive fees earned on such accounts. Currently, the portfolio managers of this fund are not entitled to receive a portion of incentive fees of other accounts.
6
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, Inc. has adopted policies that are intended to ensure 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, as appropriate.
(a)(3) As of April 30, 2019:
Portfolio Manager Compensation Overview
The discussion below describes the portfolio managers’ compensation as of April 30, 2019.
BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.
Base Compensation. Generally, portfolio managers receive base compensation based on their position with the firm.
Discretionary Incentive Compensation
Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s performance and contribution to the overall performance of these portfolios and BlackRock. In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured. Among other things, BlackRock’s Chief Investment Officers make a subjective determination with respect to each portfolio manager’s compensation based on the performance of the Fund and other accounts managed by each portfolio manager relative to the various benchmarks. Performance of fixed income funds is measured on a pre-tax and/or after-tax basis over various time periods including 1-, 3- and 5- year periods, as applicable. With respect to these portfolio managers, such benchmarks for the Fund and other accounts are: a combination of market-based indices (e.g., Standard & Poor’s Municipal Bond Index), certain customized indices and certain fund industry peer groups.
7
Distribution of Discretionary Incentive Compensation. Discretionary incentive compensation is distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/or deferred cash awards that notionally track the return of certain BlackRock investment products.
Portfolio managers receive their annual discretionary incentive compensation in the form of cash. Portfolio managers whose total compensation is above a specified threshold also receive deferred BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods. In some cases, additional deferred BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award to aid in retention, align interests with long-term shareholders and motivate performance. Deferred BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc. common stock. The portfolio managers of this Fund have deferred BlackRock, Inc. stock awards.
For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed in the form of deferred cash awards that notionally track the returns of select BlackRock investment products they manage, which provides direct alignment of portfolio manager discretionary incentive compensation with investment product results. Deferred cash awards vest ratably over a number of years and, once vested, settle in the form of cash. Only portfolio managers who manage specified products and whose total compensation is above a specified threshold are eligible to participate in the deferred cash award program.
Other Compensation Benefits. In addition to base salary and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:
Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock, Inc. employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit ($280,000 for 2019). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock, Inc. contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the purchase date. All of the eligible portfolio managers are eligible to participate in these plans.
8
(a)(4) Beneficial Ownership of Securities – As of April 30, 2019:
| Portfolio Manager | Dollar Range of Equity Securities of the Fund Beneficially Owned | |
|
Theodore R. Jaeckel, Jr. |
$50,001-$100,000 | |
|
Walter O’Connor |
None |
(b) Not Applicable
| Item 9 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
|
Period |
(a) Total Number of Shares |
(b) Average Price Paid per Share |
(c) Total Number of Shares Purchased as Part of Publicly Announced |
(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs1 | ||||
| November 1 – 30, 2018 |
0 | 0 | 0 | 0 | ||||
| December 1 – 31, 2018 |
0 | 0 | 0 | 1,800,385 | ||||
| November 1- 30, 2018 |
0 | 0 | 0 | 1,800,385 | ||||
| December 1 – 31, 2018 |
0 | 0 | 0 | 1,800,385 | ||||
| January 1 – 31, 2019 |
0 | 0 | 0 | 1,800,385 | ||||
| February 1 – 28, 2019 |
0 | 0 | 0 | 1,800,385 | ||||
| Total: |
0 | 0 | 0 | 1,800,385 |
1The Fund announced an open market share repurchase program on November 15, 2018 pursuant to which the Fund was authorized to repurchase, through November 30, 2019, up to 5% of its common shares based on common shares outstanding on November 30, 2018, in open market transactions, subject to certain conditions.
| Item 10 – | Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures. |
| Item 11 – | Controls and Procedures |
(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.
(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 last 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 – | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies – Not Applicable |
9
| Item 13 – | Exhibits attached hereto |
(a)(1) – Code of Ethics – See Item 2
(a)(2) – Certifications – Attached hereto
(a)(3) – Not Applicable
(a)(4) – Not Applicable
(b) – Certifications – Attached hereto
10
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 MuniAssets Fund, Inc. | ||
| By: | /s/ John M. Perlowski | |
| John M. Perlowski | ||
| Chief Executive Officer (principal executive officer) of | ||
| BlackRock MuniAssets Fund, Inc. | ||
Date: July 8, 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 MuniAssets Fund, Inc. |
Date: July 8, 2019
| By: | /s/ Neal J. Andrews | |
| Neal J. Andrews | ||
| Chief Financial Officer (principal financial officer) of | ||
| BlackRock MuniAssets Fund, Inc. |
Date: July 8, 2019
11
