UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
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Investment Company Act file number 811-08081
Name of Fund: BlackRock MuniHoldings Fund, Inc. (MHD)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive Officer, BlackRock MuniHoldings Fund,
Inc., 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ,
08543-9011
Registrants telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 04/30/2009
Date of reporting period: 05/01/2008 10/31/2008
Item 1 Report to Stockholders
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EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
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Semi-Annual Report
OCTOBER 31, 2008 | (UNAUDITED)
BlackRock MuniHoldings Fund, Inc. (MHD)
BlackRock MuniHoldings Insured Fund, Inc. (MUS)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
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Table of Contents
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Page
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A Letter to Shareholders
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3
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Semi-Annual Report:
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Fund Summaries
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4
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The Benefits and Risks of Leveraging
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6
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Derivative Instruments
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6
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Financial Statements:
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Schedules of Investments
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7
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Statements of Assets and Liabilities
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16
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Statements of Operations
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17
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Statements of Changes in Net Assets
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18
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Statements of Cash Flows
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19
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Financial Highlights
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20
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Notes to Financial Statements
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22
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Disclosure of Investment Advisory Agreement and Subadvisory Agreement
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27
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Officers and Directors
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30
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Additional Information
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30
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A Letter to Shareholders
Dear Shareholder
It has been a tumultuous period for investors, marked by almost daily headlines of deepening turmoil in financial markets and a darkening economic
outlook. The news took an extraordinarily heavy tone late in the period as the credit crisis boiled over and triggered unprecedented failures and consoli-
dation in the financial sector, stoking fears of a market and economic collapse and prompting a series of new government programs designed to
contain and combat the fallout.
The Federal Reserve Board (the Fed) has taken decisive measures to restore liquidity and stabilize the financial system. Key moves included
slashing the target federal funds rate 250 basis points (2.50%) between November 2007 and April 2008 and providing massive cash injections and
lending programs. In October, as credit conditions further deteriorated, the central bank cut the key interest rate by 50 basis points on two separate
occasions on October 8 in coordination with five other global central banks, and again during its regularly scheduled meeting on October 29. This
left the key short-term rate at just 1.0%, its lowest level since 2004. While the U.S. economy appeared fairly resilient through the second quarter of
2008, the third quarter saw a contraction of 0.5%, and a more significant decline is expected for the fourth quarter. Moreover, on December 1, the
National Bureau of Economic Research confirmed that the U.S. had entered a recession in December 2007.
Against this backdrop, U.S. equity markets experienced intense volatility, with periods of downward pressure punctuated by sharp rebounds. Losses
were significant and broad-based, though small-cap stocks fared moderately better than their larger counterparts. Non-U.S. markets decelerated at a
considerably faster pace than domestic equities a stark reversal of recent years trends, when international stocks generally outpaced U.S. stocks.
Treasury issues also traded in a volatile fashion, but rallied overall (yields fell and prices correspondingly rose) and outperformed other fixed income
assets as investors continued their flight to higher quality and more liquid securities. Tax-exempt issues generally underperformed, as problems among
municipal bond insurers and the collapse in the market for auction rate securities afflicted the group throughout the course of the past year. At the
same time, the above mentioned economic headwinds and malfunctioning credit markets plagued the high yield sector, with the third quarter of 2008
marking one of the worst periods in history for the asset class.
Facing unprecedented volatility and macro pressures, the major benchmark indexes generally recorded losses for the six- and 12-month reporting periods:
Total Returns as of October 31, 2008
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6-month
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12-month
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U.S. equities (S&P 500 Index)
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(29.28)%
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(36.10)%
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Small cap U.S. equities (Russell 2000 Index)
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(24.39)
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(34.16)
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International equities (MSCI Europe, Australasia, Far East Index)
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(41.21)
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(46.62)
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Fixed income (Barclays Capital U.S. Aggregate Index*)
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(3.63)
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0.30
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Tax-exempt fixed income (Barclays Capital Municipal Bond Index*)
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(4.70)
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(3.30)
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High yield bonds
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(Barclays Capital U.S. Corporate High Yield 2% Issuer Capped Index*)
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(24.86)
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(25.41)
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*Formerly a Lehman Brothers Index.
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Past performance is no guarantee of future results. Index performance shown is for illustrative purposes only. You cannot invest directly in an index.
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Through periods of market turbulence, as ever, BlackRocks full resources are dedicated to the management of our clients assets. For our most
current views on the economy and financial markets, we invite you to visit www.blackrock.com/funds. As always, we thank you for entrusting
BlackRock with your investments, and we look forward to continuing to serve you in the months and years ahead.
THIS PAGE NOT PART OF YOUR FUND REPORT
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Fund Summary
as of October 31, 2008
BlackRock MuniHoldings Fund, Inc.
Investment Objective
BlackRock MuniHoldings Fund, Inc. (MHD) (the Fund)
seeks to provide shareholders with current income exempt from federal income taxes by
investing primarily in a portfolio of long-term, investment grade municipal obligations the interest on which, in the opinion of bond counsel to the
issuers, is exempt from federal income taxes.
Performance
For the six months ended October 31, 2008, the Fund returned (24.99)%, based on market price and (15.97)% based on net asset value (NAV). For
the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (16.98)% on a NAV basis. All
returns reflect reinvestment of dividends. The Funds discount to NAV, which widened during the period, accounts for the difference between perform-
ance based on price and performance based on NAV. The Funds relative performance benefited from a high-quality bias as credit spreads widened;
an emphasis on pre-refunded securities, which outperformed in the steepening yield curve environment; and a competitive dividend yield. With credit
spreads at historically cheap levels, Fund management expects to increase exposure to the lower end of the credit spectrum in order to maintain an
above-average yield among the Funds Lipper peers.
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.
Fund Information
Symbol on New York Stock Exchange
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MHD
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Initial Offering Date
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May 2, 1997
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Yield on Closing Market Price as of October 31, 2008 ($10.73)
1
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7.94%
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Tax Equivalent Yield
2
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12.22%
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Current Monthly Distribution per share of Common Stock
3
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$0.071
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Current Annualized Distribution per share of Common Stock
3
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$0.852
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Leverage as of October 31, 2008
4
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41%
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1
Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past per-
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formance does not guarantee future results.
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2
Tax equivalent yield assumes the maximum federal tax rate of 35%.
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3
The distribution is not constant and is subject to change.
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4
As a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to Auction Market Preferred
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Shares (Preferred Shares) and Tender Option Bond Trusts (TOBs)) minus the sum of accrued liabilities.
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The table below summarizes the changes in the Funds market price and net asset value per share:
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10/31/08
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4/30/08
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Change
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High
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Low
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Market Price
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$10.73
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$14.77
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(27.35)%
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$15.20
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$ 7.53
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Net Asset Value
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$12.37
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$15.20
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(18.62)%
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$15.36
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$11.60
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The following charts show the portfolio composition and credit quality allocations of the Funds long-term investments:
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Portfolio Composition
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Credit Quality Allocations
5
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Sector
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10/31/08
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4/30/08
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Credit Rating
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10/31/08
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4/30/08
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Hospital
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21%
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21%
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AAA/Aaa
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38%
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40%
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Industrial & Pollution Control
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14
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15
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AA/Aa
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18
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12
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City, County & State
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14
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16
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A/A
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16
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18
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Education
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11
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9
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BBB/Baa
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11
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8
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Sales Tax
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10
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12
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BB/Ba
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1
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2
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Transportation
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10
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7
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B/B
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2
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1
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Housing
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8
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8
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CCC/Caa
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1
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2
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Power
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6
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6
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Not Rated
6
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13
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17
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Tobacco
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5
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5
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5
Using the higher of Standard & Poors (S&Ps) or Moodys
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Water & Sewer
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1
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1
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Investors Service (Moodys) ratings.
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6
The investment advisor has deemed certain of these non-rated
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securities to be of investment grade quality. As of October 31,
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2008 and April 30, 2008, the market value of these securities
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was $6,027,960, representing 2% and $10,735,995 represent-
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ing 6% respectively, of the Funds long-term investments.
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4 SEMI-ANNUAL REPORT OCTOBER 31, 2008
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Fund Summary
as of October 31, 2008
BlackRock MuniHoldings Insured Fund, Inc.
Investment Objective
BlackRock MuniHoldings Insured Fund, Inc. (MUS) (the Fund)
seeks to provide shareholders with current income exempt from federal income taxes
by investing primarily in a portfolio of long-term, investment grade municipal obligations the interest on which, in the opinion of bond counsel to the
issuers, is exempt from federal income taxes. Under normal circumstances, the Fund invests at least 80% of its total assets in municipal bonds that
are covered by insurance.
Performance
For the six months ended October 31, 2008, the Fund returned (21.75)%, based on market price and (15.04)% based on NAV. For the same period,
the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of (13.73)% on a NAV basis. All returns reflect
reinvestment of dividends. The Funds discount to NAV, which widened during the period, accounts for the difference between performance based on
price and performance based on NAV. The Fund was significantly overweight in pre-refunded bonds within the one- to five-year maturity range, which
enhanced its performance as the yield curve steepened and short and intermediate maturities outperformed the rest of the market. Conversely, pressure
on municipal insurers, exposure to AMT bonds and the Funds overexposure to hospital bonds and single-family bonds hindered performance.
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.
Fund Information
Symbol on New York Stock Exchange
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MUS
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Initial Offering Date
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May 1, 1998
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Yield on Closing Market Price as of October 31, 2008 ($9.12)
1
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6.38%
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Tax Equivalent Yield
2
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9.82%
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Current Monthly Distribution per share of Common Stock
3
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$0.0485
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Current Annualized Distribution per share of Common Stock
3
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$0.5820
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Leverage as of October 31, 2008
4
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47%
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1
Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
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Past performance does not guarantee future results.
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2
Tax equivalent yield assumes the maximum federal tax rate of 35%.
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3
The distribution is not constant and is subject to change.
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4
As a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to Preferred Shares and
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TOBs) minus the sum of accrued liabilities.
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The table below summarizes the changes in the Funds market price and net asset value per share:
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10/31/08
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4/30/08
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Change
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High
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Low
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Market Price
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$ 9.12
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$11.97
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(23.81)%
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$12.23
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$7.11
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Net Asset Value
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$11.01
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$13.31
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(17.28)%
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$13.51
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$9.70
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The following charts show the portfolio composition and credit quality allocations of the Funds long-term investments:
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Portfolio Composition
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Credit Quality Allocations
5
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Sector
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10/31/08
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4/30/08
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Credit Rating
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10/31/08
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4/30/08
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Transportation
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17%
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17%
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AAA/Aaa
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50%
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83%
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Lease Revenue
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14
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12
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AA/Aa
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43
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8
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Education
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12
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9
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A/A
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4
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8
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Sales Tax
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12
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13
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BBB/Baa
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3
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1
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Hospital
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11
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9
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5
Using the higher of S&Ps or Moodys ratings.
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City, County & State
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10
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16
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Housing
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8
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9
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Power
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7
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7
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Industrial & Pollution Control
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4
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4
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Water & Sewer
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4
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3
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Resource Recovery
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1
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1
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SEMI-ANNUAL REPORT OCTOBER 31, 2008 5
The Benefits and Risks of Leveraging
The Funds may utilize leverage to seek to enhance the yield and NAV
of their Common Shares. However, these objectives cannot be achieved
in all interest rate environments.
To leverage, each Fund issues Preferred Shares, which pay dividends at
prevailing short-term interest rates, and invests the proceeds in long-term
municipal bonds. In general, the concept of leveraging is based on the
premise that the cost of assets to be obtained from leverage will be
based on short-term interest rates, which normally will be lower than
the income earned by each Fund on its longer-term portfolio invest-
ments. To the extent that the total assets of each Fund (including the
assets obtained from leverage) are invested in higher-yielding portfolio
investments, each Funds Common Shareholders will benefit from the
incremental yield.
To illustrate these concepts, assume a Funds Common Shares capitaliza-
tion is $100 million and it issues Preferred Shares for an additional $50
million, creating a total value of $150 million available for investment in
long-term municipal bonds. If prevailing short-term interest rates are 3%
and long-term interest rates are 6%, the yield curve has a strongly posi-
tive slope. The Fund pays dividends on the $50 million of Preferred
Shares based on the lower short-term interest rates. At the same time,
the Funds total portfolio of $150 million earns the income based on
long-term interest rates. Conversely, if prevailing short-term interest rates
rise above long-term interest rates of 6%, the yield curve has a negative
slope. Each Fund pays dividends on the higher short-term interest rates
whereas each Funds total portfolio earns income based on lower long-
term interest rates.
In this case, the dividends paid to Preferred Shareholders are signifi-
cantly lower than the income earned on the Funds long-term invest-
ments, and therefore the Common Shareholders are the beneficiaries of
the incremental yield. However, if short-term interest rates rise, narrow-
ing the differential between short-term and long-term interest rates, the
incremental yield pickup on the Common Shares will be reduced or
eliminated completely.
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
redemption value of the Funds Preferred Shares does not fluctuate in
relation to interest rates. As a result, changes in interest rates can influ-
ence the Funds NAV positively or negatively in addition to the impact on
Fund performance from leverage from Preferred Shares discussed above.
The Funds may also, from time to time, leverage their assets through the
use of tender option bond (TOB) programs, as described in Note 1 of
the Notes to Financial Statements. TOB investments generally will provide
the Funds with economic benefits in periods of declining short-term
interest rates, but expose the Funds to risks during periods of rising
short-term interest rates similar to those associated with Preferred
Shares issued by the Funds, as described above. Additionally, fluctua-
tions in the market value of municipal securities deposited into the TOB
trust may adversely affect the Funds NAVs per share.
The use of leverage may enhance opportunities for increased returns to
the Funds and Common Shareholders, but as described above, it also
creates risks as short- or long-term interest rates fluctuate. Leverage also
will generally cause greater changes in the Funds NAV, market price and
dividend rate than a comparable portfolio without leverage. If the income
derived from securities purchased with assets received from leverage
exceeds the cost of leverage, the Funds net income will be greater than
if leverage had not been used. Conversely, if the income from the securi-
ties purchased is not sufficient to cover the cost of leverage, the Funds
net income will be less than if leverage had not been used, and therefore
the amount available for distribution to Common Shareholders will be
reduced. The Funds may be required to sell portfolio securities at inop-
portune times or below fair market values in order to comply with regula-
tory requirements applicable to the use of leverage or as required by the
terms of leverage instruments, which may cause the Funds to incur loss-
es. The use of leverage may limit the Funds ability to invest in certain
types of securities or use certain types of hedging strategies, such as in
the case of certain restrictions imposed by ratings agencies that rate pre-
ferred shares issued by the Funds. The Funds will incur expenses in con-
nection with the use of leverage, all of which are borne by the holders of
the Common Shares and may reduce returns on the Common Shares.
Under the Investment Company Act of 1940, the Funds are permitted
to issue Preferred Shares in an amount of up to 50% of their total man-
aged assets at the time of issuance. Under normal circumstances, each
Fund anticipates that the total economic leverage from Preferred Shares
and TOBs will not exceed 50% of its total managed assets at the time
such leverage is incurred. As of October 31, 2008, the Funds had eco-
nomic leverage from Preferred Shares and TOBs as a percentage of
their total managed assets as follows:
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Percent of
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Leverage
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BlackRock MuniHoldings Fund, Inc
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41%
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BlackRock MuniHoldings Insured Fund, Inc
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47%
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Derivative Instruments
The Funds may invest in various derivative instruments, including swap
agreements and other instruments specified in the Notes to Financial
Statements, which constitute additional forms of economic leverage.
Such instruments are used to obtain exposure to a market without own-
ing or taking physical custody of securities or to hedge market and/or
interest rate risks. Such derivative instruments involve risks, including the
imperfect correlation between the value of a derivative instrument and
the underlying asset, possible default of the other party to the trans-
action and illiquidity of the derivative instrument. The Funds ability to
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successfully use a derivative instrument depends on the Advisors ability
to accurately predict pertinent market movements, which cannot be
assured. The use of derivative instruments may result in losses greater
than if they had not been used, may require the Funds to sell or pur-
chase portfolio securities at inopportune times or for prices other than
current market values, may limit the amount of appreciation the Funds
can realize on an investment or may cause the Funds to hold a security
that it might otherwise sell. The Funds investments in these instruments
are discussed in detail in the Notes to Financial Statements.
Schedule of Investments
October 31, 2008 (Unaudited)
|
|
BlackRock MuniHoldings Fund, Inc. (MHD)
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(Percentages shown are based on Net Assets)
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Par
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Par
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Municipal Bonds
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(000)
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Value
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Municipal Bonds
|
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(000)
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Value
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Alabama 3.3%
|
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California (concluded)
|
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Camden, Alabama, IDB, Exempt Facilities Revenue
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|
|
|
|
Sacramento County, California, Airport System
|
|
|
|
|
Bonds (Weyerhaeuser Company), Series A,
|
|
|
|
|
|
|
|
Revenue Bonds, AMT, Senior Series B, 5.25%,
|
|
|
|
|
6.125%, 12/01/13 (a)
|
|
$ 1,750
|
|
$1,945,807
|
|
7/01/39 (f)
|
|
$ 2,115
|
|
$
1,602,218
|
Jefferson County, Alabama, Limited Obligation
|
|
|
|
|
|
|
|
San Jose, California, Airport Revenue Refunding
|
|
|
|
|
School Warrants, Series A, 5%, 1/01/24
|
|
|
|
4,550
|
|
3,802,480
|
|
Bonds, AMT, Series A, 5.50%, 3/01/32 (g)
|
|
5,210
|
|
4,250,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,748,287
|
|
|
|
|
|
|
|
30,520,150
|
Arizona 5.8%
|
|
|
|
|
|
|
|
Colorado 3.6%
|
|
|
|
|
|
|
Maricopa County, Arizona, IDA, Education Revenue
|
|
|
|
|
|
|
|
Colorado Health Facilities Authority, Revenue Refunding
|
|
|
|
|
Bonds (Arizona Charter Schools Project 1), Series A:
|
|
|
|
|
|
Bonds (Poudre Valley Health Care) (f):
|
|
|
|
|
6.50%, 7/01/12
|
|
|
|
500
|
|
445,550
|
|
5.20%, 3/01/31
|
|
|
|
500
|
|
466,805
|
6.75%, 7/01/29
|
|
|
|
2,200
|
|
1,699,104
|
|
Series B, 5.25%, 3/01/36
|
|
1,000
|
|
913,490
|
Phoenix, Arizona, IDA, Airport Facility, Revenue Refunding
|
|
|
|
|
|
Series C, 5.25%, 3/01/40
|
|
1,750
|
|
1,565,410
|
Bonds (America West Airlines Inc. Project), AMT,
|
|
|
|
|
|
|
|
Elk Valley, Colorado, Public Improvement Revenue
|
|
|
|
|
6.30%, 4/01/23
|
|
|
|
2,215
|
|
1,418,575
|
|
Bonds (Public Improvement Fee), Series A,
|
|
|
|
|
Pinal County, Arizona, COP, 5%, 12/01/29
|
|
|
|
1,000
|
|
846,310
|
|
7.35%, 9/01/31
|
|
|
|
2,645
|
|
2,279,144
|
Salt Verde Financial Corporation, Arizona, Senior Gas
|
|
|
|
|
|
Plaza Metropolitan District Number 1, Colorado,
|
|
|
|
|
Revenue Bonds:
|
|
|
|
|
|
|
|
Tax Allocation Revenue Bonds (Public Improvement
|
|
|
|
|
5%, 12/01/32
|
|
|
|
3,505
|
|
2,186,279
|
|
Fees), 8.125%, 12/01/25
|
|
1,000
|
|
873,420
|
5%, 12/01/37
|
|
|
|
4,905
|
|
2,952,859
|
|
|
|
|
|
|
|
6,098,269
|
Show Low, Arizona, Improvement District Number 5,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special Assessment Bonds, 6.375%, 1/01/15
|
|
|
|
415
|
|
399,732
|
|
Connecticut 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Connecticut State Development Authority, Airport
|
|
|
|
|
|
|
|
|
|
|
9,948,409
|
|
Facility Revenue Bonds (Learjet Inc. Project), AMT,
|
|
|
|
|
California 17.7%
|
|
|
|
|
|
|
|
7.95%, 4/01/26
|
|
|
|
2,165
|
|
1,950,946
|
Agua Caliente Band of Cahuilla Indians, California,
|
|
|
|
|
|
|
|
Connecticut State Development Authority, IDR
|
|
|
|
|
Casino Revenue Bonds, 5.60%, 7/01/13
|
|
|
|
875
|
|
808,404
|
|
(AFCO Cargo BDL LLC Project), AMT, 8%, 4/01/30
|
|
2,735
|
|
2,513,109
|
California Pollution Control Financing Authority, PCR,
|
|
|
|
|
|
|
|
|
|
|
|
4,464,055
|
Refunding (Pacific Gas & Electric), AMT, Series A,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.35%, 12/01/16 (b)
|
|
|
|
6,810
|
|
6,424,009
|
|
Florida 8.7%
|
|
|
|
|
|
|
California State, GO, Refunding, 5%, 6/01/32
|
|
|
|
2,455
|
|
2,209,991
|
|
Greater Orlando Aviation Authority, Florida, Airport
|
|
|
|
|
California State Public Works Board, Lease Revenue
|
|
|
|
|
|
|
|
Facilities Revenue Bonds (JetBlue Airways Corp.),
|
|
|
|
|
Bonds (Department of Corrections), Series C,
|
|
|
|
|
|
|
|
AMT, 6.50%, 11/15/36
|
|
|
|
2,095
|
|
1,240,156
|
5.25%, 6/01/28
|
|
|
|
6,550
|
|
6,095,037
|
|
Hillsborough County, Florida, IDA, Hospital Revenue
|
|
|
|
|
California Statewide Communities Development Authority,
|
|
|
|
|
|
Bonds (H. Lee Moffitt Cancer Center Project), Series A,
|
|
|
|
|
Health Facility Revenue Bonds (Memorial Health
|
|
|
|
|
|
|
|
5.25%, 7/01/37
|
|
|
|
3,190
|
|
2,310,900
|
Services), Series A, 6%, 10/01/23
|
|
|
|
3,870
|
|
3,755,990
|
|
Miami-Dade County, Florida, Aviation Revenue
|
|
|
|
|
East Side Union High School District, California,
|
|
|
|
|
|
|
|
Refunding Bonds (Miami International Airport), AMT,
|
|
|
|
|
Santa Clara County, GO (Election of 2002), Series D,
|
|
|
|
|
|
Series A, 5.25%, 10/01/38 (h)
|
|
1,795
|
|
1,365,546
|
5%, 8/01/21 (c)
|
|
|
|
2,000
|
|
1,962,900
|
|
Miami-Dade County, Florida, Special Obligation Revenue
|
|
|
|
|
Golden State Tobacco Securitization Corporation of
|
|
|
|
|
|
|
|
Bonds, Sub-Series A, 5.24%, 10/01/37 (b)(e)
|
|
2,340
|
|
330,829
|
California, Tobacco Settlement Revenue Bonds,
|
|
|
|
|
|
|
|
Midtown Miami, Florida, Community Development
|
|
|
|
|
Series A-3, 7.875%, 6/01/13 (a)
|
|
|
|
1,165
|
|
1,366,394
|
|
District, Special Assessment Revenue Bonds:
|
|
|
|
|
Montebello, California, Unified School District,
|
|
|
|
|
|
|
|
Series A, 6.25%, 5/01/37
|
|
2,250
|
|
1,672,335
|
GO (b)(d)(e):
|
|
|
|
|
|
|
|
Series B, 6.50%, 5/01/37
|
|
2,530
|
|
1,946,708
|
5.61%, 8/01/22
|
|
|
|
2,405
|
|
1,048,484
|
|
Orange County, Florida, Health Facilities Authority, Hospital
|
|
|
|
|
5.61%, 8/01/23
|
|
|
|
2,455
|
|
996,092
|
|
Revenue Bonds (Orlando Regional Healthcare),
|
|
|
|
|
|
|
|
|
|
|
|
|
6%, 12/01/12 (a)
|
|
|
|
3,225
|
|
3,553,305
|
Portfolio Abbreviations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To simplify the listings of portfolio holdings in the
|
|
AMT
|
|
Alternative Minimum Tax (subject to)
|
|
IDB
|
|
Industrial Development Board
|
Schedule of Investments, we have abbreviated the
|
|
COP
|
|
Certificates of Participation
|
|
IDR
|
|
Industrial Development Revenue Bonds
|
names and descriptions of many of the securities
|
|
EDA
|
|
Economic Development Authority
|
|
M/F
|
|
Multi-Family
|
according to the list on the right.
|
|
GO
|
|
General Obligation Bonds
|
|
PCR
|
|
Pollution Control Revenue Bonds
|
|
|
HDA
|
|
Housing Development Authority
|
|
S/F
|
|
Single-Family
|
|
|
HFA
|
|
Housing Finance Agency
|
|
VRDN
|
|
Variable Rate Demand Notes
|
|
|
IDA
|
|
Industrial Development Authority
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
Schedule of Investments (continued)
|
|
BlackRock MuniHoldings Fund, Inc. (MHD)
|
|
|
|
|
|
|
|
|
(Percentages shown are based on Net Assets)
|
|
|
|
|
Par
|
|
|
|
|
|
|
|
Par
|
|
|
Municipal Bonds
|
|
|
|
(000)
|
|
Value
|
|
Municipal Bonds
|
|
|
|
(000)
|
|
Value
|
Florida (concluded)
|
|
|
|
|
|
|
|
Maryland (concluded)
|
|
|
|
|
|
|
Orlando, Florida, Urban Community Development
|
|
|
|
|
|
|
|
Baltimore, Maryland, Convention Center Hotel Revenue
|
|
|
|
|
District, Capital Improvement Special Assessment
|
|
|
|
|
|
Bonds, Senior Series A, 5.25%, 9/01/39 (c)(l)
|
|
$ 5,725
|
|
$ 5,313,372
|
Bonds, Series A, 6.95%, 5/01/11 (a)
|
|
$ 800
|
|
$ 872,200
|
|
Maryland State Economic Development Corporation,
|
|
|
|
|
Palm Coast Park Community Development District,
|
|
|
|
|
|
|
|
Student Housing Revenue Bonds (University of
|
|
|
|
|
|
|
Florida, Special Assessment Revenue Bonds,
|
|
|
|
|
|
|
|
Maryland College Park Project), 6%, 6/01/13 (a)
|
|
|
|
760
|
|
847,970
|
5.70%, 5/01/37
|
|
|
|
710
|
|
473,442
|
|
Maryland State Energy Financing Administration, Limited
|
|
|
|
|
Preserve at Wilderness Lake, Florida, Community
|
|
|
|
|
|
|
|
Obligation Revenue Bonds (Cogeneration AES
|
|
|
|
|
|
|
Development District, Capital Improvement Bonds,
|
|
|
|
|
|
Warrior Run), AMT, 7.40%, 9/01/19
|
|
|
|
2,750
|
|
2,346,822
|
Series A, 5.90%, 5/01/34
|
|
|
|
1,580
|
|
1,160,968
|
|
|
|
|
|
|
|
10,467,924
|
|
|
|
|
|
|
14,926,389
|
|
Massachusetts 1.2%
|
|
|
|
|
|
|
Georgia 3.6%
|
|
|
|
|
|
|
|
Massachusetts State, HFA, Housing Revenue Bonds,
|
|
|
|
|
Atlanta, Georgia, Tax Allocation Refunding Bonds
|
|
|
|
|
|
|
|
AMT, Series A, 5.25%, 12/01/48
|
|
|
|
2,900
|
|
2,145,884
|
(Atlantic Station Project) (h):
|
|
|
|
|
|
|
|
Michigan 2.1%
|
|
|
|
|
|
|
5.25%, 12/01/20
|
|
|
|
1,000
|
|
993,950
|
|
Flint, Michigan, Hospital Building Authority, Revenue
|
|
|
|
|
|
|
5.25%, 12/01/21
|
|
|
|
2,000
|
|
1,967,600
|
|
Refunding Bonds (Hurley Medical Center), Series A,
|
|
|
|
|
5.25%, 12/01/22
|
|
|
|
1,000
|
|
975,860
|
|
6%, 7/01/20 (m)
|
|
|
|
1,400
|
|
1,124,438
|
Main Street Natural Gas, Inc., Georgia, Gas Project
|
|
|
|
|
|
|
|
Michigan State Strategic Fund, Limited Obligation
|
|
|
|
|
|
|
Revenue Bonds, Series A, 6.375%, 7/15/38 (i)(j)
|
|
1,185
|
|
183,675
|
|
Revenue Refunding Bonds (Detroit Edison
|
|
|
|
|
|
|
Private Colleges and Universities Authority, Georgia,
|
|
|
|
|
|
|
|
Company Pollution Control Project), AMT,
|
|
|
|
|
|
|
Revenue Refunding Bonds (Emory University Project),
|
|
|
|
|
|
Series B, 5.65%, 9/01/29
|
|
|
|
3,000
|
|
2,541,720
|
Series C, 5%, 9/01/38
|
|
|
|
2,260
|
|
2,098,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,666,158
|
|
|
|
|
|
|
6,219,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minnesota 2.2%
|
|
|
|
|
|
|
Illinois 3.3%
|
|
|
|
|
|
|
|
Minneapolis, Minnesota, Community Development
|
|
|
|
|
|
|
Chicago, Illinois, Special Assessment Bonds (Lake
|
|
|
|
|
|
|
|
Agency, Supported Development Revenue Refunding
|
|
|
|
|
Shore East), 6.75%, 12/01/32
|
|
|
|
1,200
|
|
1,009,572
|
|
Bonds, Series G-3, 5.45%, 12/01/11 (a)
|
|
|
|
3,500
|
|
3,739,680
|
Illinois HDA, Homeowner Mortgage Revenue Bonds,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMT, Sub-Series C-2, 5.35%, 2/01/27
|
|
|
|
4,000
|
|
3,387,240
|
|
Mississippi 2.3%
|
|
|
|
|
|
|
Illinois State Finance Authority Revenue Bonds:
|
|
|
|
|
|
|
|
Mississippi Business Finance Corporation, Mississippi,
|
|
|
|
|
(Landing At Plymouth Place Project), Series A, 6%,
|
|
|
|
|
|
PCR, Refunding (System Energy Resources Inc.
|
|
|
|
|
|
|
5/15/25
|
|
|
|
700
|
|
524,440
|
|
Project), 5.90%, 5/01/22
|
|
|
|
2,500
|
|
2,018,250
|
(Monarch Landing, Inc. Project), Series A, 7%,
|
|
|
|
|
|
|
|
Mississippi Development Bank, Special Obligation
|
|
|
|
|
|
|
12/01/37
|
|
|
|
1,010
|
|
780,296
|
|
Revenue Refunding Bonds (Gulfport Water and Sewer
|
|
|
|
|
|
|
|
|
|
|
|
|
System Project) (f):
|
|
|
|
|
|
|
|
|
|
|
|
|
5,701,548
|
|
5.25%, 7/01/17
|
|
|
|
1,000
|
|
1,056,950
|
Kentucky 1.1%
|
|
|
|
|
|
|
|
5.25%, 7/01/19
|
|
|
|
810
|
|
836,698
|
Louisville and Jefferson Counties, Kentucky,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,911,898
|
Metropolitan Sewer District, Sewer and Drain System
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Bonds, Series A, 5.50%, 5/15/34 (b)
|
|
|
|
2,000
|
|
1,933,440
|
|
Missouri 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Missouri State Development Finance Board,
|
|
|
|
|
|
|
Louisiana 6.2%
|
|
|
|
|
|
|
|
Infrastructure Facilities Revenue Refunding Bonds
|
|
|
|
|
|
|
Louisiana Local Government Environmental Facilities
|
|
|
|
|
|
(Branson), Series A, 5.50%, 12/01/32
|
|
|
|
1,000
|
|
746,570
|
and Community Development Authority Revenue Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
(Westlake Chemical Corporation), 6.75%, 11/01/32
|
|
3,500
|
|
2,649,150
|
|
New Jersey 9.4%
|
|
|
|
|
|
|
Louisiana Public Facilities Authority, Hospital Revenue
|
|
|
|
|
|
New Jersey EDA, Cigarette Tax Revenue Bonds:
|
|
|
|
|
|
|
Bonds (Franciscan Missionaries of Our Lady Health
|
|
|
|
|
|
5.75%, 6/15/29
|
|
|
|
5,385
|
|
4,179,298
|
System, Inc.), Series A, 5.25%, 8/15/36
|
|
|
|
4,115
|
|
3,148,181
|
|
5.75%, 6/15/34
|
|
|
|
2,280
|
|
1,701,450
|
Louisiana Public Facilities Authority Revenue Bonds
|
|
|
|
|
|
|
|
New Jersey EDA, Retirement Community Revenue
|
|
|
|
|
|
|
(Black & Gold Facilities Project), Series A, 5%,
|
|
|
|
|
|
|
|
Bonds (a):
|
|
|
|
|
|
|
7/01/39 (k)
|
|
|
|
3,815
|
|
2,932,705
|
|
(Cedar Crest Village Inc. Facility), Series A, 7.25%,
|
|
|
|
|
New Orleans, Louisiana, Financing Authority Revenue
|
|
|
|
|
|
11/15/11
|
|
|
|
1,475
|
|
1,631,527
|
Bonds (Xavier University of Louisiana Project),
|
|
|
|
|
|
|
|
(Seabrook Village Inc.), Series A, 8.25%, 11/15/10
|
|
2,600
|
|
2,899,858
|
5.30%, 6/01/12 (a)(b)
|
|
|
|
1,750
|
|
1,869,157
|
|
New Jersey EDA, Special Facility Revenue Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continental Airlines Inc. Project), AMT:
|
|
|
|
|
|
|
|
|
|
|
|
|
10,599,193
|
|
6.625%, 9/15/12
|
|
|
|
1,000
|
|
820,100
|
Maryland 6.1%
|
|
|
|
|
|
|
|
6.25%, 9/15/29
|
|
|
|
2,950
|
|
1,660,083
|
Anne Arundel County, Maryland, Special
|
|
|
|
|
|
|
|
New Jersey State Turnpike Authority, Turnpike Revenue
|
|
|
|
|
Obligation Revenue Bonds (Arundel Mills Project),
|
|
|
|
|
|
Bonds, Series C, 5%, 1/01/30 (f)
|
|
|
|
3,500
|
|
3,337,145
|
7.10%, 7/01/09 (a)
|
|
|
|
1,870
|
|
1,959,760
|
|
|
|
|
|
|
|
16,229,461
|
See Notes to Financial Statements.
8 SEMI-ANNUAL REPORT OCTOBER 31, 2008
|
Schedule of Investments (continued)
|
|
BlackRock MuniHoldings Fund, Inc. (MHD)
|
|
|
|
|
|
|
|
|
(Percentages shown are based on Net Assets)
|
|
|
|
|
Par
|
|
|
|
|
|
|
|
Par
|
|
|
Municipal Bonds
|
|
|
|
(000)
|
|
Value
|
|
Municipal Bonds
|
|
|
|
(000)
|
|
Value
|
New York 11.8%
|
|
|
|
|
|
|
|
South Carolina 2.0%
|
|
|
|
|
|
|
Dutchess County, New York, IDA, Civic Facility Revenue
|
|
|
|
|
|
Medical University Hospital Authority, South Carolina,
|
|
|
|
|
Refunding Bonds (Saint Francis Hospital),
|
|
|
|
|
|
|
|
Hospital Facilities Revenue Refunding Bonds,
|
|
|
|
|
|
|
Series A, 7.50%, 3/01/29
|
|
$ 1,100
|
|
$ 1,051,699
|
|
Series A, 6.375%, 8/15/12 (a)
|
|
$ 3,020
|
|
$
3,362,830
|
New York City, New York, City IDA, Civic Facility Revenue
|
|
|
|
|
|
South Dakota 0.8%
|
|
|
|
|
|
|
Bonds, Series C, 6.80%, 6/01/28
|
|
|
|
535
|
|
503,077
|
|
South Dakota State Health and Educational
|
|
|
|
|
|
|
New York City, New York, City IDA, Special Facility
|
|
|
|
|
|
|
|
Facilities Authority Revenue Bonds (Sanford Health),
|
|
|
|
|
Revenue Bonds (Continental Airlines Inc. Project), AMT:
|
|
|
|
|
|
5%, 11/01/40
|
|
|
|
1,825
|
|
1,438,958
|
8%, 11/01/12
|
|
|
|
725
|
|
543,750
|
|
|
|
|
|
|
|
|
8.375%, 11/01/16
|
|
|
|
725
|
|
507,493
|
|
Tennessee 5.1%
|
|
|
|
|
|
|
New York City, New York, City Transitional Finance
|
|
|
|
|
|
|
|
Hardeman County, Tennessee, Correctional Facilities
|
|
|
|
|
|
|
Authority, Building Aid Revenue Refunding Bonds,
|
|
|
|
|
|
|
|
Corporation Revenue Bonds, 7.75%, 8/01/17
|
|
|
|
3,750
|
|
3,477,975
|
Series S-1, 4.50%, 1/15/38
|
|
|
|
700
|
|
542,983
|
|
Shelby County, Tennessee, Health, Educational and
|
|
|
|
|
|
|
New York City, New York, Sales Tax Asset Receivable
|
|
|
|
|
|
|
|
Housing Facility Board, Hospital Revenue Refunding
|
|
|
|
|
Corporation Revenue Bonds, Series A,
|
|
|
|
|
|
|
|
Bonds (Methodist Healthcare), 6.50%, 9/01/12 (a)
|
|
1,845
|
|
2,053,540
|
5%, 10/15/20 (b)
|
|
|
|
6,615
|
|
6,703,178
|
|
Tennessee Educational Loan Revenue Bonds
|
|
|
|
|
|
|
Tobacco Settlement Financing Corporation of New York
|
|
|
|
|
|
(Educational Funding South Inc.), AMT, Senior
|
|
|
|
|
|
|
Revenue Bonds:
|
|
|
|
|
|
|
|
Series B, 6.20%, 12/01/21
|
|
|
|
3,160
|
|
3,168,374
|
Series A-1, 5.50%, 6/01/18
|
|
|
|
3,150
|
|
3,172,208
|
|
|
|
|
|
|
|
8,699,889
|
Series C-1, 5.50%, 6/01/17
|
|
|
|
3,500
|
|
3,529,960
|
|
Texas 13.4%
|
|
|
|
|
|
|
Series C-1, 5.50%, 6/01/22
|
|
|
|
1,400
|
|
1,367,240
|
|
Brazos River, Texas, Harbor Navigation District, Brazoria
|
|
|
|
|
Westchester County, New York, IDA, Continuing Care
|
|
|
|
|
|
|
|
County Environmental Revenue Refunding Bonds
|
|
|
|
|
|
|
Retirement, Mortgage Revenue Bonds (Kendal on
|
|
|
|
|
|
|
|
(Dow Chemical Company Project), AMT, Series A-7,
|
|
|
|
|
Hudson Project), Series A, 6.50%, 1/01/13 (a)
|
|
|
|
2,080
|
|
2,353,458
|
|
6.625%, 5/15/33
|
|
|
|
3,655
|
|
3,001,194
|
|
|
|
|
|
|
20,275,046
|
|
Houston, Texas, Health Facilities Development
|
|
|
|
|
|
|
Ohio 2.1%
|
|
|
|
|
|
|
|
Corporation, Retirement Facility Revenue Bonds
|
|
|
|
|
|
|
American Municipal Power, Inc., Ohio, Revenue
|
|
|
|
|
|
|
|
(Buckingham Senior Living Community), Series A,
|
|
|
|
|
|
|
Refunding Bonds (Prairie State Energy Campus
|
|
|
|
|
|
|
|
7.125%, 2/15/14 (a)
|
|
|
|
1,800
|
|
2,032,884
|
Project), Series A, 5%, 2/15/38
|
|
|
|
2,455
|
|
2,139,287
|
|
Lower Colorado River Authority, Texas, PCR (Samsung
|
|
|
|
|
Buckeye Tobacco Settlement Financing Authority,
|
|
|
|
|
|
|
|
Austin Semiconductor), AMT, 6.375%, 4/01/27
|
|
|
|
3,000
|
|
2,388,180
|
Ohio, Tobacco Settlement Asset-Backed Bonds,
|
|
|
|
|
|
|
|
Matagorda, Texas, Hospital District Revenue Bonds,
|
|
|
|
|
|
|
Series A-2, 6.50%, 6/01/47
|
|
|
|
2,160
|
|
1,480,982
|
|
5%, 2/15/35 (n)
|
|
|
|
4,500
|
|
3,871,035
|
|
|
|
|
|
|
|
|
North Texas Tollway Authority, System Revenue Refunding
|
|
|
|
|
|
|
|
|
|
|
3,620,269
|
|
Bonds, Second Tier, Series F, 6.125%, 1/01/31
|
|
|
|
4,190
|
|
3,859,116
|
Pennsylvania 5.8%
|
|
|
|
|
|
|
|
San Antonio Energy Acquisition Public Facilities
|
|
|
|
|
|
|
Bucks County, Pennsylvania, IDA, Retirement
|
|
|
|
|
|
|
|
Corporation, Texas, Gas Supply Revenue Bonds:
|
|
|
|
|
|
|
Community Revenue Bonds (Anns Choice Inc.),
|
|
|
|
|
|
|
|
5.50%, 8/01/23
|
|
|
|
2,425
|
|
1,797,895
|
Series A, 6.25%, 1/01/35
|
|
|
|
1,700
|
|
1,215,347
|
|
5.50%, 8/01/24
|
|
|
|
1,100
|
|
813,098
|
Pennsylvania Economic Development Financing Authority,
|
|
|
|
|
|
5.50%, 8/01/25
|
|
|
|
1,120
|
|
823,301
|
Exempt Facilities Revenue Bonds (National Gypsum
|
|
|
|
|
|
Texas State Department of Housing and Community
|
|
|
|
|
|
|
Company), AMT, Series B, 6.125%, 11/01/27
|
|
|
|
3,500
|
|
2,121,525
|
|
Affairs, Residential Mortgage Revenue Bonds, AMT,
|
|
|
|
|
Philadelphia, Pennsylvania, Authority for IDR,
|
|
|
|
|
|
|
|
Series A, 5.70%, 1/01/33 (o)(p)
|
|
|
|
2,115
|
|
1,997,110
|
Commercial Development, 7.75%, 12/01/17
|
|
|
|
725
|
|
686,611
|
|
Texas State Department of Housing and Community
|
|
|
|
|
|
|
Philadelphia, Pennsylvania, Authority for Industrial
|
|
|
|
|
|
|
|
Affairs, Residential Mortgage Revenue Refunding
|
|
|
|
|
|
|
Development, Senior Living Revenue Bonds:
|
|
|
|
|
|
|
|
Bonds, AMT, Series B, 5.25%, 7/01/22 (o)(p)
|
|
|
|
2,565
|
|
2,412,767
|
(Arbor House Inc. Project), Series E, 6.10%, 7/01/33
|
|
1,105
|
|
878,342
|
|
|
|
|
|
|
|
22,996,580
|
(Saligman House Project), Series C, 6.10%, 7/01/33
|
|
1,245
|
|
989,626
|
|
|
|
|
|
|
|
|
Sayre, Pennsylvania, Health Care Facilities Authority,
|
|
|
|
|
|
|
|
Vermont 1.3%
|
|
|
|
|
|
|
Revenue Bonds (Guthrie Healthcare System),
|
|
|
|
|
|
|
|
Vermont Educational and Health Buildings Financing
|
|
|
|
|
Series B, 7.125%, 12/01/11 (a)
|
|
|
|
3,500
|
|
4,154,745
|
|
Agency, Revenue Bonds (Developmental and Mental
|
|
|
|
|
|
|
|
|
|
|
|
|
Health), Series A, 6%, 6/15/17
|
|
|
|
2,370
|
|
2,253,680
|
|
|
|
|
|
|
10,046,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virginia 10.1%
|
|
|
|
|
|
|
Rhode Island 1.8%
|
|
|
|
|
|
|
|
Chesterfield County, Virginia, IDA, PCR (Virginia Electric
|
|
|
|
|
Rhode Island State Health and Educational Building
|
|
|
|
|
|
and Power Company), Series A, 5.875%, 6/01/17
|
|
1,150
|
|
1,159,533
|
Corporation, Hospital Financing Revenue Bonds
|
|
|
|
|
|
|
|
Fairfax County, Virginia, EDA, Resource Recovery Revenue
|
|
|
|
|
(Lifespan Obligation Group), 6.50%, 8/15/12 (a)
|
|
2,820
|
|
3,112,293
|
|
Refunding Bonds, AMT, Series A, 6.10%, 2/01/11 (g)
|
|
3,000
|
|
3,067,200
|
See Notes to Financial Statements.
SEMI-ANNUAL REPORT OCTOBER 31, 2008 9
Schedule of Investments (continued)
|
|
BlackRock MuniHoldings Fund, Inc. (MHD)
|
|
|
|
|
|
|
|
|
(Percentages shown are based on Net Assets)
|
|
|
|
|
Par
|
|
|
|
Municipal Bonds Transferred to
|
|
Par
|
|
|
Municipal Bonds
|
|
|
|
(000)
|
|
Value
|
|
Tender Option Bond Trusts (q)
|
|
(000)
|
|
Value
|
Virginia (concluded)
|
|
|
|
|
|
|
|
New York 2.5%
|
|
|
|
|
Tobacco Settlement Financing Corporation of
|
|
|
|
|
|
|
|
New York City, New York, Sales Tax Asset Receivable
|
|
|
|
|
Virginia, Asset-Backed Revenue Bonds,
|
|
|
|
|
|
|
|
Corporation Revenue Bonds, Series A,
|
|
|
|
|
5.625%, 6/01/15 (a)
|
|
$ 3,035
|
|
$ 3,316,952
|
|
5.25%, 10/15/27 (g)
|
|
$ 4,240
|
|
$ 4,252,762
|
Virginia State, HDA, Commonwealth Mortgage
|
|
|
|
|
|
|
|
Tennessee 1.1%
|
|
|
|
|
Revenue Bonds, Series H, Sub-Series H-1,
|
|
|
|
|
|
|
|
Shelby County, Tennessee, Health, Educational and
|
|
|
|
|
5.375%, 7/01/36 (b)
|
|
|
|
10,940
|
|
9,765,263
|
|
Housing Facility Board, Hospital Revenue Refunding
|
|
|
|
|
|
|
|
|
|
|
17,308,948
|
|
Bonds (Saint Jude Childrens Research Hospital),
|
|
|
|
|
Washington 0.6%
|
|
|
|
|
|
|
|
5%, 7/01/31
|
|
2,250
|
|
1,978,065
|
Seattle, Washington, Housing Authority Revenue
|
|
|
|
|
|
|
|
Texas 7.2%
|
|
|
|
|
Bonds (Replacement Housing Project),
|
|
|
|
|
|
|
|
Harris County, Texas, Toll Road Revenue Refunding
|
|
|
|
|
6.125%, 12/01/32
|
|
|
|
1,325
|
|
1,064,863
|
|
Bonds, Senior Lien, Series A, 5.25%, 8/15/35 (f)
|
|
11,760
|
|
12,351,646
|
Wisconsin 1.2%
|
|
|
|
|
|
|
|
Virginia 3.3%
|
|
|
|
|
Wisconsin State Health and Educational Facilities
|
|
|
|
|
|
|
|
University of Virginia, Revenue Refunding Bonds,
|
|
|
|
|
Authority Revenue Bonds:
|
|
|
|
|
|
|
|
5%, 6/01/40
|
|
3,750
|
|
3,539,925
|
(New Castle Place Project), Series A, 7%, 12/01/31
|
|
825
|
|
673,753
|
|
Virginia State, HDA, Commonwealth Mortgage
|
|
|
|
|
(SynergyHealth Inc.), 6%, 11/15/32
|
|
|
|
1,755
|
|
1,472,217
|
|
Revenue Bonds, Series H, Sub-Series H-1,
|
|
|
|
|
|
|
|
|
|
|
2,145,970
|
|
5.35%, 7/01/31 (b)
|
|
2,370
|
|
2,150,348
|
Puerto Rico 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
5,690,273
|
Puerto Rico Industrial, Medical and Environmental
|
|
|
|
|
|
|
|
Washington 1.0%
|
|
|
|
|
Pollution Control Facilities Financing Authority, Special
|
|
|
|
|
|
Central Puget Sound Regional Transportation Authority,
|
|
|
|
|
Facilities Revenue Bonds (American Airlines Inc.),
|
|
|
|
|
|
|
|
Washington, Sales and Use Tax Revenue Bonds,
|
|
|
|
|
Series A, 6.45%, 12/01/25
|
|
|
|
2,060
|
|
813,700
|
|
Series A, 5%, 11/01/32 (f)
|
|
1,860
|
|
1,704,111
|
U.S. Virgin Islands 1.7%
|
|
|
|
|
|
|
|
Total Municipal Bonds Transferred to
|
|
|
|
|
Virgin Islands Government Refinery Facilities, Revenue
|
|
|
|
|
|
Tender Option Bond Trusts 27.0%
|
|
|
|
46,465,548
|
Refunding Bonds (Hovensa Coker Project),
|
|
|
|
|
|
|
|
Total Long-Term Investments
|
|
|
|
|
AMT, 6.50%, 7/01/21
|
|
|
|
3,460
|
|
2,868,132
|
|
(Cost $320,501,327) 164.8%
|
|
|
|
283,539,509
|
Total Municipal Bonds 137.8%
|
|
|
|
|
|
237,073,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Securities
|
|
Shares
|
|
|
Municipal Bonds Transferred to
|
|
|
|
|
|
|
|
Merrill Lynch Institutional Tax-Exempt
|
|
|
|
|
Tender Option Bond Trusts (q)
|
|
|
|
|
|
|
|
Fund, 1.63% (r)(s)
|
|
1,813,829
|
|
1,813,829
|
California 3.5%
|
|
|
|
|
|
|
|
Total Short-Term Securities
|
|
|
|
|
Sequoia, California, Unified High School District, GO,
|
|
|
|
|
|
(Cost $1,813,829) 1.0%
|
|
|
|
1,813,829
|
Refunding, Series B, 5.50%, 7/01/35 (f)
|
|
|
|
3,494
|
|
3,460,261
|
|
|
|
|
|
|
Tustin, California, Unified School District, Senior Lien
|
|
|
|
|
|
Total Investments (Cost $322,315,156*) 165.8%
|
|
285,353,338
|
Special Tax Bonds (Community Facilities District
|
|
|
|
|
|
|
|
Other Assets Less Liabilities 3.0%
|
|
|
|
5,107,847
|
Number 97-1), Series A, 5%, 9/01/32 (f)
|
|
|
|
2,910
|
|
2,600,784
|
|
Liability for Trust Certificates, Including Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense and Fees Payable (15.4)%
|
|
|
|
(26,438,312)
|
|
|
|
|
|
|
6,061,045
|
|
Preferred Shares, at Redemption Value (53.4)%
|
|
|
|
(91,959,509)
|
Colorado 2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Colorado Health Facilities Authority Revenue Bonds
|
|
|
|
|
|
|
|
Net Assets Applicable to Common Shares 100.0%
|
|
|
|
$172,063,364
|
(Catholic Health) (f)
|
|
|
|
|
|
|
|
|
|
|
|
|
Series C-3, 5.10%, 10/01/41
|
|
|
|
2,580
|
|
2,278,243
|
|
* The cost and unrealized appreciation (depreciation) of investments as of
|
Series C-7, 5%, 9/01/36
|
|
|
|
1,650
|
|
1,460,349
|
|
October 31, 2008, as computed for federal income tax purposes, were
|
|
|
|
|
|
|
3,738,592
|
|
as follows:
|
|
|
|
|
Connecticut 3.5%
|
|
|
|
|
|
|
|
Aggregate cost
|
|
|
|
$295,452,516
|
Connecticut State Health and Educational Facilities
|
|
|
|
|
|
|
|
Gross unrealized appreciation
|
|
|
|
$ 5,096,971
|
Authority Revenue Bonds (Yale University)
|
|
|
|
|
|
|
|
Gross unrealized depreciation
|
|
|
|
(41,469,105)
|
Series T-1, 4.70%, 7/01/29
|
|
|
|
3,180
|
|
2,965,350
|
|
Net unrealized depreciation
|
|
|
|
$ (36,372,134)
|
Series X-3, 4.85%, 7/01/37
|
|
|
|
3,270
|
|
2,990,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) U.S. government securities, held in escrow, are used to pay interest on this
|
|
|
|
|
|
|
5,955,700
|
|
security, as well as to retire the bond in full at the date indicated, typically at
|
Massachusetts 2.7%
|
|
|
|
|
|
|
|
a premium to par.
|
|
|
|
|
Massachusetts State School Building Authority,
|
|
|
|
|
|
|
|
(b) MBIA Insured.
|
|
|
|
|
Dedicated Sales Tax Revenue Bonds, Series A,
|
|
|
|
|
|
|
|
|
|
|
|
|
5%, 8/15/30 (f)
|
|
|
|
4,994
|
|
4,733,354
|
|
(c) XL Capital Insured.
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) FGIC Insured.
|
|
|
|
|
See Notes to Financial Statements.
10 SEMI-ANNUAL REPORT OCTOBER 31, 2008
Schedule of Investments (concluded)
BlackRock MuniHoldings Fund, Inc. (MHD)
|
(e) Represents a zero-coupon bond. Rate shown reflects the effective yield at the
time of purchase.
(f) FSA Insured.
(g) AMBAC Insured.
(h) Assured Guaranty Insured.
(i) Issuer filed for bankruptcy or is in default of interest payments.
(j) Non-income producing security.
(k) CIFG Insured.
(l) BHAC Insured.
(m) ACA Insured.
(n) FHA Insured.
(o) FNMA Collateralized
(p) GNMA Collateralized
(q) Securities represent bonds transferred to a tender option bond trust in
exchange for which the Fund acquired residual interest certificates. These securi-
ties serve as collateral in a financing transaction. See Note 1 of the Notes to
Financial Statements for details of municipal bonds transferred to tender option
bond trusts.
(r) Investments in companies considered to be an affiliate of the Fund, for purposes
of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
|
|
Net
|
|
|
Affiliate
|
|
Activity
|
|
Income
|
Merrill Lynch Institutional Tax-Exempt Fund
|
|
1,804,858
|
|
$ 9,625
|
(s) Represents the current yield as of report date.
|
|
|
|
|
See Notes to Financial Statements.
|
Effective May 1, 2008, the Fund adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 157, Fair Value
Measurements (FAS 157). FAS 157 clarifies the definition of fair value, estab-
lishes a framework for measuring fair values and requires additional disclosures
about the use of fair value measurements. Various inputs are used in determin-
ing the fair value of investments, which are as follows:
Level 1 price quotations in active markets/exchanges for identical
securities
Level 2 other observable inputs (including, but not limited to: quoted prices
for 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
circumstance, to the extent observable inputs are not available (including the
Funds own assumption used in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indi-
cation of the risk associated with investing in those securities. For information
about the Funds policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following table summarizes the inputs used as of October 31, 2008 in deter-
mining the fair valuation of the Funds investments:
Valuation
|
|
Investments in
|
Inputs
|
|
Securities
|
Level 1
|
|
$ 1,813,829
|
Level 2
|
|
283,539,509
|
Level 3
|
|
|
Total
|
|
$285,353,338
|
SEMI-ANNUAL REPORT
Schedule of Investments
October 31, 2008 (Unaudited)
|
|
BlackRock MuniHoldings Insured Fund, Inc. (MUS)
|
|
|
|
|
|
|
|
|
|
|
(Percentages shown are based on Net Assets)
|
|
|
|
|
Par
|
|
|
|
|
|
|
|
|
|
Par
|
|
|
Municipal Bonds
|
|
|
|
(000)
|
|
Value
|
|
Municipal Bonds
|
|
|
|
(000)
|
|
Value
|
Alabama 1.3%
|
|
|
|
|
|
|
|
Florida (concluded)
|
|
|
|
|
|
|
Jefferson County, Alabama, Limited Obligation School
|
|
|
|
|
|
Hillsborough County, Florida, HFA, S/F
|
|
|
|
|
|
|
Warrants, Series A, 5.50%, 1/01/22
|
|
$ 2,170
|
|
$ 1,821,303
|
|
Mortgage Revenue Bonds, AMT, Series 1,
|
|
|
|
|
|
|
Arkansas 4.6%
|
|
|
|
|
|
|
|
5.375%, 10/01/49 (k)(l)(m)
|
|
$ 2,100
|
|
$ 1,782,564
|
Arkansas State Development Finance Authority,
|
|
|
|
|
|
|
|
Hillsborough County, Florida, IDA, Hospital Revenue
|
|
|
|
|
|
|
M/F Mortgage Revenue Refunding Bonds,
|
|
|
|
|
|
|
|
Bonds (H. Lee Moffitt Cancer Center Project),
|
|
|
|
|
|
|
Series C, 5.35%, 12/01/35 (a)(b)
|
|
|
|
7,420
|
|
6,466,011
|
|
Series A, 5.25%, 7/01/37
|
|
|
|
2,450
|
|
1,774,829
|
|
|
|
|
|
|
|
|
Hillsborough County, Florida, IDA, PCR, Refunding
|
|
|
|
|
|
|
California 22.9%
|
|
|
|
|
|
|
|
(Tampa Electric Company Project), Series B,
|
|
|
|
|
|
|
California State Public Works Board, Lease Revenue
|
|
|
|
|
|
|
|
5.15%, 9/01/25
|
|
|
|
700
|
|
693,175
|
Bonds (Department of General Services Capitol
|
|
|
|
|
|
Jacksonville, Florida, Health Facilities Authority, Hospital
|
|
|
|
|
East End Complex), Series A, 5%, 12/01/27 (c)
|
|
|
|
2,000
|
|
1,793,280
|
|
Revenue Bonds (Baptist Medical Center Project),
|
|
|
|
|
|
|
California State, Various Purpose, GO,
|
|
|
|
|
|
|
|
5%, 8/15/37 (d)
|
|
|
|
4,515
|
|
3,949,361
|
5.25%, 12/01/22 (d)
|
|
|
|
5,955
|
|
5,966,434
|
|
Jacksonville, Florida, Port Authority Revenue Bonds,
|
|
|
|
|
|
|
East Side Union High School District, California,
|
|
|
|
|
|
|
|
AMT, 6%, 11/01/38 (n)
|
|
|
|
3,750
|
|
3,337,687
|
Santa Clara County, GO (Election of 2002), Series B,
|
|
|
|
|
|
Lee Memorial Health System, Florida, Hospital Revenue
|
|
|
|
|
5%, 8/01/27 (a)(e)
|
|
|
|
1,800
|
|
1,659,744
|
|
Bonds, Series A, 5%, 4/01/32 (c)
|
|
|
|
3,000
|
|
2,635,350
|
Eastern Municipal Water District, California, Water
|
|
|
|
|
|
|
|
Miami-Dade County, Florida, Aviation Revenue
|
|
|
|
|
|
|
and Sewer, COP, Series H, 5%, 7/01/35
|
|
|
|
1,000
|
|
877,310
|
|
Refunding Bonds (Miami International Airport), AMT,
|
|
|
|
|
Los Angeles County, California, Metropolitan
|
|
|
|
|
|
|
|
Series A, 5.50%, 10/01/41 (d)
|
|
|
|
3,900
|
|
3,056,625
|
Transportation Authority, Sales Tax Revenue Refunding
|
|
|
|
|
|
Miami-Dade County, Florida, School Board, COP,
|
|
|
|
|
|
|
Bonds, Proposition C, VRDN, Second Senior Series A,
|
|
|
|
|
|
Refunding, Series B (n):
|
|
|
|
|
|
|
8%, 7/01/20 (a)(f)
|
|
|
|
3,000
|
|
3,000,000
|
|
5.25%, 5/01/26
|
|
|
|
5,000
|
|
4,833,400
|
Modesto, California, Schools Infrastructure Financing
|
|
|
|
|
|
5.25%, 5/01/31
|
|
|
|
2,400
|
|
2,269,848
|
Agency, Special Tax Bonds, 5.50%, 9/01/36 (c)
|
|
|
|
2,565
|
|
2,257,482
|
|
Miami-Dade County, Florida, Special Obligation Revenue
|
|
|
|
|
Sacramento County, California, Airport System Revenue
|
|
|
|
|
|
Bonds, Sub-Series A, 5.24%, 10/01/37 (a)(h)
|
|
|
|
2,225
|
|
314,571
|
Bonds, AMT, Senior Series B, 5.25%, 7/01/39 (d)
|
|
3,150
|
|
2,386,283
|
|
Orlando, Florida, Senior Tourist Development Tax
|
|
|
|
|
|
|
San Pablo, California, Joint Powers Financing Authority,
|
|
|
|
|
|
Revenue Bonds (6th Cent Contract Payments),
|
|
|
|
|
|
|
Tax Allocation Revenue Refunding Bonds (a)(h):
|
|
|
|
|
|
|
|
Series A, 5.25%, 11/01/38 (n)
|
|
|
|
2,000
|
|
1,812,980
|
5.66%, 12/01/24
|
|
|
|
2,635
|
|
938,930
|
|
Pasco County, Florida, Half-Cent Sales Tax Revenue
|
|
|
|
|
|
|
5.66%, 12/01/25
|
|
|
|
2,355
|
|
780,518
|
|
Bonds, 5.125%, 12/01/28 (c)
|
|
|
|
3,850
|
|
3,398,241
|
5.66%, 12/01/26
|
|
|
|
2,355
|
|
724,021
|
|
Seminole County, Florida, Water and Sewer Revenue
|
|
|
|
|
Santa Ana, California, Unified School District,
|
|
|
|
|
|
|
|
Bonds, 5%, 10/01/31
|
|
|
|
3,750
|
|
3,438,750
|
GO, 5%, 8/01/32 (a)
|
|
|
|
4,265
|
|
3,915,057
|
|
|
|
|
|
|
|
|
|
|
Stockton, California, Public Financing Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,760,557
|
Bonds (Redevelopment Projects), Series A,
|
|
|
|
|
|
|
|
Illinois 5.1%
|
|
|
|
|
|
|
5.25%, 9/01/31 (i)
|
|
|
|
2,140
|
|
1,766,527
|
|
Chicago, Illinois, OHare International Airport, General
|
|
|
|
|
Vista, California, COP (Community Projects),
|
|
|
|
|
|
|
|
Airport Revenue Refunding Bonds, Third Lien (a):
|
|
|
|
|
|
|
5%, 5/01/37 (a)
|
|
|
|
3,600
|
|
3,025,512
|
|
AMT, Series A, 5.75%, 1/01/19
|
|
|
|
1,875
|
|
1,756,800
|
West Contra Costa, California, Unified School District,
|
|
|
|
|
|
Series A, 5%, 1/01/31
|
|
|
|
1,000
|
|
865,010
|
GO, Series C, 5%, 8/01/21 (a)(e)
|
|
|
|
3,480
|
|
3,374,417
|
|
Illinois State, GO, First Series, 6%, 1/01/18 (e)
|
|
|
|
4,500
|
|
4,622,040
|
|
|
|
|
|
|
32,465,515
|
|
Lake, Cook, Kane and McHenry Counties, Illinois,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community Unit School District Number 220,
|
|
|
|
|
|
|
Colorado 8.0%
|
|
|
|
|
|
|
|
GO, 5.75%, 12/01/19 (e)
|
|
|
|
45
|
|
46,678
|
Aurora, Colorado, COP, 5.75%, 12/01/10 (c)(j)
|
|
|
|
10,620
|
|
11,330,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,290,528
|
District of Columbia 0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
District of Columbia, Deed Tax Revenue Bonds (Housing
|
|
|
|
|
|
Indiana 6.1%
|
|
|
|
|
|
|
Production Trust Fund New Communities Project),
|
|
|
|
|
|
Indiana Municipal Power Agency, Power Supply System
|
|
|
|
|
Series A, 5%, 6/01/32 (a)
|
|
|
|
1,500
|
|
1,296,675
|
|
Revenue Bonds, Series A (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5%, 1/01/37
|
|
|
|
4,460
|
|
3,720,086
|
Florida 27.3%
|
|
|
|
|
|
|
|
5%, 1/01/42
|
|
|
|
6,000
|
|
4,866,840
|
Brevard County, Florida, Health Facilities Authority,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare Facilities Revenue Bonds (Health First Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,586,926
|
Project), 5%, 4/01/34
|
|
|
|
1,650
|
|
1,095,880
|
|
Kentucky 0.4%
|
|
|
|
|
|
|
Broward County, Florida, HFA, S/F Mortgage
|
|
|
|
|
|
|
|
Kentucky Economic Development Financing
|
|
|
|
|
|
|
Revenue Refunding Bonds, AMT, Series E,
|
|
|
|
|
|
|
|
Authority, Louisville Arena Project Revenue Bonds
|
|
|
|
|
|
|
5.90%, 10/01/39 (k)(l)(m)
|
|
|
|
1,470
|
|
1,364,395
|
|
(Louisville Arena Authority, Inc.), Sub-Series A-1,
|
|
|
|
|
|
|
Broward County, Florida, School Board, COP,
|
|
|
|
|
|
|
|
6%, 12/01/38 (n)
|
|
|
|
650
|
|
613,788
|
Series A, 5.25%, 7/01/33 (d)
|
|
|
|
3,300
|
|
3,002,901
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
12 SEMI-ANNUAL REPORT OCTOBER 31, 2008
|
Schedule of Investments (continued)
|
|
BlackRock MuniHoldings Insured Fund, Inc. (MUS)
|
|
|
|
|
|
|
|
|
(Percentages shown are based on Net Assets)
|
|
|
|
|
Par
|
|
|
|
|
|
|
|
Par
|
|
|
Municipal Bonds
|
|
|
|
(000)
|
|
Value
|
|
Municipal Bonds
|
|
|
|
(000)
|
|
Value
|
Louisiana 3.2%
|
|
|
|
|
|
|
|
New York (concluded)
|
|
|
|
|
|
|
Louisiana Public Facilities Authority Revenue Bonds
|
|
|
|
|
|
|
|
New York City, New York, GO, Series E,
|
|
|
|
|
|
|
(CHRISTUS Health Project), VRDN, Series C,
|
|
|
|
|
|
|
|
5%, 11/01/17 (d)
|
|
$ 4,000
|
|
$ 4,121,760
|
9.90%, 7/01/47 (a)(f)
|
|
$ 3,750
|
|
$ 3,750,000
|
|
New York City, New York, Sales Tax Asset
|
|
|
|
|
|
|
Louisiana State Gas and Fuels Tax Revenue Bonds,
|
|
|
|
|
|
|
|
Receivable Corporation Revenue Bonds, Series A,
|
|
|
|
|
|
|
Series A, 5%, 5/01/41 (a)(e)
|
|
|
|
940
|
|
814,651
|
|
5.25%, 10/15/27 (c)
|
|
|
|
4,095
|
|
4,107,326
|
|
|
|
|
|
|
4,564,651
|
|
|
|
|
|
|
|
15,690,203
|
Massachusetts 1.6%
|
|
|
|
|
|
|
|
Oregon 1.0%
|
|
|
|
|
|
|
Massachusetts State, HFA, Housing Development
|
|
|
|
|
|
|
|
Portland, Oregon, Urban Renewal and Redevelopment
|
|
|
|
|
Revenue Refunding Bonds, AMT, Series A,
|
|
|
|
|
|
|
|
Tax Allocation Bonds (Oregon Convention Center),
|
|
|
|
|
|
|
5.15%, 6/01/11 (a)
|
|
|
|
315
|
|
317,504
|
|
Series A, 5.75%, 6/15/15 (c)
|
|
|
|
1,400
|
|
1,432,452
|
Massachusetts State, HFA, Rental Housing Mortgage
|
|
|
|
|
|
Rhode Island 5.6%
|
|
|
|
|
|
|
Revenue Bonds, AMT, Series C, 5.50%, 7/01/32 (d)
|
|
2,440
|
|
2,007,364
|
|
Providence, Rhode Island, Redevelopment Agency
|
|
|
|
|
|
|
|
|
|
|
|
|
2,324,868
|
|
Revenue Refunding Bonds (Public Safety and
|
|
|
|
|
|
|
Michigan 4.2%
|
|
|
|
|
|
|
|
Municipal Buildings), Series A, 5.75%, 4/01/10 (c)(j)
|
|
5,000
|
|
5,289,550
|
Michigan State Strategic Fund, Limited Obligation
|
|
|
|
|
|
|
|
Rhode Island State Health and Educational Building
|
|
|
|
|
Revenue Refunding Bonds (Detroit Edison Company
|
|
|
|
|
|
Corporation Revenue Bonds (Rhode Island School
|
|
|
|
|
Pollution Control Project), AMT (o):
|
|
|
|
|
|
|
|
of Design), Series D, 5.50%, 8/15/31 (o)
|
|
|
|
2,870
|
|
2,581,135
|
Series A, 5.50%, 6/01/30
|
|
|
|
2,000
|
|
1,639,640
|
|
|
|
|
|
|
|
7,870,685
|
Series B, 5.65%, 9/01/29
|
|
|
|
1,500
|
|
1,338,195
|
|
South Carolina 1.1%
|
|
|
|
|
|
|
Series C, 5.65%, 9/01/29
|
|
|
|
3,500
|
|
2,975,455
|
|
Medical University Hospital Authority, South Carolina,
|
|
|
|
|
|
|
|
|
|
|
5,953,290
|
|
Hospital Facilities Revenue Refunding Bonds,
|
|
|
|
|
|
|
Minnesota 3.0%
|
|
|
|
|
|
|
|
Series A, 5.25%, 2/15/25 (a)(b)
|
|
|
|
1,525
|
|
1,482,590
|
Sauk Rapids, Minnesota, Independent School District
|
|
|
|
|
|
Tennessee 2.7%
|
|
|
|
|
|
|
Number 47, GO, Series A, 5.65%, 2/01/19 (a)
|
|
|
|
4,015
|
|
4,240,763
|
|
Tennessee HDA, Revenue Refunding Bonds
|
|
|
|
|
|
|
Missouri 1.5%
|
|
|
|
|
|
|
|
(Homeownership Program), AMT, Series A (d):
|
|
|
|
|
|
|
Cape Girardeau, Missouri, School District
|
|
|
|
|
|
|
|
5.25%, 7/01/22
|
|
|
|
2,300
|
|
2,017,376
|
Number 063, GO (Missouri Direct Deposit Program),
|
|
|
|
|
|
5.35%, 1/01/26
|
|
|
|
2,115
|
|
1,803,461
|
5.50%, 3/01/18 (e)
|
|
|
|
2,000
|
|
2,074,300
|
|
|
|
|
|
|
|
3,820,837
|
Montana 5.0%
|
|
|
|
|
|
|
|
Texas 16.0%
|
|
|
|
|
|
|
Mehlville, Montana, School District Number R-9,
|
|
|
|
|
|
|
|
Dallas-Fort Worth, Texas, International Airport, Joint
|
|
|
|
|
|
|
COP, Series A (d):
|
|
|
|
|
|
|
|
Revenue Bonds, AMT, Series B, 6%, 11/01/23 (a)
|
|
700
|
|
636,230
|
5.50%, 3/01/11 (j)
|
|
|
|
5,510
|
|
5,855,476
|
|
Katy, Texas, Independent School District, GO,
|
|
|
|
|
|
|
5.50%, 3/01/14
|
|
|
|
360
|
|
372,578
|
|
Series C, 5%, 2/15/38
|
|
|
|
4,200
|
|
3,861,522
|
5.50%, 3/01/15
|
|
|
|
405
|
|
419,151
|
|
North Texas Tollway Authority, System Revenue
|
|
|
|
|
|
|
5.50%, 3/01/16
|
|
|
|
215
|
|
222,512
|
|
Refunding Bonds (a):
|
|
|
|
|
|
|
5.50%, 3/01/17
|
|
|
|
280
|
|
289,716
|
|
First Tier, 5.75%, 1/01/40
|
|
|
|
6,710
|
|
6,225,471
|
|
|
|
|
|
|
7,159,433
|
|
First Tier, Series B, 5.75%, 1/01/40
|
|
|
|
6,275
|
|
5,821,882
|
|
|
|
|
|
|
|
|
Series A, 5.625%, 1/01/33
|
|
|
|
6,585
|
|
6,207,482
|
Nevada 5.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clark County, Nevada, Airport Revenue Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,752,587
|
(Jet Aviation Fuel Tax), AMT, Series C, 5.375%,
|
|
|
|
|
|
|
|
Washington 2.6%
|
|
|
|
|
|
|
7/01/20 (c)
|
|
|
|
1,000
|
|
891,580
|
|
Chelan County, Washington, Public Utility District
|
|
|
|
|
|
|
Clark County, Nevada, Passenger Facility Charge
|
|
|
|
|
|
|
|
Number 001, Consolidated Revenue Bonds (Chelan
|
|
|
|
|
Revenue Bonds (Las Vegas McCarran International),
|
|
|
|
|
|
Hydro System), AMT, Series A, 5.45%, 7/01/37 (c)
|
|
2,310
|
|
1,800,206
|
AMT, Series A-1, 5%, 7/01/23 (c)(d)
|
|
|
|
1,750
|
|
1,444,712
|
|
Snohomish County, Washington, Public Utility
|
|
|
|
|
|
|
Clark County, Nevada, Water Reclamation District,
|
|
|
|
|
|
|
|
District Number 001, Electric Revenue Bonds,
|
|
|
|
|
|
|
Limited Tax, GO, 6%, 7/01/38 (p)
|
|
|
|
5,000
|
|
5,091,250
|
|
5.50%, 12/01/22 (d)
|
|
|
|
1,810
|
|
1,823,702
|
|
|
|
|
|
|
7,427,542
|
|
|
|
|
|
|
|
3,623,908
|
New Jersey 8.1%
|
|
|
|
|
|
|
|
Wisconsin 0.3%
|
|
|
|
|
|
|
New Jersey EDA, Motor Vehicle Surcharge Revenue
|
|
|
|
|
|
|
|
Wisconsin State Health and Educational Facilities
|
|
|
|
|
|
|
Bonds, Series A, 5.25%, 7/01/33 (a)
|
|
|
|
6,700
|
|
6,277,498
|
|
Authority Revenue Bonds (Blood Center of
|
|
|
|
|
|
|
New Jersey State Turnpike Authority, Turnpike Revenue
|
|
|
|
|
|
Southeastern Wisconsin Project), 5.50%, 6/01/24
|
|
500
|
|
437,660
|
Bonds, Series C, 5%, 1/01/30 (d)
|
|
|
|
5,500
|
|
5,244,085
|
|
Puerto Rico 1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
11,521,583
|
|
Puerto Rico Public Buildings Authority, Government
|
|
|
|
|
|
|
New York 11.1%
|
|
|
|
|
|
|
|
Facilities Revenue Refunding Bonds, Series D,
|
|
|
|
|
|
|
Nassau Health Care Corporation, New York, Health
|
|
|
|
|
|
|
|
5.25%, 7/01/36
|
|
|
|
1,870
|
|
1,546,677
|
System Revenue Bonds, 5.75%, 8/01/09 (d)(j)
|
|
|
|
7,130
|
|
7,461,117
|
|
Total Municipal Bonds 149.9%
|
|
|
|
|
|
212,556,235
|
See Notes to Financial Statements.
SEMI-ANNUAL REPORT OCTOBER 31, 2008 13
Schedule of Investments (continued)
|
|
BlackRock MuniHoldings Insured Fund, Inc. (MUS)
|
|
|
|
|
|
|
(Percentages shown are based on Net Assets)
|
Municipal Bonds Transferred to
|
|
Par
|
|
|
|
|
|
|
|
|
Tender Option Bond Trusts (q)
|
|
(000)
|
|
Value
|
|
Short-Term Securities
|
|
Shares
|
|
Value
|
|
California 9.0%
|
|
|
|
|
|
Merrill Lynch Institutional Tax-Exempt
|
|
|
|
|
Palomar Pomerado Health Care District, California, GO
|
|
|
|
|
|
Fund, 1.63% (g)(r)
|
|
4,037,217
|
|
$ 4,037,217
|
(Election of 2004), Series A, 5.125%, 8/01/37 (a) $
|
|
4,340
|
|
$ 4,046,703
|
|
Total Short-Term Securities
|
|
|
|
|
San Jose, California, GO (Libraries, Parks and
|
|
|
|
|
|
(Cost $4,037,217) 2.8%
|
|
|
|
4,037,217
|
Public Safety Projects), 5%, 9/01/30 (a)
|
|
1,259
|
|
1,177,340
|
|
|
|
|
|
|
Sequoia, California, Unified High School District, GO,
|
|
|
|
|
|
Total Investments (Cost $295,128,781*) 190.2%
|
|
269,738,629
|
Refunding, Series B, 5.50%, 7/01/35 (d)
|
|
3,149
|
|
3,118,691
|
|
Liabilities in Excess of Other Assets (1.0)%
|
|
|
|
(1,406,061)
|
Tustin, California, Unified School District, Senior Lien
|
|
|
|
|
|
Liability for Trust Certificates, Including Interest
|
|
|
|
|
Special Tax Bonds (Community Facilities District
|
|
|
|
|
|
Expense and Fees Payable (22.8)%
|
|
|
|
(32,277,421)
|
Number 97-1). Series A (d):
|
|
|
|
|
|
Preferred Shares, at Redemption Value (66.4)%
|
|
|
|
(94,238,499)
|
5%, 9/01/32
|
|
2,180
|
|
1,948,353
|
|
Net Assets Applicable to Common Shares 100.0%
|
|
$141,816,648
|
5%, 9/01/38
|
|
2,800
|
|
2,448,012
|
|
|
|
|
|
|
|
|
|
|
12,739,099
|
|
* The cost and unrealized appreciation (depreciation) of investments as of
|
Colorado 3.5%
|
|
|
|
|
|
October 31, 2008, as computed for federal income tax purposes, were
|
Colorado Health Facilities Authority Revenue Bonds
|
|
|
|
|
|
as follows:
|
|
|
|
|
(Catholic Health), Series C-3, 5.10%, 10/01/41 (d)
|
|
5,610
|
|
4,953,854
|
|
Aggregate cost
|
|
|
|
$ 262,189,801
|
Florida 4.4%
|
|
|
|
|
|
Gross unrealized appreciation
|
|
|
|
$ 3,067,003
|
Lee County, Florida, HFA, S/F Mortgage Revenue
|
|
|
|
|
|
Gross unrealized depreciation
|
|
|
|
(27,587,447)
|
Bonds (Multi-County Program), AMT, Series A-2,
|
|
|
|
|
|
|
|
|
|
|
6%, 9/01/40 (k)(l)(m)
|
|
2,505
|
|
2,420,707
|
|
Net unrealized depreciation
|
|
|
|
$ (24,520,444)
|
Saint Petersburg, Florida, Public Utilities Revenue
|
|
|
|
|
|
(a) MBIA Insured.
|
|
|
|
|
Refunding Bonds, 5%, 10/01/35 (a)
|
|
4,302
|
|
3,857,457
|
|
(b) FHA Insured.
|
|
|
|
|
|
|
|
|
6,278,164
|
|
(c) AMBAC Insured.
|
|
|
|
|
Georgia 2.8%
|
|
|
|
|
|
(d) FSA Insured.
|
|
|
|
|
Augusta, Georgia, Water and Sewer Revenue Bonds,
|
|
|
|
|
|
|
|
|
|
|
5.25%, 10/01/34 (d)
|
|
4,000
|
|
3,922,080
|
|
(e) FGIC Insured.
|
|
|
|
|
Illinois 6.6%
|
|
|
|
|
|
(f) Security may have a maturity of more than one year at the time of issuance, but
|
Chicago, Illinois, OHare International Airport, General
|
|
|
|
|
|
has variable rate and demand features that qualify it as a short-term security.
|
Airport Revenue Refunding Bonds, Third Lien, AMT,
|
|
|
|
|
|
Rate disclosed is as of report date. Maturity shown is the final maturity date.
|
Series A, 5%, 1/01/38 (d)
|
|
8,000
|
|
7,016,120
|
|
(g) Investments in companies considered to be an affiliate of the Fund, for purposes
|
Chicago, Illinois, Water Revenue Refunding Bonds,
|
|
|
|
|
|
of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
|
Second Lien, 5.25%, 11/01/33 (d)
|
|
2,509
|
|
2,309,575
|
|
|
|
Net
|
|
|
|
|
|
|
9,325,695
|
|
Affiliate
|
|
Activity
|
|
Income
|
|
Massachusetts 7.5%
|
|
|
|
|
|
Merrill Lynch Institutional Tax-Exempt Fund
|
|
4,016,396
|
|
$ 69,649
|
Massachusetts Bay Transportation Authority, Sales
|
|
|
|
|
|
|
|
|
|
|
Tax Revenue Refunding Bonds, Senior Series A,
|
|
|
|
|
|
(h) Represents a zero-coupon bond. Rate shown reflects the effective yield at time
|
5%, 7/01/35
|
|
3,375
|
|
3,048,604
|
|
of purchase.
|
|
|
|
|
Massachusetts State School Building Authority,
|
|
|
|
|
|
(i) Radian Insured.
|
|
|
|
|
Dedicated Sales Tax Revenue Bonds,
|
|
|
|
|
|
|
|
|
|
|
Series A, 5%, 8/15/30 (d)
|
|
8,008
|
|
7,590,423
|
|
(j) U.S. government securities, held in escrow, are used to pay interest on this
|
|
|
|
|
|
|
security, as well as to retire the bond in full at the date indicated, typically at
|
|
|
|
|
10,639,027
|
|
a premium to par.
|
|
|
|
|
Virginia 0.9%
|
|
|
|
|
|
(k) FHLMC Collateralized.
|
|
|
|
|
Virginia State, HDA, Commonwealth Mortgage Revenue
|
|
|
|
|
|
|
|
|
|
|
Bonds, Series H, Sub-Series H-1, 5.35%, 7/01/31 (a)
|
|
1,500
|
|
1,360,980
|
|
(l ) FNMA Collateralized.
|
|
|
|
|
Washington 2.8%
|
|
|
|
|
|
(m) GNMA Collateralized.
|
|
|
|
|
Bellevue, Washington, GO, Refunding,
|
|
|
|
|
|
(n) Assured Guaranty Insured.
|
|
|
|
|
5.50%, 12/01/39 (a)
|
|
4,002
|
|
3,926,278
|
|
(o) XL Capital Insured.
|
|
|
|
|
Total Municipal Bonds Transferred to
|
|
|
|
|
|
(p) When issued security.
|
|
|
|
|
Tender Option Bond Trusts 37.5%
|
|
|
|
53,145,177
|
|
|
|
|
|
|
|
|
|
|
|
|
(q) Securities represent bonds transferred to a tender option bond trust in
|
Total Long Term Investments
|
|
|
|
|
|
exchange for which the Fund acquired residual interest certificates. These securi-
|
(Cost $291,091,564) 187.4%
|
|
|
|
265,701,412
|
|
ties serve as collateral in a financing transaction. See Note 1 of the Notes to
|
|
|
|
|
|
|
Financial Statements for details of municipal bonds transferred to tender option
|
|
|
|
|
|
|
bond trusts.
|
|
|
|
|
|
|
|
|
|
|
(r) Represents the current yield as of report date.
|
|
|
|
|
|
See Notes to Financial Statements.
14 SEMI-ANNUAL REPORT OCTOBER 31, 2008
|
Schedule of Investments (concluded)
BlackRock MuniHoldings Insured Fund, Inc. (MUS)
Effective May 1, 2008, the Fund adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 157, Fair Value Measurements
(FAS 157). FAS 157 clarifies the definition of fair value, establishes a frame-
work for measuring fair values and requires additional disclosures about the use
of fair value measurements. Various inputs are used in determining the fair value
of investments, which are as follows:
Level 1 price quotations in active markets/exchanges for identical securities
Level 2 other observable inputs (including, but not limited to: quoted prices
for 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
circumstance, to the extent observable inputs are not available (including the
Funds own assumption used in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For information
about the Funds policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following table summarizes the inputs used as of October 31, 2008 in deter-
mining the fair valuation of the Funds investments:
Valuation
|
|
Investments in
|
Inputs
|
|
Securities
|
Level 1
|
|
$ 4,037,217
|
Level 2
|
|
265,701,412
|
Level 3
|
|
|
Total
|
|
$269,738,629
|
See Notes to Financial Statements.
SEMI-ANNUAL REPORT OCTOBER 31, 2008 15
|
Statements of Assets and Liabilities
|
|
|
|
|
|
|
|
|
BlackRock
|
|
|
BlackRock
|
|
MuniHoldings
|
|
|
MuniHoldings
|
|
Insured
|
|
|
Fund, Inc.
|
|
Fund, Inc.
|
October 31, 2008 (Unaudited)
|
|
(MHD)
|
|
(MUS)
|
Assets
|
|
|
|
|
Investments at value unaffiliated
1
|
|
$ 283,539,509
|
|
$ 265,701,412
|
Investments at value affiliated
2
|
|
1,813,829
|
|
4,037,217
|
Cash
|
|
43,088
|
|
80,443
|
Investments sold receivable
|
|
570,477
|
|
|
Interest receivable
|
|
5,655,464
|
|
4,326,876
|
Prepaid expenses
|
|
15,443
|
|
13,526
|
Other assets
|
|
3,287
|
|
|
Total assets
|
|
291,641,097
|
|
274,159,474
|
|
Accrued Liabilities
|
|
|
|
|
Investments purchased payable
|
|
|
|
5,072,500
|
Income dividends payable Common Shares
|
|
987,824
|
|
624,981
|
Investment advisory fees payable
|
|
151,794
|
|
94,911
|
Interest expense and fees payable
|
|
165,356
|
|
208,149
|
Officers and Directors fee payable
|
|
13,914
|
|
6,688
|
Other affiliates payable
|
|
1,716
|
|
1,588
|
Other accrued expenses payable
|
|
24,664
|
|
26,238
|
Total accrued liabilities
|
|
1,345,268
|
|
6,035,055
|
|
Other Liabilities
|
|
|
|
|
Trust certificates
3
|
|
26,272,956
|
|
32,069,272
|
Total Liabilities
|
|
27,618,224
|
|
38,104,327
|
|
Preferred Shares at Redemption Value
|
|
|
|
|
Preferred Shares, at $0.10 par value per share at $25,000 per share liquidation preference, plus unpaid dividends
4
|
|
91,959,509
|
|
94,238,499
|
Net Assets Applicable to Common Shareholders
|
|
$ 172,063,364
|
|
$ 141,816,648
|
|
Net Assets Applicable to Common Shareholders Consist of
|
|
|
|
|
Common Shares, par value $0.10 per share
|
|
$ 1,391,301
|
|
$ 1,288,620
|
Paid-in capital in excess of par
|
|
205,793,237
|
|
181,957,307
|
Undistributed net investment income
|
|
1,230,173
|
|
583,111
|
Accumulated net realized gain (loss)
|
|
610,471
|
|
(16,622,238)
|
Net unrealized appreciation/depreciation
|
|
(36,961,818)
|
|
(25,390,152)
|
|
|
|
|
|
Net Assets Applicable to Common Shareholders
|
|
$ 172,063,364
|
|
$ 141,816,648
|
Net asset value per share of Common Share
5
|
|
$ 12.37
|
|
$ 11.01
|
1
Investments at cost unaffiliated
|
|
$ 320,501,327
|
|
$ 291,091,564
|
2
Investments at cost affiliated
|
|
$ 1,813,829
|
|
$ 4,037,217
|
3
Represents short-term floating certificates issued by tender option bond trusts.
|
|
|
|
|
4
Preferred Shares issued and outstanding
|
|
3,677
|
|
3,768
|
5
Common Shares outstanding
|
|
13,913,010
|
|
12,886,200
|
See Notes to Financial Statements.
|
16 SEMI-ANNUAL REPORT
Statements of Operations
|
|
|
|
|
|
|
|
|
BlackRock
|
|
|
BlackRock
|
|
MuniHoldings
|
|
|
MuniHoldings
|
|
Insured
|
|
|
Fund, Inc.
|
|
Fund, Inc.
|
Six Months Ended October 31, 2008 (Unaudited)
|
|
(MHD)
|
|
(MUS)
|
Investment Income
|
|
|
|
|
Interest
|
|
$ 9,454,589
|
|
$ 6,808,130
|
Income affiliated
|
|
9,625
|
|
69,649
|
Total income
|
|
9,464,214
|
|
6,877,779
|
|
Expenses
|
|
|
|
|
Investment advisory
|
|
949,249
|
|
848,100
|
Commissions for Preferred Shares
|
|
131,162
|
|
128,432
|
Professional
|
|
60,358
|
|
61,524
|
Accounting services
|
|
48,926
|
|
46,415
|
Transfer agent
|
|
22,796
|
|
17,320
|
Printing
|
|
17,080
|
|
15,566
|
Custodian
|
|
10,684
|
|
11,312
|
Officer and Directors
|
|
9,391
|
|
8,945
|
Registration
|
|
4,491
|
|
4,503
|
Miscellaneous
|
|
35,351
|
|
33,547
|
Total expenses excluding interest expense and fees
|
|
1,289,488
|
|
1,175,664
|
Interest expense and fees
1
|
|
642,672
|
|
620,488
|
Total expenses
|
|
1,932,160
|
|
1,796,152
|
Less fees waived by advisor
|
|
(676)
|
|
(198,540)
|
Total expenses after waiver
|
|
1,931,484
|
|
1,597,612
|
Net investment income
|
|
7,532,730
|
|
5,280,167
|
|
Realized and Unrealized Gain (Loss)
|
|
|
|
|
Net realized gain (loss) from:
|
|
|
|
|
Investments
|
|
613,354
|
|
(1,922,281)
|
Swaps
|
|
(137,764)
|
|
|
|
|
475,590
|
|
(1,922,281)
|
|
|
|
|
|
Net change in unrealized appreciation/depreciation on investments
|
|
(39,463,276)
|
|
(27,284,237)
|
Total realized and unrealized loss
|
|
(38,987,686)
|
|
(29,206,518)
|
|
Dividends to Preferred Shareholders From
|
|
|
|
|
Net investment income
|
|
(1,984,032)
|
|
(2,017,579)
|
Net Decrease in Net Assets Applicable to Common Shareholders Resulting from Operations
|
|
$ (33,438,988)
|
|
$ (25,943,930)
|
1
Related to tender option bond trusts.
|
|
|
|
|
See Notes to Financial Statements.
SEMI-ANNUAL REPORT
OCTOBER 31, 2008
17
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
BlackRock MuniHoldings
|
|
BlackRock MuniHoldings
|
|
|
Fund, Inc. (MHD)
|
|
Insured Fund, Inc. (MUS)
|
|
|
Six Months Ended
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
|
|
October 31, 2008
|
|
April 30,
|
|
October 31, 2008
|
|
April 30,
|
Increase (Decrease) in Net Assets Applicable to Common Shareholders:
|
|
(Unaudited)
|
|
2008
|
|
(Unaudited)
|
|
2008
|
Operations
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$ 7,532,730
|
|
$ 16,092,295
|
|
$ 5,280,167
|
|
$ 13,564,913
|
Net realized gain (loss)
|
|
475,590
|
|
618,266
|
|
(1,922,281)
|
|
(2,120,717)
|
Net change in unrealized appreciation/depreciation
|
|
(39,463,276)
|
|
(17,097,855)
|
|
(27,284,237)
|
|
(9,018,484)
|
Dividends and distributions to Preferred Shareholders from:
|
|
|
|
|
|
|
|
|
Net investment income
|
|
(1,984,032)
|
|
(4,329,651)
|
|
(2,017,579)
|
|
(4,926,956)
|
Net realized gain
|
|
|
|
(478,218)
|
|
|
|
|
Net decrease in net assets applicable to Common Shareholders
|
|
|
|
|
|
|
|
|
resulting from operations
|
|
(33,438,988)
|
|
(5,195,163)
|
|
(25,943,930)
|
|
(2,501,244)
|
|
Dividends and Distributions to Common Shareholders From
|
|
|
|
|
|
|
|
|
Net investment income
|
|
(5,926,942)
|
|
(11,848,523)
|
|
(3,749,884)
|
|
(7,628,630)
|
Net realized gain
|
|
|
|
(1,156,764)
|
|
|
|
|
Decrease in net assets resulting from dividends and distributions to
|
|
|
|
|
|
|
|
|
Common Shareholders
|
|
(5,926,942)
|
|
(13,005,287)
|
|
(3,749,884)
|
|
(7,628,630)
|
|
Capital Share Transactions
|
|
|
|
|
|
|
|
|
Reinvestment of common dividends
|
|
|
|
253,398
|
|
|
|
|
|
Net Assets Applicable to Common Shareholders
|
|
|
|
|
|
|
|
|
Total decrease in net assets applicable to Common Shareholders
|
|
(39,365,930)
|
|
(17,947,052)
|
|
(29,693,814)
|
|
(10,129,874)
|
Beginning of period
|
|
211,429,294
|
|
229,376,346
|
|
171,510,462
|
|
181,640,336
|
End of period
|
|
$ 172,063,364
|
|
$ 211,429,294
|
|
$ 141,816,648
|
|
$ 171,510,462
|
End of period undistributed net investment income
|
|
$ 1,230,173
|
|
$ 1,608,417
|
|
$ 583,111
|
|
$ 1,070,407
|
See Notes to Financial Statements.
Statements of Cash Flows
|
|
|
|
|
|
|
|
|
BlackRock
|
|
|
BlackRock
|
|
MuniHoldings
|
|
|
MuniHoldings
|
|
Insured
|
|
|
Fund, Inc.
|
|
Fund, Inc.
|
Six Months Ended October 31, 2008 (Unaudited)
|
|
(MHD)
|
|
(MUS)
|
Cash Provided by Operating Activities
|
|
|
|
|
Net decrease in net assets resulting from operations, excluding dividends to Preferred Shareholders
|
|
$ (31,454,956)
|
|
$ (23,926,351)
|
Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by operating activities:
|
|
|
|
|
Increase in receivables
|
|
(136,678)
|
|
(245,242)
|
Increase in prepaid expenses and other assets
|
|
(3,287)
|
|
|
Increase (decrease) in other liabilities
|
|
(6,761)
|
|
106,170
|
Net realized and unrealized gain
|
|
38,849,922
|
|
29,206,518
|
Amortization of premium and discount on investments
|
|
312,208
|
|
1,089,130
|
Proceeds from sales of long-term securities
|
|
52,815,225
|
|
57,508,654
|
Purchases of long-term securities
|
|
(28,072,487)
|
|
(37,704,573)
|
Net purchases of short-term investments
|
|
(104,858)
|
|
(6,026,396)
|
Cash provided by operating activities
|
|
32,198,328
|
|
20,007,910
|
|
Cash Used for Financing Activities
|
|
|
|
|
Payments on redemption of Preferred Shares
|
|
(33,075,000)
|
|
(39,800,000)
|
Cash receipts from trust certificates
|
|
32,122,315
|
|
34,345,144
|
Cash payments from trust certificates
|
|
(23,379,359)
|
|
(8,765,872)
|
Cash dividends paid to Common Shareholders
|
|
(5,926,942)
|
|
(3,749,884)
|
Cash dividends paid to Preferred Shareholders
|
|
(1,991,296)
|
|
(2,031,858)
|
Cash used for financing activities
|
|
(32,250,282)
|
|
(20,002,470)
|
|
Cash
|
|
|
|
|
Net increase (decrease) in cash
|
|
(51,954)
|
|
5,440
|
Cash at beginning of period
|
|
95,042
|
|
75,003
|
Cash at end of period
|
|
$ 43,088
|
|
$ 80,443
|
|
Cash Flow Information
|
|
|
|
|
Cash paid for interest
|
|
$ 589,770
|
|
$ 434,641
|
See Notes to Financial Statements.
Financial Highlights
|
|
|
|
|
|
|
|
|
|
BlackRock MuniHoldings Fund, Inc. (MHD)
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, 2008
|
|
|
|
Year Ended April 30,
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
2008
|
|
2007
|
|
2006
|
|
|
|
2005
|
|
2004
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$ 15.20
|
|
$ 16.51
|
|
$ 16.14
|
|
$ 16.31
|
|
$ 15.54
|
|
$ 15.07
|
Net investment income
1
|
|
0.54
|
|
|
|
1.16
|
|
1.17
|
|
1.16
|
|
|
|
1.20
|
|
1.25
|
Net realized and unrealized gain (loss)
|
|
(2.80)
|
|
|
|
(1.20)
|
|
0.42
|
|
(0.00)
2
|
|
|
|
0.84
|
|
0.40
|
Dividends and distributions to Preferred Shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
(0.14)
|
|
|
|
(0.31)
|
|
(0.32)
|
|
(0.23)
|
|
|
|
(0.12)
|
|
(0.07)
|
Net realized gain
|
|
|
|
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
(2.40)
|
|
|
|
0.38
|
|
1.27
|
|
0.93
|
|
|
|
1.92
|
|
1.58
|
Dividends and distributions to Common Shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
(0.43)
|
|
|
|
(0.85)
|
|
(0.90)
|
|
(1.08)
|
|
|
|
(1.15)
|
|
(1.11)
|
Net realized gain
|
|
|
|
|
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions
|
|
(0.43)
|
|
|
|
(0.93)
|
|
(0.90)
|
|
(1.08)
|
|
|
|
(1.15)
|
|
(1.11)
|
Capital charges with respect to issuance of Preferred Shares
|
|
|
|
|
|
|
|
|
|
(0.02)
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$ 12.37
|
|
$ 15.20
|
|
$ 16.51
|
|
$ 16.14
|
|
$ 16.31
|
|
$ 15.54
|
Market price, end of period
|
|
$ 10.73
|
|
$ 14.77
|
|
$ 16.49
|
|
$ 16.20
|
|
$ 16.12
|
|
$ 14.43
|
|
Total Investment Return
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
(15.97)%
4
|
|
|
|
(2.08)%
|
|
8.06%
|
|
5.69%
|
|
|
|
12.95%
|
|
10.94%
|
Based on market price
|
|
(24.99)%
4
|
|
|
|
(4.74)%
|
|
7.52%
|
|
7.34%
|
|
|
|
20.22%
|
|
7.58%
|
|
Ratios to Average Net Assets Applicable to Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses after waiver and excluding interest expense and fees
5,6
|
|
1.21%
7
|
|
|
|
1.20%
|
|
1.17%
|
|
1.15%
|
|
|
|
1.13%
|
|
1.14%
|
Total expenses after waiver
6
|
|
1.82%
7
|
|
|
|
1.56%
|
|
1.54%
|
|
1.30%
|
|
|
|
1.15%
|
|
1.23%
|
Total expenses
6
|
|
1.82%
7
|
|
|
|
1.56%
|
|
1.54%
|
|
1.30%
|
|
|
|
1.15%
|
|
1.24%
|
Net investment income
6
|
|
7.09%
7
|
|
|
|
7.27%
|
|
7.14%
|
|
7.15%
|
|
|
|
7.61%
|
|
7.98%
|
Dividends to Preferred Shareholders
|
|
1.87%
7
|
|
|
|
1.96%
|
|
1.93%
|
|
1.45%
|
|
|
|
0.74%
|
|
0.45%
|
Net investment income to Common Shareholders
|
|
5.22%
7
|
|
|
|
5.31%
|
|
5.20%
|
|
5.70%
|
|
|
|
6.87%
|
|
7.53%
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$ 172,063
|
|
$ 211,429
|
|
$ 229,376
|
|
$ 223,658
|
|
$ 225,218
|
|
$ 214,473
|
Preferred Shares outstanding at liquidation preference,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
end of period (000)
|
|
$ 91,925
|
|
$ 125,000
|
|
$ 125,000
|
|
$ 125,000
|
|
$ 110,000
|
|
$ 110,000
|
Portfolio turnover
|
|
5%
|
|
|
|
30%
|
|
20%
|
|
45%
|
|
|
|
34%
|
|
41%
|
Asset coverage per Preferred Share, end of period
8
|
|
$ 71,804
|
|
$ 67,294
|
|
$ 70,889
|
|
$ 69,742
|
|
$ 76,186
|
|
$ 73,744
|
1
|
Based on average shares outstanding.
|
|
2
|
Amount is less than $(0.01).
|
|
3
|
Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges.
|
|
4
|
Aggregate total investment return.
|
|
5
|
Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.
|
|
6
|
Do not reflect the effect of dividends to Preferred Shareholders.
|
|
7
|
Annualized.
|
|
8
|
Prior year amounts have been recalculated to conform with current period presentation.
|
|
See Notes to Financial Statements.
|
Financial Highlights (concluded)
|
|
|
|
|
|
|
|
BlackRock MuniHoldings Insured Fund, Inc. (MUS)
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, 2008
|
|
|
|
Year Ended April 30,
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
2008
|
|
2007
|
|
2006
|
|
|
|
2005
|
|
2004
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$ 13.31
|
|
$ 14.10
|
|
$ 13.80
|
|
$ 14.44
|
|
$ 14.12
|
|
$ 14.48
|
Net investment income
1
|
|
0.41
|
|
|
|
1.05
|
|
0.93
|
|
0.97
|
|
|
|
1.01
|
|
1.04
|
Net realized and unrealized gain (loss)
|
|
(2.26)
|
|
|
|
(0.87)
|
|
0.36
|
|
(0.50)
|
|
|
|
0.38
|
|
(0.42)
|
Dividends to Preferred Shareholders from net investment income
|
|
(0.16)
|
|
|
|
(0.38)
|
|
(0.36)
|
|
(0.28)
|
|
|
|
(0.16)
|
|
(0.09)
|
Net increase (decrease) from investment operations
|
|
(2.01)
|
|
|
|
(0.20)
|
|
0.93
|
|
0.19
|
|
|
|
1.23
|
|
0.53
|
Dividends to Common Shareholders from net investment income
|
|
(0.29)
|
|
|
|
(0.59)
|
|
(0.63)
|
|
(0.83)
|
|
|
|
(0.91)
|
|
(0.89)
|
Net asset value, end of period
|
|
$ 11.01
|
|
$ 13.31
|
|
$ 14.10
|
|
$ 13.80
|
|
$ 14.44
|
|
$ 14.12
|
Market price, end of period
|
|
$ 9.12
|
|
$ 11.97
|
|
$ 13.13
|
|
$ 13.10
|
|
$ 13.70
|
|
$ 12.64
|
|
Total Investment Return
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
(15.04)%
3
|
|
|
|
(0.95)%
|
|
7.29%
|
|
1.46%
|
|
|
|
9.35%
|
|
4.07%
|
Based on market price
|
|
(21.75)%
3
|
|
|
|
(4.34)%
|
|
5.25%
|
|
1.51%
|
|
|
|
15.90%
|
|
(0.07)%
|
|
Ratios to Average Net Assets Applicable to Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses after waiver and excluding interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and fees
4,5
|
|
1.12%
6
|
|
|
|
1.27%
|
|
1.23%
|
|
1.24%
|
|
|
|
1.24%
|
|
1.24%
|
Total expenses after waiver
5
|
|
1.82%
6
|
|
|
|
1.51%
|
|
1.56%
|
|
1.54%
|
|
|
|
1.60%
|
|
1.57%
|
Total expenses
5
|
|
2.05%
6
|
|
|
|
1.64%
|
|
1.67%
|
|
1.65%
|
|
|
|
1.70%
|
|
1.67%
|
Net investment income
5
|
|
6.03%
6
|
|
|
|
7.72%
|
|
6.62%
|
|
6.87%
|
|
|
|
7.09%
|
|
7.12%
|
Dividends to Preferred Shareholders
|
|
2.30%
6
|
|
|
|
2.80%
|
|
2.59%
|
|
2.00%
|
|
|
|
1.09%
|
|
0.65%
|
Net investment income to Common Shareholders
|
|
3.73%
6
|
|
|
|
4.92%
|
|
4.03%
|
|
4.87%
|
|
|
|
6.00%
|
|
6.47%
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$ 141,817
|
|
$ 171,510
|
|
$ 181,640
|
|
$ 177,790
|
|
$ 185,821
|
|
$ 181,726
|
Preferred Shares outstanding at liquidation preference,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
end of period (000)
|
|
$ 94,200
|
|
$ 134,000
|
|
$ 134,000
|
|
$ 134,000
|
|
$ 134,000
|
|
$ 134,000
|
Portfolio turnover
|
|
14%
|
|
|
|
57%
|
|
29%
|
|
59%
|
|
|
|
43%
|
|
41%
|
Asset coverage per Preferred Share, end of period
7
|
|
$ 62,647
|
|
$ 57,008
|
|
$ 58,903
|
|
$ 58,181
|
|
$ 59,674
|
|
$ 58,906
|
1
|
Based on average shares outstanding.
|
|
2
|
Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges.
|
|
3
|
Aggregate total investment return.
|
|
4
|
Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.
|
|
5
|
Do not reflect the effect of dividends to Preferred Shareholders.
|
|
6
|
Annualized.
|
|
7
|
Prior year amounts have been recalculated to conform with current period presentation.
|
|
See Notes to Financial Statements.
|
Notes to Financial Statements
(Unaudited)
1. Organization and Significant Accounting Policies:
BlackRock MuniHoldings Fund, Inc. and BlackRock MuniHoldings Insured
Fund, Inc. (the Funds or individually as the Fund), are registered
under the Investment Company Act of 1940, as amended (the 1940
Act), as non-diversified, closed-end management investment compa-
nies. BlackRock MuniHoldings Fund, Inc. is organized as a Delaware
statutory trust. BlackRock MuniHoldings Insured Fund, Inc. is organized
as a Maryland corporation. The Funds financial statements are prepared
in conformity with accounting principles generally accepted in the United
States of America, which may require the use of management accruals
and estimates. Actual results may differ from these estimates. The Funds
determine and make available for publication the net asset values of
their Common Shares on a daily basis.
The following is a summary of significant accounting policies followed
by the Funds:
Valuation of Investments:
Municipal investments (including commit-
ments to purchase such investments on a when-issued basis) are
valued on the basis of prices provided by dealers or pricing services
selected under the supervision of each Funds Board of Directors (the
Board). 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. Swap agreements are
valued utilizing quotes received by the Funds pricing service or through
brokers. Short-term securities are valued at amortized cost.
In the event that application of these methods of valuation results in
a price for an investment which is deemed not to be representative of
the market value of such investment, the investment will be valued by
a method approved by the Board as reflecting fair value (Fair Value
Assets). When determining the price for Fair Value Assets, the invest-
ment advisor and/or sub-advisor seeks to determine the price that the
Fund might reasonably expect to receive from the current sale of that
asset in an arms-length transaction. Fair value determinations shall
be based upon all available factors that the investment advisor and/or
sub-advisor deems relevant. The pricing of all Fair Value Assets is
subsequently reported to the Board or a committee thereof.
Derivative Financial Instruments:
The Funds may engage in various port-
folio investment strategies both to increase the return of the Funds and
to hedge, or protect, their exposure to interest rate movements and move-
ments in the securities markets. Losses may arise if the value of the con-
tract decreases due to an unfavorable change in the price of the underly-
ing security or if the counterparty does not perform under the contract.
Forward interest rate swaps The Funds may enter into forward
interest rate swaps for investment purposes. In a forward interest rate
swap, the Funds and the counterparty agree to make periodic net
payments on a specified notional contract amount, commencing on
a specified future effective date, unless terminated earlier. Forward
interest rate swaps are marked-to-market daily and changes in value
are recorded as unrealized appreciation (depreciation). When the for-
ward interest rate swap is terminated, the Fund will record a realized
gain or loss equal to the difference between the proceeds from (or
cost of) the closing transaction and the Funds basis in the contract,
if any. Forward interest rate swap transactions involve, to varying
degrees, elements of credit and market risk in excess of the amounts
recognized on the Statement of Assets and Liabilities. Such risks
involve the possibility that there will be no liquid market for these
agreements, that the counterparty to the agreements may default
on its obligation to perform or disagree as to the meaning of the
contractual terms in the agreements, and that there may be unfavor-
able changes in interest rates and/or market values associated with
these transactions. The Funds generally intend to close each forward
interest rate swap before the effective date specified in the agree-
ment and therefore avoid entering into the interest rate swap under-
lying each forward interest rate swap.
Forward Commitments and When-Issued Delayed Delivery Securities:
The 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. The Funds may purchase securi-
ties under such conditions only 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, the Funds may be required to pay more at
settlement then the security is worth. In addition, the purchaser is not
entitled to any of the interest earned prior to settlement. When purchas-
ing a security on a delayed-delivery basis, the Fund assumes the rights
and risks of ownership of the security, including the risk of price and
yield fluctuations.
Municipal Bonds Transferred to Tender Option Bond Trusts:
The Funds
leverage their assets through the use of tender option bond trusts
(TOBs). A TOB is established by a third party sponsor forming a special
purpose entity, into which one or more funds, or an agent on behalf of
the funds, transfers municipal securities. Other funds managed by the
investment advisor may also contribute municipal securities to a TOB
into which the Funds have contributed securities. A TOB typically issues
two classes of beneficial interests: short-term floating rate certificates,
which are sold to third party investors, and residual certificates (TOB
Residuals), which are generally issued to the participating funds that
made the transfer. The TOB Residuals held by the Funds include the right
of the Funds (1) to cause the holders of a proportional share of the
floating rate certificates to tender their certificates at par, and (2) to
transfer, within seven days, a corresponding share of the municipal
Notes to Financial Statements (continued)
securities from the TOB to the Funds. The cash received by the TOB
from the sale of the short-term floating rate certificates, less transaction
expenses, is paid to the Funds, which typically invests the cash in addi-
tional municipal securities. The Funds transfer of the municipal securi-
ties to a TOB is accounted for as a secured borrowing, therefore the
municipal securities deposited into a TOB are presented in each Funds
Schedule of Investments and the proceeds from the transaction are
reported as a liability for trust certificates.
Interest income from the underlying securities is recorded by the Funds
on an accrual basis. Interest expense incurred on the secured borrow-
ing and other expenses related to remarketing, administration and
trustee services to a TOB are reported as expenses of the Funds. The
floating rate certificates have interest rates that generally reset weekly
and their holders have the option to tender certificates to the TOB for
redemption at par at each reset date. As of October 31, 2008, the
aggregate value of the underlying municipal securities transferred to
TOBs, the related liability for trust certificates and the range of interest
rates were as follows:
Underlying
|
Municipal
|
|
|
Securities
|
|
Liability for
|
|
Range of
|
|
|
Transferred
|
|
Trust
|
|
Interest
|
|
|
to TOBs
|
|
Certificates
|
|
Rates
|
|
|
|
|
|
|
|
BlackRock MuniHoldings
|
|
|
|
|
|
2.343%
|
Fund, Inc
|
|
$46,465,548
|
|
$ 26,272,956
|
|
3.648%
|
|
|
|
|
|
|
|
BlackRock MuniHoldings
|
|
|
|
|
|
2.363%
|
Insured Fund, Inc
|
|
$53,145,177
|
|
$ 32,069,272
|
|
3.005%
|
|
|
|
|
|
|
|
Financial transactions executed through TOBs generally will underperform
the market for fixed rate municipal bonds when short-term interest rates
rise, but tend to outperform the market for fixed rate bonds when interest
rates decline or remain relatively stable. Should short-term interest rates
rise, the Funds investments in TOBs likely will adversely affect the Funds
investment income and dividends to common shareholders. Fluctuations
in the market value of municipal securities deposited into the TOB may
adversely affect the Funds net asset values per share.
Zero-Coupon Bonds:
The Funds may invest in zero-coupon bonds, which
are normally issued at a significant discount from face value and do not
provide for periodic interest payments. Zero-coupon bonds may experi-
ence greater volatility in market value than similar maturity debt obliga-
tions which provide for regular interest payments.
Segregation and Collateralization:
In cases in which the 1940 Act and
the interpretive positions of the Securities and Exchange Commission
(SEC) require that the Funds segregate assets in connection with
certain investments (e.g., swaps) or certain borrowings, each Fund will,
consistent with certain interpretive letters issued by the SEC, designate
on its books and records cash or other liquid securities having a market
value at least equal to the amount that would otherwise be required to
be physically segregated. Furthermore, based on requirements and
agreements with certain exchanges and third party broker-dealers, the
Fund may also be required to deliver or deposit securities as collateral
for certain investments (e.g., swaps).
Investment Transactions and Investment Income:
Investment trans-
actions are recorded on the dates the transactions are entered into (the
trade dates). Realized gains and losses on security transactions are deter-
mined on the identified cost basis. Dividend income is recorded on the
ex-dividend dates. Interest income is recognized on the accrual method.
The Funds amortize all premiums and discounts on debt securities.
Dividends and Distributions:
Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded
on the ex-dividend dates. Dividends and distributions to preferred
shareholders are accrued and determined as described in Note 4.
Income Taxes:
It is each Funds policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment com-
panies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no federal income tax provision is required.
The Funds file U.S. federal and various state and local tax returns.
No income tax returns are currently under examination. The statute of
limitations on each Funds U.S. federal tax returns remains open for
the years ended April 30, 2005 through April 30, 2007. The statutes of
limitations on each Funds state and local tax returns may remain open
for an additional year depending upon the jurisdiction.
Recent Accounting Pronouncement:
In March 2008, Statement of
Financial Accounting Standards No. 161, Disclosures about Derivative
Instruments and Hedging Activities an amendment of FASB Statement
No. 133 (FAS 161), was issued. FAS 161 is intended to improve
financial reporting for derivative instruments by requiring enhanced
disclosure that enables investors to understand how and why an entity
uses derivatives, how derivatives are accounted for, and how derivative
instruments affect an entitys results of operations and financial
position. In September 2008, FASB Staff Position No. 133-1 and FASB
Interpretation No. 45-4 (the FSP), Disclosures about Credit Derivatives
and Certain Guarantees: An Amendment of FASB Statement No. 133
and FASB Interpretation No. 45; and Clarification of the Effective Date
of FASB Statement No. 161 was issued and is effective for fiscal years
and interim periods ending after November 15, 2008. The FSP amends
FASB Statement No. 133, Accounting for Derivative Instruments and
Hedging Activities, to require disclosures by sellers of credit derivatives,
including credit derivatives embedded in hybrid instruments. The
FSP also clarifies the effective date of FAS 161, whereby disclosures
required by FAS 161 are effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008.
The impact on the Funds financial statement disclosures, if any, is cur-
rently being assessed.
Notes to Financial Statements (continued)
Deferred Compensation and BlackRock Closed-End Share Equivalent
Investment Plan:
Under the deferred compensation plan approved by
each Funds Board, non-interested Directors (Independent Directors)
defer a portion of their annual complex-wide compensation. Deferred
amounts earn an approximate return as though equivalent dollar
amounts have been invested in common shares of other certain
BlackRock Closed-End Funds selected by the Independent Directors.
This has approximately the same economic effect for the Independent
Directors as if the Independent Directors had invested the deferred
amounts directly in the other certain BlackRock Closed-End Funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of each
Fund. Each Fund may, however, elect to invest in common shares of
other certain BlackRock Closed-End Funds selected by the Independent
Directors in order to match its deferred compensation obligations.
Other:
Expenses directly related to each Fund are charged to each
Fund. Other operating expenses shared by several funds are prorated
among those funds on the basis of relative net assets or other appro-
priate methods.
2. Investment Advisory Agreement and Other Transactions
with Affiliates:
Each Fund has entered into an Investment Advisory Agreement with
BlackRock Advisors, LLC (the Advisor), an indirect, wholly-owned sub-
sidiary of BlackRock, Inc., to provide investment advisory and adminis-
tration services. Merrill Lynch & Co., Inc. (Merrill Lynch) and The PNC
Financial Services Group, Inc. are principal owners of BlackRock, Inc.
The Advisor is responsible for the management of each Funds portfolio
and provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of each Fund. For such serv-
ices, each Fund pays the Advisor a monthly fee at an annual rate of
0.55% of each Funds average daily net assets. Average daily net assets
is the average daily value of each Funds total assets minus the sum of
its accrued liabilities.
The Advisor has agreed to waive its advisory fees by the amount of invest-
ment advisory fees each Fund pays to the Advisor indirectly through
its investment in affiliated money market funds. These amounts are in-
cluded in fees waived by advisor on the Statements of Operations. For
the six months ended October 31, 2008, the amounts were as follows:
BlackRock MuniHoldings Fund, Inc
|
|
$ 676
|
BlackRock MuniHoldings Insured Fund, Inc
|
|
$ 6,541
|
|
|
|
The Advisor for MuniHoldings Insured Fund, Inc. has agreed to waive its
investment advisory fee on the proceeds of Preferred Shares that exceed
35% of the Funds average daily net assets. The waiver can be discontin-
ued at any time. For the six months ended October 31, 2008, the waiver
was $191,999, which is included in fees waived by advisor in the
Statements of Operations.
The Advisor has entered into separate sub-advisory agreements with
BlackRock Investment Management, LLC (BIM) an affiliate of the
Advisor, with respect to each Fund, under which the Advisor pays BIM for
services it provides, a monthly fee that is a percentage of the investment
advisory fee paid by each Fund to the Advisor.
For the six months ended October 31, 2008, the Funds reimbursed the
Advisor for certain accounting services, which are included in accounting
services on the Statements of Operations. The reimbursements were
as follows:
BlackRock MuniHoldings Fund, Inc
|
|
$ 2,552
|
BlackRock MuniHoldings Insured Fund, Inc
|
|
$ 2,372
|
|
|
|
Certain officers and/or directors of the Funds are officers and/or
directors of BlackRock, Inc. or its affiliates. The Funds reimburse the
Advisor for compensation paid to the Funds Chief Compliance Officer.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for
the six months ended October 31, 2008 were as follows:
|
|
Total
|
|
Total
|
|
|
Purchases
|
|
Sales
|
|
|
|
|
|
BlackRock MuniHoldings Fund, Inc
|
|
$16,825,709
|
|
$28,153,605
|
BlackRock MuniHoldings Insured
|
|
|
|
|
Fund, Inc
|
|
$39,626,046
|
|
$57,508,654
|
|
|
|
|
|
|
4. Capital Share Transactions:
|
|
|
|
|
Common Shares
Each Fund is authorized to issue 200,000,000 shares, including
Preferred Shares, all of which were initially classified as Common Shares.
Each Board is authorized, however, to reclassify any unissued Common
Shares without approval of the holders of Common Shares.
Common Shares issued and outstanding during the six months ended
October 31, 2008 remained constant for the Funds. Common Shares
issued and outstanding during the year ended April 30, 2008 increased
by 16,210 as a result of dividend reinvestment for BlackRock
MuniHoldings Fund, Inc. and remained constant for MuniHoldings
Insured Fund, Inc.
|
Notes to Financial Statements (continued)
Preferred Shares
The Preferred Shares are redeemable at the option of each Fund, in
whole or in part, on any dividend payment date at $25,000 per share
plus any accumulated or unpaid dividends whether or not declared. The
Preferred Shares are also subject to mandatory redemption at their
liquidation preference plus any accumulated or unpaid dividends,
whether or not declared, if certain requirements relating to the composi-
tion of the assets and liabilities of a Fund, as set forth in each Funds
Articles Supplementary, are not satisfied.
The holders of Preferred Shares have voting rights equal to the holders
of Common Shares (one vote per share) and will vote together with
holders of Common Shares (one vote per share) as a single class.
However, holders of Preferred Shares, voting as a separate class, are
also entitled to elect two Directors for each Fund. In addition, the 1940
Act requires that along with approval by shareholders that might other-
wise be required, the approval of the holders of a majority of any
outstanding Preferred Shares, voting separately as a class would be
required to (a) adopt any plan of reorganization that would adversely
affect the Preferred Shares, (b) change a Funds subclassification as a
closed-end investment company or change its fundamental investment
restrictions or (c) change its business so as to cease to be an invest-
ment company.
The Funds had the following series of Preferred Shares outstanding and
effective yields at October 31, 2008:
|
|
Series
|
|
Shares
|
|
Yields
|
|
|
|
|
|
|
|
BlackRock MuniHoldings Fund, Inc
|
|
A
|
|
1,618
|
|
3.087%
|
|
|
B
|
|
1,618
|
|
2.999%
|
|
|
C
|
|
441
|
|
4.105%
|
|
|
|
|
|
|
|
BlackRock MuniHoldings Insured Fund, Inc
|
|
A
|
|
1,884
|
|
2.999%
|
|
|
B
|
|
1,884
|
|
3.474%
|
|
|
|
|
|
|
|
Dividends on seven-day Preferred Shares are cumulative at a rate
which is reset every seven days based on the results of an auction. If
the Preferred Shares fail to clear the auction on an auction date, each
Fund is required to pay the maximum applicable rate on the Preferred
Shares to holders of such shares for each successive dividend period
until such time as the shares are successfully auctioned. The maximum
applicable rate on the Preferred Shares for all of the series except
BlackRock MuniHoldings Fund, Inc. Series C is the higher of 110% of
the AA commercial paper rate or 110% of 90% of the Kenny S&P 30-
day High Grade Index rate divided by 1.00 minus the marginal tax rate.
The maximum applicable rate on the Preferred Shares of BlackRock
MuniHoldings Fund, Inc. Series C is the higher of 110% plus or times
the Telerate/BBA LIBOR or 90% of the Kenny S&P 30-day High Grade
Index rate divided by 1.00 minus the marginal tax rate. The low, high
and average dividend rates on the Preferred Shares for each Fund for
the six months ended October 31, 2008 were as follows:
|
|
Series
|
|
Low
|
|
High
|
|
Average
|
|
|
|
|
|
|
|
|
|
BlackRock MuniHoldings
|
|
A
|
|
2.535%
|
|
11.347%
|
|
3.801%
|
Fund, Inc.
|
|
B
|
|
2.458%
|
|
12.261%
|
|
4.356%
|
|
|
C
|
|
3.404%
|
|
10.377%
|
|
4.611%
|
|
|
|
|
|
|
|
|
|
BlackRock MuniHoldings
|
|
A
|
|
2.458%
|
|
12.261%
|
|
3.818%
|
Insured Fund, Inc.
|
|
B
|
|
2.483%
|
|
10.205%
|
|
3.835%
|
|
|
|
|
|
|
|
|
|
Since February 13, 2008 the Preferred Shares of each Fund failed to
clear any auctions. As a result, the Preferred Shares dividend rates were
reset to the maximum applicable rate, which ranged from 2.458% to
12.261% . A failed auction is not an event of default for the Funds but
it has a negative impact on the liquidity of Preferred Shares. A failed
auction occurs when there are more sellers of a funds auction rate
preferred shares than buyers. It is impossible to predict how long this
imbalance will last. A successful auction for each Funds Preferred
Shares may not occur for some time, if ever, and even if liquidity does
resume, holders of Preferred Shares may not have the ability to sell the
Preferred Shares at its liquidation preference.
The Funds may not declare dividends or make other distributions on
Common Shares or purchase any such shares if, at the time of the
declaration, distribution or purchase, asset coverage with respect to the
outstanding Preferred Shares is less than 200%.
Each Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate of 0.25%, calculated on the aggregate
principal amount. For the six months ended October 31, 2008, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, a wholly owned subsidiary
of Merrill Lynch, earned commissions as follows:
|
|
Commissions
|
|
|
|
BlackRock MuniHoldings Fund, Inc
|
|
$ 12,076
|
BlackRock MuniHoldings Insured Fund, Inc
|
|
$142,332
|
|
|
|
On June 4, 2008, the Funds announced the following redemptions of
Preferred Shares at a price of $25,000 per share plus any accrued and
unpaid dividends through the redemption date:
|
|
|
|
Redemption
|
|
Shares
|
|
Aggregate
|
|
|
Series
|
|
Date
|
|
Redeemed
|
|
Principal
|
|
|
|
|
|
|
|
|
|
BlackRock MuniHoldings
|
|
A
|
|
6/25/08
|
|
582
|
|
$14,550,000
|
Fund, Inc.
|
|
B
|
|
6/27/08
|
|
582
|
|
$14,550,000
|
|
|
C
|
|
6/24/08
|
|
159
|
|
$ 3,975,000
|
|
|
|
|
|
|
|
|
|
BlackRock MuniHoldings
|
|
A
|
|
6/27/08
|
|
796
|
|
$19,900,000
|
Insured Fund, Inc.
|
|
B
|
|
6/24/08
|
|
796
|
|
$19,900,000
|
|
|
|
|
|
|
|
|
|
The Fund financed the Preferred Share redemptions with cash received
from TOB transactions.
|
Notes to Financial Statements (concluded)
Shares issued and outstanding for the year ended April 30, 2008
remained constant.
5. Capital Loss Carryforward:
As of April 30, 2008, BlackRock MuniHoldings Insured Fund, Inc. had a
capital loss carryforward available to offset future realized capital gains
through the indicated year of expiration:
Expires April 30,
|
|
|
2009
|
|
$ 9,583,913
|
2016
|
|
623,720
|
Total
|
|
$10,207,633
|
|
6. Concentration Risk:
|
|
|
Each Funds investments are concentrated in certain states, which
may be affected by adverse financial, social, environmental, economic,
regulatory and political factors.
Many municipalities insure repayment of their bonds, which reduces
the risk of loss due to issuer default. The market value of these bonds
may fluctuate for other reasons, including market perception of the value
of such issuance, and there is no guarantee that the insurer will meet
its obligation.
7. Restatement Information:
Subsequent to the initial issuance of their April 30, 2006 financial state-
ments, the Funds determined that the criteria for sale accounting in FAS
140 had not been met for certain transfers of municipal bonds related
to investments in TOB Residuals, and that these transfers should have
been accounted for as secured borrowings rather than as sales. As a
result, certain financial highlights for each of the two years in the period
ended April 30, 2005 have been restated to give effect to recording the
transfers of the municipal bonds as secured borrowings, including
recording interest on the bonds as interest income and interest on
the secured borrowings as interest expense.
MuniHoldings Fund, Inc.
|
|
|
|
|
|
|
|
|
Financial Highlights
|
|
|
|
|
|
|
|
|
For the Years Ended April 30, 2005 and 2004
|
|
|
|
|
|
|
2005
|
|
2004
|
|
|
Previously
|
|
|
|
Previously
|
|
|
|
|
Reported
|
|
Restated
|
|
Reported
|
|
Restated
|
|
|
|
|
|
|
|
|
|
Total expenses,
|
|
|
|
|
|
|
|
|
net of reimbursement*
|
|
1.13%
|
|
1.15%
|
|
1.14%
|
|
1.23%
|
Total expenses*
|
|
1.13%
|
|
1.15%
|
|
1.15%
|
|
1.24%
|
Portfolio turnover
|
|
36.23%
|
|
34%
|
|
42.89%
|
|
41%
|
|
|
|
|
|
|
|
|
|
|
* Do not reflect the effect of dividends to Preferred Shareholders.
|
MuniHoldings Insured Fund, Inc.
|
|
|
|
|
|
|
Financial Highlights
|
|
|
|
|
|
|
|
|
For the Years Ended April 30, 2005 and 2004
|
|
|
|
|
|
|
2005
|
|
2004
|
|
|
Previously
|
|
|
|
Previously
|
|
|
|
|
Reported
|
|
Restated
|
|
Reported
|
|
Restated
|
Total expenses,
|
|
|
|
|
|
|
|
|
net of reimbursement**
|
|
1.24%
|
|
1.60%
|
|
1.24%
|
|
1.57%
|
Total expenses**
|
|
1.35%
|
|
1.70%
|
|
1.34%
|
|
1.67%
|
Portfolio turnover
|
|
51.81%
|
|
43%
|
|
39.94%
|
|
41%
|
|
|
|
|
|
|
|
|
|
|
** Do not reflect the effect of dividends to Preferred Shareholders.
|
|
|
8. Subsequent Events:
Each Fund paid a net investment income dividend to holders of
Common Shares in the amounts of $0.071 per share and $.0485 per
share relating to BlackRock MuniHoldings Fund, Inc. and BlackRock
MuniHoldings Insured Fund, Inc., respectively, on December 1, 2008
to shareholders of record on November 14, 2008.
The dividends declared on Preferred Shares for the period November 1,
2008 to November 30, 2008 for each of the Funds were as follows:
|
|
|
|
Dividends
|
|
|
Series
|
|
Declared
|
BlackRock MuniHoldings Fund, Inc
|
|
A
|
|
$55,659
|
|
|
B
|
|
$50,207
|
|
|
C
|
|
$23,602
|
BlackRock MuniHoldings Insured Fund, Inc
|
|
A
|
|
$58,460
|
|
|
B
|
|
$68,314
|
|
|
|
|
|
On September 15, 2008, Bank of America Corporation announced that
it has agreed to acquire Merrill Lynch, one of the principal owners of
BlackRock, Inc. The purchase has been approved by the shareholders
and directors of both companies and certain regulators. Subject to other
regulatory approvals, the transaction is expected to close on or about
December 31, 2008.
In December 2008, commissions paid to broker-dealers on preferred
shares that experience a failed auction were reduced to 0.15% on the
aggregate principal amount. The Funds will continue to pay commissions
of 0.25% on the aggregate principal amount of all shares that success-
fully clear their auctions.
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
The Board of Directors (collectively, the Board, the members of which
are referred to as Directors) of the BlackRock MuniHoldings Fund, Inc.
(MHD) and BlackRock MuniHoldings Insured Fund, Inc. (MUS, and
together with MHD, the Funds) met in April and May 2008 to consider
approving the continuation of each Funds investment advisory agree-
ment (each, an Advisory Agreement) with BlackRock Advisors, LLC
(the Advisor), each Funds investment advisor. The Board also con-
sidered the approval of each Funds subadvisory agreement (each, a
Subadvisory Agreement and, together with the Advisory Agreement,
the Agreements) between the Advisor and BlackRock Investment
Management, LLC (the Subadvisor). The Advisor and the Subadvisor
are collectively referred to herein as the Advisors and, together with
BlackRock, Inc., BlackRock.
Activities and Composition of the Board
The Board of each Fund consists of thirteen individuals, eleven of whom
are not interested persons of the Funds as defined in the Investment
Company Act of 1940 (the 1940 Act) (the Independent Directors).
The Directors are responsible for the oversight of the operations of the
Funds and perform the various duties imposed on the directors of invest-
ment companies by the 1940 Act. The Independent Directors have
retained independent legal counsel to assist them in connection with
their duties. The Chairman of the Board is an Independent Director. The
Board has established four standing committees: an Audit Committee, a
Governance and Nominating Committee, a Compliance Committee and
a Performance Oversight Committee.
Advisory Agreement and Subadvisory Agreement
Upon the consummation of the combination of BlackRock, Inc.s invest-
ment management business with Merrill Lynch & Co., Inc.s investment
management business, including Merrill Lynch Investment Managers, L. .,
and certain affiliates, each Fund entered into an Advisory Agreement and
a Subadvisory Agreement, each with an initial two-year term. Consistent
with the 1940 Act, after the Advisory Agreements and Subadvisory
Agreements respective initial two-year term, the Board is required to
consider the continuation of each Funds Advisory Agreement and
Subadvisory Agreement on an annual basis. In connection with this
process, the Board assessed, among other things, the nature, scope
and quality of the services provided to each Fund by the personnel of
BlackRock and its affiliates, including investment advisory services,
administrative services, secondary market support services, oversight
of fund accounting and custody, and assistance in meeting legal and
regulatory requirements. The Board also received and assessed informa-
tion regarding the services provided to each Fund by certain unaffiliated
service providers.
Throughout the year, the Board also considered a range of information in
connection with its oversight of the services provided by BlackRock and
its affiliates. Among the matters the Board considered were: (a) invest-
ment performance for one-, three- and five-year periods, as applicable,
against peer funds, as well as senior management and portfolio man-
agers analysis of the reasons for underperformance, if applicable;
(b) fees, including advisory, administration and other fees paid to
BlackRock and its affiliates by each Fund, as applicable; (c) Fund oper-
ating expenses paid to third parties; (d) the resources devoted to and
compliance reports relating to each Funds investment objective, policies
and restrictions; (e) each Funds compliance with its Code of Ethics and
compliance policies and procedures; (f) the nature, cost and character
of non-investment management services provided by BlackRock and its
affiliates; (g) BlackRocks and other service providers internal controls;
(h) BlackRocks implementation of the proxy voting guidelines approved
by the Board; (i) execution quality; (j) valuation and liquidity procedures;
and (k) reviews of BlackRocks business, including BlackRocks response
to the increasing scale of its business.
Board Considerations in Approving the Advisory
Agreement and Subadvisory Agreement
To assist the Board in its evaluation of the Agreements, the Directors
received information from BlackRock in advance of the April 22, 2008
meeting which detailed, among other things, the organization, business
lines and capabilities of the Advisors, including: (a) the responsibilities
of various departments and key personnel and biographical information
relating to key personnel; (b) financial statements for BlackRock; (c) the
advisory and/or administrative fees paid by each Fund to the Advisors,
including comparisons, compiled by Lipper Inc. (Lipper), an independ-
ent third party, with the management fees, which include advisory and
administration fees, of funds with similar investment objectives (Peers);
(d) the profitability of BlackRock and certain industry profitability analy-
ses for advisors to registered investment companies; (e) the expenses
of BlackRock in providing various services; (f) non-investment advisory
reimbursements, if applicable, and fallout benefits to BlackRock;
(g) economies of scale, if any, generated through the Advisors manage-
ment of all of the BlackRock closed-end funds (the Fund Complex);
(h) the expenses of each Fund, including comparisons of each such
Funds expense ratios (both before and after any fee waivers) with the
expense ratios of its Peers; (i) an internal comparison of management
fees classified by Lipper, if applicable; and (j) each Funds performance
for the past one-, three- and five-year periods, as applicable, as well
as each Funds performance compared to its Peers.
The Board also considered other matters it deemed important to
the approval process, where applicable, such as payments made to
BlackRock or its affiliates relating to the distribution of Fund shares,
services related to the valuation and pricing of Fund portfolio holdings,
and direct and indirect benefits to BlackRock and its affiliates from their
relationship with the Funds.
In addition to the foregoing materials, independent legal counsel to the
Independent Directors provided a legal memorandum outlining, among
other things, the duties of the Board under the 1940 Act, as well as the
general principles of relevant law in reviewing and approving advisory
contracts, the requirements of the 1940 Act in such matters, an advisors
Disclosure of Investment Advisory Agreement and Subadvisory Agreement (continued)
fiduciary duty with respect to advisory agreements and compensation,
and the standards used by courts in determining whether investment
company boards of directors have fulfilled their duties and the factors
to be considered by boards in voting on advisory agreements.
The Independent Directors reviewed this information and discussed it
with independent legal counsel prior to the meeting on April 22, 2008.
At the Board meeting on April 22, 2008, BlackRock made a presenta-
tion to and responded to questions from the Board. Following the meet-
ing on April 22, 2008, the Board presented BlackRock with questions
and requests for additional information. BlackRock responded to these
requests with additional written materials provided to the Directors prior
to the meetings on May 29 and 30, 2008. At the Board meetings on
May 29 and 30, 2008, BlackRock responded to further questions from
the Board. In connection with BlackRocks presentations, the Board con-
sidered each Agreement and, in consultation with independent legal
counsel, reviewed the factors set out in judicial decisions and Securities
and Exchange Commission (SEC) statements relating to the renewal
of the Agreements.
Matters Considered by the Board
In connection with its deliberations with respect to the Agreements,
the Board considered all factors it believed relevant with respect to
each Fund, including the following: the nature, extent and quality of the
services provided by the Advisors; the investment performance of each
Fund; the costs of the services to be provided and profits to be realized
by the Advisors and their affiliates from their relationship with the
Funds; the extent to which economies of scale would be realized as the
Fund Complex grows; and whether BlackRock realizes other benefits
from its relationship with the Funds.
A. Nature, Extent and Quality of the Services:
In evaluating the nature,
extent and quality of the Advisors services, the Board reviewed informa-
tion concerning the types of services that the Advisors provide and are
expected to provide to each Fund, narrative and statistical information
concerning each Funds performance record and how such performance
compares to each Funds Peers, information describing BlackRocks
organization and its various departments, the experience and responsi-
bilities of key personnel and available resources. The Board noted the
willingness of the personnel of BlackRock to engage in open, candid dis-
cussions with the Board. The Board further considered the quality of the
Advisors investment process in making portfolio management decisions.
In addition to advisory services, the Directors considered the quality of
the administrative and non-investment advisory services provided to the
Funds. The Advisors and their affiliates provided each Fund with such
administrative and other services, as applicable (in addition to any such
services provided by others for the Funds), and officers and other per-
sonnel as are necessary for the operations of the respective Fund. In
addition to investment management services, the Advisors and their affil-
iates provided each Fund with services such as: preparing shareholder
reports and communications, including annual and semi-annual finan-
cial statements and the Funds websites; communications with analysts
to support secondary market trading; assisting with daily accounting and
pricing; preparing periodic filings with regulators and stock exchanges;
overseeing and coordinating the activities of other service providers;
administering and organizing Board meetings and preparing the Board
materials for such meetings; providing legal and compliance support
(such as helping to prepare proxy statements and responding to regula-
tory inquiries); and performing other Fund administrative tasks neces-
sary for the operation of the respective Fund (such as tax reporting
and fulfilling regulatory filing requirements). The Board considered the
Advisors policies and procedures for assuring compliance with applica-
ble laws and regulations.
B. The Investment Performance of the Funds and BlackRock:
As previ-
ously noted, the Board received performance information regarding each
Fund and its Peers. Among other things, the Board received materials
reflecting each Funds historic performance and each Funds one-, three-
and five-year total returns (as applicable) relative to its Peers (including
the Peers median performance). The Board was provided with a descrip-
tion of the methodology used by Lipper to select each Funds Peers.
The Board noted that it regularly reviews the performance of each Fund
throughout the year. The Board reviewed a narrative and statistical analy-
sis of the Lipper data that was prepared by BlackRock, which analyzed
various factors that affect Lipper rankings.
The Board noted that in general MHD performed better than its Peers
in that MHDs performance was at or above the median of its Peers in
at least two of the one-, three- and five-year periods reported.
The Board noted that MUS performed below the median of its Peers in
at least two of the one-, three- and five-year periods reported. The Board
then discussed with representatives of BlackRock the reasons for MUS
underperformance during these periods compared with its Peers. The
Board noted that MUS underperformance was due to its defensive dura-
tion. In addition, the Board noted that MUS was over-weighted in pre-
refunded securities in the five-year part of the yield curve and that the
high acquisition yield of these securities made them difficult to replace
during this time period.
For MUS, the Board concluded that BlackRock was committed to provid-
ing the resources necessary to assist the portfolio managers and to con-
tinue improving the Funds performance. Based on its review, the Board
generally was satisfied with BlackRocks efforts to manage the Fund.
C. Consideration of the Advisory Fees and the Cost of the Services
and Profits to be Realized by BlackRock and its Affiliates from their
Relationship with the Funds:
In evaluating the management fees and
expenses that each Fund is expected to bear, the Board considered
each Funds current management fee structure and each Funds expense
ratios in absolute terms as well as relative to the fees and expense
ratios of its applicable Peers. The Board, among other things, reviewed
Disclosure of Investment Advisory Agreement and Subadvisory Agreement (concluded)
comparisons of each Funds gross management fees before and after
any applicable reimbursements and fee waivers and total expense ratios
before and after any applicable waivers with those of applicable Peers.
The Board also reviewed a narrative analysis of the Peer rankings pre-
pared by Lipper and summarized by BlackRock at the request of the
Board. This summary placed the Peer rankings into context by analyzing
various factors that affect these comparisons.
The Board noted that each Fund paid contractual management fees
lower than or equal to the median contractual fees paid by each Funds
respective Peers. This comparison was made without giving effect to any
expense reimbursements or fee waivers.
The Board also compared the management fees charged and services
provided by the Advisors to closed-end funds in general versus other
types of clients (such as open-end investment companies and separ-
ately managed institutional accounts) in similar investment categories.
The Board noted certain differences in services provided and costs
incurred by the Advisor with respect to closed-end funds compared to
these other types of clients and the reasons for such differences.
In connection with the Boards consideration of the fees and expense
information, the Board reviewed the considerable investment manage-
ment experience of the Advisors and considered the high level of invest-
ment management, administrative and other services provided by
the Advisors.
D. Profitability of BlackRock:
The Board also considered BlackRocks
profitability in conjunction with its review of fees. The Board reviewed
BlackRocks profitability with respect to the Fund Complex and other fund
complexes managed by the Advisors. In reviewing profitability, the Board
recognized that one of the most difficult issues in determining profitability
is establishing a method of allocating expenses. The Board also reviewed
BlackRocks assumptions and methodology of allocating expenses, noting
the inherent limitations in allocating costs among various advisory prod-
ucts. The Board also recognized that individual fund or product line prof-
itability of other advisors is generally not publicly available.
The Board recognized that profitability may be affected by numerous fac-
tors including, among other things, the types of funds managed, expense
allocations and business mix, and therefore comparability of profitability
is somewhat limited. Nevertheless, to the extent available, the Board
considered BlackRocks operating margin compared to the operating
margin estimated by BlackRock for a leading investment management
firm whose operations consist primarily of advising closed-end funds.
The comparison indicated that BlackRocks operating margin was
approximately the same as the operating margin of such firm.
In evaluating the reasonableness of the Advisors compensation, the
Board also considered any other revenues paid to the Advisors, including
partial reimbursements paid to the Advisors for certain non-investment
advisory services, if applicable. The Board noted that these payments
were less than the Advisors costs for providing these services. The Board
also considered indirect benefits (such as soft dollar arrangements) that
the Advisors and their affiliates are expected to receive, which are attrib-
utable to their management of the Fund.
E. Economies of Scale:
In reviewing each Funds fees and expenses,
the Board examined the potential benefits of economies of scale, and
whether any economies of scale should be reflected in the Funds fee
structure, for example through the use of breakpoints for the Fund or the
Fund Complex. In this regard, the Board reviewed information provided
by BlackRock, noting that most closed-end fund complexes do not have
fund-level breakpoints because closed-end funds generally do not expe-
rience substantial growth after their initial public offering and each fund
is managed independently consistent with its own investment objectives.
The Board noted that only three closed-end funds in the Fund Complex
have breakpoints in their fee structures. Information provided by Lipper
also revealed that only one closed-end fund complex used a complex-
level breakpoint structure. The Board found, based on its review of com-
parable funds, that each Funds management fee is appropriate in light
of the scale of the respective Fund.
F. Other Factors:
In evaluating fees, the Board also considered indirect
benefits or profits the Advisors or their affiliates may receive as a result
of their relationships with the Funds (fall-out benefits). The Directors,
including the Independent Directors, considered the intangible benefits
that accrue to the Advisors and their affiliates by virtue of their relation-
ships with the Funds, including potential benefits accruing to the
Advisors and their affiliates as a result of participating in offerings of
the Funds shares, potentially stronger relationships with members of the
broker-dealer community, increased name recognition of the Advisors
and their affiliates, enhanced sales of other investment funds and prod-
ucts sponsored by the Advisors and their affiliates and increased assets
under management which may increase the benefits realized by the
Advisors from soft dollar arrangements with broker-dealers. The Board
also considered the unquantifiable nature of these potential benefits.
Conclusion with Respect to the Agreements
In reviewing and approving the continuation of the Agreements, the
Directors did not identify any single factor discussed above as all-impor-
tant or controlling, but considered all factors together, and different
Directors may have attributed different weights to the various factors
considered. The Independent Directors were also assisted by the
advice of independent legal counsel in making this determination. The
Directors, including the Independent Directors, unanimously determined
that each of the factors described above, in light of all the other factors
and all of the facts and circumstances applicable to each respective
Fund, was acceptable for each Fund and supported the Directors con-
clusion that the terms of each Agreement were fair and reasonable, that
each Funds fees are reasonable in light of the services provided to the
respective Fund and that each Agreement should be approved.
Officers and Directors
Richard E. Cavanagh, Chairman of the Board and Director
Karen . Robards, Vice Chair of the Board, Chair of the
Audit Committee and Director
G. Nicholas Beckwith, III, Director
Richard S. Davis, Director
Kent Dixon, Director
Frank J. Fabozzi, Director
Kathleen F. Feldstein, Director
James T. Flynn, Director
Henry Gabbay, Director
Jerrold B. Harris, Director
R. Glenn Hubbard, Director
W. Carl Kester, Director
Robert S. Salomon, Jr., Director
Donald C. Burke, Fund President and Chief Executive Officer
Anne F. Ackerley, Vice President
Neal J. Andrews, Chief Financial Officer
Jay M. Fife, Treasurer
Brian . Kindelan, Chief Compliance Officer of the Funds
Howard B. Surloff, Secretary
|
Custodian
The Bank of New York Mellon
New York, NY 10286
Transfer Agent
Common Shares and
Preferred Shares
BNY Mellon Shareowner Services
Jersey City, NJ 07310
Accounting Agent
State Street Bank and
Trust Company
Princeton, NJ 08540
Independent Registered Public
Accounting Firm
Deloitte & Touche
LLP
Princeton, NJ 08540
Legal Counsel
Skadden, Arps, Slate,
Meagher & Flom
LLP
New York, NY 10036
|
Additional Information
Dividend Policy
The Funds dividend policy is to distribute all or a portion of their net
investment income to its shareholders on a monthly basis. In order to
provide shareholders with a more stable level of dividend distributions,
the Funds may at times pay out less than the entire amount of net
investment income earned in any particular month and may at times
in any particular month pay out such accumulated but undistributed
income in addition to net investment income earned in that month.
|
As a result, the dividends paid by the Funds for any particular month
may be more or less than the amount of net investment income earned
by the Funds during such month. The Funds current accumulated
but undistributed net investment income, if any, is disclosed in the
Statements of Assets and Liabilities, which comprises part of the
financial information included in this report.
|
General Information
The Funds will mail only one copy of shareholder documents, including
annual and semi-annual reports and proxy statements, to shareholders
with multiple accounts at the same address. This practice is commonly
called householding and it is intended to reduce expenses and elimi-
nate 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
contact the Funds at (800) 441-7762.
|
Quarterly performance, semi-annual and annual reports and other
information regarding the Funds may be found on BlackRocks website,
which can be accessed at http://www.blackrock.com. This reference
to BlackRocks website is intended to allow investors public access to
information regarding the Funds and does not, and is not intended to,
incorporate BlackRocks website into this report.
|
Additional Information (concluded)
Proxy Results
The Annual Meeting of Shareholders was held on September 12, 2008 for shareholders of record on July 14, 2008, to elect director nominees
of each Fund:
Approved the Directors as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
G. Nicholas Beckwith, III
|
|
Kent Dixon
|
|
R. Glenn Hubbard
|
|
|
|
|
Votes
|
|
|
|
Votes
|
|
|
|
Votes
|
|
|
Votes For
|
|
Withheld
|
|
Votes For
|
|
Withheld
|
|
Votes For
|
|
Withheld
|
BlackRock MuniHoldings Fund, Inc.
|
|
12,258,233
|
|
714,787
|
|
12,263,944
|
|
709,076
|
|
12,259,033
|
|
713,987
|
BlackRock MuniHoldings Insured Fund, Inc.
|
|
10,709,737
|
|
1,331,753
|
|
10,701,764
|
|
1,339,726
|
|
10,711,078
|
|
1,330,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W. Carl Kester
|
|
Robert S. Salomon, Jr.
|
|
Richard S. Davis
|
|
|
|
|
Votes
|
|
|
|
Votes
|
|
|
|
Votes
|
|
|
Votes For
|
|
Withheld
|
|
Votes For
|
|
Withheld
|
|
Votes For
|
|
Withheld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock MuniHoldings Fund, Inc.
|
|
2,134
1
|
|
959
1
|
|
12,258,506
|
|
714,514
|
|
12,258,996
|
|
714,024
|
BlackRock MuniHoldings Insured Fund, Inc.
|
|
3,319
1
|
|
73
1
|
|
10,711,777
|
|
1,329,713
|
|
10,710,623
|
|
1,330,867
|
|
|
|
Frank J. Fabozzi
|
|
James T. Flynn
|
|
Karen
|
|
P. Robards
|
|
|
|
|
Votes
|
|
|
|
Votes
|
|
|
|
Votes
|
|
|
Votes For
|
|
Withheld
|
|
Votes For
|
|
Withheld
|
|
Votes For
|
|
Withheld
|
BlackRock MuniHoldings Fund, Inc.
|
|
2,134
1
|
|
959
1
|
|
12,260,650
|
|
712,370
|
|
12,266,482
|
|
706,538
|
BlackRock MuniHoldings Insured Fund, Inc.
|
|
3,319
1
|
|
73
1
|
|
10,703,010
|
|
1,338,480
|
|
10,711,561
|
|
1,329,929
|
|
|
|
Richard E. Cavanaugh
|
|
Kathleen F. Feldstein
|
|
Henry Gabbay
|
|
|
|
|
Votes
|
|
|
|
Votes
|
|
|
|
Votes
|
|
|
Votes For
|
|
Withheld
|
|
Votes For
|
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Withheld
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Votes For
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Withheld
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BlackRock MuniHoldings Fund, Inc.
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12,259,900
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713,120
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12,264,488
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708,532
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12,258,317
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714,703
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BlackRock MuniHoldings Insured Fund, Inc.
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10,718,811
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1,322,679
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10,701,910
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1,339,580
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10,710,623
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1,330,867
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Jerrold B. Harris
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Votes
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Votes For
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Withheld
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BlackRock MuniHoldings Fund, Inc.
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12,260,650
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712,370
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BlackRock MuniHoldings Insured Fund, Inc.
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10,713,322
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1,328,168
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1
Voted on by holders of Preferred Shares only.
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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 SECs website
at http://www.sec.gov and may also be reviewed and copied at the
SECs Public Reference Room in Washington, DC. Information on the
operation of the Public Reference Room may be obtained by calling
(800) SEC-0330. The Funds Forms N-Q may also be obtained upon
request and without charge by calling (800) 441-7762.
Electronic Delivery
Electronic copies of most financial reports are available on the Funds
websites or shareholders can sign up for e-mail notifications of quarterly
statements, annual and semi-annual reports by enrolling in the Funds
electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisors, Banks
or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisors, banks or brokerages may offer this service.
This report is transmitted to shareholders only. It is not a prospectus.
Past performance results shown in this report should not be consid-
ered 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 the short-term dividend rates of the Preferred
Shares, currently set at the maximum reset rate as a result of
failed auctions, may affect the yield to Common Shareholders.
Statements and other information herein are as dated and are
subject to change.
A description of the policies and procedures that the Funds use
to determine how to vote proxies relating to portfolio securities
is available (1) without charge, upon request, by calling toll-
free 1-800-441-7762; (2) at www.blackrock.com; and (3)
on the Securities and Exchange Commissions website at
http://www.sec.gov. Information about how the Funds voted
proxies relating to securities held in the Funds portfolio during
the most recent 12-month period ended June 30 is available upon
request and without charge (1) at www.blackrock.com or by calling
(800) 441-7762 and (2) on the Securities and Exchange
Commissions website at http://www.sec.gov.
BlackRock MuniHoldings Fund, Inc.
BlackRock MuniHoldings Insured Fund, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
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Item 2 Code of Ethics Not Applicable to this semi-annual report
Item 3 Audit Committee Financial Expert Not Applicable to this semi-annual report
Item 4 Principal Accountant Fees and Services Not Applicable to this semi-annual report
Item 5 Audit Committee of Listed Registrants Not Applicable to this semi-annual report
Item 6 Investments
(a) The registrants 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
Not Applicable to this semi-annual report
Item 8 Portfolio Managers of Closed-End Management Investment Companies Not Applicable to this semi-
annual report
Item 9 Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated
Purchasers Not Applicable
Item 10 Submission of Matters to a Vote of Security Holders The registrants Nominating and Governance
Committee will consider nominees to the board of directors recommended by shareholders when a vacancy
becomes available. Shareholders who wish to recommend a nominee should send nominations that include
biographical information and set forth the qualifications of the proposed nominee to the registrants
Secretary. There have been no material changes to these procedures.
Item 11 Controls and Procedures
11(a) The registrants principal executive and principal financial officers or persons performing similar functions
have concluded that the registrants 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.
11(b) There were no changes in the registrants internal control over financial reporting (as defined in Rule 30a-
3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report
that have materially affected, or are reasonably likely to materially affect, the registrants internal control
over financial reporting.
Item 12 Exhibits attached hereto
12(a)(1) Code of Ethics Not Applicable to this semi-annual report
12(a)(2) Certifications Attached hereto
12(a)(3) Not Applicable
12(b) Certifications Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of
1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
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BlackRock MuniHoldings Fund, Inc.
By:
/s/ Donald C. Burke
Donald C. Burke
Chief Executive Officer of
BlackRock MuniHoldings Fund, Inc.
Date: December 19, 2008
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/ Donald C. Burke
Donald C. Burke
Chief Executive Officer (principal executive officer) of
BlackRock MuniHoldings Fund, Inc.
Date: December 19, 2008
By:
/s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniHoldings Fund, Inc.
Date: December 19, 2008
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