UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-08349
Name of Fund: BlackRock MuniHoldings Insured Investment Fund (MFL)
(formerly BlackRock MuniHoldings Florida Insured Fund)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive Officer,
BlackRock MuniHoldings Insured Investment Fund, 800 Scudders Mill Road,
Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton, NJ
08543-9011
Registrant's telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 08/31/2008
Date of reporting period: 09/01/2007 - 08/31/2008
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE
LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
Annual Report BLACKROCK
AUGUST 31, 2008
BlackRock MuniHoldings Insured Investment Fund (MFL)
BlackRock MuniHoldings New York Insured Fund, Inc. (MHN)
BlackRock MuniVest Fund, Inc. (MVF)
The Massachusetts Health & Education Tax-Exempt Trust (MHE)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
Table of Contents
================================================================================
Page
--------------------------------------------------------------------------------
A Letter to Shareholders ................................................. 3
Annual Report:
Fund Summaries ........................................................... 4
The Benefits and Risks of Leveraging ..................................... 8
Swap Agreements .......................................................... 8
Financial Statements:
Schedules of Investments ............................................... 9
Statements of Assets and Liabilities ................................... 29
Statements of Operations ............................................... 30
Statements of Changes in Net Assets .................................... 31
Statement of Cash Flows ................................................ 32
Financial Highlights ..................................................... 33
Notes to Financial Statements ............................................ 36
Report of Independent Registered Public Accounting Firm .................. 44
Important Tax Information (Unaudited) .................................... 44
Disclosure of Investment Advisory Agreement and Subadvisory Agreement .... 45
Automatic Dividend Reinvestment Plan ..................................... 48
Officers and Directors/Trustees .......................................... 50
Additional Information ................................................... 53
2 ANNUAL REPORT AUGUST 31, 2008
A Letter to Shareholders
Dear Shareholder
It has been a tumultuous year for investors, marked by almost daily headlines
related to the beleaguered housing market, rising food and energy prices, and
the escalating credit crisis. The news took an extraordinarily heavy tone
shortly after the close of this reporting period as the credit crisis boiled
over and triggered unprecedented failures and consolidation in the financial
sector, stoking fears of a market and economic collapse and prompting the
largest government rescue plan since the Great Depression.
Through it all, the Federal Reserve Board (the "Fed") has been aggressive in its
attempts to restore order in financial markets. Key moves included slashing the
target federal funds rate 325 basis points (3.25%) between September 2007 and
April 2008 and providing numerous cash injections and lending programs. As the
credit crisis took an extreme turn for the worse in September, the Fed, in
concert with five other global central banks, cut interest rates by 50 basis
points in a rare move intended to stave off worldwide economic damage from the
intensifying financial market turmoil. The U.S. economy managed to grow at a
slow-but-positive pace through the second quarter of the year, though the recent
events almost certainly portend a global economic recession.
Against this backdrop, U.S. stocks experienced intense volatility (steep
declines and quick recoveries), generally posting losses for the current
reporting period. Small-cap stocks fared significantly better than their larger
counterparts. Non-U.S. markets followed the U.S. on the way down and, notably,
decelerated at a faster pace than domestic equities -- a stark reversal of
recent years' trends, when international stocks generally outpaced U.S. stocks.
Treasury securities also traded in a volatile fashion, but rallied overall
(yields fell and prices correspondingly rose), as the broader flight-to-quality
theme persisted. The yield on 10-year Treasury issues, which fell to 3.34% in
March, climbed to the 4.20% range in mid-June as investors temporarily shifted
out of Treasury issues in favor of riskier assets (such as stocks and other
high-quality fixed income sectors), then declined again to 3.83% by period-end
when credit fears resurfaced. Tax-exempt issues posted positive returns, but
problems among municipal bond insurers and the collapse in the market for
auction rate securities pressured the group throughout the course of the past
year. Economic and financial market distress also dampened the performance of
high yield issues, which were very volatile due to the macro factors noted
above.
Overall, severe market instability resulted in mixed results for the major
benchmark indexes:
Total returns as of August 31, 2008 6-month 12-month
============================================================================================================
U.S. equities (S&P 500 Index) (2.57)% (11.14)%
------------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) 8.53 (5.48)
------------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) (10.18) (14.41)
------------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers U.S. Aggregate Index) 0.18 5.86
------------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) 5.12 4.48
------------------------------------------------------------------------------------------------------------
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Capped Index) 0.74 (0.66)
------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future results. Index performance shown for
illustrative purposes only. You cannot invest directly in an index.
Through periods of market turbulence, as ever, BlackRock's 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.
Sincerely,
/s/ Rob Kapito
Rob Kapito
President, BlackRock Advisors, LLC
THIS PAGE NOT PART OF YOUR FUND REPORT 3
Fund Summary as of August 31, 2008
BlackRock MuniHoldings Insured Investment Fund
Investment Objective
BlackRock MuniHoldings Insured Investment Fund (MFL) (the "Fund") (formerly
BlackRock MuniHoldings Florida Insured Fund) seeks to provide shareholders with
current income exempt from federal income tax. The Fund also seeks to offer
shareholders the opportunity to own shares, the value of which is exempt from
Florida intangible personal property tax. The Fund seeks to achieve its
investment objective 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 issuer, is exempt from federal income taxes and which
enables shares of the Fund to be exempt from Florida intangible personal
property tax. Due to the repeal of the Florida intangible personal property tax,
the Fund may satisfy its investment objective by investing in municipal
obligations issued by or on behalf of any state or its political subdivisions,
agencies and instrumentalities regardless of geographical location.
Performance
For the 12 months ended August 31, 2008, the Fund returned (4.68)% based on
market price and 1.16% based on net asset value ("NAV"). For the same period,
the closed-end Lipper Single-State Insured Municipal Debt Funds category posted
an average return of 1.32% on a NAV basis. All returns reflect reinvestment of
dividends. Several key factors influenced performance during the year. A
positive contributor was the Fund's significant overweight in pre-refunded bonds
in the one- to five-year maturity range, as the yield curve steepened and short-
and intermediate-maturity issues outperformed the rest of the market.
Conversely, problems within the monoline insurance industry had a negative
impact on the entire insured municipal market and thus, hampered the results of
the Fund and its peers. Health care, tax increment, housing and corporate-backed
bonds were among the sectors that underperformed the tax-exempt market over the
annual period. The Fund's discount to NAV, which widened during the period,
accounts for the difference between performance based on price and performance
based on NAV.
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 ................................. MFL
Initial Offering Date ............................................. September 26, 1997
Yield on Closing Market Price as of August 31, 2008 ($11.61) 1 .... 5.74%
Tax Equivalent Yield 2 ............................................ 8.83%
Current Monthly Distribution per Common Share 3 ................... $ 0.0555
Current Annualized Distribution per Common Share 3 ................ $ 0.666
Leverage as of August 31, 2008 4 .................................. 43%
------------------------------------------------------------------------------------------
1 Yield on closing market price is calculated by dividing the current
annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution is not constant and is subject to change.
4 As a percentage of total managed assets, which is the total assets of the
Fund (including any assets attributable to Auction Market Preferred Shares
("Preferred Shares") and tender option bond trusts ("TOBs")) minus the sum
of accrued liabilities.
The table below summarizes the changes in the Fund's market price and net asset
value per share:
--------------------------------------------------------------------------------
8/31/08 8/31/07 Change High Low
--------------------------------------------------------------------------------
Market Price ................ $11.61 $12.86 (9.72)% $13.49 $11.56
Net Asset Value ............. $13.50 $14.09 (4.19)% $14.60 $13.07
--------------------------------------------------------------------------------
The following unaudited charts show the Fund's portfolio composition and credit
quality allocations of the Fund's long-term investments:
Portfolio Composition
Sector 8/31/08 8/31/07
--------------------------------------------------------------------------------
Transportation ............................................. 23% 20%
Lease Revenue .............................................. 17 14
Water & Sewer .............................................. 14 17
City, County & State ....................................... 13 14
Education .................................................. 13 14
Hospital ................................................... 8 6
Housing .................................................... 6 6
Tax Revenue ................................................ 3 5
Power ...................................................... 2 2
Industrial & Pollution Control ............................. 1 2
--------------------------------------------------------------------------------
Credit Quality Allocations 5
Credit Rating 8/31/08 8/31/07
--------------------------------------------------------------------------------
AAA/Aaa .................................................... 37% 95%
AA/Aa ...................................................... 47 1
A/A ........................................................ 9 3
BBB/Baa .................................................... 2 1
Not Rated .................................................. 5 6 --
--------------------------------------------------------------------------------
5 Using the higher of Standard & Poor's ("S&P's") or Moody's Investors
Service ("Moody's") ratings.
6 The investment advisor has deemed certain of these non-rated securities to
be of investment grade quality. As of August 31, 2008, the market value of
these securities was $33,232,933 representing 4% of the Fund's long-term
investments.
4 ANNUAL REPORT AUGUST 31, 2008
Fund Summary as of August 31, 2008
BlackRock MuniHoldings New York Insured Fund, Inc.
Investment Objective
BlackRock MuniHoldings New York Insured Fund, Inc. (MHN) (the "Fund") seeks to
provide shareholders with current income exempt from federal income taxes and
New York State and New York City personal 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 issuer, is exempt from federal
income taxes and New York State and New York City personal income taxes.
Performance
For the 12 months ended August 31, 2008, the Fund returned (5.72)% based on
market price and 1.74% based on NAV. For the same period, the closed-end Lipper
Single-State Insured Municipal Debt Funds category posted an average return of
1.32% on a NAV basis. All returns reflect reinvestment of dividends. Exposure to
longer-dated bonds detracted from results over the annual period, as these
securities proved more volatile when risk spreads increased and the municipal
yield curve steepened. Performance also was hampered by an above-average
exposure to select long insured bonds, which underperformed due to the monoline
insurers' credit woes and subsequent ratings downgrades. Conversely, the Fund's
above-average distribution rate benefited performance. Looking ahead, we believe
the Fund is well positioned to benefit amid a recovery in market liquidity, a
reversion to historical valuations versus Treasury issues and a continued
slowing economy. The Fund's discount to NAV, which widened during the period,
accounts for the difference between performance based on price and performance
based on NAV.
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 .................................. MHN
Initial Offering Date .............................................. September 19, 1997
Yield on Closing Market Price as of August 31, 2008 ($12.12) 1 ..... 5.25%
Tax Equivalent Yield 2 ............................................. 8.08%
Current Monthly Distribution per share of Common Stock 3 ........... $ 0.053
Current Annualized Distribution per share of Common Stock 3 ........ $ 0.636
Leverage as of August 31, 2008 4 ................................... 44%
------------------------------------------------------------------------------------------
1 Yield on closing market price is calculated by dividing the current
annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution is not constant and is subject to change.
4 As a percentage of total managed assets, which is the total assets of the
Fund (including any assets attributable to Preferred Shares and TOBs)
minus the sum of accrued liabilities.
The table below summarizes the changes in the Fund's market price and net asset
value per share:
--------------------------------------------------------------------------------
8/31/08 8/31/07 Change High Low
--------------------------------------------------------------------------------
Market Price .............. $12.12 $13.53 (10.42)% $13.85 $11.87
Net Asset Value ........... $13.92 $14.40 (3.33)% $14.93 $13.24
--------------------------------------------------------------------------------
The following unaudited charts show the Fund's portfolio composition and credit
quality allocations of the Fund's long-term investments:
Portfolio Composition
Sector 8/31/08 8/31/07
--------------------------------------------------------------------------------
Transportation ............................................ 34% 35%
City, County & State ...................................... 14 16
Education ................................................. 9 8
Tax Revenue ............................................... 9 7
Water & Sewer ............................................. 8 8
Power ..................................................... 6 7
Housing ................................................... 6 6
Hospital .................................................. 5 5
Industrial & Pollution Control ............................ 4 3
Tobacco ................................................... 3 3
Lease Revenue ............................................. 2 2
--------------------------------------------------------------------------------
Credit Quality Allocations 5
Credit Rating 8/31/08 8/31/07
--------------------------------------------------------------------------------
AAA/Aaa ................................................... 41% 91%
AA/Aa ..................................................... 49 6
A/A ....................................................... 5 2
BBB/Baa ................................................... 5 1
--------------------------------------------------------------------------------
5 Using the higher of S&P's or Moody's ratings.
ANNUAL REPORT AUGUST 31, 2008 5
Fund Summary as of August 31, 2008 BlackRock MuniVest Fund, Inc.
Investment Objective
BlackRock MuniVest Fund, Inc. (MVF) (the "Fund") seeks to provide shareholders
with as high a level of current income exempt from federal income taxes as is
consistent with its investment policies and prudent investment management by
investing primarily in a portfolio of long-term, investment grade municipal
obligations, the interest on which is exempt from federal income taxes in the
opinion of bond counsel to the issuer.
Performance
For the 12 months ended August 31, 2008, the Fund returned (5.63)% based on
market price and 0.51% based on NAV. For the same period, the closed-end Lipper
General Municipal Debt Funds (Leveraged) category posted an average return of
(0.98)% on a NAV basis. All returns reflect reinvestment of dividends. The
Fund's comparative performance reflects a relatively neutral duration position
versus its Lipper peers during a period of generally rising municipal bond
yields. The Fund's underweight in insured bonds positively impacted relative
performance as values on issues backed by monoline insurers declined
dramatically during the year. Additionally, the Fund's holdings of lower-rated
issues generated significant incremental income, which allowed the Fund to
maintain its above-average income distribution to shareholders. The Fund's
discount to NAV, which widened during the period, accounts for the difference
between performance based on price and performance based on NAV.
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 American Stock Exchange .................................. MVF
Initial Offering Date .............................................. September 29, 1988
Yield on Closing Market Price as of August 31, 2008 ($8.33) 1 ...... 6.19%
Tax Equivalent Yield 2 ............................................. 9.52%
Current Monthly Distribution per share of Common Stock 3 ........... $ 0.043
Current Annualized Distribution per share of Common Stock 3 ........ $ 0.516
Leverage as of August 31, 2008 4 ................................... 43%
-----------------------------------------------------------------------------------------
1 Yield on closing market price is calculated by dividing the current
annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution is not constant and is subject to change.
4 As a percentage of total managed assets, which is the total assets of the
Fund (including any assets attributable to Preferred Shares and TOBs)
minus the sum of accrued liabilities.
The table below summarizes the changes in the Fund's market price and net asset
value per share:
--------------------------------------------------------------------------------
8/31/08 8/31/07 Change High Low
--------------------------------------------------------------------------------
Market Price ................ $8.33 $9.35 (10.91)% $10.02 $8.13
Net Asset Value ............. $8.91 $9.39 (5.11)% $ 9.63 $8.71
--------------------------------------------------------------------------------
The following unaudited charts show the Fund's portfolio composition and credit
quality allocations of the Fund's long-term investments:
Portfolio Composition
Sector 8/31/08 8/31/07
--------------------------------------------------------------------------------
Hospital ................................................... 19% 29%
Industrial & Pollution Control ............................. 15 16
Education .................................................. 12 9
Tax Revenue ................................................ 9 6
City, County & State ....................................... 9 8
Power ...................................................... 8 8
Water & Sewer .............................................. 7 5
Transportation ............................................. 7 6
Tobacco .................................................... 6 6
Housing .................................................... 4 3
Lease Revenue .............................................. 4 4
--------------------------------------------------------------------------------
Credit Quality Allocations 5
Credit Rating 8/31/08 8/31/07
--------------------------------------------------------------------------------
AAA/Aaa .................................................... 34% 33%
AA/Aa ...................................................... 24 17
A/A ........................................................ 20 28
BBB/Baa .................................................... 18 18
BB/Ba ...................................................... 1 2
B/B ........................................................ 1 1
Not Rated .................................................. 2 6 1
--------------------------------------------------------------------------------
5 Using the higher of S&P's or Moody's ratings.
6 The investment advisor has deemed certain of these non-rated securities to
be of investment grade quality. As of August 31, 2008, the market value of
these securities was $14,242,697 representing 2% of the Fund's long-term
investments.
6 ANNUAL REPORT AUGUST 31, 2008
Fund Summary as of August 31, 2008
The Massachusetts Health & Education Tax-Exempt Trust
Investment Objective
The Massachusetts Health & Education Tax-Exempt Trust (MHE) (the "Fund") seeks
to provide shareholders with as high a level of current income exempt from both
regular federal income taxes and Massachusetts personal income taxes as is
consistent with the preservation of shareholders' capital. The Fund seeks to
achieve its investment objective by investing primarily in Massachusetts
tax-exempt obligations issued on behalf of participating not-for-profit
institutions. The Fund will continue to invest primarily in investment-grade
obligations. The Fund is intended to be a long-term investment and not a
short-term trading vehicle.
Performance
For the 12 months ended August 31, 2008, the Fund returned (2.38)% based on
market price and 0.84% based on NAV. For the same period, the closed-end Lipper
Other States Municipal Debt Funds category posted an average return of 1.93% on
a NAV basis. All returns reflect reinvestment of dividends. Detracting from the
Fund's performance over the year was exposure to the health care sector, which
underperformed the rest of the municipal bond market. On the positive side, the
Fund's significant overweight in pre-refunded bonds in the one- to five-year
maturity range benefited performance, as the yield curve steepened and short-
and intermediate-maturity issues outperformed. Additionally, exposure to the
education sector aided results as it was one of the stronger areas of the
market. The Fund's discount to NAV, which widened during the period, accounts
for the difference between performance based on price and performance based on
NAV.
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.
Trust Information
Symbol on American Stock Exchange .................................. MHE
Initial Offering Date .............................................. July 23, 1993
Yield on Closing Market Price as of August 31, 2008 ($11.22) 1 ..... 5.24%
Tax Equivalent Yield 2 ............................................. 8.06%
Current Monthly Distribution per Common Share 3 .................... $ 0.049
Current Annualized Distribution per Common Share 3 ................. $ 0.588
Leverage as of August 31, 2008 4 ................................... 40%
-----------------------------------------------------------------------------------
1 Yield on closing market price is calculated by dividing the current
annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution is not constant and is subject to change.
4 As a percentage of total managed assets, which is the total assets of the
Fund (including any assets attributable to Preferred Shares and TOBs")
minus the sum of accrued liabilities.
The table below summarizes the changes in the Fund's market price and net asset
value per share:
--------------------------------------------------------------------------------
8/31/08 12/31/07 Change High Low
--------------------------------------------------------------------------------
Market Price ............... $11.22 $11.95 (6.11)% $12.90 $11.22
Net Asset Value ............ $12.55 $13.10 (4.20)% $13.50 $11.95
--------------------------------------------------------------------------------
The following unaudited charts show the Fund's portfolio composition and credit
quality allocations of the Fund's long-term investments:
Portfolio Composition
Sector 8/31/08 12/31/07
--------------------------------------------------------------------------------
Education ................................................. 47% 51%
Hospital .................................................. 29 29
City, County & State ...................................... 17 10
Industrial & Pollution Control ............................ 3 4
Housing ................................................... 3 5
Transportation ............................................ 1 1
--------------------------------------------------------------------------------
Credit Quality Allocations 5
Credit Rating 8/31/08 12/31/07
--------------------------------------------------------------------------------
AAA/Aaa ................................................... 20% 38%
AA/Aa ..................................................... 22 16
A/A ....................................................... 29 17
BBB/Baa ................................................... 12 11
BB/Ba ..................................................... 3 2
B/B ....................................................... 2 3
CCC/Caa ................................................... -- 2
Not Rated ................................................. 12 6 11
--------------------------------------------------------------------------------
5 Using the higher of S&P's or Moody's ratings.
6 The investment advisor has deemed certain of these non-rated securities to
be of investment grade quality. As of August 31, 2008, the market value of
these securities was $1,139,707 representing 2% of the Fund's long-term
investments.
ANNUAL REPORT AUGUST 31, 2008 7
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. The interest earned on these investments is paid to Common
Shareholders in the form of dividends, and the value of these portfolio holdings
is reflected in the per share NAV of each Fund's Common Shares. However, in
order to benefit Common Shareholders, the yield curve must be positively sloped;
that is, short-term interest rates must be lower than long-term interest rates.
At the same time, a period of generally declining interest rates will benefit
Common Shareholders. If either of these conditions change, then the risks of
leveraging will begin to outweigh the benefits. If the yield curve becomes
negatively sloped, meaning short-term interest rates exceed long-term interest
rates, returns to Common Shareholders will be lower than if the Fund had not
used leverage.
To illustrate these concepts, assume a fund's Common Shares capitalization of
$100 million and the issuance of 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 approximately 3%
and long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million of Preferred
Shares based on the lower short-term interest rates. At the same time, the
fund's total portfolio of $150 million earns income based on long-term interest
rates.
In this case, the dividends paid to Preferred Shareholders are significantly
lower than the income earned on the fund's long-term investments, and therefore
the Common Shareholders are the beneficiaries of the incremental yield. However,
if short-term interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the Common Shares
will be reduced or eliminated completely. At the same time, the market value of
the fund's Common Shares (that is, its price as listed on the New York Stock
Exchange or the American Stock Exchange), may, as a result, decline.
Furthermore, if long-term interest rates rise, the Common Shares' NAV will
reflect the full decline in the price of the portfolio's investments, since the
value of the fund's Preferred Shares does not fluctuate. In addition to the
decline in NAV, the market value of the fund's Common Shares may also decline.
In addition, the Funds may leverage their assets through the use of tender
option bond ("TOB") programs. In a typical TOB program, the Fund transfers one
or more municipal bonds to a TOB trust, which issues short-term variable rate
securities to third-party investors and a residual interest to the Fund. The
cash received by the TOB trust from the issuance of the short-term securities
(less transaction expenses) is paid to the Fund, which invests the cash in
additional portfolio securities. The distribution rate on the short-term
securities is reset periodically (typically every seven days) through a
remarketing of the short-term securities. Any income earned on the bonds in the
TOB trust, net of expenses incurred by the TOB trust, that is not paid to the
holders of the short-term securities is paid to the Fund. In connection with
managing the Funds' assets, the Funds' investment advisor may at any time
retrieve the bonds out of the TOB trust typically within seven days. 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,
fluctuations in the market value of municipal securities deposited into the TOB
trust may adversely affect the Funds' NAVs per share. (See Note 1 of the Notes
to Financial Statements for details of municipal bonds transferred to TOB
trusts.)
Under the Investment Company Act of 1940, the Funds are permitted to issue
Preferred Shares in an amount up to 50% of their total managed assets at the
time of issuance. Under normal circumstances, each Fund anticipates that the
total economic leverage incurred from Preferred Shares and TOBs will not exceed
50% of its total managed assets. As of August 31, 2008, the Funds had leverage
from Preferred Shares and TOBs as a percentage of their total managed assets as
follows:
--------------------------------------------------------------------------------
Percent of
Leverage
--------------------------------------------------------------------------------
BlackRock MuniHoldings Insured Investment Fund ...................... 43%
BlackRock MuniHoldings New York Insured Fund, Inc. .................. 44%
BlackRock MuniVest Fund, Inc. ....................................... 43%
The Massachusetts Health & Education Tax-Exempt Trust ............... 40%
--------------------------------------------------------------------------------
Swap Agreements
The Funds may invest in swap agreements, which are over-the-counter contracts in
which one party agrees to make periodic payments based on the change in market
value of a specified bond, basket of bonds, or index in return for periodic
payments based on a fixed or variable interest rate or the change in market
value of a different bond, basket of bonds or index. Swap agreements may be used
to obtain exposure to a bond or market without owning or taking physical custody
of securities. Swap agreements involve the risk that the party with whom each
Fund has entered into a swap will default on its obligation to pay the Fund and
the risk that the Fund will not be able to meet its obligations to pay the other
party to the agreement.
8 ANNUAL REPORT AUGUST 31, 2008
Schedule of Investments August 31, 2008
BlackRock MuniHoldings Insured Investment Fund
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
Florida -- 147.7%
----------------------------------------------------------------------------------------------------
Alachua County, Florida, School Board, COP, 5.25%,
7/01/29 (a) $ 6,600 $ 6,615,972
----------------------------------------------------------------------------------------------------
Beacon Tradeport Community Development District,
Florida, Special Assessment Revenue Refunding
Bonds (Commercial Project), Series A, 5.625%,
5/01/32 (b) 2,940 2,819,225
----------------------------------------------------------------------------------------------------
Brevard County, Florida, Health Facilities Authority,
Healthcare Facilities Revenue Bonds
(Health First Inc. Project):
5%, 4/01/24 2,600 2,459,236
5%, 4/01/34 6,520 5,781,088
----------------------------------------------------------------------------------------------------
Brevard County, Florida, School Board, COP,
Series A, 5%, 7/01/30 (c)(d) 3,950 3,862,429
----------------------------------------------------------------------------------------------------
Broward County, Florida, Educational Facilities
Authority Revenue Bonds (Nova Southeastern
University), 5%, 4/01/31 (e) 8,000 7,903,600
----------------------------------------------------------------------------------------------------
Broward County, Florida, HFA, S/F Mortgage
Revenue Refunding Bonds, AMT, Series E,
5.90%, 10/01/39 (f)(g)(h) 4,150 4,169,920
----------------------------------------------------------------------------------------------------
Broward County, Florida, School Board, COP,
Series A, 5.25%, 7/01/33 (i) 9,600 9,643,200
----------------------------------------------------------------------------------------------------
Cape Coral, Florida, Special Obligation Revenue
Bonds, 5%, 10/01/30 (c) 3,000 2,983,980
----------------------------------------------------------------------------------------------------
Clay County, Florida, School Board, COP
(Master Lease Program), 5.75%, 7/01/10 (c)(j) 1,320 1,418,868
----------------------------------------------------------------------------------------------------
Collier County, Florida, IDA, IDR, Refunding
(Southern States Utilities), AMT, 6.50%, 10/01/25 900 899,883
----------------------------------------------------------------------------------------------------
Deltona, Florida, Transportation Capital Improvement
Revenue Bonds, 5.125%, 10/01/26 (c) 2,000 2,031,000
----------------------------------------------------------------------------------------------------
Emerald Coast, Florida, Utilities Authority, System
Revenue Bonds (d):
5.25%, 1/01/26 1,130 1,129,921
5.25%, 1/01/36 1,560 1,511,484
----------------------------------------------------------------------------------------------------
Escambia County, Florida, HFA, S/F Mortgage
Revenue Refunding Bonds (Multi-County Program),
AMT, Series A (c)(k):
6.30%, 10/01/20 80 80,913
6.375%, 10/01/26 305 308,611
----------------------------------------------------------------------------------------------------
Florida HFA, Homeowner Mortgage Revenue
Refunding Bonds, AMT, Series 2 (c):
5.75%, 7/01/14 1,085 1,097,184
5.90%, 7/01/29 8,610 8,817,243
----------------------------------------------------------------------------------------------------
Florida Higher Educational Facilities Financing
Authority Revenue Bonds (Flagler College, Inc.
Project), 5.25%, 11/01/36 (l) 12,000 10,305,240
----------------------------------------------------------------------------------------------------
Florida Housing Finance Corporation, Homeowner
Mortgage Revenue Bonds, AMT:
Series 1, 6%, 7/01/39 (f)(g) 2,450 2,405,875
Series 11, 5.95%, 1/01/32 (i) 5,915 5,835,148
----------------------------------------------------------------------------------------------------
Florida Housing Finance Corporation, Homeowner
Mortgage Revenue Refunding Bonds, AMT, Series 4,
6.25%, 7/01/22 (i) 665 696,900
----------------------------------------------------------------------------------------------------
Florida Housing Finance Corporation, Housing
Revenue Bonds (Waverly Apartments), AMT,
Series C-1, 6.30%, 7/01/30 (i) 2,055 2,077,050
----------------------------------------------------------------------------------------------------
Florida Municipal Loan Council Revenue Bonds,
Series B (c):
5.375%, 11/01/25 1,285 1,296,822
5.375%, 11/01/30 4,150 4,168,260
----------------------------------------------------------------------------------------------------
Florida State Board of Education, Capital Outlay, GO,
Public Education, Refunding, Series D, 5.75%,
6/01/22 (i) 3,750 3,943,950
----------------------------------------------------------------------------------------------------
Florida State Board of Education, Capital Outlay, GO,
Public Education, Series C, 5.75%, 6/01/10 (d)(j) 1,000 1,073,090
----------------------------------------------------------------------------------------------------
Florida State Board of Education, Lottery Revenue
Bonds, Series B:
6.25%, 7/01/10 (d)(j) 24,510 26,584,281
5%, 7/01/28 7,000 6,982,080
----------------------------------------------------------------------------------------------------
Florida State Board of Regents, Housing Revenue
Bonds (University of Central Florida), 5.25%,
10/01/26 (d) 2,200 2,199,890
----------------------------------------------------------------------------------------------------
Florida State Department of Management Services,
Division Facilities Management Revenue Bonds
(Florida Facilities Pool), Series A, 6%, 9/01/10 (a)(j) 3,505 3,801,488
----------------------------------------------------------------------------------------------------
Florida State Governmental Utility Authority, Utility
Revenue Bonds (Lehigh Utility System), 5.125%,
10/01/33 (a) 2,900 2,901,798
----------------------------------------------------------------------------------------------------
Florida State Turnpike Authority, Turnpike Revenue
Bonds (Department of Transportation), Series A,
6.25%, 7/01/10 (d)(j) 28,650 31,074,649
----------------------------------------------------------------------------------------------------
Hernando County, Florida, School Board, COP, 5%,
7/01/30 (c) 6,140 6,051,338
----------------------------------------------------------------------------------------------------
Hillsborough County, Florida, Aviation Authority,
Revenue Refunding Bonds, AMT, Series C, 5.75%,
10/01/26 (e) 2,875 2,943,339
----------------------------------------------------------------------------------------------------
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedules of Investments,
the names and descriptions of many of the securities have been abbreviated
according to the list on the right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DRIVERS Derivative Inverse Tax-Exempt Receipts
EDA Economic Development Authority
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
PILOT Payment in Lieu of Taxes
RIB Residual Interest Bonds
SIFMA Securities Industry and Financial Markets Association
S/F Single-Family
VRDN Variable Rate Demand Notes
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 9
Schedule of Investments (continued)
BlackRock MuniHoldings Insured Investment Fund
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
Florida (continued)
----------------------------------------------------------------------------------------------------
Hillsborough County, Florida, HFA, S/F Mortgage
Revenue Bonds, AMT, Series 1, 5.375%,
10/01/49 (f)(g)(h) $ 6,340 $ 6,052,734
----------------------------------------------------------------------------------------------------
Hillsborough County, Florida, IDA, Hospital Revenue
Bonds (H. Lee Moffitt Cancer Center Project),
Series A, 5.25%, 7/01/37 5,205 4,902,954
----------------------------------------------------------------------------------------------------
Hillsborough County, Florida, IDA, PCR, Refunding
(Tampa Electric Company Project), Series B,
5.15%, 9/01/25 2,100 2,154,894
----------------------------------------------------------------------------------------------------
Hillsborough County, Florida, Port District Revenue
Bonds (Tampa Port Authority Project), AMT, 5%,
6/01/36 (c) 3,425 3,044,619
----------------------------------------------------------------------------------------------------
Hillsborough County, Florida, School Board,
COP (c)(j):
5.375%, 7/01/09 6,600 6,778,068
6%, 7/01/09 33,400 34,801,798
----------------------------------------------------------------------------------------------------
Indian River County, Florida, Water and Sewer
Revenue Refunding Bonds, Series A, 5.25%,
9/01/18 (d) 1,300 1,324,167
----------------------------------------------------------------------------------------------------
Jacksonville, Florida, Economic Development
Commission, Health Care Facilities Revenue
Bonds (Mayo Clinic -- Jacksonville), Series A, 5.50%,
11/15/36 (c) 1,800 1,824,318
----------------------------------------------------------------------------------------------------
Jacksonville, Florida, Guaranteed Entitlement
Revenue Refunding and Improvement Bonds,
5.25%, 10/01/32 (d) 7,305 7,349,999
----------------------------------------------------------------------------------------------------
Jacksonville, Florida, HFA, Homeowner Mortgage
Revenue Refunding Bonds, AMT, Series A-1, 5.625%,
10/01/39 (f)(g)(h) 1,000 986,740
----------------------------------------------------------------------------------------------------
Jacksonville, Florida, Port Authority Revenue Bonds,
AMT, 6%, 11/01/38 (e) 11,760 11,975,443
----------------------------------------------------------------------------------------------------
Jacksonville, Florida, Port Authority, Seaport Revenue
Bonds, AMT, 5.625%, 11/01/26 (c) 1,870 1,856,181
----------------------------------------------------------------------------------------------------
Jacksonville, Florida, Sales Tax Revenue Bonds (a):
5.50%, 10/01/16 2,000 2,138,960
5.50%, 10/01/18 3,800 4,010,292
----------------------------------------------------------------------------------------------------
Jacksonville, Florida, Water and Sewer Revenue
Bonds (United Water Florida Project), AMT, 6.35%,
8/01/25 (a) 1,500 1,500,885
----------------------------------------------------------------------------------------------------
Lee County, Florida, Capital Revenue Bonds, 5.25%,
10/01/23 (a) 4,225 4,359,608
----------------------------------------------------------------------------------------------------
Lee County, Florida, HFA, S/F Mortgage Revenue
Bonds (Multi-County Program), AMT, Series A-1,
7.20%, 3/01/33 (g)(h) 65 66,114
----------------------------------------------------------------------------------------------------
Lee County, Florida, HFA, S/F Mortgage Revenue
Refunding Bonds, AMT, Series A-2, 6.30%,
3/01/29 (f)(g)(h) 255 258,399
----------------------------------------------------------------------------------------------------
Lee Memorial Health System, Florida, Hospital
Revenue Bonds, Series A, 5%, 4/01/32 (a) 9,000 8,792,460
----------------------------------------------------------------------------------------------------
Leesburg, Florida, Capital Improvement
Revenue Bonds (d):
5.25%, 10/01/27 1,605 1,622,414
5.25%, 10/01/34 3,425 3,438,974
----------------------------------------------------------------------------------------------------
Manatee County, Florida, HFA, S/F Mortgage
Revenue Refunding Bonds, AMT, Sub-Series 1,
6.25%, 11/01/28 (h) 345 349,719
----------------------------------------------------------------------------------------------------
Martin County, Florida, Utilities System Revenue
Bonds, 5.125%, 10/01/33 (a) 5,990 5,935,431
----------------------------------------------------------------------------------------------------
Miami Beach, Florida, Stormwater
Revenue Bonds (d):
5.75%, 9/01/16 1,630 1,722,144
5.25%, 9/01/20 1,000 1,029,650
5.25%, 9/01/25 4,400 4,408,448
5.375%, 9/01/30 1,910 1,908,777
----------------------------------------------------------------------------------------------------
Miami Beach, Florida, Water and Sewer
Revenue Bonds (a):
5.625%, 9/01/18 2,690 2,832,920
5.75%, 9/01/25 10,600 11,106,362
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Aviation Revenue
Bonds, AMT, Series A:
5.125%, 10/01/2035 (i) 11,105 10,300,665
DRIVERS, 7.343%, 10/01/11 (i)(m) 68 55,988
(Miami International Airport)
6%, 10/01/2024 (d) 6,000 6,055,740
(Miami International Airport)
6%, 10/01/29 (d) 10,000 10,053,200
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Aviation Revenue
Refunding Bonds (Miami International Airport),
AMT, Series A, 5.50%, 10/01/41 (i) 11,400 11,094,708
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Educational Facilities
Authority Revenue Bonds (University of Miami),
Series A (a)(j):
5.75%, 4/01/10 5,000 5,339,300
6%, 4/01/10 19,425 20,818,744
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Expressway Authority,
Toll System Revenue Bonds, Series B (d):
5.25%, 7/01/27 8,995 9,088,908
5%, 7/01/33 1,865 1,823,354
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Expressway Authority,
Toll System Revenue Refunding Bonds, 5.125%,
7/01/25 (d) 12,250 12,430,197
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, GO (Parks Program),
6%, 11/01/24 (d) 6,705 6,989,091
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, HFA, Home Ownership
Mortgage Revenue Bonds, AMT, Series A, 5.55%,
10/01/49 (f)(g)(h) 5,500 5,396,654
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, HFA, M/F Mortgage
Revenue Bonds (Marbrisa Apartments Project),
AMT, Series 2A, 6%, 8/01/26 (i) 2,185 2,243,864
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, IDA, IDR (a):
(Airis Miami II LLC Project), AMT, 6%, 10/15/19 5,100 5,182,977
(BAC Funding Corporation Project), Series A,
5.25%, 10/01/20 3,280 3,414,054
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
10 ANNUAL REPORT AUGUST 31, 2008
Schedule of Investments (continued)
BlackRock MuniHoldings Insured Investment Fund
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
Florida (continued)
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, School Board, COP,
Refunding, Series B (e):
5.25%, 5/01/25 $ 3,500 $ 3,590,510
5.25%, 5/01/28 7,480 7,598,558
5.25%, 5/01/30 6,625 6,745,244
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Solid Waste System
Revenue Bonds:
5.50%, 10/01/15 (i) 2,945 3,146,026
5.50%, 10/01/16 (i) 3,105 3,316,947
5.25%, 10/01/30 (c) 8,800 8,840,920
----------------------------------------------------------------------------------------------------
Nassau County, Florida, Water and Sewer System
Revenue Bonds, 5.125%, 9/01/33 (c) 5,175 5,171,377
----------------------------------------------------------------------------------------------------
Orange County, Florida, HFA, S/F Mortgage Revenue
Bonds, AMT, 6.85%, 10/01/27 (h) 215 215,138
----------------------------------------------------------------------------------------------------
Orange County, Florida, Health Facilities
Authority, Hospital Revenue Bonds
(Orlando Regional Healthcare):
6%, 12/01/12 (j) 9,220 10,367,060
Series A, 6.25%, 10/01/18 (c) 5,000 5,611,750
----------------------------------------------------------------------------------------------------
Orange County, Florida, Health Facilities Authority,
Hospital Revenue Refunding Bonds
(Orlando Regional Healthcare), Series B,
5.25%, 12/01/29 (i) 6,800 6,934,096
----------------------------------------------------------------------------------------------------
Orange County, Florida, School Board, COP, 5.50%,
8/01/25 (a) 1,300 1,373,476
----------------------------------------------------------------------------------------------------
Orange County, Florida, Tourist Development, Tax
Revenue Bonds, 5.75%, 10/01/09 (a)(j) 31,745 33,048,450
----------------------------------------------------------------------------------------------------
Orlando and Orange County, Florida, Expressway
Authority Revenue Bonds:
Series A, 5%, 7/01/32 (i) 5,000 5,004,950
Series B, 5%, 7/01/30 (a) 3,250 3,232,677
Series B, 5%, 7/01/35 (a) 37,550 36,840,305
----------------------------------------------------------------------------------------------------
Osceola County, Florida, Infrastructure Sales Surplus
Tax Revenue Bonds, 5.375%, 10/01/18 (a) 3,155 3,324,329
----------------------------------------------------------------------------------------------------
Osceola County, Florida, Tourist Development Tax
Revenue Bonds, Series A, 5.50%, 10/01/27 (d) 5,560 5,565,727
----------------------------------------------------------------------------------------------------
Palm Beach County, Florida, School Board, COP,
Refunding, Series B, 5.375%, 8/01/17 (a) 6,115 6,376,783
----------------------------------------------------------------------------------------------------
Palm Beach County, Florida, School Board,
COP, Series A (d)(j):
8/01/10 5,070 5,466,778
8/01/10 13,205 14,300,091
----------------------------------------------------------------------------------------------------
Panama City, Florida, Water and Sewer Revenue
Bonds, Series B, 5.25%, 10/01/22 (c) 3,000 3,143,220
----------------------------------------------------------------------------------------------------
Port St. Lucie, Florida, Utility Revenue Bonds (c):
5.25%, 9/01/26 1,280 1,291,802
5.25%, 9/01/27 1,345 1,354,630
----------------------------------------------------------------------------------------------------
Saint Johns County, Florida, IDA, IDR, Refunding
(Professional Golf Project) (c):
5.50%, 9/01/15 1,275 1,371,122
5.50%, 9/01/16 1,345 1,446,399
5.50%, 9/01/17 1,420 1,527,054
5.50%, 9/01/18 1,500 1,593,915
----------------------------------------------------------------------------------------------------
Saint Johns County, Florida, Ponte Vedra Utility
System Revenue Bonds (i):
5%, 10/01/31 3,200 3,218,432
5%, 10/01/35 4,980 5,000,418
5%, 10/01/37 8,200 8,199,590
----------------------------------------------------------------------------------------------------
Saint Johns County, Florida, Sales Tax
Revenue Bonds (a):
Series A, 5.25%, 10/01/28 1,375 1,385,615
Series A, 5.25%, 10/01/31 1,355 1,364,756
Series A, 5.25%, 10/01/34 2,000 2,008,380
Series B, 5.25%, 10/01/27 1,430 1,444,758
Series B, 5.25%, 10/01/32 840 844,435
----------------------------------------------------------------------------------------------------
Saint Johns County, Florida, Transportation
Improvement Revenue Bonds, 5.125%,
10/01/32 (a) 3,500 3,506,825
----------------------------------------------------------------------------------------------------
Saint Lucie County, Florida, School Board, COP,
6.25%, 7/01/10 (i)(j) 4,055 4,398,175
----------------------------------------------------------------------------------------------------
Saint Lucie County, Florida, School Board, COP,
Refunding (i):
Series A, 5.50%, 7/01/18 1,495 1,593,207
Series C, 5.50%, 7/01/18 1,170 1,246,857
----------------------------------------------------------------------------------------------------
Saint Lucie, Florida, West Services District, Utility
Revenue Bonds (c):
5.25%, 10/01/34 1,720 1,712,656
5%, 10/01/38 4,750 4,522,902
----------------------------------------------------------------------------------------------------
Saint Lucie, Florida, West Services District, Utility
Revenue Refunding Bonds, Senior Lien, 6%,
10/01/22 (c) 3,250 3,463,103
----------------------------------------------------------------------------------------------------
Santa Rosa County, Florida, School Board, COP,
Refunding, Series 2, 5.25%, 2/01/31 (d) 8,795 8,848,298
----------------------------------------------------------------------------------------------------
Seminole County, Florida, Water and Sewer
Revenue Bonds, 5%, 10/01/31 5,000 5,066,150
----------------------------------------------------------------------------------------------------
South Florida Water Management District, COP,
5%, 10/01/31 (a) 4,610 4,591,007
----------------------------------------------------------------------------------------------------
South Lake County, Florida, Hospital District
Revenue Bonds (South Lake Hospital Inc.),
5.80%, 10/01/34 1,750 1,759,853
----------------------------------------------------------------------------------------------------
Sunrise, Florida, Utility System Revenue Refunding
Bonds, 5.20%, 10/01/22 (a) 2,250 2,339,460
----------------------------------------------------------------------------------------------------
Tallahassee, Florida, Capital Revenue Bonds,
5%, 10/01/24 (i) 1,975 2,024,889
----------------------------------------------------------------------------------------------------
Tallahassee, Florida, Lease Revenue Bonds
(Florida State University Project), Series A (c):
5.25%, 8/01/23 2,800 2,808,876
5.375%, 8/01/26 1,000 1,022,550
----------------------------------------------------------------------------------------------------
Tampa Bay, Florida, Water Utility System Revenue
Bonds, 6%, 10/01/11 (d)(j) 30,335 33,566,891
----------------------------------------------------------------------------------------------------
Taylor County, Florida, Sales Tax Revenue Bonds,
6%, 10/01/10 (d)(j) 3,835 4,130,832
----------------------------------------------------------------------------------------------------
University of Central Florida Athletics Association Inc.,
COP, Series A, 5.25%, 10/01/34 (d) 8,935 7,906,671
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 11
Schedule of Investments (continued)
BlackRock MuniHoldings Insured Investment Fund
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
Florida (concluded)
----------------------------------------------------------------------------------------------------
Village Center Community Development District,
Florida, Recreational Revenue Bonds, Series A (c):
5.375%, 11/01/34 $ 10,775 $ 10,796,335
5.125%, 11/01/36 1,750 1,692,898
----------------------------------------------------------------------------------------------------
Village Center Community Development District,
Florida, Utility Revenue Bonds, 5.25%, 10/01/23 (c) 3,000 3,150,210
----------------------------------------------------------------------------------------------------
Volusia County, Florida, IDA, Student Housing
Revenue Bonds (Stetson University Project),
Series A (n):
5%, 6/01/25 2,075 1,863,475
5%, 6/01/35 1,740 1,447,124
---------------
751,420,833
====================================================================================================
Puerto Rico -- 0.5%
----------------------------------------------------------------------------------------------------
Puerto Rico Industrial, Tourist, Educational,
Medical and Environmental Control Facilities
Revenue Bonds (University Plaza Project),
Series A, 5.625%, 7/01/19 (c) 2,725 2,762,251
----------------------------------------------------------------------------------------------------
Total Municipal Bonds -- 148.2% 754,183,084
====================================================================================================
====================================================================================================
Municipal Bonds Transferred to
Tender Option Bond Trusts (o)
====================================================================================================
Georgia -- 1.9%
----------------------------------------------------------------------------------------------------
Atlanta, Georgia, Airport Passenger Facility Charge
and Subordinate Lien General Revenue Refunding
Bonds, Series C, 5%, 1/01/33 (i) 9,690 9,728,275
====================================================================================================
Florida -- 23.0%
----------------------------------------------------------------------------------------------------
Hillsborough County, Florida, Aviation Authority
Revenue Bonds, AMT, Series A, 5.5%, 10/01/38 (e) 10,749 10,501,020
----------------------------------------------------------------------------------------------------
Jacksonville Electric Authority, Florida, Saint John's
River Power Park System Revenue Bonds, Issue
Three, Series 2, 5%, 10/01/37 6,085 6,115,247
----------------------------------------------------------------------------------------------------
Jacksonville, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Baptist Medical Center
Project), 5%, 8/15/37 (i) 14,100 13,887,513
----------------------------------------------------------------------------------------------------
Jacksonville, Florida, Sales Tax Revenue Bonds, 5%,
10/01/27 (c) 9,994 10,128,430
----------------------------------------------------------------------------------------------------
Lee County, Florida, Airport Revenue Bonds, AMT,
Series A, 6%, 10/01/29 (i) 19,925 20,259,740
----------------------------------------------------------------------------------------------------
Lee County, Florida, HFA, S/F Mortgage Revenue
Bonds (Multi-County Program), AMT, Series A-2, 6%,
9/01/40 (f)(g)(h) 8,295 8,624,146
----------------------------------------------------------------------------------------------------
Manatee County, Florida, HFA, Homeowner Revenue
Bonds, AMT, Series A, 5.9%, 9/01/40 (f)(g)(h) 4,350 4,279,095
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Aviation Revenue
Bonds, AMT, Series A, 5%, 10/01/33 (i) 10,010 9,022,288
----------------------------------------------------------------------------------------------------
Orlando, Florida, Senior Tourist Development Tax
Revenue Bonds (6th Cent Contract Payments),
Series A, 5.25%, 11/01/38 (e) 10,240 10,268,774
----------------------------------------------------------------------------------------------------
Palm Beach County, Florida, School Board, COP,
Series A, 5%, 8/01/31 (i) 13,500 13,569,660
----------------------------------------------------------------------------------------------------
Polk County, Florida, School Board COP,
Master Lease, Series A, 5.5%, 1/01/10 (i) 9,873 10,245,456
---------------
116,901,369
----------------------------------------------------------------------------------------------------
Total Municipal Bonds Transferred to
Tender Option Bond Trusts -- 24.9% 126,629,644
====================================================================================================
Total Long-Term Investments
(Cost -- $878,678,409) -- 173.1% 880,812,728
====================================================================================================
====================================================================================================
Short-Term Securities Shares
====================================================================================================
CMA Florida Municipal Money Fund, 1.28% (p)(q) 1,473,234 1,473,234
----------------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost -- $1,473,234) -- 0.3% 1,473,234
====================================================================================================
Total Investments (Cost -- $880,151,643*) -- 173.4% 882,285,962
Other Assets Less Liabilities -- 1.0% 5,045,528
Liability for Trust Certificates, Including Interest
Expense and Fees Payable -- (16.2)% (82,374,692)
Preferred Shares, at Redemption Value -- (58.2)% (296,258,455)
---------------
Net Assets Applicable to Common Shares -- 100.0% $ 508,698,343
===============
See Notes to Financial Statements.
12 ANNUAL REPORT AUGUST 31, 2008
Schedule of Investments (concluded)
BlackRock MuniHoldings Insured Investment Fund
* The cost and unrealized appreciation (depreciation) of investments as of
August 31, 2008, as computed for federal income tax purposes, were as
follows:
Aggregate cost ......................................... $ 802,176,218
=============
Gross unrealized appreciation .......................... $ 15,529,610
Gross unrealized depreciation .......................... (17,400,888)
-------------
Net unrealized depreciation ............................ $ (1,871,278)
=============
(a) AMBAC Insured.
(b) Radian Insured.
(c) MBIA Insured.
(d) FGIC Insured.
(e) Assured Guaranty Insured.
(f) FHLMC Collateralized.
(g) FNMA Collateralized.
(h) GNMA Collateralized.
(i) FSA Insured.
(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 a premium to par.
(k) FHA Insured.
(l) XL Capital Insured.
(m) Variable rate security. Rate shown is as of report date. Maturity shown is
the final maturity date.
(n) CIFG Insured.
(o) Securities represent bonds transferred to a tender option bond trust in
exchange for which the Fund acquired residual interest certificates. These
securities 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.
(p) 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
--------------------------------------------------------------------------
CMA Florida Municipal Money Fund (1,896,673) $409,241
--------------------------------------------------------------------------
(q) Represents the current yield as of report date.
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 13
Schedule of Investments August 31, 2008
BlackRock MuniHoldings New York Insured Fund, Inc.
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
New York -- 124.1%
----------------------------------------------------------------------------------------------------
Albany, New York, IDA, Civic Facility Revenue Bonds
(The University Heights Association -- Albany Law
School), Series A, 6.75%, 12/01/09 (a)(b) $ 3,375 $ 3,608,516
----------------------------------------------------------------------------------------------------
Buffalo, New York, GO, Series D,
6%, 12/01/09 (a)(c) 2,000 2,121,160
----------------------------------------------------------------------------------------------------
Erie County, New York, Public Improvement,
GO, Series A, 5.75%, 10/01/13 (d) 1,025 1,065,088
----------------------------------------------------------------------------------------------------
Hudson Yards Infrastructure Corporation, New York,
Revenue Bonds, Series A:
4.50%, 2/15/47 (e) 13,750 11,897,600
5%, 2/15/47 (d) 10,250 9,882,230
----------------------------------------------------------------------------------------------------
Long Island Power Authority, New York, Electric System
Revenue Bonds, Series A (f):
5%, 9/01/29 3,000 3,000,000
5%, 9/01/34 4,850 4,780,548
----------------------------------------------------------------------------------------------------
Madison County, New York, IDA, Civic Facility
Revenue Bonds (Colgate University Project),
Series A, 5%, 7/01/35 (f) 3,225 3,252,671
----------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York,
Dedicated Tax Fund Revenue Bonds, Series A,
5%, 11/15/35 (e) 2,000 2,015,940
----------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York,
Revenue Refunding Bonds:
Series A, 5.25%, 11/15/31 (d) 2,500 2,516,675
Series B, 5%, 11/15/28 1,500 1,503,975
----------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York,
Service Contract Revenue Refunding Bonds,
Series A, 5%, 7/01/21 (d) 3,500 3,563,315
----------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York,
Transit Facilities Revenue Bonds, Series C,
4.75%, 7/01/12 (a)(c) 2,535 2,745,380
----------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York,
Transportation Revenue Refunding Bonds, Series F,
5.25%, 11/15/12 (a)(e) 6,300 6,975,675
----------------------------------------------------------------------------------------------------
Nassau Health Care Corporation, New York, Health
System Revenue Bonds, 5.75%, 8/01/09 (a)(c) 4,210 4,446,686
----------------------------------------------------------------------------------------------------
New York City, New York, City Health and Hospital
Corporation, Health System Revenue Refunding
Bonds, Series A, 5.25%, 2/15/17 (e) 2,000 2,041,440
----------------------------------------------------------------------------------------------------
New York City, New York, City Housing Development
Corporation, M/F Housing Revenue Bonds, AMT:
Series C, 5%, 11/01/26 1,250 1,150,350
Series C, 5.05%, 11/01/36 2,000 1,858,740
Series H-1, 4.70%, 11/01/40 1,000 862,290
Series H-2, 5.125%, 11/01/34 2,340 2,067,811
----------------------------------------------------------------------------------------------------
New York City, New York, City IDA, Civic Facility Revenue
Refunding Bonds (Nightingale-Bamford School),
5.25%, 1/15/17 (f) 1,200 1,286,868
----------------------------------------------------------------------------------------------------
New York City, New York, City IDA, IDR (Japan Airlines
Company), AMT, 6%, 11/01/15 (c) 10,740 10,872,209
----------------------------------------------------------------------------------------------------
New York City, New York, City IDA, PILOT
Revenue Bonds:
(Queens Baseball Stadium Project),
5%, 1/01/31 (f) 4,000 3,952,000
(Queens Baseball Stadium Project),
5%, 1/01/36 (f) 14,390 14,032,984
(Queens Baseball Stadium Project),
5%, 1/01/39 (f) 4,500 4,369,770
(Queens Baseball Stadium Project),
5%, 1/01/46 (f) 7,800 7,494,006
(Yankee Stadium Project), 5%, 3/01/36 (e) 4,450 4,339,596
(Yankee Stadium Project), 5%, 3/01/46 (d) 12,250 11,709,652
----------------------------------------------------------------------------------------------------
New York City, New York, City IDA, Parking Facility
Revenue Bonds (Royal Charter Properties Inc. --
The New York and Pennsylvania Hospital Leasehold
Project), 5.75%, 12/15/29 (c) 7,965 8,450,068
----------------------------------------------------------------------------------------------------
New York City, New York, City IDA, Special Facility
Revenue Refunding Bonds (Terminal One Group
Association Project), AMT, 5.50%, 1/01/24 1,500 1,483,050
----------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System Revenue Bonds,
Series A:
4.25%, 6/15/33 1,000 910,570
4.25%, 6/15/39 (c) 3,200 2,875,584
----------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System, Revenue
Refunding Bonds:
Series A, 5.125%, 6/15/34 (e) 1,250 1,260,400
Series A, 5%, 6/15/35 (f) 3,500 3,516,030
Series C, 5%, 6/15/35 (e) 1,000 1,007,430
Series F, 5%, 6/15/29 (c) 500 504,765
----------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance
Authority, Building Aid Revenue Bonds, Series S-2,
4.25%, 1/15/34 (d) 4,830 4,319,807
----------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance
Authority, Building Aid Revenue Refunding Bonds,
Series S-1, 4.50%, 1/15/38 1,760 1,637,944
----------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance
Authority, Future Tax Secured Revenue Bonds:
Series B, 5.50%, 2/01/12 (e) 1,145 1,225,001
Series B, 5.50%, 2/01/13 (e) 805 861,245
Series B, 6.25%, 11/15/18 (d) 6,405 6,923,549
Series C, 5%, 2/01/33 (d) 16,200 16,314,048
Series E, 5.25%, 2/01/22 (e) 2,500 2,620,275
----------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance
Authority, Future Tax Secured, Revenue Refunding
Bonds, Series A, 5%, 11/15/26 (d) 1,000 1,013,940
----------------------------------------------------------------------------------------------------
New York City, New York, GO:
Series B, 5.75%, 8/01/13 (e) 2,280 2,429,682
Series D, 5.25%, 10/15/13 (a) 3,750 4,196,550
Series D1, 5.125%, 12/01/23 1,000 1,041,440
Series D1, 5.125%, 12/01/28 1,250 1,279,038
Series J, 5%, 5/15/23 8,000 8,170,640
Sub-Series C-1, 5.25%, 8/15/26 1,150 1,183,730
VRDN, Sub-Series A-6, 2.15%, 11/01/26 (c)(g)(s) 375 375,000
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
14 ANNUAL REPORT AUGUST 31, 2008
Schedule of Investments (continued)
BlackRock MuniHoldings New York Insured Fund, Inc.
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
New York (continued)
----------------------------------------------------------------------------------------------------
New York City, New York, GO, Refunding (c):
Series A, 6.25%, 5/15/26 $ 3,700 $ 3,956,965
VRDN, Series H, Sub-Series H-3, 2.50%,
8/01/19 (g)(s) 4,300 4,300,000
----------------------------------------------------------------------------------------------------
New York City, New York, IDA, Civic Facility Revenue
Refunding Bonds (Polytechnic University),
5.25%, 11/01/37 (h) 2,160 1,871,597
----------------------------------------------------------------------------------------------------
New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds (f):
DRIVERS, Series 1438Z, 7.647%,
10/15/12 (g) 1,250 1,337,324
Series A, 5%, 10/15/32 14,175 14,398,398
----------------------------------------------------------------------------------------------------
New York City, New York, Trust for Cultural Resources,
Revenue Refunding Bonds (American Museum of
Natural History), Series A, 5%, 7/01/36 (e) 3,800 3,820,748
----------------------------------------------------------------------------------------------------
New York Convention Center Development
Corporation, New York, Revenue Bonds
(Hotel Unit Fee Secured) (f):
5%, 11/15/30 2,100 2,091,474
5%, 11/15/35 21,000 20,660,850
5%, 11/15/44 2,055 2,000,214
----------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Hospital Revenue
Refunding Bonds:
(New York and Presbyterian Hospital),
5.50%, 8/01/11 (f)(i) 1,000 1,070,000
(North General Hospital), 5.75%, 2/15/17 (j) 2,000 2,184,260
----------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Lease
Revenue Bonds:
(Municipal Health Facilities Improvement
Program), Series 1, 5.50%, 1/15/14 (c) 1,535 1,638,674
(Office Facilities Audit and Control),
5.50%, 4/01/23 (e) 645 659,912
(State University Dormitory Facilities),
5%, 7/01/37 (f) 1,000 1,009,900
----------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Non-State
Supported Debt, Lease Revenue Bonds (Municipal
Health Facilities Improvement Program),
Sub-Series 2-5, 5%, 1/15/32 3,300 3,286,305
----------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Non-State
Supported Debt Revenue Bonds:
(Fordham University), Series B, 5%, 7/01/38 (k) 1,000 1,009,220
(School District Financing Program), Series A,
5%, 10/01/35 (c) 450 456,548
(School District Financing Program), Series C,
5%, 10/01/37 (c) 2,500 2,534,525
----------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Non-State
Supported Debt, Revenue Refunding Bonds:
(Mount Sinai School of Medicine of New York
University), 5%, 7/01/35 (e) 2,100 2,066,316
(School District Financing Program), Series A,
5%, 10/01/35 (c) 5,000 5,079,000
----------------------------------------------------------------------------------------------------
New York State Dormitory Authority Revenue Bonds:
(853 Schools Program), Issue 2, Series E,
5.75%, 7/01/19 (f) 1,340 1,388,093
(Cooper Union of Advance Science),
6.25%, 7/01/09 (a)(e) 1,200 1,256,880
(Gustavus Adolphus Child & Family
Services, Inc.), Series B, 5.50%, 7/01/18 (f) 2,058 2,126,737
(Long Island University), Series B,
5.50%, 9/01/20 (b) 1,585 1,576,742
(New York State Rehabilitation Association),
Series A, 5.25%, 7/01/19 (l) 1,180 1,222,173
(New York State Rehabilitation Association),
Series A, 5.125%, 7/01/23 (l) 1,000 1,026,840
(Pace University), 6%, 7/01/10 (a)(e) 5,345 5,776,448
(Saint Barnabas Hospital), 5.45%,
8/01/35 (f)(i) 2,150 2,152,924
(School Districts Financing Program), Series D,
5%, 10/01/30 (e) 1,240 1,243,584
(School Districts Financing Program), Series E,
5.75%, 10/01/30 (e) 6,900 7,321,659
(Upstate Community Colleges), Series A,
6%, 7/01/10 (a)(c) 1,405 1,518,411
----------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Revenue
Refunding Bonds:
(City University System), Series 1, 5.25%,
7/01/14 (d) 685 700,926
(Saint Charles Hospital and Rehabilitation Center),
Series A, 5.625%, 7/01/12 (e) 3,400 3,460,418
(School District Financing Program), Series I,
5.75%, 10/01/18 (e) 1,370 1,494,081
----------------------------------------------------------------------------------------------------
New York State Dormitory Authority, State Supported Debt
Revenue Bonds (Mental Health Services Facilities) (c):
AMT, Series C, 5.40%, 2/15/33 5,650 5,589,376
Series B, 5%, 2/15/33 4,650 4,678,923
----------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Supported Debt Revenue Bonds
(Mental Health Facilities) (a):
Series B, 5.25%, 2/15/14 1,550 1,730,079
Series D, 5.875%, 8/15/10 1,060 1,136,924
----------------------------------------------------------------------------------------------------
New York State Energy Research and Development
Authority, Gas Facilities Revenue Refunding Bonds
(Brooklyn Union Gas Company/Keyspan), AMT,
Series A, 4.70%, 2/01/24 (d) 15,590 14,500,259
----------------------------------------------------------------------------------------------------
New York State Energy Research and Development
Authority, PCR, Refunding (Central Hudson Gas and
Electric), Series A, 5.45%, 8/01/27 (f) 6,000 6,148,320
----------------------------------------------------------------------------------------------------
New York State Environmental Facilities Corporation,
Water Facilities Revenue Bonds (Long Island Water
Corp. Project), AMT, Series A, 4.90%, 10/01/34 (e) 6,000 5,353,440
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 15
Schedule of Investments (continued)
BlackRock MuniHoldings New York Insured Fund, Inc.
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
New York (continued)
----------------------------------------------------------------------------------------------------
New York State Environmental Facilities Corporation,
Water Facilities Revenue Refunding Bonds (Spring
Valley Water Company), Series B, 6.15%, 8/01/24 (f) $ 4,400 $ 4,411,044
----------------------------------------------------------------------------------------------------
New York State, HFA, Housing Revenue Bonds
(Tri-Senior Development Project), AMT, Series A,
5.40%, 11/15/42 (m) 2,400 2,172,288
----------------------------------------------------------------------------------------------------
New York State, HFA, M/F Housing Revenue Bonds
(Saint Philips Housing), AMT, Series A, 4.65%,
11/15/38 (m) 3,250 2,871,050
----------------------------------------------------------------------------------------------------
New York State, HFA, State Personal Income Tax
Revenue Bonds (Economic Development and
Housing), Series A, 5%, 9/15/23 (e) 750 774,143
----------------------------------------------------------------------------------------------------
New York State Mortgage Agency, Homeowner
Mortgage Revenue Bonds, AMT:
Series 143, 4.90%, 10/01/37 1,000 844,630
Series 145, 5.125%, 10/01/37 1,000 875,650
----------------------------------------------------------------------------------------------------
New York State Mortgage Agency, Homeowner
Mortgage Revenue Refunding Bonds:
AMT, Series 67, 5.70%, 10/01/17 (e) 2,140 2,153,632
AMT, Series 133, 4.95%, 10/01/21 1,500 1,434,720
AMT, Series 143, 4.85%, 10/01/27 (e) 2,000 1,773,840
Series 83, 5.55%, 10/01/27 (e) 2,100 2,109,555
----------------------------------------------------------------------------------------------------
New York State Mortgage Agency Revenue Refunding
Bonds, AMT, Series 82, 5.65%, 4/01/30 (e) 1,035 1,076,348
----------------------------------------------------------------------------------------------------
New York State Thruway Authority, General Revenue
Bonds, Series F, 5%, 1/01/30 (f) 5,000 5,075,600
----------------------------------------------------------------------------------------------------
New York State Thruway Authority, General Revenue
Refunding Bonds, Series G (c):
4.75%, 1/01/29 2,000 2,013,820
4.75%, 1/01/30 1,605 1,612,351
----------------------------------------------------------------------------------------------------
New York State Thruway Authority, Highway and
Bridge Trust Fund Revenue Bonds, Series B-1,
5.75%, 4/01/10 (a)(d) 8,000 8,546,800
----------------------------------------------------------------------------------------------------
New York State Thruway Authority, Second General
Highway and Bridge Trust Fund Revenue Bonds,
Series A, 5%, 4/01/26 (f) 8,700 8,971,092
----------------------------------------------------------------------------------------------------
New York State Urban Development Corporation,
Personal Income Tax Revenue Bonds:
Series C-1, 5%, 3/15/13 (a)(e) 3,000 3,299,400
(State Facilities), Series A-1, 5%, 3/15/29 (d) 2,000 2,028,940
----------------------------------------------------------------------------------------------------
Oneida-Herkimer, New York, Solid Waste
Management Authority, Solid Waste Revenue
Refunding Bonds, 5.50%, 4/01/13 (c) 1,800 1,985,436
----------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey,
Consolidated Revenue Bonds, AMT, 141st Series,
4.50%, 9/01/35 (l) 1,000 857,680
----------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Special
Obligation Revenue Bonds (JFK International Air
Terminal LLC), AMT, Series 6 (e):
6.25%, 12/01/11 3,000 3,181,320
6.25%, 12/01/15 7,830 8,421,243
5.90%, 12/01/17 7,000 7,095,060
5.75%, 12/01/22 26,725 26,728,741
----------------------------------------------------------------------------------------------------
Rochester, New York, Housing Authority, Mortgage
Revenue Bonds (Andrews Terrace Apartments
Project), AMT, 4.70%, 12/20/38 (n) 1,250 1,013,838
----------------------------------------------------------------------------------------------------
Schenectady, New York, IDA, Civic Facility Revenue
Bonds (Union College Project), Series A, 5.45%,
12/01/09 (a)(f) 5,000 5,317,800
----------------------------------------------------------------------------------------------------
Schenectady, New York, IDA, Civic Facility Revenue
Refunding Bonds (Union College Project), Series A,
5.625%, 7/01/11 (a)(f) 3,000 3,332,280
----------------------------------------------------------------------------------------------------
Suffolk County, New York, IDA, IDR (Keyspan -- Port
Jefferson), AMT, 5.25%, 6/01/27 4,355 4,054,679
----------------------------------------------------------------------------------------------------
Suffolk County, New York, IDA, Solid Waste Disposal
Facility, Revenue Refunding Bonds (Ogden Martin
System Huntington Project), AMT (f):
6%, 10/01/10 4,660 4,894,445
6.15%, 10/01/11 5,000 5,331,700
6.25%, 10/01/12 3,530 3,809,717
----------------------------------------------------------------------------------------------------
Syracuse, New York, IDA, PILOT Revenue Bonds
(Carousel Center Project), AMT, Series A,
5%, 1/01/36 (j) 10,000 8,651,600
----------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corporation of
New York Revenue Bonds:
Series A-1, 5.25%, 6/01/20 (f) 5,000 5,228,250
Series A-1, 5.25%, 6/01/21 (f) 13,275 13,846,090
Series A-1, 5.25%, 6/01/22 (f) 2,000 2,077,300
Series C-1, 5.50%, 6/01/21 3,700 3,898,616
----------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York,
Revenue Refunding Bonds, Series A, 5%,
1/01/12 (a)(e) 2,095 2,268,005
----------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York,
Subordinate Revenue Bonds:
5%, 11/15/28 (f) 2,465 2,486,174
Series A, 5.25%, 11/15/30 (e) 6,000 6,147,720
----------------------------------------------------------------------------------------------------
Westchester County, New York, IDA, Civic Facility
Revenue Bonds (Purchase College Foundation
Housing Project), Series A, 5.75%, 12/01/31 (f) 7,000 7,350,210
----------------------------------------------------------------------------------------------------
Yonkers, New York, GO, Series A, 5.75%,
10/01/10 (d) 1,795 1,941,131
---------------
531,812,366
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
16 ANNUAL REPORT AUGUST 31, 2008
Schedule of Investments (continued)
BlackRock MuniHoldings New York Insured Fund, Inc.
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
Guam -- 1.1%
----------------------------------------------------------------------------------------------------
A.B. Won Guam International Airport Authority, General
Revenue Refunding Bonds, AMT, Series C (e):
5.25%, 10/01/21 $ 3,700 $ 3,609,905
5.25%, 10/01/22 1,050 1,018,437
---------------
4,628,342
====================================================================================================
Puerto Rico -- 18.5%
----------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Aqueduct and Sewer
Authority, Senior Lien Revenue Bonds, Series A,
5.125%, 7/01/47 (k) 9,950 9,778,064
----------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway and
Transportation Authority, Highway Revenue
Refunding Bonds, Series CC (c):
5.50%, 7/01/31 4,000 4,264,560
5.25%, 7/01/33 1,000 1,029,490
5.25%, 7/01/34 3,895 4,006,475
5.25%, 7/01/36 5,500 5,679,850
----------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Bonds, 5.25%, 7/01/17 (d) 4,800 4,876,416
----------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Refunding Bonds, Series D, 5.75%, 7/01/12 (a) 10,000 11,005,000
----------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Infrastructure Financing
Authority, Special Tax and Capital Appreciation
Revenue Bonds, Series A (o):
4.62%, 7/01/31 (d) 10,280 2,735,200
4.66%, 7/01/33 (d) 5,500 1,301,905
4.66%, 7/01/34 (f) 9,300 2,140,860
4.67%, 7/01/37 (f) 2,200 420,860
----------------------------------------------------------------------------------------------------
Puerto Rico Convention Center District Authority,
Hotel Occupancy Tax Revenue Bonds, Series A,
5%, 7/01/31 (f) 3,270 3,153,294
----------------------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority, Power
Revenue Bonds (a):
Series NN, 5.125%, 7/01/13 3,750 4,147,237
Series RR, 5%, 7/01/15 (l) 4,850 5,401,106
Series RR, 5%, 7/01/15 (j) 4,950 5,512,469
Series RR, 5%, 7/01/15 (d) 7,110 7,917,909
----------------------------------------------------------------------------------------------------
Puerto Rico Housing Financing Authority, Capital
Funding Program, Subordinate Revenue Refunding
Bonds, 5.125%, 12/01/27 4,000 3,939,560
----------------------------------------------------------------------------------------------------
Puerto Rico Municipal Finance Agency, GO, Series A,
5%, 8/01/30 (c) 2,000 2,003,400
---------------
79,313,655
----------------------------------------------------------------------------------------------------
Total Municipal Bonds -- 143.7% 615,754,363
====================================================================================================
Municipal Bonds Transferred to Par
Tender Option Bond Trusts (p) (000) Value
====================================================================================================
New York --32.7%
----------------------------------------------------------------------------------------------------
Erie County, New York, IDA, School Facility Revenue
Bonds (City of Buffalo Project), 5.75%, 5/01/24 (c) 4,158 4,314,675
----------------------------------------------------------------------------------------------------
Long Island Power Authority, New York, Electric
System Revenue Refunding Bonds, Series B,
5%, 12/01/35 (c) 3,493 3,537,506
----------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York,
Dedicated Tax Fund Revenue Bonds, Series A,
5%, 11/15/31 (e) 6,994 7,097,249
----------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York,
Revenue Refunding Bonds, Series A (c):
5%, 11/15/30 5,007 5,069,612
5.75%, 11/15/32 38,900 41,403,215
----------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water
Finance Authority, Water and Sewer System Revenue
Bonds, Series A, 5.75%, 6/15/11 (a)(c) 23,000 25,181,320
----------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance
Authority, Building Aid Revenue Bonds, Series S-2,
5%, 1/15/37 (c)(d) 3,750 3,798,450
----------------------------------------------------------------------------------------------------
New York City, New York, GO, Series C, 5.75%,
3/15/27 (c) 9,500 10,563,430
----------------------------------------------------------------------------------------------------
New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A, 5%,
10/15/32 (f) 7,000 7,244,510
----------------------------------------------------------------------------------------------------
New York State Thruway Authority, General Revenue
Refunding Bonds, Series H, 5%, 1/01/37 (c)(d) 8,505 8,624,836
----------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey,
Consolidated Revenue Bonds, AMT, 137th Series,
5.125%, 7/15/30 (c) 2,504 2,476,223
----------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York,
Revenue Refunding Bonds (e):
5.25%, 11/15/23 12,000 12,550,920
5%, 11/15/32 8,309 8,333,317
----------------------------------------------------------------------------------------------------
Total Municipal Bonds Transferred to
Tender Option Bond Trusts -- 32.7% 140,195,263
====================================================================================================
Total Long-Term Investments
(Cost -- $758,155,075) -- 176.4% 755,949,626
====================================================================================================
====================================================================================================
Short-Term Securities Shares
====================================================================================================
CMA New York Municipal Money Fund,
1.31% (q)(r) 3,469,473 3,469,473
----------------------------------------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $3,469,473) -- 0.8% 3,469,473
====================================================================================================
Total Investments (Cost -- $761,624,548*) -- 177.2% 759,419,099
Other Assets Less Liabilities -- 2.2% 9,674,102
Liability for Trust Certificates, Including Interest
Expense and Fees Payable -- (20.4)% (87,552,144)
Preferred Shares, at Redemption Value -- (59.0)% (252,993,595)
---------------
Net Assets Applicable to Common Shares -- 100.0% $ 428,547,462
===============
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 17
Schedule of Investments (concluded)
BlackRock MuniHoldings New York Insured Fund, Inc.
* The cost and unrealized appreciation (depreciation) of investments as of
August 31, 2008, as computed for federal income tax purposes, were as
follows:
Aggregate cost ......................................... $ 677,210,626
=============
Gross unrealized appreciation .......................... $ 13,616,354
Gross unrealized depreciation .......................... (18,464,200)
-------------
Net unrealized depreciation ............................ $ (4,847,846)
=============
(a) U.S. government securities, held in escrow, are used to pay interest on
this security, as well as to retire the bond in full at the date
indicated, typically at a premium to par.
(b) Radian Insured.
(c) FSA Insured.
(d) FGIC Insured.
(e) MBIA Insured.
(f) AMBAC Insured.
(g) Variable rate security. Rate shown is as of report date. Maturity shown is
the final maturity date.
(h) ACA Insured.
(i) FHA Insured.
(j) XL Capital Insured.
(k) Assured Guaranty Insured.
(l) CIFG Insured.
(m) FNMA Collateralized.
(n) GNMA Collateralized.
(o) Represents a zero-coupon bond. Rate shown reflects the effective yield at
the time of purchase.
(p) Securities represent bonds transferred to a tender option bond trust in
exchange for which the Fund acquired residual interest certificates. These
securities 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.
(q) 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
--------------------------------------------------------------------------
CMA New York Municipal Money Fund 1,567,078 $269,447
--------------------------------------------------------------------------
(r) Represents the current yield as of report date.
(s) Security may have a maturity of more than one year at the time of
issuance, but has variable rate and demand features that qualify it as a
short-term security.
See Notes to Financial Statements.
18 ANNUAL REPORT AUGUST 31, 2008
Schedule of Investments August 31, 2008 BlackRock MuniVest Fund, Inc.
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
Alabama -- 2.9%
----------------------------------------------------------------------------------------------------
Camden, Alabama, IDB, Exempt Facilities Revenue
Bonds (Weyerhaeuser Company), Series A,
6.125%, 12/01/13 (a) $ 2,550 $ 2,895,219
----------------------------------------------------------------------------------------------------
Huntsville, Alabama, Health Care Authority Revenue
Bonds, Series A, 5.75%, 6/01/11 (a) 3,500 3,828,685
----------------------------------------------------------------------------------------------------
Prattville, Alabama, IDB, Environmental Improvement
Revenue Bonds (International Paper Company
Projects), AMT, Series A, 4.75%, 12/01/30 6,500 4,757,155
----------------------------------------------------------------------------------------------------
Selma, Alabama, IDB, Environmental Improvement
Revenue Refunding Bonds (International Paper
Company Project), Series B, 5.50%, 5/01/20 5,000 4,699,950
---------------
16,181,009
====================================================================================================
Arizona -- 1.8%
----------------------------------------------------------------------------------------------------
Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1), Series A,
6.75%, 7/01/29 4,100 3,603,941
----------------------------------------------------------------------------------------------------
Pima County, Arizona, IDA, Education Revenue Bonds
(Arizona Charter Schools Project):
Series E, 7.25%, 7/01/31 2,055 2,106,026
Series I, 6.10%, 7/01/24 500 490,510
Series I, 6.30%, 7/01/31 1,000 964,290
----------------------------------------------------------------------------------------------------
Pima County, Arizona, IDA, Education Revenue
Refunding Bonds:
(Arizona Charter Schools Project), Series O,
5%, 7/01/26 1,545 1,308,012
(Arizona Charter Schools Project II), Series A,
6.75%, 7/01/11 (a) 560 623,666
(Arizona Charter Schools Project II), Series A,
6.75%, 7/01/21 940 954,504
---------------
10,050,949
====================================================================================================
California -- 15.0%
----------------------------------------------------------------------------------------------------
California State, GO:
5.50%, 4/01/14 (a) 550 624,338
5.50%, 4/01/30 10 10,229
----------------------------------------------------------------------------------------------------
California State, GO, Refunding, 5.25%, 3/01/38 6,700 6,680,034
----------------------------------------------------------------------------------------------------
California State Public Works Board, Lease
Revenue Bonds:
(Department of Corrections), Series C,
5.50%, 6/01/22 5,000 5,221,800
(Department of Corrections), Series C,
5.50%, 6/01/23 6,000 6,243,420
(Department of Mental Health -- Coalinga
State Hospital), Series A, 5.125%, 6/01/29 11,075 11,093,274
----------------------------------------------------------------------------------------------------
California State, Various Purpose, GO,
5.50%, 11/01/33 11,250 11,461,725
----------------------------------------------------------------------------------------------------
California Statewide Communities Development
Authority, Health Facility Revenue Bonds (Memorial
Health Services), Series A, 6%, 10/01/23 5,240 5,429,007
----------------------------------------------------------------------------------------------------
Chula Vista, California, IDR (San Diego Gas and
Electric Company), AMT, Series B, 5%, 12/01/27 1,250 1,163,600
----------------------------------------------------------------------------------------------------
Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds (a):
Series A-3, 7.875%, 6/01/13 10,725 12,896,169
Series A-4, 7.80%, 6/01/13 3,750 4,497,412
Series A-5, 7.875%, 6/01/13 1,425 1,713,477
Series B, 5.375%, 6/01/10 8,000 8,395,600
----------------------------------------------------------------------------------------------------
Los Angeles County, California, Metropolitan
Transportation Authority, Sales Tax Revenue
Refunding Bonds, Proposition C, VRDN, Second
Senior Series A, 7.50%, 7/01/20 (b)(c)(q) 7,000 7,000,000
---------------
82,430,085
====================================================================================================
Colorado -- 0.6%
----------------------------------------------------------------------------------------------------
Colorado HFA, Revenue Refunding Bonds
(S/F Program), AMT, Senior Series A-2:
6.60%, 5/01/28 495 513,929
7.50%, 4/01/31 170 177,463
----------------------------------------------------------------------------------------------------
Colorado Health Facilities Authority Revenue
Bonds (Lutheran Medical Center), Series A,
5.25%, 6/01/34 3,000 2,757,990
---------------
3,449,382
====================================================================================================
Connecticut -- 0.5%
----------------------------------------------------------------------------------------------------
Mohegan Tribe Indians Gaming Authority,
Connecticut, Public Improvement Revenue
Refunding Bonds (Priority Distribution),
6.25%, 1/01/31 2,810 2,555,695
====================================================================================================
Florida -- 3.2%
----------------------------------------------------------------------------------------------------
Hillsborough County, Florida, IDA, Hospital Revenue
Bonds (H. Lee Moffitt Cancer Center Project),
Series A, 5.25%, 7/01/37 6,500 6,122,805
----------------------------------------------------------------------------------------------------
Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System),
5.625%, 11/15/12 (a) 10,320 11,532,600
---------------
17,655,405
====================================================================================================
Georgia -- 5.3%
----------------------------------------------------------------------------------------------------
Gainesville, Georgia, Redevelopment Authority,
Educational Facilities Revenue Refunding Bonds
(Riverside Military Academy), 5.125%, 3/01/37 1,100 911,020
----------------------------------------------------------------------------------------------------
Georgia Municipal Electric Authority, Power Revenue
Refunding Bonds:
Series W, 6.60%, 1/01/18 (d) 250 287,448
Series W, 6.60%, 1/01/18 4,595 5,321,148
Series Y, 10%, 1/01/10 (d) 250 275,890
----------------------------------------------------------------------------------------------------
Houston County, Georgia, Hospital Authority
Revenue Bonds (Houston Heart Institute Project),
5.25%, 10/01/35 5,000 4,797,550
----------------------------------------------------------------------------------------------------
Main Street Natural Gas, Inc., Georgia, Gas Project
Revenue Bonds, Series A:
6.25%, 7/15/33 1,165 1,051,249
6.375%, 7/15/38 3,270 2,969,814
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 19
Schedule of Investments (continued) BlackRock MuniVest Fund, Inc.
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
Georgia (concluded)
----------------------------------------------------------------------------------------------------
Milledgeville-Baldwin County, Georgia, Development
Authority Revenue Bonds (Georgia College and
State University Foundation) (a):
5.50%, 9/01/14 $ 4,390 $ 4,978,084
5.625%, 9/01/14 3,000 3,429,330
----------------------------------------------------------------------------------------------------
Monroe County, Georgia, Development Authority,
PCR, Refunding (Oglethorpe Power Corporation --
Scherer), Series A, 6.80%, 1/01/11 4,785 5,171,963
---------------
29,193,496
====================================================================================================
Idaho -- 0.0%
----------------------------------------------------------------------------------------------------
Idaho Housing Agency, S/F Mortgage Revenue
Refunding Bonds, AMT, Series E-2, 6.90%, 1/01/27 215 222,802
====================================================================================================
Illinois -- 9.1%
----------------------------------------------------------------------------------------------------
Chicago, Illinois, O'Hare International Airport, General
Airport Revenue Refunding Bonds, Third Lien, AMT,
Series A, 5.75%, 1/01/19 (b) 5,000 5,044,800
----------------------------------------------------------------------------------------------------
Chicago, Illinois, O'Hare International Airport
Revenue Bonds, Third Lien, AMT, Series B-2,
6%, 1/01/27 (b) 17,080 17,556,361
----------------------------------------------------------------------------------------------------
Chicago, Illinois, S/F Mortgage Revenue Bonds, AMT,
Series C, 7%, 3/01/32 (e)(f)(g) 60 62,077
----------------------------------------------------------------------------------------------------
Hodgkins, Illinois, Environmental Improvement
Revenue Bonds (Metro Biosolids Management
LLC Project), AMT, 6%, 11/01/23 10,000 10,014,200
----------------------------------------------------------------------------------------------------
Illinois Development Finance Authority Revenue
Bonds (Community Rehabilitation Providers
Facilities), Series A, 6.50%, 7/01/22 2,140 2,223,182
----------------------------------------------------------------------------------------------------
Illinois Development Finance Authority, Revenue
Refunding Bonds (Community Rehabilitation
Providers Facilities), Series A, 6%, 7/01/15 370 373,356
----------------------------------------------------------------------------------------------------
Illinois State Finance Authority, Revenue Bonds
(Community Rehabilitation Providers Facilities),
4.625%, 7/01/27 2,695 2,322,308
----------------------------------------------------------------------------------------------------
Kane and De Kalb Counties, Illinois, Community
Unit School District Number 302, GO,
5.75%, 2/01/14 (h) 30 34,101
----------------------------------------------------------------------------------------------------
McLean and Woodford Counties, Illinois, Community
Unit School District Number 005, GO, Refunding (i):
6.25%, 12/01/14 1,005 1,106,254
6.375%, 12/01/16 845 933,666
----------------------------------------------------------------------------------------------------
Regional Transportation Authority, Illinois,
Revenue Bonds:
Series A, 7.20%, 11/01/20 (j) 3,500 4,230,450
Series C, 7.75%, 6/01/20 (h) 4,000 5,035,600
----------------------------------------------------------------------------------------------------
Will County, Illinois, School District Number 122
(New Lenox Elementary), GO, Series A (i):
6.50%, 11/01/10 (a) 395 429,756
6.50%, 11/01/13 505 545,198
---------------
49,911,309
====================================================================================================
Indiana -- 6.3%
----------------------------------------------------------------------------------------------------
Indiana Health and Educational Facilities Financing
Authority, Hospital Revenue Bonds (Clarian Health
Obligation), Series A, 5.25%, 2/15/40 8,980 8,367,025
----------------------------------------------------------------------------------------------------
Indiana Transportation Finance Authority, Highway
Revenue Bonds, Series A, 6.80%, 12/01/16 8,195 9,419,661
----------------------------------------------------------------------------------------------------
Indianapolis, Indiana, Local Public Improvement
Bond Bank, Revenue Refunding Bonds, Series D,
6.75%, 2/01/14 15,335 17,151,737
---------------
34,938,423
====================================================================================================
Iowa -- 1.0%
----------------------------------------------------------------------------------------------------
Iowa Financing Authority, S/F Mortgage Revenue
Refunding Bonds, AMT, Series E, 5.15%,
7/01/32 (f)(g) 5,945 5,297,708
====================================================================================================
Kansas -- 0.7%
----------------------------------------------------------------------------------------------------
Sedgwick and Shawnee Counties, Kansas, S/F
Mortgage Revenue Bonds (Mortgage-Backed
Securities Program), AMT, Series A-4, 5.95%,
12/01/33 (f)(g) 3,805 3,853,095
====================================================================================================
Kentucky -- 1.7%
----------------------------------------------------------------------------------------------------
Louisville and Jefferson County, Kentucky,
Metropolitan Government Health System, Revenue
Refunding Bonds (Norton Healthcare, Inc.),
5.25%, 10/01/36 10,420 9,455,942
====================================================================================================
Louisiana -- 3.5%
----------------------------------------------------------------------------------------------------
Louisiana Public Facilities Authority, Hospital Revenue
Bonds (Franciscan Missionaries of Our Lady Health
System, Inc.), Series A:
5%, 8/15/33 8,720 8,102,624
5.25%, 8/15/36 11,660 11,149,875
---------------
19,252,499
====================================================================================================
Maine -- 0.3%
----------------------------------------------------------------------------------------------------
Portland, Maine, Housing Development Corporation,
Senior Living Revenue Bonds (Avesta Housing
Development Corporation Project), Series A:
5.70%, 8/01/21 775 762,453
6%, 2/01/34 1,190 1,139,163
---------------
1,901,616
====================================================================================================
Maryland -- 0.5%
----------------------------------------------------------------------------------------------------
Maryland State Community Development
Administration, Department of Housing and
Community Development, Residential Revenue
Refunding Bonds, AMT, Series D, 4.90%, 9/01/42 3,250 2,738,060
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
20 ANNUAL REPORT AUGUST 31, 2008
Schedule of Investments (continued) BlackRock MuniVest Fund, Inc.
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
Massachusetts -- 9.5%
----------------------------------------------------------------------------------------------------
Boston, Massachusetts, Water and Sewer
Commission Revenue Bonds, 9.25%, 1/01/11 (d) $ 2,035 $ 2,281,337
----------------------------------------------------------------------------------------------------
Massachusetts Bay Transportation Authority, Revenue
Refunding Bonds (General Transportation System),
Series A, 7%, 3/01/19 3,010 3,669,431
----------------------------------------------------------------------------------------------------
Massachusetts State, HFA, Housing Revenue Bonds,
AMT, Series A, 5.20%, 12/01/37 3,000 2,651,940
----------------------------------------------------------------------------------------------------
Massachusetts State, HFA, Housing Revenue
Refunding Bonds, AMT, Series D, 4.85%, 6/01/40 3,000 2,444,010
----------------------------------------------------------------------------------------------------
Massachusetts State, HFA, S/F Housing Revenue
Bonds, AMT, Series 130, 5%, 12/01/32 2,500 2,173,800
----------------------------------------------------------------------------------------------------
Massachusetts State Water Resource Authority
Revenue Bonds, Series A, 6.50%, 7/15/19 (d) 30,000 35,595,900
----------------------------------------------------------------------------------------------------
Massachusetts State Water Resource Authority,
Revenue Refunding Bonds, Series A,
6%, 8/01/10 (a)(h) 3,480 3,760,384
---------------
52,576,802
====================================================================================================
Michigan -- 5.3%
----------------------------------------------------------------------------------------------------
Delta County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (Mead Westvaco -- Escanaba),
Series A, 6.25%, 4/15/12 (a) 2,500 2,790,425
----------------------------------------------------------------------------------------------------
Macomb County, Michigan, Hospital Finance Authority,
Hospital Revenue Bonds (Mount Clemens General
Hospital), Series B (a):
5.75%, 11/15/13 3,715 4,160,503
5.875%, 11/15/13 4,250 4,784,947
----------------------------------------------------------------------------------------------------
Michigan State Hospital Finance Authority, Hospital
Revenue Refunding Bonds:
(Crittenton Hospital), Series A,
5.625%, 3/01/27 1,900 1,919,760
(Oakwood Obligated Group), Series A,
5%, 7/15/25 2,000 1,880,140
----------------------------------------------------------------------------------------------------
Michigan State Hospital Finance Authority, Revenue
Refunding Bonds:
(Henry Ford Health System), Series A,
5.25%, 11/15/46 10,450 9,536,879
(McLaren Health Care Corporation),
5.75%, 5/15/38 3,285 3,284,671
(Sinai Hospital), 6.70%, 1/01/26 1,000 973,340
---------------
29,330,665
====================================================================================================
Minnesota -- 1.7%
----------------------------------------------------------------------------------------------------
Minneapolis, Minnesota, Health Care System
Revenue Bonds (Allina Health System), Series A,
5.75%, 11/15/12 (a) 7,235 8,056,534
----------------------------------------------------------------------------------------------------
Saint Cloud, Minnesota, Health Care Revenue
Refunding Bonds (Saint Cloud Hospital Obligation
Group), Series A, 6.25%, 5/01/17 (i) 1,405 1,498,194
---------------
9,554,728
====================================================================================================
Mississippi -- 6.6%
----------------------------------------------------------------------------------------------------
Lowndes County, Mississippi, Solid Waste
Disposal and PCR, Refunding (Weyerhaeuser
Company Project):
Series A, 6.80%, 4/01/22 9,160 9,588,688
Series B, 6.70%, 4/01/22 4,500 4,584,105
----------------------------------------------------------------------------------------------------
Mississippi Business Finance Corporation,
Mississippi, PCR, Refunding (System Energy
Resources Inc. Project):
5.875%, 4/01/22 20,705 19,999,581
5.90%, 5/01/22 2,250 2,176,088
---------------
36,348,462
====================================================================================================
Missouri -- 0.5%
----------------------------------------------------------------------------------------------------
Missouri State Development Finance Board,
Infrastructure Facilities Revenue Refunding Bonds
(Branson), Series A, 5.50%, 12/01/32 2,600 2,453,698
----------------------------------------------------------------------------------------------------
Missouri State Housing Development Commission,
S/F Mortgage Revenue Bonds (Homeowner Loan),
AMT, Series A, 7.50%, 3/01/31 (f)(g) 185 194,785
---------------
2,648,483
====================================================================================================
Montana -- 1.1%
----------------------------------------------------------------------------------------------------
Forsyth, Montana, PCR, Refunding (Portland General
Electric Company), Series A, 5.20%, 5/01/33 6,000 6,046,140
====================================================================================================
Nebraska -- 0.0%
----------------------------------------------------------------------------------------------------
Nebraska Investment Finance Authority,
S/F Housing Revenue Bonds, AMT, Series C,
6.30%, 9/01/28 (e)(f)(g) 10 10,002
====================================================================================================
New Hampshire -- 0.5%
----------------------------------------------------------------------------------------------------
New Hampshire Health and Education Facilities
Authority, Revenue Refunding Bonds (Elliot
Hospital), Series B, 5.60%, 10/01/22 2,675 2,713,921
====================================================================================================
New Jersey -- 4.8%
----------------------------------------------------------------------------------------------------
New Jersey EDA, Cigarette Tax Revenue Bonds:
5.50%, 6/15/24 9,080 8,628,724
5.75%, 6/15/29 2,885 2,737,346
5.75%, 6/15/34 8,695 8,070,525
----------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corporation of
New Jersey, Asset-Backed Revenue Bonds,
7%, 6/01/13 (a) 5,980 7,081,038
---------------
26,517,633
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 21
Schedule of Investments (continued) BlackRock MuniVest Fund, Inc.
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
New York -- 3.5%
----------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System, Revenue
Refunding Bonds, Series DD, 5%, 6/15/37 $ 11,000 $ 11,100,980
----------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance
Authority Revenue Bonds, RIB, Series 283,
10.40%, 11/15/15 (c) 1,125 1,307,161
----------------------------------------------------------------------------------------------------
New York City, New York, GO, Refunding, Series A,
6.375%, 5/15/14 (h) 965 1,030,408
----------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey,
Consolidated Revenue Refunding Bonds,
153rd Series, 5%, 7/15/35 5,500 5,589,760
---------------
19,028,309
====================================================================================================
North Carolina -- 2.8%
----------------------------------------------------------------------------------------------------
Gaston County, North Carolina, Industrial Facilities
and Pollution Control Financing Authority, Revenue
Bonds (National Gypsum Company Project), AMT,
5.75%, 8/01/35 4,105 3,197,302
----------------------------------------------------------------------------------------------------
North Carolina State Educational Assistance
Authority, Revenue Refunding Bonds (Guaranteed
Student Loan), VRDN, AMT, Series A-1, 10%,
9/01/35 (c)(j)(q) 11,955 11,955,000
---------------
15,152,302
====================================================================================================
Ohio -- 4.4%
----------------------------------------------------------------------------------------------------
Buckeye Tobacco Settlement Financing Authority,
Ohio, Tobacco Settlement Asset-Backed Bonds,
Series A-2, 6.50%, 6/01/47 27,500 24,458,775
====================================================================================================
Pennsylvania -- 4.5%
----------------------------------------------------------------------------------------------------
Pennsylvania State Higher Education Assistance
Agency Revenue Bonds, Capital Acquisition,
6.125%, 12/15/10 (a)(b) 2,440 2,648,815
----------------------------------------------------------------------------------------------------
Pennsylvania State Higher Educational Facilities
Authority Revenue Bonds (University of
Pennsylvania Medical Center Health System),
Series A, 6%, 1/15/31 6,250 6,569,937
----------------------------------------------------------------------------------------------------
Philadelphia, Pennsylvania, Authority for Industrial
Development, Senior Living Revenue Bonds:
(Arbor House Inc. Project), Series E,
6.10%, 7/01/33 1,000 970,070
(Rieder House Project), Series A,
6.10%, 7/01/33 1,355 1,314,445
----------------------------------------------------------------------------------------------------
Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Bonds (Guthrie Healthcare System),
Series B, 7.125%, 12/01/11 (a) 9,280 11,194,835
----------------------------------------------------------------------------------------------------
Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Refunding Bonds (Guthrie Healthcare
System), Series A:
6.25%, 12/01/11 (a) 1,340 1,501,430
6.25%, 12/01/18 410 430,439
---------------
24,629,971
====================================================================================================
South Carolina -- 1.0%
----------------------------------------------------------------------------------------------------
Georgetown County, South Carolina, Environmental
Improvement Revenue Refunding Bonds
(International Paper Company Project), AMT,
Series A, 5.55%, 12/01/29 1,000 836,860
----------------------------------------------------------------------------------------------------
Richland County, South Carolina, Environmental
Improvement Revenue Refunding Bonds
(International Paper), AMT, 6.10%, 4/01/23 5,000 4,785,750
---------------
5,622,610
====================================================================================================
South Dakota -- 0.4%
----------------------------------------------------------------------------------------------------
South Dakota State Health and Educational
Facilities Authority Revenue Bonds (Sanford Health),
5%, 11/01/40 2,605 2,425,229
====================================================================================================
Tennessee -- 0.9%
----------------------------------------------------------------------------------------------------
Shelby County, Tennessee, Health, Educational and
Housing Facility Board, Hospital Revenue
Refunding Bonds (Methodist Healthcare),
6.50%, 9/01/12 (a) 4,120 4,721,232
====================================================================================================
Texas -- 16.0%
----------------------------------------------------------------------------------------------------
Austin, Texas, Convention Center Revenue Bonds
(Convention Enterprises Inc.), First Tier, Series A,
6.70%, 1/01/11 (a) 6,290 6,886,292
----------------------------------------------------------------------------------------------------
Brazos River Authority, Texas, PCR, Refunding (TXU
Energy Company LLC Project), AMT, Series A,
7.70%, 4/01/33 3,055 2,830,763
----------------------------------------------------------------------------------------------------
Brazos River, Texas, Harbor Navigation District,
Brazoria County Environmental Revenue Refunding
Bonds (Dow Chemical Company Project), AMT,
Series A-7, 6.625%, 5/15/33 11,460 11,506,642
----------------------------------------------------------------------------------------------------
Cypress-Fairbanks, Texas, Independent School
District, GO, Refunding, 5%, 2/15/35 6,500 6,531,005
----------------------------------------------------------------------------------------------------
Dallas-Fort Worth, Texas, International Airport, Joint
Revenue Bonds, AMT (b):
Series B, 6.25%, 11/01/28 4,500 4,536,225
Series C, 6.25%, 11/01/28 1,500 1,509,030
----------------------------------------------------------------------------------------------------
Dallas-Fort Worth, Texas, International Airport, Joint
Revenue Refunding Bonds, AMT, Sub-Series A-2,
6.10%, 11/01/24 (b) 1,000 1,005,380
----------------------------------------------------------------------------------------------------
Gregg County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Good
Shepherd Medical Center Project), 6.875%,
10/01/10 (a)(k) 3,000 3,310,440
----------------------------------------------------------------------------------------------------
Guadalupe-Blanco River Authority, Texas, Sewage
and Solid Waste Disposal Facility Revenue Bonds
(E. I. du Pont de Nemours and Company Project),
AMT, 6.40%, 4/01/26 10,250 10,256,867
----------------------------------------------------------------------------------------------------
Gulf Coast Waste Disposal Authority, Texas, Revenue
Refunding Bonds (International Paper Company),
AMT, Series A, 6.10%, 8/01/24 6,000 5,594,940
----------------------------------------------------------------------------------------------------
Harris County-Houston Sports Authority, Texas,
Revenue Refunding Bonds, Senior Lien, Series G,
5.75%, 11/15/20 (b) 5,500 5,646,080
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
22 ANNUAL REPORT AUGUST 31, 2008
Schedule of Investments (continued) BlackRock MuniVest Fund, Inc.
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
Texas (concluded)
----------------------------------------------------------------------------------------------------
Houston, Texas, Industrial Development Corporation
Revenue Bonds (Air Cargo), AMT, 6.375%, 1/01/23 $ 1,790 $ 1,704,295
----------------------------------------------------------------------------------------------------
Mansfield, Texas, Independent School District, GO,
Refunding, 6.625%, 2/15/15 155 164,288
----------------------------------------------------------------------------------------------------
Matagorda County, Texas, Navigation District
Number 1, Revenue Refunding Bonds
(Centerpoint Energy Project), 5.60%, 3/01/27 9,355 8,480,495
----------------------------------------------------------------------------------------------------
Midway, Texas, Independent School District, GO,
Refunding, 6.125%, 8/15/14 5,225 5,580,039
----------------------------------------------------------------------------------------------------
Port Corpus Christi, Texas, Revenue Refunding Bonds
(Celanese Project), Series A, 6.45%, 11/01/30 2,700 2,507,922
----------------------------------------------------------------------------------------------------
Red River Authority, Texas, PCR, Refunding (Celanese
Project), AMT, Series B, 6.70%, 11/01/30 5,000 4,673,750
----------------------------------------------------------------------------------------------------
Texas State University, System Financing Revenue
Refunding Bonds, 5.25%, 3/15/27 4,950 5,161,216
---------------
87,885,669
====================================================================================================
Vermont -- 0.2%
----------------------------------------------------------------------------------------------------
Vermont Educational and Health Buildings
Financing Agency, Developmental and Mental
Health Revenue Bonds (Howard Center for Human
Services), Series A, 6.375%, 6/15/22 1,000 1,029,160
====================================================================================================
Virginia -- 1.7%
----------------------------------------------------------------------------------------------------
Chesterfield County, Virginia, IDA, PCR (Virginia
Electric and Power Company), Series A,
5.875%, 6/01/17 1,425 1,500,710
----------------------------------------------------------------------------------------------------
Fairfax County, Virginia, EDA, Residential Care
Facilities, Mortgage Revenue Refunding Bonds
(Goodwin House, Inc.):
5.125%, 10/01/37 2,000 1,765,440
5.125%, 10/01/42 7,015 6,073,657
---------------
9,339,807
====================================================================================================
Washington -- 5.0%
----------------------------------------------------------------------------------------------------
Energy Northwest, Washington, Electric Revenue
Refunding Bonds (Columbia Generating), Series B,
6%, 7/01/18 (j) 7,015 7,574,025
----------------------------------------------------------------------------------------------------
Seattle, Washington, Housing Authority Revenue
Bonds (Replacement Housing Project),
6.125%, 12/01/32 2,355 2,295,277
----------------------------------------------------------------------------------------------------
Washington State Public Power Supply System,
Revenue Refunding Bonds (Nuclear Project
Number 1), Series B, 7.125%, 7/01/16 14,320 17,773,268
---------------
27,642,570
====================================================================================================
Wisconsin -- 2.8%
----------------------------------------------------------------------------------------------------
Milwaukee, Wisconsin, Revenue Bonds (Air Cargo),
AMT, 6.50%, 1/01/25 1,755 1,685,800
----------------------------------------------------------------------------------------------------
Wisconsin Housing and EDA, Home Ownership
Revenue Refunding Bonds, AMT, Series A,
5.625%, 3/01/31 6,000 5,752,680
----------------------------------------------------------------------------------------------------
Wisconsin State Health and Educational Facilities
Authority, Mortgage Revenue Bonds (Hudson
Memorial Hospital), 5.70%, 1/15/29 (l) 5,000 5,114,600
----------------------------------------------------------------------------------------------------
Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (SynergyHealth Inc.),
6%, 11/15/32 3,040 3,024,678
---------------
15,577,758
====================================================================================================
U.S. Virgin Islands -- 1.5%
----------------------------------------------------------------------------------------------------
Virgin Islands Government Refinery Facilities,
Revenue Refunding Bonds (Hovensa Coker
Project), AMT, 6.50%, 7/01/21 8,000 8,017,040
----------------------------------------------------------------------------------------------------
Total Municipal Bonds -- 127.1% 700,364,743
====================================================================================================
====================================================================================================
Municipal Bonds Transferred to
Tender Option Bond Trusts (m)
====================================================================================================
Connecticut -- 2.2%
----------------------------------------------------------------------------------------------------
Connecticut State Health and Educational Facilities
Authority Revenue Bonds (Yale University),
Series Z-3, 5.05%, 7/01/42 12,000 12,239,280
====================================================================================================
Florida -- 1.6%
----------------------------------------------------------------------------------------------------
Miami-Dade County, Florida, Aviation Revenue
Refunding Bonds (Miami International Airport),
AMT, 5%, 10/01/40 (n) 10,000 8,731,790
====================================================================================================
Illinois -- 6.0%
----------------------------------------------------------------------------------------------------
Chicago, Illinois, Water Revenue Refunding Bonds,
Second Lien, 5.25%, 11/01/33 (i) 1,334 1,367,907
----------------------------------------------------------------------------------------------------
Kane and De Kalb Counties, Illinois, Community
Unit School District Number 302, GO,
5.75%, 2/01/14 (a)(h) 10,460 11,889,882
----------------------------------------------------------------------------------------------------
Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Refunding Bonds
(McCormick Place Expansion Project), Series B,
5.75%, 6/15/23 (b) 18,554 19,844,969
---------------
33,102,758
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 23
Schedule of Investments (continued) BlackRock MuniVest Fund, Inc.
(Percentages shown are based on Net Assets)
Municipal Bonds Transferred to Par
Tender Option Bond Trusts (m) (000) Value
====================================================================================================
Maryland -- 0.9%
----------------------------------------------------------------------------------------------------
Maryland State Transportation Authority,
Transportation Facilities Projects Revenue Bonds,
5%, 7/01/41 (i) $ 4,708 $ 4,780,509
====================================================================================================
Massachusetts -- 3.7%
----------------------------------------------------------------------------------------------------
Massachusetts State School Building Authority,
dedicated Sales Tax Revenue Bonds, Series A,
5%, 8/15/30 (i) 20,000 20,364,200
====================================================================================================
New York -- 10.1%
----------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water
Finance Authority, Water and Sewer System,
Revenue Refunding Bonds, Series DD,
5%, 6/15/37 15,700 15,844,126
----------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance
Authority Revenue Bonds, Future Tax Secured,
Series B, 6.25%, 11/15/18 13,500 14,592,961
----------------------------------------------------------------------------------------------------
New York State Dormitory Authority, State University
Educational Facilities Revenue Refunding Bonds,
Series 1989, 6%, 5/15/10 (a)(b) 23,750 25,565,212
---------------
56,002,299
====================================================================================================
North Carolina -- 2.3%
----------------------------------------------------------------------------------------------------
North Carolina Capital Facilities Finance Agency,
Revenue Refunding Bonds (Duke University
Project), Series A, 5%, 10/01/41 12,675 12,825,832
====================================================================================================
Texas -- 7.9%
----------------------------------------------------------------------------------------------------
Harris County, Texas, Health Facilities Development
Corporation Revenue Refunding Bonds (School
Health Care System), Series B, 5.75%, 7/01/27 (d) 20,970 24,072,302
----------------------------------------------------------------------------------------------------
Judson, Texas, Independent School District, School
Building, GO, 5%, 2/01/37 (n) 5,997 5,942,820
----------------------------------------------------------------------------------------------------
Texas State Department of Housing and Community
Affairs, S/F Mortgage Revenue Bonds, AMT,
Series B, 5.25%, 9/01/32 (e)(f)(g) 8,499 7,672,771
----------------------------------------------------------------------------------------------------
Texas State University, System Financing Revenue
Refunding Bonds, 5%, 3/15/30 (i) 5,667 5,719,701
---------------
43,407,594
====================================================================================================
Washington -- 9.6%
----------------------------------------------------------------------------------------------------
Central Puget Sound Regional Transportation
Authority, Washington, Sales and Use Tax Revenue
Bonds, Series A:
5%, 11/01/32 (i) 14,000 14,246,400
5%, 11/01/34 5,000 5,015,092
5%, 11/01/36 6,000 6,129,558
----------------------------------------------------------------------------------------------------
Energy Northwest, Washington, Electric Revenue
Refunding Bonds (b):
(Columbia Generating), Series A, 5.75%,
7/01/18 10,660 11,399,378
(Project Number 1), Series B, 6%, 7/01/17 14,700 16,136,043
---------------
52,926,471
----------------------------------------------------------------------------------------------------
Total Municipal Bonds Transferred to
Tender Option Bond Trusts -- 44.3% 244,380,733
====================================================================================================
Total Long-Term Investments
(Cost -- $933,619,069) -- 171.4% 944,745,476
====================================================================================================
====================================================================================================
Short-Term Securities Shares
====================================================================================================
Merrill Lynch Institutional Tax-Exempt Fund,
1.84% (o)(p) 5,430,974 5,430,974
----------------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost -- $5,430,974) -- 1.0% 5,430,974
====================================================================================================
Total Investments (Cost -- $939,050,043*) -- 172.4% 950,176,450
Other Assets Less Liabilities -- 2.0% 11,027,206
Liability for Trust Certificates, Including Interest
Expense and Fees Payable -- (24.3)% (134,176,798)
Preferred Shares, at Redemption Value -- (50.1)% (275,999,509)
---------------
Net Assets Applicable to Common Shares -- 100.0% $ 551,027,349
===============
See Notes to Financial Statements.
24 ANNUAL REPORT AUGUST 31, 2008
Schedule of Investments (concluded) BlackRock MuniVest Fund, Inc.
* The cost and unrealized appreciation (depreciation) of investments as of
August 31, 2008, as computed for federal income tax purposes, were as
follows:
Aggregate cost ......................................... $ 807,835,064
=============
Gross unrealized appreciation .......................... $ 34,452,473
Gross unrealized depreciation .......................... (25,659,874)
-------------
Net unrealized appreciation ............................ $ 8,792,599
=============
(a) U.S. government securities, held in escrow, are used to pay interest on
this security as well as to retire the bond in full at the date indicated,
typically at a premium to par.
(b) MBIA Insured.
(c) Variable rate security. Rate shown is as of report date. Maturity shown is
the final maturity date.
(d) Security is collateralized by Municipal or U.S. Treasury Obligations.
(e) FHLMC Collateralized.
(f) FNMA Collateralized.
(g) GNMA Collateralized.
(h) FGIC Insured.
(i) FSA Insured.
(j) AMBAC Insured.
(k) Radian Insured.
(l) FHA Insured.
(m) Securities represent bonds transferred to a tender option bond trust in
exchange for which the Fund acquired residual interest certificates. These
securities 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.
(n) Assured Guaranty Insured.
(o) 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 (2,492,032) $419,773
--------------------------------------------------------------------------
(p) Represents the current yield as of report date.
(q) Security may have a maturity of more than one year at the time of
issuance, but has variable rate and demand features that qualify it as a
short-term security.
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 25
Schedule of Investments August 31, 2008
The Massachusetts Health & Education Tax-Exempt Trust
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
====================================================================================================
Massachusetts -- 159.7%
----------------------------------------------------------------------------------------------------
Massachusetts State College Building Authority,
Project Revenue Bonds, Series A, 5%, 5/01/31 (a) $ 1,000 $ 998,580
----------------------------------------------------------------------------------------------------
Massachusetts State College Building Authority,
Project Revenue Refunding Bonds, Series B, 5.50%,
5/01/39 (b) 825 882,123
----------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency,
Education Revenue Bonds:
(Belmont Hill School), 5%, 9/01/11 (c) 1,100 1,191,795
(Middlesex School Project), 5%, 9/01/33 400 396,616
(Xaverian Brothers High School), 5.65%, 7/01/29 250 242,830
----------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency,
Educational Facility Revenue Bonds (Academy of the
Pacific Rim), Series A, 5.125%, 6/01/31 (d) 1,000 806,370
----------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency,
First Mortgage Revenue Bonds, Series A:
(Edgecombe Project), 6.75%, 7/01/21 855 906,129
(Overlook Communities Inc.), 6.125%, 7/01/24 850 788,350
----------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency,
First Mortgage Revenue Refunding Bonds (Symmes
Life Care, Inc. -- Brookhaven at Lexington), Series A,
5%, 3/01/35 (e) 1,250 1,066,075
----------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency,
Human Service Provider Revenue Bonds (Seven Hills
Foundation & Affiliates), 5%, 9/01/35 (e) 500 434,145
----------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency,
Resource Recovery Revenue Bonds (Ogden Haverhill
Associates), AMT, Series A, 6.70%, 12/01/14 695 709,929
----------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency
Revenue Bonds:
(Boston University), Series T-1, 5%, 10/01/39 (a) 1,000 970,790
(College of Pharmacy and Allied Health Services),
Series D, 5%, 7/01/27 (f) 500 506,030
(Franklin W. Olin College), Series B, 5.25%,
7/01/33 (b) 400 391,816
(Linden Ponds, Inc. Facility), Series A,
5.75%, 11/15/35 1,000 861,710
(Massachusetts College of Pharmacy and Health
Sciences), 5.75%, 7/01/13 (c) 1,000 1,139,380
(Massachusetts Council of Human Service
Providers, Inc.), Series C, 6.60%, 8/15/29 425 380,362
(Smith College), 5%, 7/01/35 2,000 2,007,919
(Volunteers of America -- Ayer Limited Partnership),
AMT, Series A, 6.20%, 2/20/46 (g) 495 510,157
(WGBH Educational Foundation), Series A, 5.75%,
1/01/42 (a) 1,100 1,252,734
(Western New England College), 5.875%,
12/01/12 (c) 600 661,014
(The Wheeler School), 6.50%, 12/01/29 540 548,392
(Williston Northampton School Project), 5%,
10/01/25 (b) 500 485,440
(Worcester Polytechnic Institute), 5%, 9/01/27 (h) 1,985 2,005,067
----------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency,
Revenue Refunding Bonds:
(Boston University), Series P, 5.45%, 5/15/59 1,500 1,496,790
(Clark University), 5.125%, 10/01/35 (b) 500 495,275
(Western New England College), Series A, 5%,
9/01/33 (f) 1,500 1,483,110
(Wheelock College), Series C, 5.25%, 10/01/37 1,000 935,050
----------------------------------------------------------------------------------------------------
Massachusetts State, HFA, Housing Revenue Bonds,
AMT, Series A, 5.25%, 12/01/48 1,000 867,650
----------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities
Authority, Healthcare System Revenue Refunding
Bonds (Covenant Health System):
6%, 1/01/12 (c) 255 284,450
6%, 7/01/22 630 657,109
6%, 7/01/31 315 322,393
----------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities
Authority Revenue Bonds:
(Baystate Medical Center), Series F,
5.75%, 7/01/33 1,000 1,005,540
(Berkshire Health System), Series E,
6.25%, 10/01/31 350 355,341
(Berkshire Health System), Series F, 5%,
10/01/19 (f) 1,000 1,029,410
(Harvard University), Series FF, 5.125%, 7/15/37 1,350 1,371,587
(Lahey Clinic Medical Center), Series D,
5.25%, 8/15/37 1,000 994,080
(Milford-Whitinsville Hospital), Series D, 6.35%,
7/15/12 (c) 750 852,893
(Northeastern University), Series R,
5%, 10/01/33 750 739,418
(Simmons College), Series F, 5%, 10/01/13 (c)(i) 1,000 1,099,660
(University of Massachusetts), Series C, 5.125%,
10/01/34 (i) 230 228,190
(Wheaton College), Series D, 6%, 1/01/18 1,130 1,139,707
----------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities
Authority, Revenue Refunding Bonds:
(Bay Cove Human Services Issue), Series A,
5.90%, 4/01/28 775 721,734
(Berklee College of Music), Series A,
5%, 10/01/37 1,000 977,460
(Boston College), Series N, 5.125%, 6/01/37 1,000 1,006,410
(Caregroup, Inc.), Series E-1, 5%, 7/01/28 500 469,715
(Christopher House), Series A, 6.875%, 1/01/29 490 488,608
(Learning Center For Deaf Children), Series C,
6.125%, 7/01/29 495 465,706
(Massachusetts Institute of Technology), Series L,
5%, 7/01/23 500 548,460
(Partners Healthcare System), Series C, 5.75%,
7/01/11 (c) 480 528,341
(Partners Healthcare System), Series C,
5.75%, 7/01/32 20 20,325
(Partners Healthcare System), VRDN, Series D-1,
2.05%, 7/01/35 (j)(o) 1,200 1,200,000
(Valley Regional Health System), Series C, 5.75%,
7/01/18 (k) 395 395,683
(Wellesley College), 5%, 7/01/33 1,500 1,512,075
----------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
26 ANNUAL REPORT AUGUST 31, 2008
Par
Municipal Bonds (000) Value
====================================================================================================
Massachusetts (concluded)
----------------------------------------------------------------------------------------------------
Massachusetts State Industrial Finance Agency,
Health Care Facility Revenue Bonds (Age Institute
of Massachusetts Project), 8.05%, 11/01/25 $ 715 $ 719,269
----------------------------------------------------------------------------------------------------
Massachusetts State Industrial Finance Agency, PCR
(General Motors Corporation), 5.55%, 4/01/09 1,000 952,030
----------------------------------------------------------------------------------------------------
Massachusetts State Industrial Finance Agency
Revenue Bonds (Wentworth Institute of Technology),
5.75%, 10/01/08 (c) 400 409,460
----------------------------------------------------------------------------------------------------
Rail Connections, Inc., Massachusetts, Capital
Appreciation Revenue Bonds (Route 128 Parking
Garage), Series B, 6.53%, 7/01/09 (c)(d)(l) 1,000 494,820
----------------------------------------------------------------------------------------------------
University of Massachusetts Building Authority, Project
Revenue Refunding
Bonds, Senior Series 04-1, 5.125%,
11/01/14 (a)(c) 500 558,035
----------------------------------------------------------------------------------------------------
Total Municipal Bonds -- 159.7% 46,969,537
====================================================================================================
====================================================================================================
Municipal Bonds Transferred to
Tender Option Bond Trusts (m)
====================================================================================================
Massachusetts
----------------------------------------------------------------------------------------------------
Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A, 5%,
8/15/30 (n) 1,999 2,035,816
----------------------------------------------------------------------------------------------------
Total Municipal Bonds Transferred to
Tender Option Bond Trusts -- 6.9% 2,035,816
====================================================================================================
Total Investments (Cost -- $49,244,025*) -- 166.6% 49,005,353
Other Assets Less Liabilities -- 1.4% 418,955
Liability for Trust Certificates, Including Interest
Expense and Fees Payable -- (5.1)% (1,500,673)
Preferred Shares, at Redemption Value -- (62.9)% (18,507,680)
---------------
Net Assets Applicable to Common Shares -- 100.0% $ 29,415,955
===============
* The cost and unrealized appreciation (depreciation) of investments as of
August 31, 2008, as computed for federal income tax purposes, were as
follows:
Aggregate cost .......................................... $ 47,623,246
============
Gross unrealized appreciation ........................... $ 1,162,251
Gross unrealized depreciation ........................... (1,279,540)
------------
Net unrealized depreciation ............................. $ (117,289)
============
(a) AMBAC Insured.
(b) XL Capital Insured.
(c) U.S. government securities, held in escrow, are used to pay interest on
this security as well as to retire the bond in full at the date indicated,
typically at a premium to par.
(d) ACA Insured.
(e) Radian Insured.
(f) Assured Guaranty Insured.
(g) GNMA Collateralized.
(h) MBIA Insured.
(i) FGIC Insured.
(j) Variable rate security. Rate shown is as of report date. Maturity shown is
the final maturity date.
(k) Connie Lee Insured.
(l) Represents a zero-coupon bond. Rate shown reflects the effective yield at
the time of purchase.
(m) Securities represent bonds transferred to a tender option bond trust in
exchange for which the Fund acquired residual interest certificates. These
securities 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.
(n) FSA Insured.
(o) Security may have a maturity of more than one year at the time of
issuance, but has variable rate and demand features that qualify it as a
short-term security.
o Forward interest rate swaps outstanding as of August 31, 2008 were as
follows:
--------------------------------------------------------------------------------------
Notional
Amount Unrealized
(000) Depreciation
--------------------------------------------------------------------------------------
Pay a fixed rate of 3.837% and receive a floating rate
based on 1-week SIFMA Municipal Swap Index Rate
Broker, JPMorgan Chase
Expires September 2023 $2,500 $(83,017)
--------------------------------------------------------------------------------------
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 27
Schedule of Investments (concluded)
The Massachusetts Health & Education Tax-Exempt Trust
o Effective January 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 framework 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:
o Level 1 -- price quotations in active markets/exchanges for
identical securities
o 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)
o Level 3 -- unobservable inputs based on the best information
available in the circumstance, to the extent observable inputs are
not available (including the Fund's 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 Fund's 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 August 31, 2008 in
determining the fair valuation of the Fund's investments:
--------------------------------------------------------------------------------
Investments in Other Financial
Valuation Inputs Securities Instruments*
--------------------------------------------------------------------------------
Level 1 ................................... -- --
Level 2 ................................... $49,005,353 $ (83,017)
Level 3 ................................... -- --
--------------------------------------------------------------------------------
Total $49,005,353 $ (83,017)
=================================
* Other financial instruments are swaps.
See Notes to Financial Statements.
28 ANNUAL REPORT AUGUST 31, 2008
Statements of Assets and Liabilities
The
BlackRock Massachusetts
MuniHoldings BlackRock Health &
Insured MuniHoldings BlackRock Education
Investment New York Insured MuniVest Tax-Exempt
August 31, 2008 Fund Fund, Inc. Fund, Inc. Trust
===================================================================================================================================
Assets
-----------------------------------------------------------------------------------------------------------------------------------
Investments at value -- unaffiliated 1 ............................. $ 880,812,728 $ 755,949,626 $ 944,745,476 $ 49,005,353
Investments at value -- affiliated 2 ............................... 1,473,234 3,469,473 5,430,974 --
Cash ............................................................... 67,089 37,227 49,734 16,594
Interest receivable ................................................ 14,183,643 9,752,097 14,188,683 714,455
Investments sold receivable ........................................ 478,476 1,929,673 -- --
Prepaid expenses ................................................... 24,345 20,581 25,236 1,389
Other assets ....................................................... 19,143 15,978 20,644 --
-------------------------------------------------------------
Total assets ....................................................... 897,058,658 771,174,655 964,460,747 49,737,791
-------------------------------------------------------------
===================================================================================================================================
Accrued Liabilities
-----------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on forward interest rate swaps ............. -- -- -- 83,017
Income dividends payable -- Common Shares .......................... 2,090,555 1,632,142 2,660,632 114,860
Investments purchased payable ...................................... 7,094,508 -- -- --
Investment advisory fees payable ................................... 352,015 259,833 415,606 21,718
Interest expense and fees payable .................................. 393,670 495,825 628,011 1,277
Officer's and Directors'/Trustees' fees payable .................... 20,044 16,722 30,536 22
Other affiliates payable ........................................... 5,682 4,845 5,760 324
Other accrued expenses payable ..................................... 164,364 167,912 144,557 93,542
-------------------------------------------------------------
Total accrued liabilities .......................................... 10,120,838 2,577,279 3,885,102 314,760
-------------------------------------------------------------
===================================================================================================================================
Other Liabilities
-----------------------------------------------------------------------------------------------------------------------------------
Trust certificates 3 ............................................... 81,981,022 87,056,319 133,548,787 1,499,396
-------------------------------------------------------------
Total Liabilities .................................................. 92,101,860 89,633,598 137,433,889 1,814,156
-------------------------------------------------------------
===================================================================================================================================
Preferred Shares at Redemption Value
-----------------------------------------------------------------------------------------------------------------------------------
Preferred Shares, at liquidation preference plus
unpaid dividends 4,5 ............................................. 296,258,455 252,993,595 275,999,509 18,507,680
-------------------------------------------------------------
Net Assets Applicable to Common Shareholders ....................... $ 508,698,343 $ 428,547,462 $ 551,027,349 $ 29,415,955
=============================================================
===================================================================================================================================
Net Assets Applicable to Common Shareholders Consist of
-----------------------------------------------------------------------------------------------------------------------------------
Common Shares, par value per share 6 ............................... $ 3,766,766 $ 3,079,514 $ 6,187,516 $ 23,441
Paid-in capital in excess of par ................................... 539,920,000 470,986,538 569,512,900 29,660,491
Undistributed net investment income ................................ 3,443,863 1,245,028 3,929,327 356,896
Accumulated net realized loss ...................................... (40,566,605) (44,558,169) (39,728,801) (303,184)
Net unrealized appreciation/depreciation ........................... 2,134,319 (2,205,449) 11,126,407 (321,689)
-------------------------------------------------------------
Net Assets Applicable to Common Shareholders ....................... $ 508,698,343 $ 428,547,462 $ 551,027,349 $ 29,415,955
=============================================================
Net asset value per Common Share 7 ................................. $ 13.50 $ 13.92 $ 8.91 $ 12.55
=============================================================
1 Investments at cost -- unaffiliated ............................. $ 878,678,409 $ 758,155,075 $ 933,619,069 $ 49,244,025
=============================================================
2 Investments at cost -- affiliated ............................... $ 1,473,234 $ 3,469,473 $ 5,430,974 --
=============================================================
3 Represents short-term floating rate certificates
issued by tender option bond trusts.
4 Preferred Shares issued and outstanding ......................... 11,845 10,115 11,028 370
=============================================================
5 Preferred Shares at liquidation preference ...................... $ 25,000 $ 25,000 $ 25,000 $ 50,000
=============================================================
6 Par value per Common Share ...................................... $ 0.10 $ 0.10 $ 0.10 $ 0.01
=============================================================
7 Common Shares issued and outstanding ............................ 37,667,658 30,795,138 61,875,156 2,344,067
=============================================================
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 29
Statements of Operations
BlackRock
MuniHoldings BlackRock The
Insured MuniHoldings BlackRock Massachusetts Health &
Investment New York Insured MuniVest Education Tax-Exempt Trust
Fund Fund, Inc. Fund, Inc. -----------------------------
------------- ------------- ------------- Period
Year Ended Year Ended Year Ended Jan. 1, 2008 to Year Ended
Aug. 31, 2008 Aug. 31, 2008 Aug. 31, 2008 Aug. 31, 2008 Dec. 31, 2007 1
==================================================================================================================================
Investment Income
----------------------------------------------------------------------------------------------------------------------------------
Interest .............................................. $ 44,991,210 $ 36,605,712 $ 50,202,378 $ 1,728,540 $ 2,616,581
Income from affiliates ................................ 409,772 269,890 420,348 -- --
-------------------------------------------------------------------------
Total income .......................................... 45,400,982 36,875,602 50,622,726 1,728,540 2,616,581
-------------------------------------------------------------------------
==================================================================================================================================
Expenses
----------------------------------------------------------------------------------------------------------------------------------
Investment advisory ................................... 4,897,584 4,150,228 4,592,791 166,975 258,537
Commissions for Preferred Shares ...................... 888,583 764,503 814,434 32,941 50,230
Accounting services ................................... 240,650 214,883 252,152 14,492 --
Professional .......................................... 209,722 180,751 189,870 57,241 37,498
Transfer agent ........................................ 46,587 48,488 108,928 17,435 32,959
Printing .............................................. 37,561 26,839 50,501 30,955 30,234
Officer and Directors/Trustees ........................ 47,727 40,205 60,277 1,895 23,584
Custodian ............................................. 43,105 38,931 45,697 3,765 6,615
Registration .......................................... 12,403 10,151 24,471 932 561
Miscellaneous ......................................... 98,751 115,185 114,790 21,722 25,970
-------------------------------------------------------------------------
Total expenses excluding interest expense and fees .... 6,522,673 5,590,164 6,253,911 348,353 466,188
Interest expense and fees 2 ........................... 1,530,824 1,624,494 2,726,572 8,664 --
-------------------------------------------------------------------------
Total expenses ........................................ 8,053,497 7,214,658 8,980,483 357,017 466,188
Less fees waived by advisor ........................... (580,887) (568,514) (36,116) -- --
Less fees paid indirectly ............................. -- -- -- (34) --
-------------------------------------------------------------------------
Total expenses after waiver and fees paid indirectly .. 7,472,610 6,646,144 8,944,367 356,983 466,188
-------------------------------------------------------------------------
Net investment income ................................. 37,928,372 30,229,458 41,678,359 1,371,557 2,150,393
-------------------------------------------------------------------------
==================================================================================================================================
Realized and Unrealized Gain (Loss)
----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ....................................... (5,413,818) (1,662,425) (6,569,614) (157,627) (30,307)
Futures and swaps ................................. -- (2,696,319) (3,784,133) 15,000 (60,080)
-------------------------------------------------------------------------
(5,413,818) (4,358,744) (10,353,747) (142,627) (90,387)
-------------------------------------------------------------------------
Net change in unrealized appreciation/depreciation on:
Investments ....................................... (17,228,007) (11,573,551) (19,532,052) (1,126,310) (1,775,043)
Futures and swaps ................................. -- 1,004,162 1,325,162 (76,492) (46,476)
-------------------------------------------------------------------------
(17,228,007) (10,569,389) (18,206,890) (1,202,802) (1,821,519)
-------------------------------------------------------------------------
Total realized and unrealized loss .................... (22,641,825) (14,928,133) (28,560,637) (1,345,429) (1,911,906)
-------------------------------------------------------------------------
==================================================================================================================================
Dividends to Preferred Shareholders From
----------------------------------------------------------------------------------------------------------------------------------
Net investment income ................................. (12,122,435) (9,817,592) (11,038,935) (408,081) (718,637)
-------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Applicable to
Common Shareholders Resulting from Operations ....... $ 3,164,112 $ 5,483,733 $ 2,078,787 $ (381,953) $ (480,150)
=========================================================================
1 Prior year amounts have been reclassified to conform with current year
presentation.
2 Related to tender option bond trusts.
See Notes to Financial Statements.
30 ANNUAL REPORT AUGUST 31, 2008
Statements of Changes in Net Assets
BlackRock BlackRock
MuniHoldings Insured MuniHoldings New York BlackRock
Investment Fund Insured Fund, Inc. MuniVest Fund, Inc.
-------------------------- -------------------------- --------------------------
Year Ended August 31, Year Ended August 31, Year Ended August 31,
-------------------------- -------------------------- --------------------------
Increase (Decrease) in Net Assets: 2008 2007 2008 2007 2008 2007
==================================================================================================================================
Operations
----------------------------------------------------------------------------------------------------------------------------------
Net investment income ........................ $ 37,928,372 $ 40,360,690 $ 30,229,458 $ 30,741,420 $ 41,678,359 $ 44,776,577
Net realized gain (loss) ..................... (5,413,818) 2,169,524 (4,358,744) 2,915,022 (10,353,747) 2,026,324
Net change in unrealized
appreciation/depreciation .................. (17,228,007) (26,868,176) (10,569,389) (18,996,207) (18,206,890) (35,772,119)
Dividends to Preferred Shareholders
from net investment income ................. (12,122,435) (13,244,774) (9,817,592) (10,569,016) (11,038,935) (12,083,580)
----------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common Shareholders
resulting from operations .................. 3,164,112 2,417,264 5,483,733 4,091,219 2,078,787 (1,052,798)
----------------------------------------------------------------------------------
==================================================================================================================================
Dividends to Common Shareholders From
----------------------------------------------------------------------------------------------------------------------------------
Net investment income ........................ (25,369,168) (27,007,711) (20,232,405) (21,433,416) (31,888,913) (32,123,465)
----------------------------------------------------------------------------------
==================================================================================================================================
Capital Share Transactions
----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of common dividends ............. -- -- -- -- 1,758,887 2,642,853
----------------------------------------------------------------------------------
==================================================================================================================================
Net Assets Applicable to Common Shareholders
----------------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets applicable
to Common Shareholders ..................... (22,205,056) (24,590,447) (14,748,672) (17,342,197) (28,051,239) (30,533,410)
Beginning of year ............................ 530,903,399 555,493,846 443,296,134 460,638,331 579,078,588 609,611,998
----------------------------------------------------------------------------------
End of year .................................. $508,698,343 $530,903,399 $428,547,462 $443,296,134 $551,027,349 $579,078,588
==================================================================================
End of year undistributed net
investment income .......................... $ 3,443,863 $ 3,123,218 $ 1,245,028 $ 1,031,070 $ 3,929,327 $ 5,076,193
==================================================================================
The Massachusetts Health & Education
Tax-Exempt Trust
--------------------------------------------
Period Year Ended
January 1, 2008 December 31,
to August 31, ---------------------------
Increase (Decrease) in Net Assets: 2008 2007 2006
===================================================================================================================================
Operations
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income ................................................................. $ 1,371,557 $ 2,150,393 $ 2,108,489
Net realized gain (loss) .............................................................. (142,627) (90,387) 201,249
Net change in unrealized appreciation/depreciation .................................... (1,202,802) (1,821,519) 886,659
Dividends and distributions to Preferred Shareholders from:
Net investment income ............................................................. (408,081) (718,637) (584,916)
Net realized gain ................................................................. -- -- (75,604)
------------------------------------------
Net increase (decrease) in net assets applicable to Common Shareholders resulting
from operations ..................................................................... (381,953) (480,150) 2,535,877
------------------------------------------
===================================================================================================================================
Dividends and Distributions to Common Shareholders From
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income ................................................................. (918,874) (1,378,312) (1,588,436)
Net realized gain ..................................................................... -- (5,635) (222,930)
------------------------------------------
Decrease in net assets resulting from dividends and distributions to Common
Shareholders ........................................................................ (918,874) (1,383,947) (1,811,366)
------------------------------------------
===================================================================================================================================
Capital Share Transactions
-----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of common dividends ...................................................... -- -- 64,509
------------------------------------------
===================================================================================================================================
Net Assets Applicable to Common Shareholders
-----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets applicable to Common Shareholders ............. (1,300,827) (1,864,097) 789,020
Beginning of period ................................................................... 30,716,782 32,580,879 31,791,859
------------------------------------------
End of period ......................................................................... $ 29,415,955 $ 30,716,782 $ 32,580,879
==========================================
End of period undistributed net investment income ..................................... $ 356,896 $ 323,091 $ 269,647
==========================================
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 31
Statement of Cash Flows
Year Ended August 31, 2008 BlackRock MuniVest Fund, Inc.
===================================================================================================================================
Cash Provided by Operating Activities
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations, excluding dividends to Preferred Shareholders .............. $ 13,117,722
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided
by operating activities:
Increase in receivables ..................................................................................... (681,037)
Increase in prepaid expenses and other assets ............................................................... (13,400)
Increase in accrued liabilities ............................................................................. 56,679
Net realized and unrealized loss ................................................................................. 24,776,504
Amortization of premium and discount on investments .............................................................. 3,518,465
Proceeds from sales of long-term securities ...................................................................... 441,188,997
Purchases of long-term securities ................................................................................ (402,558,457)
Net purchases of short-term investments .......................................................................... (15,678,006)
-------------
Cash provided by operating activities ............................................................................ 63,727,467
-------------
===================================================================================================================================
Cash Used For Financing Activities
-----------------------------------------------------------------------------------------------------------------------------------
Payments on redemption of Preferred Shares ....................................................................... (58,300,000)
Cash receipts from trust certificates ............................................................................ 76,528,787
Cash payments from trust certificates ............................................................................ (40,583,890)
Cash dividends paid to Common Shareholders ....................................................................... (30,121,871)
Cash dividends paid to Preferred Shareholders .................................................................... (11,221,262)
-------------
Cash used for financing activities ............................................................................... (63,698,236)
-------------
===================================================================================================================================
Cash
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in cash ............................................................................................. 29,231
Cash at beginning of year ........................................................................................ 20,503
-------------
Cash at end of year .............................................................................................. $ 49,734
=============
===================================================================================================================================
Cash Flow Information
-----------------------------------------------------------------------------------------------------------------------------------
Cash paid for interest ........................................................................................... $ 2,680,870
=============
===================================================================================================================================
Non-Cash Financing Activities
-----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of dividends ........................................................................................ $ 1,758,887
=============
See Notes to Financial Statements.
32 ANNUAL REPORT AUGUST 31, 2008
Financial Highlights
BlackRock MuniHoldings Insured Investment Fund
----------------------------------------------------------------
Year Ended August 31,
----------------------------------------------------------------
2008 2007 2006 2005 2004
===================================================================================================================================
Per Share Operating Performance
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ............................ $ 14.09 $ 14.75 $ 15.32 $ 15.37 $ 15.04
----------------------------------------------------------------
Net investment income 1 ....................................... 1.01 1.07 1.04 1.09 1.11
Net realized and unrealized gain (loss) ....................... (0.61) (0.66) (0.47) 0.05 0.31
Dividends to Preferred Shareholders
from net investment income .................................. (0.32) (0.35) (0.30) (0.18) (0.09)
----------------------------------------------------------------
Net increase from investment operations ....................... 0.08 0.06 0.27 0.96 1.33
----------------------------------------------------------------
Dividends to Common Shareholders
from net investment income .................................. (0.67) (0.72) (0.84) (1.01) (1.00)
----------------------------------------------------------------
Net asset value, end of year .................................. $ 13.50 $ 14.09 $ 14.75 $ 15.32 $ 15.37
================================================================
Market price, end of year ..................................... $ 11.61 $ 12.86 $ 14.37 $ 15.75 $ 14.84
================================================================
===================================================================================================================================
Total Investment Return 2
-----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value ...................................... 1.16% 0.59% 2.10% 6.49% 9.43%
================================================================
Based on market price ......................................... (4.68)% (5.76)% (3.24)% 13.39% 12.86%
================================================================
===================================================================================================================================
Ratios to Average Net Assets Applicable to Common Shares
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses after waiver and excluding
interest expense and fees 3,4 ............................... 1.13% 1.12% 1.12% 1.11% 1.10%
================================================================
Total expenses after waiver 3 ................................. 1.42% 1.46% 1.38% 1.35% 1.24%
================================================================
Total expenses 3 .............................................. 1.54% 1.54% 1.46% 1.41% 1.31%
================================================================
Net investment income 3 ....................................... 7.23% 7.30% 7.08% 7.11% 7.23%
================================================================
Dividends to Preferred Shareholders ........................... 2.31% 2.40% 2.00% 1.15% 0.60%
================================================================
Net investment income to
Common Shareholders ......................................... 4.92% 4.90% 5.08% 5.96% 6.63%
================================================================
===================================================================================================================================
Supplemental Data
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
Shareholders, end of year (000) ............................. $508,698 $530,903 $555,494 $576,931 $578,509
================================================================
Preferred Shares outstanding at liquidation
preference, end of year (000) ............................... $296,125 $363,250 $363,250 $363,250 $363,250
================================================================
Portfolio turnover ............................................ 25% 22% 43% 26% 20%
================================================================
Asset coverage per Preferred Share,
end of year 5 ............................................... $ 67,958 $ 61,555 $ 63,240 $ 64,711 $ 64,816
================================================================
BlackRock MuniHoldings New York Insured Fund, Inc.
----------------------------------------------------------------
Year Ended August 31,
----------------------------------------------------------------
2008 2007 2006 2005 2004
===================================================================================================================================
Per Share Operating Performance
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ............................ $ 14.40 $ 14.96 $ 15.54 $ 15.41 $ 15.19
----------------------------------------------------------------
Net investment income 1 ....................................... 0.98 1.00 1.03 1.04 1.05
Net realized and unrealized gain (loss) ....................... (0.48) (0.52) (0.48) 0.21 0.18
Dividends to Preferred Shareholders
from net investment income .................................. (0.32) (0.34) (0.29) (0.17) (0.08)
----------------------------------------------------------------
Net increase from investment operations ....................... 0.18 0.14 0.26 1.08 1.15
----------------------------------------------------------------
Dividends to Common Shareholders
from net investment income .................................. (0.66) (0.70) (0.84) (0.95) (0.93)
----------------------------------------------------------------
Net asset value, end of year .................................. $ 13.92 $ 14.40 $ 14.96 $ 15.54 $ 15.41
================================================================
Market price, end of year ..................................... $ 12.12 $ 13.53 $ 14.62 $ 15.28 $ 14.10
================================================================
===================================================================================================================================
Total Investment Return 2
-----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value ...................................... 1.74% 1.12% 1.98% 7.63% 8.36%
================================================================
Based on market price ......................................... (5.72)% (2.78)% 1.36% 15.66% 9.21%
================================================================
===================================================================================================================================
Ratios to Average Net Assets Applicable to Common Shares
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses after waiver and excluding
interest expense and fees 3,4 ............................... 1.15% 1.15% 1.15% 1.14% 1.14%
================================================================
Total expenses after waiver 3 ................................. 1.52% 1.71% 1.65% 1.52% 1.43%
================================================================
Total expenses 3 .............................................. 1.65% 1.79% 1.73% 1.59% 1.50%
================================================================
Net investment income 3 ....................................... 6.90% 6.65% 6.94% 6.71% 6.80%
================================================================
Dividends to Preferred Shareholders ........................... 2.24% 2.29% 1.93% 1.09% 0.55%
================================================================
Net investment income to
Common Shareholders ......................................... 4.66% 4.36% 5.01% 5.62% 6.25%
================================================================
===================================================================================================================================
Supplemental Data
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
Shareholders, end of year (000) ............................. $428,547 $443,296 $460,638 $478,413 $474,357
================================================================
Preferred Shares outstanding at liquidation
preference, end of year (000) ............................... $252,875 $313,000 $313,000 $313,000 $313,000
================================================================
Portfolio turnover ............................................ 21% 24% 47% 33% 31%
================================================================
Asset coverage per Preferred Share,
end of year 5 ............................................... $ 67,379 $ 60,422 $ 61,799 $ 63,214 $ 62,889
================================================================
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 Do not reflect the effect of dividends to Preferred Shareholders.
4 Interest expense and fees relate to tender option bonds trusts. See Note 1
of the Notes to Financial Statements for details of municipal bonds
transferred to tender option bond trusts.
5 Prior year amounts have been recalculated to conform with current year
presentation.
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 33
Financial Highlights (continued)
BlackRock MuniVest Fund, Inc.
---------------------------------------------------------
Year Ended August 31,
---------------------------------------------------------
2008 2007 2006 2005 2004
===================================================================================================================================
Per Share Operating Performance
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year .................................... $ 9.39 $ 9.93 $ 10.23 $ 9.91 $ 9.54
---------------------------------------------------------
Net investment income 1 ............................................... 0.67 0.73 0.70 0.74 0.72
Net realized and unrealized gain (loss) ............................... (0.45) (0.55) (0.23) 0.35 0.36
Dividends to Preferred Shareholders from net investment income ........ (0.18) (0.20) (0.17) (0.10) (0.04)
---------------------------------------------------------
Net increase (decrease) from investment operations .................... 0.04 (0.02) 0.30 0.99 1.04
---------------------------------------------------------
Dividends to Common Shareholders from net investment income ........... (0.52) (0.52) (0.60) (0.67) (0.66)
---------------------------------------------------------
Capital charges with respect to issuance of Preferred Shares .......... -- -- -- -- 2 (0.01)
---------------------------------------------------------
Net asset value, end of year .......................................... $ 8.91 $ 9.39 $ 9.93 $ 10.23 $ 9.91
=========================================================
Market price, end of year ............................................. $ 8.33 $ 9.35 $ 9.66 $ 10.15 $ 9.30
=========================================================
===================================================================================================================================
Total Investment Return 3
-----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value .............................................. 0.51% (0.30)% 3.27% 10.64% 11.60%
=========================================================
Based on market price ................................................. (5.63)% 2.05% 1.26% 16.97% 13.53%
=========================================================
===================================================================================================================================
Ratios to Average Net Assets Applicable to Common Shares
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses after waiver and excluding interest expense and fees 4,5 1.10% 1.02% 1.04% 1.02% 0.94%
=========================================================
Total expenses after waiver 4 ......................................... 1.58% 1.66% 1.60% 1.45% 1.23%
=========================================================
Total expenses 4 ...................................................... 1.58% 1.66% 1.60% 1.45% 1.23%
=========================================================
Net investment income 4 ............................................... 7.34% 7.33% 7.11% 7.38% 7.37%
=========================================================
Dividends to Preferred Shareholders ................................... 1.94% 1.98% 1.72% 1.02% 0.43%
=========================================================
Net investment income to Common Shareholders .......................... 5.40% 5.35% 5.39% 6.36% 6.94%
=========================================================
===================================================================================================================================
Supplemental Data
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common Shareholders, end of year (000) ....... $ 551,027 $ 579,079 $ 609,612 $ 627,562 $ 607,842
=========================================================
Preferred Shares outstanding at liquidation preference,
end of year (000) ................................................... $ 275,700 $ 334,000 $ 334,000 $ 334,000 $ 334,000
=========================================================
Portfolio turnover .................................................... 41% 39% 56% 49% 40%
=========================================================
Asset coverage per Preferred Share, end of year 6 ..................... $ 74,993 $ 68,380 $ 70,654 $ 71,973 $ 70,497
=========================================================
1 Based on average shares outstanding.
2 Amount is less than $(0.01) per share.
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 Do not reflect the effect of dividends to Preferred Shareholders.
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 Prior year amounts have been recalculated to conform with current year
presentation.
See Notes to Financial Statements.
34 ANNUAL REPORT AUGUST 31, 2008
Financial Highlights (concluded)
The Massachusetts Health & Education Tax-Exempt Trust
-------------------------------------------------------------------
Period
January 1,
2008 to Year Ended December 31,
August 31, ------------------------------------------------------
2008 2007 2006 2005 2004 1 2003
===================================================================================================================================
Per Share Operating Performance
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ......................... $ 13.10 $ 13.90 $ 13.59 $ 13.74 $ 13.91 $ 13.76
-------------------------------------------------------------------
Net investment income 2 ...................................... 0.59 0.92 0.90 0.83 0.82 0.93
Net realized and unrealized gain (loss) ...................... (0.58) (0.82) 0.47 0.15 0.08 0.07
Dividends and distributions to Preferred Shareholders from:
Net investment income .................................... (0.17) (0.31) (0.25) (0.11) (0.03) (0.03)
Net realized gain ........................................ -- -- (0.03) (0.01) (0.01) --
-------------------------------------------------------------------
Net increase (decrease) from investment operations ........... (0.16) (0.21) 1.09 0.86 0.86 0.97
-------------------------------------------------------------------
Dividends and distributions to Common Shareholders from:
Net investment income .................................... (0.39) (0.59) (0.68) (0.78) (0.87) (0.82)
Net realized gain ........................................ -- -- 3 (0.10) (0.13) (0.16) --
-------------------------------------------------------------------
Total dividends and distributions ............................ (0.39) (0.59) (0.78) (0.91) (1.03) (0.82)
-------------------------------------------------------------------
Capital charges with respect to issuance of Preferred Shares . -- -- -- (0.10) -- --
-------------------------------------------------------------------
Net asset value, end of period ............................... $ 12.55 $ 13.10 $ 13.90 $ 13.59 $ 13.74 $ 13.91
===================================================================
Market price, end of period .................................. $ 11.22 $ 11.95 $ 13.10 $ 13.60 $ 16.24 $ 15.26
===================================================================
===================================================================================================================================
Total Investment Return 4
-----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value ..................................... (1.01)% 5 (1.23)% 8.30% 5.46% 6.08% 7.26%
===================================================================
Based on market price ........................................ (2.99)% 5 (4.40)% 1.99% (10.71)% 14.29% 20.11%
===================================================================
===================================================================================================================================
Ratios to Average Net Assets Applicable to Common Shares
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses after fees paid indirectly and
excluding interest expense and fees 6,7 .................... 1.73% 8 1.47% 1.64% 1.30% 1.45% 1.16%
===================================================================
Total expenses after fees paid indirectly 6 .................. 1.77% 8 1.47% 1.64% 1.30% 1.45% 1.16%
===================================================================
Total expenses before fees paid indirectly 6 ................. 1.77% 8 1.47% 1.64% 1.30% 1.45% 1.16%
===================================================================
Total expenses 6 ............................................. 1.77% 8 1.47% 1.64% 1.30% 1.45% 1.16%
===================================================================
Net investment income 6 ...................................... 6.82% 8 6.78% 6.61% 6.00% 5.97% 6.74%
===================================================================
Dividends to Preferred Shareholders .......................... 2.03% 8 2.27% 2.07% 0.76% 0.24% 0.25%
===================================================================
Net investment income to Common Shareholders ................. 4.79% 8 4.51% 4.54% 5.24% 5.73% 6.49%
===================================================================
===================================================================================================================================
Supplemental Data
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common Shareholders,
end of period (000) ........................................ $ 29,416 $ 30,717 $ 32,581 $ 31,792 $ 32,076 $ 32,390
===================================================================
Preferred Shares outstanding at liquidation preference,
end of period (000) ........................................ $ 18,500 $ 20,000 $ 20,000 $ 20,000 $ 10,000 $ 10,000
===================================================================
Portfolio turnover ........................................... 5% 18% 9% 16% 21% 26%
===================================================================
Asset coverage per Preferred Share, end of period9 ........... $129,523 $126,835 $131,484 $129,506 $210,378 $211,950
===================================================================
1 On September 1, 2004, Fund Asset Management, L.P. became the investment
advisor, which combined with BlackRock, Inc. on September 26, 2006.
2 Based on average shares outstanding.
3 Amount is less than ($0.01) per share.
4 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.
5 Aggregate total investment return.
6 Do not reflect the effect of dividends to Preferred Shareholders.
7 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.
8 Annualized.
9 Prior year amounts have been recalculated to conform with current period
presentation.
See Notes to Financial Statements.
ANNUAL REPORT AUGUST 31, 2008 35
Notes to Financial Statements
1. Significant Accounting Policies:
BlackRock MuniHoldings Insured Investment Fund ("MuniHoldings Insured")
(formerly BlackRock MuniHoldings Florida Insured Fund), BlackRock MuniHoldings
New York Insured Fund, Inc. ("MuniHoldings New York"), BlackRock MuniVest Fund,
Inc. ("MuniVest") and The Massachusetts Health & Education Tax-Exempt Trust ("MA
HEFA") (the "Funds" or individually the "Fund") are registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as non-diversified,
closed-end management investment companies. 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 value 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 commitments 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 Fund's Board of Directors/Trustees (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 bond dealers,
pricing matrixes, market transactions in comparable investments and various
relationships between investments. Financial futures contracts traded on
exchanges are valued at their last sale price. Swaps are valued by quoted fair
values received daily by the Funds' pricing service or through brokers.
Short-term securities are valued at amortized cost. Investments in open-end
investment companies are valued at net asset value each business day.
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 investment advisor and/or sub-advisor seeks to
determine the price that each Fund might reasonably expect to receive from the
current sale of that asset in an arm's-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 portfolio
investment strategies both to increase the return of the Funds and to hedge, or
protect, their exposure to interest rate movements and movements in the
securities markets. Losses may arise if the value of the contract decreases due
to an unfavorable change in the price of the underlying security or if the
counterparty does not perform under the contract.
o Financial futures contracts -- Each Fund may purchase or sell financial
futures contracts and options on such futures contracts. Futures contracts
are contracts for delayed delivery of securities at a specific future date
and at a specific price or yield. Upon entering into a contract, a Fund
deposits and maintains as collateral such initial margin as required by
the exchange on which the transaction is effected. Pursuant to the
contract, the Fund agrees to receive from, or pay to, the broker an amount
of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as margin variation and are recognized by
the Fund as unrealized gains or losses. When the contract is closed, the
Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time
it was closed.
o Forward interest rate swaps -- Each Fund may enter into forward interest
rate swaps. In a forward interest rate swap, a Fund and the counterparty
agree to make periodic net payments on a specified notional contract
amount, commencing on a specified future effective date, unless terminated
earlier. Changes in the value of the forward interest rate swap are
recognized as unrealized gains and losses. When the agreement is closed,
the Fund records a realized gain or loss in an amount equal to the value
of the agreement. The Fund generally intends to close each forward
interest rate swap before the effective date specified in the agreement
and therefore avoid entering into the interest rate swap underlying each
forward interest rate swap.
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 a Fund has 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
fund 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 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 invest the cash in additional municipal securities. The
Funds' transfer of the municipal securities to a TOB is accounted for as a
secured borrowing, therefore the municipal securities deposited into a TOB are
presented in the Fund's Schedules of Investments and the proceeds from the
transaction are reported as a liability of the Funds.
Interest income from the underlying securities is recorded by the Funds on an
accrual basis. Interest expense incurred on the secured borrowing and other
expenses related to remarketing, administration and trustee
36 ANNUAL REPORT AUGUST 31, 2008
Notes to Financial Statements (continued)
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. At August 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 Liability
Securities for
Transferred Trust Range of
to TOBs Certificates Interest Rates
-------------------------------------------------------------------------------
MuniHoldings Insured ....... $126,629,644 $ 81,981,022 1.781% - 2.69%
MuniHoldings New York ...... $140,195,263 $ 87,056,319 1.739% - 2.84%
MuniVest ................... $244,380,733 $133,548,787 1.681% - 2.766%
MA HEFA .................... $ 2,035,816 $ 1,499,396 1.804%
-------------------------------------------------------------------------------
Financial transactions executed through TOBs generally will underperform the
market for fixed rate municipal bonds in a rising interest rate environment, but
tend to outperform the market for fixed rate bonds when interest rates decline
or remain relatively stable. Should short-term interest rates rise, the Funds'
investments in 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 value 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 periodic
interest payments. Zero-coupon bonds may experience greater volatility in market
value than similar maturity debt obligations which provide for regular interest
payments.
Segregation: 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., futures and 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 debt
securities having a market value at least equal to the amount that would
otherwise be required to be physically segregated.
Investment Transactions and Investment Income: Investment transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual method. Each Fund amortizes 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 Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
Effective February 29, 2008, MuniHoldings Insured, MuniHoldings New York and
MuniVest implemented Financial Accounting Standards Board ("FASB")
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an
interpretation of FASB Statement No. 109" ("FIN 48"). Effective June 30, 2008,
MA HEFA implemented FIN 48. FIN 48 prescribes the minimum recognition threshold
a tax position must meet in connection with accounting for uncertainties in
income tax positions taken or expected to be taken by an entity, including
investment companies, before being measured and recognized in the financial
statements. The investment advisor has evaluated the application of FIN 48 to
each Fund, and has determined that the adoption of FIN 48 does not have a
material impact on each Fund's financial statements. Each Fund files U.S.
federal and various state and local tax returns. No income tax returns are
currently under examination. The statute of limitations on the Funds' U.S.
federal tax returns remains open as follows: years ended August 31, 2005 through
August 31, 2007 for MuniHoldings Insured, MuniHoldings New York and MuniVest;
years ended December 31, 2005 through December 31, 2007 for MA HEFA. The
statutes of limitations on each Fund's state and local tax returns may remain
open for an additional year depending upon the jurisdiction.
Recent Accounting Pronouncements: In September 2006, Statement of Financial
Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), was issued
and is effective for fiscal years beginning after November 15, 2007. Effective
January 1, 2008, MA HEFA adopted FAS 157. FAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. The impact on the financial statement disclosures for
MuniHoldings Insured, MuniHoldings New York and MuniVest, if any, is currently
being assessed.
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
ANNUAL REPORT AUGUST 31, 2008 37
Notes to Financial Statements (continued)
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 entity's 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
currently being assessed.
Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan:
Under the deferred compensation plan approved by the Funds' Board,
non-interested Directors/Trustees ("Independent Directors/Trustees") may defer a
portion of their annual complex-wide compensation. Deferred amounts earn an
approximate return as though equivalent dollar amounts had been invested in
common shares of other certain BlackRock Closed-End Funds selected by the
Independent Directors/Trustees. This has approximately the same economic effect
for the Independent Directors/Trustees as if the Independent Directors/ Trustees
had invested the deferred amounts directly in 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/ Trustees in order to
match its deferred compensation obligations. Investments to cover the Fund's
deferred compensation liability are included in other assets on the Statements
of Assets and Liabilities. Dividends and distributions from the BlackRock
Closed-End Fund investments under the plan are included in income from
affiliates on the Statements of Operations.
Other: Expenses directly related to each Fund are charged to that Fund. Other
operating expenses shared by several funds are pro-rated among those funds on
the basis of relative net assets or other appropriate 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 subsidiary of
BlackRock, Inc., to provide investment advisory 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 Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of each Fund. For such services, each Fund
pays the Advisor a monthly fee at an annual rate of 0.50% for MA HEFA, 0.55% for
MuniHoldings Insured and MuniHoldings New York and 0.50% for MuniVest of each
Fund's average daily net assets. Average daily net assets is the average daily
value of the Funds' total assets minus the sum of its accrued liabilities.
The Advisor has voluntarily agreed to waive its investment advisory fee on the
proceeds of Preferred Shares and TOBs that exceeds 35% of the average daily net
assets of MuniHoldings Insured and MuniHoldings New York. These amounts are
included in fees waived by advisor on the Statements of Operations. For the year
ended August 31, 2008, the amounts were as follows:
--------------------------------------------------------------------------------
MuniHoldings Insured ............................................... $468,459
MuniHoldings New York .............................................. $502,407
--------------------------------------------------------------------------------
The Advisor has agreed to waive its advisory fee by the amount of investment
advisory fees each Fund pays to the Advisor indirectly through its investment in
affiliated money market funds. These amounts are included in fees waived by
advisor on the Statements of Operations. For the year ended August 31, 2008, the
amounts were as follows:
--------------------------------------------------------------------------------
MuniHoldings Insured ............................................... $112,428
MuniHoldings New York .............................................. $ 66,107
MuniVest ........................................................... $ 36,116
--------------------------------------------------------------------------------
The Advisor has entered into a separate sub-advisory agreement with BlackRock
Investment Management, LLC ("BIM"), an affiliate of the Advisor, with respect to
MuniHoldings Insured, MuniHoldings New York and MuniVest, under which the
Advisor pays BIM for services it provides, a monthly fee at an annual rate that
is a percentage of the investment advisory fee paid by each Fund to the Advisor.
For the year ended August 31, 2008 and August 31, 2007 for MuniHoldings Insured,
MuniHoldings New York and MuniVest and for the period January 1, 2008 to August
31, 2008 and the year ended December 31, 2007 for MA HEFA, the Funds reimbursed
the Advisor for certain accounting services. The reimbursements, which are
included in accounting services on the Statements of Operations, were as
follows:
--------------------------------------------------------------------------------
Period Ended Prior
August 31, 2008 Year Ended
--------------------------------------------------------------------------------
MuniHoldings Insured ......................... $15,011 $18,038
MuniHoldings New York ........................ $12,732 $15,256
MuniVest ..................................... $15,247 $17,092
MA HEFA ...................................... $ 539 $ 699
--------------------------------------------------------------------------------
Pursuant to the terms of the custody agreement for MA HEFA, custodian fees may
be reduced by amounts calculated on uninvested cash balances ("custody
credits"), which are on the Statements of Operations as fees paid indirectly.
38 ANNUAL REPORT AUGUST 31, 2008
Notes to Financial Statements (continued)
Certain officers and/or directors/trustees 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
year ended August 31, 2008 for MuniHoldings Insured, MuniHoldings New York and
MuniVest and the period January 1, 2008 to August 31, 2008 for MA HEFA were as
follows:
--------------------------------------------------------------------------------
Purchases Sales
--------------------------------------------------------------------------------
MuniHoldings Insured ........................... $222,552,597 $253,547,933
MuniHoldings New York .......................... $164,400,294 $189,564,179
MuniVest ....................................... $394,054,356 $427,369,360
MA HEFA ........................................ $ 2,158,410 $ 2,193,336
--------------------------------------------------------------------------------
4. Capital Shares Transactions:
Common Shares
MuniHoldings Insured
The Fund is authorized to issue an unlimited number of shares, including
1,000,000 Preferred Shares, par value $0.10 per share. Shares issued and
outstanding for the years ended August 31, 2008 and August 31, 2007 remained
constant.
MuniHoldings New York
The Fund is authorized to issue 200,000,000 shares, par value $0.10 per share,
all of which were initially classified as Common Shares. The Board is
authorized, however, to reclassify any unissued shares without approval of
Common Shareholders. Shares issued and outstanding for the years ended August
31, 2008 and August 31, 2007 remained constant.
MuniVest
The Fund is authorized to issue 160,000,000 shares, 150,000,000 of which were
initially classified as Common Shares, par value $0.10 per share and 10,000,000
of which were classified as Preferred Shares. Shares issued and outstanding for
the years ended August 31, 2008 and August 31, 2007 increased by 189,635 and
267,589, respectively, as a result of dividend reinvestments.
MA HEFA
The Fund is authorized to issue an unlimited number of shares, including
Preferred Shares, par value of $0.01 per share. Shares issued and outstanding
during the period January 1, 2008 to August 31, 2008 and the year ended December
31, 2007 remained constant and for the year ended December 31, 2006 increased
4,386 as a result of dividend reinvestment.
Preferred Shares
MuniHoldings Insured and MuniHoldings New York
Preferred Shares of the Funds have a par value of $0.10 per share and a
liquidation preference of $25,000 per share plus accrued and unpaid dividends
that entitle their holders to receive cash dividends at varying annualized rates
for each dividend period.
MuniVest
Preferred Shares of the Fund has a par value of $0.025 per share for Series A,
B, C, D and E and a par value of $0.10 per share for Series F and a liquidation
preference of $25,000 per share, plus accrued and unpaid dividends that entitle
their holders to receive cash dividends at varying annualized rates for each
dividend period.
MA HEFA
Preferred Shares of the Fund have a par value of $0.01 per share and a
liquidation preference of $50,000 per share, plus accrued and unpaid dividends,
that entitle their holders to receive cash dividends at varying annualized rates
for each dividend period.
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%.
The Preferred Shares are redeemable at the option of each Fund, in whole or in
part, on any dividend payment date at their liquidation preference plus any
accumulated or unpaid dividends whether or not declared. The Preferred Shares
are also subject to mandatory redemption at their liquidation preference per
share for each of the other Funds plus any accumulated or unpaid dividends,
whether or not declared, if certain requirements relating to the composition of
the assets and liabilities of the Funds, as set forth in the Funds' Articles
Supplementary/Certificate of Designation/Certificate of Vote of Trustees, as
applicable, 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, the holders of Preferred
Shares, voting as a separate class, are also entitled to elect two
Directors/Trustees for each Fund. In addition, the 1940 Act requires that along
with approval by shareholders that might otherwise 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 the 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 investment
company.
ANNUAL REPORT AUGUST 31, 2008 39
Notes to Financial Statements (continued)
As of August 31, 2008, Preferred Shares outstanding with corresponding yields
are as follows:
Series Shares Yields
--------------------------------------------------------------------------------
MuniHoldings Insured A 1,708 2.742%
B 2,849 2.802%
C 2,804 2.802%
D 1,761 2.772%
E 2,723 2.802%
--------------------------------------------------------------------------------
MuniHoldings New York A 1,535 2.772%
B 1,535 2.802%
C 2,456 2.802%
D 2,973 2.802%
E 1,616 2.742%
--------------------------------------------------------------------------------
MuniVest A 1,651 2.750%
B 1,651 2.828%
C 1,651 2.750%
D 1,651 2.795%
E 2,476 2.906%
F 1,948 3.952%
--------------------------------------------------------------------------------
MA HEFA A 185 2.772%
B 185 2.741%
--------------------------------------------------------------------------------
The Funds pay 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 year ended August 31, 2008, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, a wholly owned subsidiary of Merrill Lynch, earned commissions as
follows:
--------------------------------------------------------------------------------
Commissions
--------------------------------------------------------------------------------
MuniHoldings Insured .................................... $540,045
MuniHoldings New York ................................... $357,101
MuniVest ................................................ $579,785
MA HEFA ................................................. $ 22,349
--------------------------------------------------------------------------------
On June 4, 2008 and June 17, 2008, the Funds announced the following redemptions
of Preferred Shares at a price of $50,000 per share for MA HEFA and $25,000 for
each of the other Funds plus any accrued and unpaid dividends through the
redemption date:
--------------------------------------------------------------------------------
Redemption Shares Aggregate
Series Date Redeemed Principal
--------------------------------------------------------------------------------
MuniHoldings Insured A 6/25/08 387 $ 9,675,000
B 6/23/08 646 $16,150,000
C 6/24/08 636 $15,900,000
D 6/26/08 399 $ 9,975,000
E 6/27/08 617 $15,425,000
--------------------------------------------------------------------------------
MuniHoldings New York A 6/26/08 365 $ 9,125,000
B 6/27/08 365 $ 9,125,000
C 6/24/08 584 $14,600,000
D 6/23/08 707 $17,675,000
E 6/25/08 384 $ 9,600,000
--------------------------------------------------------------------------------
MuniVest A 6/30/08 349 $ 8,725,000
B 7/07/08 349 $ 8,725,000
C 6/16/08 349 $ 8,725,000
D 6/23/08 349 $ 8,725,000
E 6/16/08 524 $13,100,000
F 6/25/08 412 $10,300,000
--------------------------------------------------------------------------------
MA HEFA A 6/12/08 15 $ 750,000
B 6/11/08 15 $ 750,000
--------------------------------------------------------------------------------
The Funds financed the Preferred Share redemptions with cash received from TOB
transactions.
Shares issued and outstanding during the years ended August 31, 2007 for
MuniHoldings Insured, MuniHoldings New York and MuniVest and December 31, 2007
and December 31, 2006 for MA HEFA remained constant.
Dividends on seven-day Preferred Shares are cumulative at a rate which is reset
every seven days based on the results of an auction. Dividends on 28-day
Preferred Shares are cumulative at a rate that is reset every 28 days based on
the results of an auction. If the Preferred Shares fail to clear the auction on
an auction date, the Funds are 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 all series of Preferred Shares, except MuniVest Series F, 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 MuniVest Series F is the higher of 110% plus or
times (i) the Telerate/BBA LIBOR or (ii) 90% of the Kenney S&P 30-day High Grade
Index rate, divided by 1.00 minus the marginal tax rate. During the year ended
August 31, 2008 for each of the other Funds and the period January 1, 2008 to
August 31, 2008 for MA HEFA, the Preferred Shares of the Funds were successfully
auctioned at each auction date until February 13, 2008. The low, high and
average dividend rates on the Preferred Shares for MuniHoldings Insured,
MuniHoldings New York and
40 ANNUAL REPORT AUGUST 31, 2008
Notes to Financial Statements (continued)
MuniVest for the year ended August 31, 2008 and the period January 1, 2008 to
August 31, 2008 for MA HEFA were as follows:
--------------------------------------------------------------------------------
Series Low High Average
--------------------------------------------------------------------------------
MuniHoldings Insured A 2.535% 4.750% 3.419%
B 2.483% 4.900% 3.452%
C 2.483% 4.750% 3.468%
D 2.480% 4.750% 3.427%
E 2.458% 4.750% 3.425%
--------------------------------------------------------------------------------
MuniHoldings New York A 2.190% 4.356% 3.177%
B 2.390% 4.508% 3.190%
C 2.483% 4.508% 3.298%
D 2.390% 4.508% 3.281%
E 2.000% 4.356% 3.223%
--------------------------------------------------------------------------------
MuniVest A 2.750% 3.800% 3.243%
B 2.762% 4.600% 3.419%
C 2.662% 4.800% 3.388%
D 2.551% 4.400% 3.309%
E 2.551% 4.600% 3.229%
F 3.040% 5.060% 3.873%
--------------------------------------------------------------------------------
MA HEFA A 2.481% 4.356% 3.161%
B 2.536% 4.356% 3.068%
--------------------------------------------------------------------------------
Since February 13, 2008, the Preferred Shares of the Funds failed to clear any
of its auctions. As a result, the Preferred Shares dividend rates were reset to
the maximum applicable rate, which ranged from 2.458% to 5.060%. 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 fund's auction rate preferred shares than buyers. It is impossible
to predict how long this imbalance will last. A successful auction for the
Funds' Preferred Shares may not occur for some time, if ever, and even if
liquidity does resume, holders of the Preferred Shares may not have the ability
to sell the Preferred Shares at its liquidation preference.
5. Income Tax Information:
Reclassifications: Accounting principles generally accepted in the United States
of America require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting. These
reclassifications have no effect on net assets or on net asset values per share.
The following permanent differences as of August 31, 2008 attributable to the
expiration of capital loss carryforwards, amortization methods on fixed income
securities, the reclassification of distributions and the classification of
income were reclassified to the following accounts:
-----------------------------------------------------------------------------------------
MuniHoldings MuniHoldings MA
Insured New York MuniVest HEFA
-----------------------------------------------------------------------------------------
Increase (decrease)
paid-in capital ........ $(8,580,234) $(3,509,287) -- --
Increase (decrease)
undistributed net
investment income ........ $ (116,124) $ 34,497 $ 102,623 $ (10,797)
Increase (decrease)
accumulated net realized
gain (loss) ............ $ 8,696,358 $ 3,474,790 $ (102,623) $ 10,797
-----------------------------------------------------------------------------------------
ANNUAL REPORT AUGUST 31, 2008 41
Notes to Financial Statements (continued)
The tax character of distributions paid during the years ended August 31, 2008
and August 31, 2007 for MuniHoldings Insured, MuniHoldings New York, and
MuniVest and the period January 1, 2008 to August 31, 2008 and the years ended
December 31, 2007 and December 31, 2006 for MA HEFA was as follows:
-----------------------------------------------------------------------------------------------------------------------------------
MuniHoldings MuniHoldings MA
Insured New York MuniVest HEFA
-----------------------------------------------------------------------------------------------------------------------------------
Tax-exempt income
8/31/08 ..................................................... $ 37,491,603 $ 30,049,997 $ 42,927,848 $ 1,326,955
8/31/07 ..................................................... $ 40,252,485 $ 32,002,432 $ 44,207,045 --
12/31/07 .................................................... -- -- -- $ 2,096,949
12/31/06 .................................................... -- -- -- $ 2,173,352
---------------------------------------------------------------
Ordinary income
8/31/08 ..................................................... -- -- -- --
8/31/07 ..................................................... -- -- -- --
12/31/07 .................................................... -- -- -- $ 2,691
12/31/06 .................................................... -- -- -- $ 155,676
---------------------------------------------------------------
Long-term capital gain
8/31/08 ..................................................... -- -- -- --
8/31/07 ..................................................... -- -- -- --
12/31/07 .................................................... -- -- -- $ 2,944
12/31/06 .................................................... -- -- -- $ 142,858
---------------------------------------------------------------
Total
8/31/08 ..................................................... $ 37,491,603 $ 30,049,997 $ 42,927,848 $ 1,326,955
===============================================================
8/31/07 ..................................................... $ 40,252,485 $ 32,002,432 $ 44,207,045 --
===============================================================
12/31/07 .................................................... -- -- -- $ 2,102,584
===============================================================
12/31/06 .................................................... -- -- -- $ 2,471,886
===============================================================
As of August 31, 2008, the tax components of accumulated earnings (losses) were
as follows:
-----------------------------------------------------------------------------------------------------------------------------------
MuniHoldings MuniHoldings MA
Insured New York MuniVest HEFA
-----------------------------------------------------------------------------------------------------------------------------------
Undistributed tax-exempt income ................................ $ 2,080,196 $ 1,549,563 $ 2,308,170 $ 222,311
Undistributed ordinary income .................................. 97,068 97,327 -- 31,570
Capital loss carryforwards ..................................... (26,386,990) (36,660,674) (18,765,647) (321,552)
Net unrealized losses* ......................................... (10,778,697) (10,504,806) (8,215,590) (200,306)
---------------------------------------------------------------
Total Accumulated Net Earnings (Losses) ........................ $(34,988,423) $(45,518,590) $(24,673,067) $ (267,977)
===============================================================
* The difference between book-basis and tax-basis net unrealized losses is
attributable primarily to the tax deferral of losses on wash sales, the
tax deferral of losses on straddles, the difference between book and tax
amortization methods for premiums and discounts on fixed income
securities, the deferral of post-October capital losses for tax purposes,
the deferral of compensation to trustees, the difference between book and
tax treatment of residual interests in tender option bond trusts and other
book/tax temporary differences.
As of August 31, 2008, the Funds had capital loss carryforwards available to
offset future realized capital gains through the indicated expiration dates:
-----------------------------------------------------------------------------------------------------------------------------------
MuniHoldings MuniHoldings MA
Expires August 31, Insured New York MuniVest HEFA
-----------------------------------------------------------------------------------------------------------------------------------
2009 ........................................................... $ 16,563,861 $ 17,055,889 $ 13,312,422 --
2010 ........................................................... -- -- -- --
2011 ........................................................... -- -- -- --
2012 ........................................................... 1,836,991 -- -- --
2013 ........................................................... 7,986,138 15,054,033 -- --
2014 ........................................................... -- 1,057,997 -- --
2015 ........................................................... -- 2,782,666 -- $ 35,869
2016 ........................................................... -- 710,089 5,453,225 285,683
---------------------------------------------------------------
Total .......................................................... $ 26,386,990 $ 36,660,674 $ 18,765,647 $ 321,552
===============================================================
6. Concentration Risk:
Each Fund's 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
42 ANNUAL REPORT AUGUST 31, 2008
Notes to Financial Statements (concluded)
such insurance, and there is no guarantee that the insurer will meet its
obligation.
7. Subsequent Events:
The Funds paid a net investment income dividend to holders of its Common
Shareholders in the following amounts per share on October 1, 2008 to
shareholders of record on September 15, 2008:
--------------------------------------------------------------------------------
Common
Dividend
Per Share
--------------------------------------------------------------------------------
MuniHoldings Insured ......................................... $ 0.055500
MuniHoldings New York ........................................ $ 0.053000
MuniVest ..................................................... $ 0.043000
MA HEFA ...................................................... $ 0.049000
--------------------------------------------------------------------------------
The dividends declared on Preferred Shares for the period September 1, 2008 to
September 30, 2008 were as follows:
--------------------------------------------------------------------------------
Dividends
Series Declared
--------------------------------------------------------------------------------
MuniHoldings Insured A $240,008
B $332,222
C $335,274
D $199,257
E $325,099
--------------------------------------------------------------------------------
MuniHoldings New York A $173,685
B $183,264
C $294,204
D $346,682
E $227,080
--------------------------------------------------------------------------------
MuniVest A $100,084
B $102,907
C $107,833
D $ 88,015
E $141,429
F $302,349
--------------------------------------------------------------------------------
MA HEFA A $ 40,092
B $ 37,615
--------------------------------------------------------------------------------
On September 12, 2008, the Board of MuniHoldings Insured and MuniHoldings New
York voted unanimously to change certain investment guidelines of the Funds.
Under normal circumstances, the Funds are required to invest at least 80% of
their assets in municipal bonds either (i) insured under an insurance policy
purchased by the Funds or (ii) insured under an insurance policy obtained by the
issuer of the municipal bond or any other party. Historically, the Funds have
had an additional non-fundamental investment policy limiting its purchase of
insured municipal bonds to those bonds insured by insurance providers with
claims-paying abilities rated AAA at the time of investment.
Following the onset of the credit and liquidity crises currently troubling the
financial markets, the applicable rating agencies lowered the claims-paying
ability rating of most of the municipal bond insurance providers below the
highest rating category. As a result, the Advisor recommended, and the Board
approved, an amended policy with respect to the purchase of insured municipal
bonds that such bonds must be insured by insurance providers or other entities
with claims-paying abilities rated at least investment grade. This investment
grade restriction is measured at the time of investment, and the Funds will not
be required to dispose of municipal bonds they hold in the event of subsequent
downgrades. These approved changes do not alter the Funds' investment
objectives. Due to the recent downgrades, some of the insurers insuring a
portion of the Funds' current holdings are already rated below the highest
rating category.
In addition, on September 12, 2008, the Board of MuniHoldings Insured (formerly
BlackRock MuniHoldings Florida Insured Fund) voted unanimously to change a
non-fundamental investment policy of the Fund, and to rename the Fund "BlackRock
MuniHoldings Insured Investment Fund." The Fund's previous policy required the
Fund, under normal circumstances, to invest at least 80% of its assets in
Florida municipal bonds insured by insurers with claims-paying abilities rated
AAA at the time of investment. Due to the repeal of the Florida Intangible
Personal Property Tax as of January 2007, the Board has approved an amended
policy allowing the Fund flexibility to invest in municipal obligations
regardless of geographic location, as well as revising the policy with respect
to the claims-paying ability rating adopted by the Fund. This approved change
does not alter the Fund's investment objective. Under current market conditions,
the Advisor anticipates that it will gradually reposition the Fund's portfolio
over time and that during such period, the Fund may continue to hold a
substantial portion of its assets in Florida municipal bonds. At this time, it
is uncertain how long the repositioning may take, and the Fund will continue to
be subject to risks associated with investing a significant portion of its
assets in Florida municipal bonds until the repositioning is complete.
The Advisor and the Board believe the amended policies will allow the Advisor to
better manage the Funds' portfolios in the best interests of the Funds'
shareholders and meet the Funds' investment objectives.
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 directors of both companies. Subject to
shareholder and regulatory approvals, the transaction is expected to close in
the first quarter of 2009.
As of August 31, 2008, MuniVest held bonds guaranteed by Lehman Brothers
Holdings Inc. ("Lehman") valued at $4,021,063. On September 15, 2008, Lehman
filed for Chapter 11 bankruptcy, which adversely impacted the value of the
bonds. Collectability of principal and interest on these bonds is not
guaranteed.
ANNUAL REPORT AUGUST 31, 2008 43
Report of Independent Registered Public Accounting Firm
To the Shareholders and Boards of Directors or Trustees of:
BlackRock MuniHoldings Insured Investment Fund
BlackRock MuniHoldings New York Insured Fund, Inc.
BlackRock MuniVest Fund, Inc.
The Massachusetts Health & Education Tax-Exempt Trust:
We have audited the accompanying statements of assets and liabilities of
BlackRock MuniHoldings Insured Investment Fund (formerly BlackRock MuniHoldings
Florida Insured Fund), BlackRock MuniHoldings New York Insured Fund, Inc., and
BlackRock MuniVest Fund, Inc., including the schedules of investments, as of
August 31, 2008, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, the financial highlights for each of the five years in the
period then ended, and for BlackRock MuniVest Fund, Inc. the statement of cash
flows for the year then ended. We have also audited the accompanying statement
of assets and liabilities, including the schedule of investments, of The
Massachusetts Health & Education Tax-Exempt Trust as of August 31, 2008, and the
related statements of operations for the period January 1, 2008 to August 31,
2008 and for the year ended December 31, 2007, the statements of changes in net
assets for the period January 1, 2008 to August 31, 2008 and for each of the two
years in the period ended December 31, 2007, and the financial highlights for
the period January 1, 2008 to August 31, 2008 and for each of the five years in
the period ended December 31, 2007. BlackRock MuniHoldings Insured Investment
Fund, BlackRock MuniHoldings New York Insured Fund, Inc., BlackRock MuniVest
Fund, Inc., and The Massachusetts Health & Education Tax-Exempt Trust are
collectively referred to as the "Funds." These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Funds
are not required to have, nor were we engaged to perform audits of their
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Funds' internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures include confirmation of
the securities owned as of August 31, 2008, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
BlackRock MuniHoldings Insured Investment Fund, BlackRock MuniHoldings New York
Insured Fund, Inc., and BlackRock MuniVest Fund, Inc. as of August 31, 2008, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended, the financial
highlights for each of the five years in the period then ended, and for
BlackRock MuniVest Fund, Inc. the statement of cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America. Additionally, in our opinion, the financial statements and
financial highlights referred to above, present fairly, in all material
respects, the financial position of The Massachusetts Health & Education
Tax-Exempt Trust as of August 31, 2008, the results of its operations for the
period January 1, 2008 to August 31, 2008 and for the year ended December 31,
2007, the changes in its net assets for the period January 1, 2008 to August 31,
2008 and for each of the two years in the period ended December 31, 2007, and
the financial highlights for the period January 1, 2008 to August 31, 2008 and
for each of the five years in the period ended December 31, 2007, in conformity
with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
October 27, 2008
Important Tax Information (Unaudited)
All of the net investment income distributions paid by BlackRock MuniHoldings
Insured Investment Fund, BlackRock MuniHoldings New York Insured Fund, Inc.,
BlackRock MuniVest Fund, Inc. and The Massachusetts Health & Education
Tax-Exempt Trust during the taxable period ended August 31, 2008 qualify as
tax-exempt interest dividends for federal income tax purposes.
44 ANNUAL REPORT AUGUST 31, 2008
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
The Board of Trustees or the Board of Directors, as the case may be
(collectively, the "Board," the members of which are referred to as "Directors")
of The Massachusetts Health & Education Tax-Exempt Trust ("MHE"), BlackRock
MuniHoldings Insured Investment Fund (formerly, BlackRock MuniHoldings Florida
Insured Fund) ("MFL"), BlackRock MuniHoldings New York Insured Fund, Inc.
("MHN") and BlackRock MuniVest Fund, Inc. ("MVF," and together with MHE, MFL and
MHN, the "Funds") met in April and May 2008 to consider approving the
continuation of each Fund's investment advisory agreement (each, an "Advisory
Agreement") with BlackRock Advisors, LLC (the "Advisor"), each Fund's investment
advisor. The Board also considered the approval of each Fund's 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."
Disclosure regarding MHE's Investment Advisory Agreement and Subadvisory
Agreement can be found in its most recent semi-annual report dated June 30, 2008
and is incorporated herein by reference.
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 investment 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 investment
management business with Merrill Lynch & Co., Inc.'s investment management
business, including Merrill Lynch Investment Managers, L.P., 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 Agreement's and Subadvisory Agreement's respective initial
two-year term, the Board is required to consider the continuation of each Fund's
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 information 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) investment
performance for one-, three- and five-year periods, as applicable, against peer
funds, as well as senior management and portfolio managers' 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 operating expenses paid to third parties; (d) the
resources devoted to and compliance reports relating to each Fund's investment
objective, policies and restrictions; (e) each Fund's 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) BlackRock's and other service providers' internal controls; (h)
BlackRock's implementation of the proxy voting guidelines approved by the Board;
(i) execution quality; (j) valuation and liquidity procedures; and (k) reviews
of BlackRock's business, including BlackRock's 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 independent 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 analyses 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' management of all of
the BlackRock closed-end funds (the "Fund Complex"); (h) the expenses of each
Fund, including comparisons of each such Fund's 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
Fund's performance for the past one-, three- and five-year periods, as
applicable, as well as each Fund's 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.
ANNUAL REPORT AUGUST 31, 2008 45
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
(continued)
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 advisor's 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 presentation to and responded to
questions from the Board. Following the meeting 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 BlackRock's presentations, the Board considered
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 information concerning
the types of services that the Advisors provide and are expected to provide to
each Fund, narrative and statistical information concerning each Fund's
performance record and how such performance compares to each Fund's Peers,
information describing BlackRock's organization and its various departments, the
experience and responsibilities of key personnel and available resources. The
Board noted the willingness of the personnel of BlackRock to engage in open,
candid discussions 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 personnel as are necessary for the
operations of the respective Fund. In addition to investment management
services, the Advisors and their affiliates provided each Fund with services
such as: preparing shareholder reports and communications, including annual and
semi-annual financial 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 regulatory inquiries); and performing
other Fund administrative tasks necessary 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 applicable laws and regulations.
B. The Investment Performance of the Funds and BlackRock: As previously noted,
the Board received performance information regarding each Fund and its Peers.
Among other things, the Board received materials reflecting each Fund's historic
performance and each Fund's one-, three- and five-year total returns (as
applicable) relative to its Peers (including the Peers' median performance). The
Board was provided with a description of the methodology used by Lipper to
select each Fund's Peers. The Board noted that it regularly reviews the
performance of each Fund throughout the year. The Board reviewed a narrative and
statistical analysis of the Lipper data that was prepared by BlackRock, which
analyzed various factors that affect Lipper rankings.
The Board noted that although MFL, MHN, and MVF underperformed their respective
Peers in at least two of the one-, three- and five-year periods reported, the
Funds outperformed their respective Peers in a subset of the Lipper universe in
at least two of such periods based on a customized performance comparison
provided by BlackRock which gives a greater significance to current
distributions, providing a more accurate comparison.
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 Fund's current management fee structure and
each Fund's 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
comparisons of each Fund's 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 prepared by Lipper and summarized by
BlackRock at the request of the Board. This summary
46 ANNUAL REPORT AUGUST 31, 2008
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
(concluded)
placed the Peer rankings into context by analyzing various factors that affect
these comparisons.
The Board noted that each of MFL, MHN, and MVF paid contractual management fees
lower than or equal to the median contractual fees paid by each Fund's
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 separately 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 Board's consideration of the fees and expense
information, the Board reviewed the considerable investment management
experience of the Advisors and considered the high level of investment
management, administrative and other services provided by the Advisors.
D. Profitability of BlackRock: The Board also considered BlackRock's
profitability in conjunction with its review of fees. The Board reviewed
BlackRock's 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
BlackRock's assumptions and methodology of allocating expenses, noting the
inherent limitations in allocating costs among various advisory products. The
Board also recognized that individual fund or product line profitability of
other advisors is generally not publicly available.
The Board recognized that profitability may be affected by numerous factors
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 BlackRock's
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 BlackRock's 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 attributable to their management
of the Fund.
E. Economies of Scale: In reviewing each Fund's fees and expenses, the Board
examined the potential benefits of economies of scale, and whether any economies
of scale should be reflected in the Fund's 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 experience 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 comparable funds,
that each Fund's 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 relationships
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 products 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-important 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' conclusion that
the terms of each Agreement were fair and reasonable, that each Fund's fees are
reasonable in light of the services provided to the respective Fund and that
each Agreement should be approved.
ANNUAL REPORT AUGUST 31, 2008 47
Automatic Dividend Reinvestment Plan
For MuniHoldings Insured, MuniHoldings New York and MuniVest
How the Plan Works -- The Funds offer a Dividend Reinvestment Plan (the "Plan")
under which income and capital gains dividends paid by MuniHoldings Insured,
MuniHoldings New York and MuniVest are automatically reinvested in additional
Common Shares of the Fund. The Plan is administered on behalf of the
shareholders by BNY Mellon Shareowner Services (the "Plan Agent"). Under the
Plan, whenever a Fund declares a dividend, participants in the Plan will receive
the equivalent in Common Shares of the Fund. The Plan Agent will acquire the
shares for the participant's account either (i) through receipt of additional
unissued but authorized shares of the Funds ("newly issued shares") or (ii) by
purchase of outstanding Common Shares on the open market on the New York Stock
Exchange or elsewhere. If, on the dividend payment date, the Fund's net asset
value per share is equal to or less than the market price per share plus
estimated brokerage commissions (a condition often referred to as a "market
premium"), the Plan Agent will invest the dividend amount in newly issued
shares. If the Fund's net asset value per share is greater than the market price
per share (a condition often referred to as a "market discount"), the Plan Agent
will invest the dividend amount by purchasing on the open market additional
shares. If the Plan Agent is unable to invest the full dividend amount in open
market purchases, or if the market discount shifts to a market premium during
the purchase period, the Plan Agent will invest any uninvested portion in newly
issued shares. The shares acquired are credited to each shareholder's account.
The amount credited is determined by dividing the dollar amount of the dividend
by either (i) when the shares are newly issued, the net asset value per share on
the date the shares are issued or (ii) when shares are purchased in the open
market, the average purchase price per share.
Participation in the Plan -- Participation in the Plan is automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
Common Shares of the Funds unless the shareholder specifically elects not to
participate in the Plan. Shareholders who elect not to participate will receive
all dividend distributions in cash. Shareholders who do not wish to participate
in the Plan must advise the Plan Agent in writing (at the address set forth
below) that they elect not to participate in the Plan. Participation in the Plan
is completely voluntary and may be terminated or resumed at any time without
penalty by writing to the Plan Agent.
Benefits of the Plan -- The Plan provides an easy, convenient way for
shareholders to make additional, regular investments in the Fund. The Plan
promotes a long-term strategy of investing at a lower cost. All shares acquired
pursuant to the Plan receive voting rights. In addition, if the market price
plus commissions of a Fund's shares is above the net asset value, participants
in the Plan will receive shares of the Fund for less than they could otherwise
purchase them and with a cash value greater than the value of any cash
distribution they would have received. However, there may not be enough shares
available in the market to make distributions in shares at prices below the net
asset value. Also, since the Funds do not redeem shares, the price on resale may
be more or less than the net asset value.
Plan Fees -- There are no enrollment fees or brokerage fees for participating in
the Plan. The Plan Agent's service fees for handling the reinvestment of
distributions are paid for by the Funds. However, brokerage commissions may be
incurred when the Funds purchase shares on the open market and shareholders will
pay a pro rata share of any such commissions.
Tax Implications -- The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income tax that may
be payable (or required to be withheld) on such dividends. Therefore, income and
capital gains may still be realized even though shareholders do not receive
cash. Participation in the Plan generally will not affect the tax-exempt status
of exempt interest dividends paid by the Funds. If, when the Funds' shares are
trading at a market premium, the Funds issue shares pursuant to the Plan that
have a greater fair market value than the amount of cash reinvested, it is
possible that all or a portion of the discount from the market value (which may
not exceed 5% of the fair market value of the Funds' shares) could be viewed as
a taxable distribution. If the discount is viewed as a taxable distribution, it
is also possible that the taxable character of this discount would be allocable
to all the shareholders, including shareholders who do not participate in the
Plan. Thus, shareholders who do not participate in the Plan might be required to
report as ordinary income a portion of their distributions equal to their
allocable share of the discount.
Contact Information -- All correspondence concerning the Plan, including any
questions about the Plan, should be directed to the Plan Agent at The BNY Mellon
Shareowner Services, P.O. Box 358035, Pittsburgh, PA 15252-8035, Telephone:
(866) 216-0242.
48 ANNUAL REPORT AUGUST 31, 2008
Automatic Dividend Reinvestment Plan (concluded)
For MA HEFA
The Fund offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Fund. The Fund declares dividends out of net
investment income, and will distribute annually net realized capital gains, if
any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, BNY Mellon Shareowner Services, as
your Plan Agent, will automatically invest your dividends and capital gains
distributions in Common Shares of the Fund in your account.
Under the Plan, participants in the Plan will have their dividends reinvested in
Common Shares of the Fund on valuation date. If the market price per Common
Share on valuation date equals or exceeds net asset value per Common Share on
that date, the Trust will issue new Common Shares to participants at the higher
of net asset value or 95% of the market price. If net asset value per Common
Share on valuation date exceeds the market price per Common Share on that date,
or if the Board should declare a dividend or capital gains distribution payable
to the Common Shareholders only in cash, the agent will buy Common Shares in the
open market on the American Stock Exchange, or elsewhere. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per Common Share, the average per share purchase price paid by the Plan Agent
may exceed the net asset value of the Trust's Common Shares, resulting in the
acquisition of fewer Common Shares than if the dividend or distribution had been
paid in Common Shares by the Fund.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmation of all transactions in the accounts, including information
needed by shareholders for tax records. Common Shares in the account of each
Plan participant will be held by the Plan Agent in noncertificated form in the
name of the participant, and each shareholder's proxy will include those shares
received pursuant to the Plan. Holders of Common Shares who do not elect to
participate in the Plan will receive all such amounts in cash paid by check
mailed directly to the record shareholder by The Bank of New York, as dividend
paying agent.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Trust reserves the right to amend or terminate the Plan.
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Fund. Each participant will pay a pro rata
share of brokerage commissions incurred with respect to the Plan Agent's open
market purchases in connection with the reinvestment of dividends or capital
gains distributions.
Plan participants will receive tax information annually for personal records and
to help prepare federal income tax returns. The automatic reinvestment of
dividends and capital gains distributions does not relieve plan participants of
any income tax which may be payable on dividends or distributions.
Plan participants may withdraw from the Plan at any time by writing to the Plan
Agent at the address noted below. If you withdraw, you will receive a share
certificate in your name for all full Common Shares credited to your account
under the Plan and a cash payment for any fraction of a share credited to your
account. If you desire, the Plan Agent will sell your shares in the Plan and
send you the proceeds of the sale, less brokerage commissions.
If your shares are held in the name of a brokerage firm, bank, or other nominee,
you should contact your nominee to see if it will participate in the Plan on
your behalf. If you wish to participate in the Plan, but your brokerage firm,
bank or nominee is unable to participate on your behalf, you should request that
your shares be re-registered in your own name, which will enable your
participation in the Plan.
Any correspondence concerning the Plan should be directed to the Plan Agent at
BNY Mellon Shareowner Services, P.O. Box 358035, Pittsburgh, PA 15252-8035,
Telephone: (866) 216-0242.
ANNUAL REPORT AUGUST 31, 2008 49
Officers and Directors/Trustees
Number of
Length of BlackRock-
Position(s) Time Served Advised Funds
Name, Address and Held with as a Director/ Principal Occupation(s) and Portfolios
Year of Birth Funds Trustee(2) During Past Five Years Overseen Public Directorships
====================================================================================================================================
Non-Interested Directors/Trustees(1)
------------------------------------------------------------------------------------------------------------------------------------
Richard E. Cavanagh Chairman of Since 2007 Trustee, Aircraft Finance Trust 113 Funds Arch Chemical
40 East 52nd Street the Board since 1999; Director, The 110 Portfolios (chemical and
New York, NY 10022 and Director/ Guardian Life Insurance Company allied products)
1946 Trustee of America since 1998; Trustee,
Educational Testing Service
since 1997; Director, The
Fremont Group since 1996;
Formerly President and Chief
Executive Officer of The
Conference Board, Inc. (global
business research organization)
from 1995 to 2007.
------------------------------------------------------------------------------------------------------------------------------------
Karen P. Robards Vice Chair of Since 2007 Partner of Robards & Company, 112 Funds AtriCure, Inc.
40 East 52nd Street the Board, LLC (financial advisory firm) 109 Portfolios (medical devices);
New York, NY 10022 Chair of since 1987; Co-founder and Care Investment
1950 the Audit Director of the Cooke Center for Trust, Inc.
Committee Learning and Development, (a (health care REIT)
and Director/ not-for-profit organization)
Trustee since 1987; Formerly Director of
Enable Medical Corp. from 1996
to 2005; Formerly an investment
banker at Morgan Stanley from
1976 to 1987.
------------------------------------------------------------------------------------------------------------------------------------
G. Nicholas Director/ Since 2007 Chairman and Chief Executive 112 Funds None
Beckwith, III Trustee Officer, Arch Street Management, 109 Portfolios
40 East 52nd Street LLC (Beckwith Family Foundation)
New York, NY 10022 and various Beckwith property
1945 compa- nies since 2005; Chairman
of the Board of Directors,
University of Pittsburgh Medical
Center since 2002; Board of
Directors, Shady Side Hospital
Foundation since 1977; Board of
Directors, Beckwith Institute
for Innovation In Patient Care
since 1991; Member, Advisory
Council on Biology and Medicine,
Brown University since 2002;
Trustee, Claude Worthington
Benedum Foundation (charitable
foundation) since 1989; Board of
Trustees, Chatham University
since 1981; Board of Trustees,
University of Pittsburgh since
2002; Emeritus Trustee, Shady
Side Academy since 1977;
Formerly Chairman and Manager,
Penn West Industrial Trucks LLC
(sales, rental and servicing of
material handling equipment)
from 2005 to 2007; Formerly
Chairman, President and Chief
Executive Officer, Beckwith
Machinery Company (sales, rental
and servicing of construction
equipment) from 1985 to 2005;
Formerly Board of Directors,
National Retail Properties
(REIT) from 2006 to 2007.
------------------------------------------------------------------------------------------------------------------------------------
Kent Dixon Director/ Since 2007 Consultant/Investor since 1988. 113 Funds None
40 East 52nd Street Trustee and 110 Portfolios
New York, NY 10022 Member of
1937 the Audit
Committee
------------------------------------------------------------------------------------------------------------------------------------
Frank J. Fabozzi Director/ Since 2007 Consultant/Editor of The Journal 113 Funds None
40 East 52nd Street Trustee and of Portfolio Management since 110 Portfolios
New York, NY 10022 Member of 2006; Professor in the Practice
1948 the Audit of Finance and Becton Fellow,
Committee Yale University, School of
Management since 2006; Formerly
Adjunct Professor of Finance and
Becton Fellow, Yale University
from 1994 to 2006.
------------------------------------------------------------------------------------------------------------------------------------
Kathleen F. Feldstein Director/ Since 2007 President of Economics Studies, 113 Funds The McClatchy
40 East 52nd Street Trustee Inc. (private economic 110 Portfolios Company (news-
New York, NY 10022 consulting firm) since 1987; paper publishing)
1941 Chair, Board of Trustees, McLean
Hospital from 2000 to 2008 and
Trustee Emeritus thereof since
2008; Member of the Corporation
of Partners Community
Healthcare, Inc. since 2005;
Member of the Corporation of
Partners HealthCare since 1995;
Member of the Corporation of
Sherrill House (health care)
since 1990; Trustee, Museum of
Fine Arts, Boston since 1992;
Member of the Visiting Committee
to the Harvard University Art
Museum since 2003; Trustee, The
Committee for Economic
Development (research
organization) since 1990; Member
of the Advisory Board to the
International School of
Business, Brandeis University
since 2002.
------------------------------------------------------------------------------------------------------------------------------------
50 ANNUAL REPORT AUGUST 31, 2008
Officers and Directors/Trustees (continued)
Number of
Length of BlackRock-
Position(s) Time Served Advised Funds
Name, Address and Held with as a Director/ Principal Occupation(s) and Portfolios
Year of Birth Funds Trustee(2) During Past Five Years Overseen Public Directorships
====================================================================================================================================
Non-Interested Directors/Trustees1 (concluded)
------------------------------------------------------------------------------------------------------------------------------------
James T. Flynn Director/ Since 2007 Formerly Chief Financial Officer 112 Funds None
40 East 52nd Street Trustee and of JPMorgan & Co., Inc. from 109 Portfolios
New York, NY 10022 Member of 1990 to 1995.
1939 the Audit
Committee
------------------------------------------------------------------------------------------------------------------------------------
Jerrold B. Harris Director/ Since 2007 Trustee, Ursinus College since 112 Funds BlackRock Kelso
40 East 52nd Street Trustee 2000; Director, Troemner LLC 109 Portfolios Capital Corp.
New York, NY 10022 (scientific equipment) since
1942 2000.
------------------------------------------------------------------------------------------------------------------------------------
R. Glenn Hubbard Director/ Since 2007 Dean of Columbia Business School 113 Funds ADP (data and infor-
40 East 52nd Street Trustee since 2004; Columbia faculty 110 Portfolios mation services);
New York, NY 10022 member since 1988; Formerly KKR Financial Corpo-
1958 Co-Director of Columbia Business ration (finance);
School's Entrepreneurship Duke Realty (real
Program from 1997 to 2004; estate); Metropolitan
Visiting Professor at the John Life Insurance
F. Kennedy School of Government Company (insur-
at Harvard University and the ance); Information
Harvard Business School since Services Group
1985 and at the University of (media/technology)
Chicago since 1994; Formerly
Chairman of the U.S. Council of
Economic Advisers under the
President of the United States
from 2001 to 2003.
------------------------------------------------------------------------------------------------------------------------------------
W. Carl Kester Director/ Since 2007 Mizuho Financial Group Professor 112 Funds None
40 East 52nd Street Trustee and of Finance, Harvard Business 109 Portfolios
New York, NY 10022 Member of School. Deputy Dean for Academic
1951 the Audit Affairs since 2006; Unit Head,
Committee Finance, Harvard Business School
from 2005 to 2006; Senior
Associate Dean and Chairman of
the MBA Program of Harvard
Business School from 1999 to
2005; Member of the faculty of
Harvard Business School since
1981; Independent Consultant
since 1978.
------------------------------------------------------------------------------------------------------------------------------------
Robert S. Salomon, Jr. Director/ Since 2007 Formerly Principal of STI 112 Funds None
40 East 52nd Street Trustee and Management LLC (investment 109 Portfolios
New York, NY 10022 Member of adviser) from 1994 to 2005.
1936 the Audit
Committee
------------------------------------------------------------------------------------------------------------
1 Directors/Trustees serve until their resignation, removal or death, or until December 31 of the year
in which they turn 72.
2 Following the combination of Merrill Lynch Investment Managers, L.P. ("MLIM") and BlackRock, Inc.
("BlackRock") in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were
realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows
directors/trustees as joining the Fund's board in 2007, each director/trustee first became a member of
the board of directors/ trustees of other legacy MLIM or legacy BlackRock Funds as follows: G.
Nicholas Beckwith, III since 1999; Richard E. Cavanagh since 1994; Kent Dixon since 1988; Frank J.
Fabozzi since 1988; Kathleen F. Feldstein since 2005; James T. Flynn since 1996; Jerrold B. Harris
since 1999; R. Glenn Hubbard since 2004; W. Carl Kester since 1998; Karen P. Robards since 1998; and
Robert S. Salomon, Jr. since 1996.
====================================================================================================================================
Interested Directors/Trustees(3)
------------------------------------------------------------------------------------------------------------------------------------
Richard S. Davis Director/ Since 2007 Managing Director, BlackRock, 185 Funds None
40 East 52nd Street Trustee Inc. since 2005; Formerly Chief 295 Portfolios
New York, NY 10022 Executive Officer, State Street
1945 Research & Management Company
from 2000 to 2005; Formerly
Chairman of the Board of
Trustees, State Street Research
Mutual Funds from 2000 to 2005;
Formerly Chairman, SSR Realty
from 2000 to 2004.
------------------------------------------------------------------------------------------------------------------------------------
Henry Gabbay Director/ Since 2007 Consultant, BlackRock, Inc. 184 Funds None
40 East 52nd Street Trustee since 2007; Formerly Managing 294 Portfolios
New York, NY 10022 Director, BlackRock, Inc. from
1947 1989 to 2007; Formerly Chief
Administrative Officer,
BlackRock Advisors, LLC from
1998 to 2007; Formerly President
of BlackRock Funds and BlackRock
Bond Allocation Target Shares
from 2005 to 2007; Formerly
Treasurer of certain closed-end
Funds in the BlackRock fund
complex from 1989 to 2006.
------------------------------------------------------------------------------------------------------------
3 Messrs. Davis and Gabbay are both "interested persons," as defined in the Investment Company Act of
1940, of the Fund based on their positions with BlackRock, Inc. and its affiliates. Directors/Trustees
serve until their resignation, removal or death, or until December 31 of the year in which they turn
72.
ANNUAL REPORT AUGUST 31, 2008 51
Officers and Directors/Trustees (concluded)
Position(s)
Name, Address Held with Length of
and Year of Birth Funds Time Served Principal Occupation(s) During Past Five Years
====================================================================================================================================
Fund Officers(1)
------------------------------------------------------------------------------------------------------------------------------------
Donald C. Burke Fund Since 2007 Managing Director of BlackRock, Inc. since 2006; Formerly Managing
40 East 52nd Street President Director of Merrill Lynch Investment Managers, L.P. ("MLIM") and Fund
New York, NY 10022 and Chief Asset Management, L.P. ("FAM") in 2006; First Vice President thereof
1960 Executive from 1997 to 2005; Treasurer thereof from 1999 to 2006 and Vice
Officer President thereof from 1990 to 1997.
------------------------------------------------------------------------------------------------------------------------------------
Anne F. Ackerley Vice President Since 2007 Managing Director of BlackRock, Inc. since 2000; Chief Operating Officer
40 East 52nd Street of BlackRock's U.S. Retail Group since 2006; Head of BlackRock's Mutual
New York, NY 10022 Fund Group from 2000 to 2006; Merrill Lynch & Co., Inc. from 1984 to
1962 1986 and from 1988 to 2000, most recently as First Vice President and
Operating Officer of the Mergers and Acquisitions Group.
------------------------------------------------------------------------------------------------------------------------------------
Neal J. Andrews Chief Financial Since 2007 Managing Director of BlackRock, Inc. since 2006; Formerly Senior Vice
40 East 52nd Street Officer President and Line of Business Head of Fund Accounting and
New York, NY 10022 Administration at PNC Global Investment Servicing (U.S.) Inc. (formerly
1966 PFPC Inc.) from 1992 to 2006.
------------------------------------------------------------------------------------------------------------------------------------
Jay M. Fife Treasurer Since 2007 Managing Director of BlackRock, Inc. since 2007 and Director in 2006;
40 East 52nd Street Formerly Assistant Treasurer of the MLIM/FAM-advised Funds from 2005 to
New York, NY 10022 2006; Director of MLIM Fund Services Group from 2001 to 2006.
1970
------------------------------------------------------------------------------------------------------------------------------------
Brian P. Kindelan Chief Since 2007 Chief Compliance Officer of the BlackRock-advised Funds since 2007;
40 East 52nd Street Compliance Anti-Money Laundering Officer of the BlackRock-advised Funds since 2007;
New York, NY 10022 Officer of Managing Director and Senior Counsel of BlackRock, Inc. since 2005;
1959 the Fund Director and Senior Counsel of BlackRock Advisors, Inc. from 2001 to
2004 and Vice President and Senior Counsel thereof from 1998 to 2000;
Formerly Senior Counsel of The PNC Bank Corp. from 1995 to 1998.
------------------------------------------------------------------------------------------------------------------------------------
Howard Surloff Secretary Since 2007 Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds
40 East 52nd Street at BlackRock, Inc. since 2006; Formerly General Counsel (U.S.) of
New York, NY 10022 Goldman Sachs Asset Management, L.P. from 1993 to 2006.
1965
------------------------------------------------------------------------------------------------------------
1 Officers of the Funds serve at the pleasure of the Board of Directors/Trustees.
For All Funds
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
BlackRock MuniHoldings Insured Investment Fund
BlackRock MuniHoldings New York Insured Fund, Inc.
BlackRock MuniVest Fund, Inc.
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
The Massachusetts Health & Education Tax-Exempt Trust
Custodian
State Street Bank and
Trust Company
Boston, MA 02101
Transfer Agents
Common Shares:
BNY Mellon
Shareowner Services
Jersey City, NJ 07310
Preferred Shares:
Deutsche Bank Trust Company
New York, NY 10018
52 ANNUAL REPORT AUGUST 31, 2008
Additional Information
Dividend Policy
The Funds dividend policy is to distribute all or a portion of their net
investment income to their shareholders on a monthly basis. In order to provide
shareholders with a more stable level of dividend distributions, the Funds may
at times pay out less than the entire amount of net investment income earned in
any particular month and may at times in any particular month pay out such
accumulated but undistributed income in addition to net investment income earned
in that month. As a result, the dividends paid by the Funds for any particular
month may be more or less than the amount of net investment income earned by the
Funds during such month. The Funds' current accumulated but undistributed net
investment income, if any, is disclosed in the Statement of Assets and
Liabilities, which comprises part of the financial information included in this
report.
Fund Certification
BlackRock MuniHoldings Insured Investment Fund and BlackRock MuniHoldings New
York Insured Fund, Inc. are listed for trading on the New York Stock Exchange
("NYSE") have filed with the NYSE their annual chief executive officer
certification regarding compliance with the NYSE's listing standards. Each Fund
filed with the Securities and Exchange Commission ("SEC") the certification of
their chief executive officer and chief financial officer required by section
302 of the Sarbanes-Oxley Act.
Availability of Quarterly Schedule of Investments
Each Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Funds' Forms N-Q
are available on the SEC's website at http://www.sec.gov and may also be
reviewed and copied at the SEC's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained by
calling (800) SEC-0330. Each Fund's 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.
General Information
The Funds do not make available copies of their Statements of Additional
Information because the Funds' shares are not continuously offered, which means
that the Statement of Additional Information of the Funds has not been updated
after completion of the Funds' offerings and the information contained in the
Funds' Statement of Additional Information may have become outdated.
During the period, there were no material changes in the Funds' investment
objectives or policies other than as disclosed in Note 7 of the Notes to
Financial Statements or to the Funds' charters or by-laws that were not approved
by the shareholders or in the principal risk factors associated with investment
in the Funds. There have been no changes in the persons who are primarily
responsible for the day-to-day management of the Funds' portfolio.
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 eliminate duplicate mailings of shareholder
documents. Mailings of your shareholder documents may be householded
indefinitely unless you instruct us otherwise. If you do not want the mailing of
these documents to be combined with those for other members of your household,
please contact the Funds at (800) 441-7762.
Quarterly performance, semi-annual and annual reports and other information
regarding the Funds may be found on BlackRock's website, which can be accessed
at http://www.blackrock.com. This reference to BlackRock's website is intended
to allow investors public access to information regarding the Funds and does
not, and is not intended to, incorporate BlackRock's website into this report.
ANNUAL REPORT AUGUST 31, 2008 53
Additional Information (concluded)
Certificate of Designation/Articles Supplementary/Certificate of Vote of
Trustees
Effective May 30, 2008, following approval by the Funds' Boards and the
applicable ratings agencies, the definition of "Deposit Securities" in each
Fund's Certificate of Designation/Articles Supplementary/Certificate of Vote of
Trustees was amended in order to facilitate the redemption of the Funds'
Preferred Shares. The following phrase was added to the definition of "Deposit
Securities" found in each Fund's Certificate of Designation/ Articles
Supplementary/Certificate of Vote of Trustees:
; provided, however, that solely in connection with any redemption of
Preferred Shares, the term Deposit Securities shall include (i) any
committed financing pursuant to a credit agreement, reverse repurchase
agreement facility or similar credit arrangement, in each case which makes
available to the Fund, no later than the day preceding the applicable
redemption date, cash in an amount not less than the aggregate amount due
to holders by reason of the redemption of their Preferred Shares on such
redemption date; and (ii) cash amounts due and payable to the Fund out of
a sale of its securities if such cash amount is not less than the
aggregate amount due to holders by reason of the redemption of their
shares of Preferred Shares on such redemption date and such sale will be
settled not later than the day preceding the applicable redemption date.
Effective September 13, 2008, following approval by the Funds' Board and the
applicable rating agencies, the Board amended the terms of the Funds' Preferred
Shares in order to allow the Funds to enter into TOB transactions, the proceeds
of which were used to redeem a portion of the Funds' Preferred Shares.
Accordingly, the definition of Inverse Floaters was amended to incorporate the
Funds' permissible ratio of floating rate instruments into inverse floating rate
instruments. Additionally, conforming changes and certain formula modifications
concerning inverse floaters were made to the definitions of Moody's Discount
Factor and S&P Discount Factor, as applicable, to integrate the Fund's
investments in TOBs into applicable calculations.
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their non-public personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our websites.
BlackRock does not sell or disclose to non-affiliated third parties any
non-public personal information about its Clients, except as permitted by law or
as is necessary to respond to regulatory requests or to service Client accounts.
These non-affiliated third parties are required to protect the confidentiality
and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to non-public
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the non-public
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
54 ANNUAL REPORT AUGUST 31, 2008
This report is transmitted to shareholders only. It is not a prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. The Funds have leveraged their Common
Shares, which creates risks for Common Shareholders, including the likelihood of
greater volatility of net asset value and market price of the Common Shares, and
the risk that fluctuations in 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 (800) 441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's website
at http://www.sec.gov. Information about how each Fund voted proxies relating to
secu- rities held in the Funds' portfolios 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 Commission's website at http://www.sec.gov.
BlackRock MuniHoldings Insured Investment Fund
BlackRock MuniHoldings New York Insured Fund, Inc.
BlackRock MuniVest Fund, Inc.
The Massachusetts Health & Education Tax-Exempt Trust
100 Bellevue Parkway
Wilmington, DE 19809
BLACKROCK
#2MHMVMA-8/08
Item 2 - Code of Ethics - The registrant (or the "Fund") has adopted a code
of ethics, as of the end of the period covered by this report,
applicable to the registrant's principal executive officer,
principal financial officer and principal accounting officer, or
persons performing similar functions. During the period covered by
this report, there have been no amendments to or waivers granted
under the code of ethics. A copy of the code of ethics is available
without charge at www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors or trustees, as applicable (the "board of directors") has
determined that (i) the registrant has the following audit committee
financial experts serving on its audit committee and (ii) each audit
committee financial expert is independent:
Kent Dixon (term began effective November 1, 2007)
Frank J. Fabozzi (term began effective November 1, 2007)
James T. Flynn (term began effective November 1, 2007)
Ronald W. Forbes (term ended effective November 1, 2007)
W. Carl Kester (term began effective November 1, 2007)
Karen P. Robards (term began effective November 1, 2007)
Robert S. Salomon, Jr. (term began effective November 1, 2007)
Richard R. West (term ended effective November 1, 2007)
The registrant's board of directors has determined that W. Carl
Kester and Karen P. Robards qualify as financial experts pursuant to
Item 3(c)(4) of Form N-CSR.
Prof. Kester has a thorough understanding of generally accepted
accounting principles, financial statements and internal control
over financial reporting as well as audit committee functions. Prof.
Kester has been involved in providing valuation and other financial
consulting services to corporate clients since 1978. Prof. Kester's
financial consulting services present a breadth and level of
complexity of accounting issues that are generally comparable to the
breadth and complexity of issues that can reasonably be expected to
be raised by the registrant's financial statements.
Ms. Robards has a thorough understanding of generally accepted
accounting principles, financial statements and internal control
over financial reporting as well as audit committee functions. Ms.
Robards has been President of Robards & Company, a financial
advisory firm, since 1987. Ms. Robards was formerly an investment
banker for more than 10 years where she was responsible for
evaluating and assessing the performance of companies based on their
financial results. Ms. Robards has over 30 years of experience
analyzing financial statements. She also is a member of the audit
committee of one publicly held company and a non-profit
organization.
Under applicable securities laws, a person determined to be an audit
committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11
of the Securities Act of 1933, as a result of being designated or
identified as an audit committee financial expert. The designation
or identification as an audit committee financial expert does not
impose on such person any duties, obligations, or liabilities
greater than the duties, obligations, and liabilities imposed on
such person as a member of the audit committee and board of
directors in the absence of such designation or identification.
Item 4 - Principal Accountant Fees and Services
-----------------------------------------------------------------------------------------------------------------------------------
(a) Audit Fees (b) Audit-Related Fees(1) (c) Tax Fees(2) (d) All Other Fees(3)
-----------------------------------------------------------------------------------------------------------------------------------
Current Previous Current Previous Current Previous Current Previous
Fiscal Year Fiscal Fiscal Year Fiscal Fiscal Year Fiscal Fiscal Year Fiscal
Entity Name End Year End End Year End End Year End End Year End
-----------------------------------------------------------------------------------------------------------------------------------
BlackRock MuniHoldings
Insured Investment
Fund $32,500 $32,600 $3,500 $3,500 $6,100 $6,100 $1,049 $1,042
-----------------------------------------------------------------------------------------------------------------------------------
1 The nature of the services include assurance and related services
reasonably related to the performance of the audit of financial statements
not included in Audit Fees.
2 The nature of the services include tax compliance, tax advice and tax
planning.
3 The nature of the services include a review of compliance procedures and
attestation thereto.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to
the registrant's affiliated service providers that relate directly
to the operations and the financial reporting of the registrant.
Certain of these non-audit services that the Committee believes are
a) consistent with the SEC's auditor independence rules and b)
routine and recurring services that will not impair the independence
of the independent accountants may be approved by the Committee
without consideration on a specific case-by-case basis ("general
pre-approval"). The term of any general pre-approval is 12 months
from the date of the pre-approval, unless the Committee provides for
a different period. Tax or other non-audit services provided to the
registrant which have a direct impact on the operation or financial
reporting of the registrant will only be deemed pre-approved
provided that any individual project does not exceed $10,000
attributable to the registrant or $50,000 for all of the registrants
the Committee oversees. For this purpose, multiple projects will be
aggregated to determine if they exceed the previously mentioned cost
levels.
Any proposed services exceeding the pre-approved cost levels
will require specific pre-approval by the Committee, as will any
other services not subject to general pre-approval (e.g.,
unanticipated but permissible services). The Committee is informed
of each service approved subject to general pre-approval at the next
regularly scheduled in-person board meeting. At this meeting, an
analysis of such services is presented to the Committee for
ratification. The Committee may delegate to one or more of its
members the authority to approve the provision of and fees for any
specific engagement of permitted non-audit services, including
services exceeding pre-approved cost levels.
(e)(2) None of the services described in each of Items 4(b) through
(d) were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) Affiliates' Aggregate Non-Audit Fees:
--------------------------------------------------------------------
Current Fiscal Previous Fiscal
Entity Name Year End Year End
--------------------------------------------------------------------
BlackRock MuniHoldings
Insured Investment Fund $298,149 $295,142
--------------------------------------------------------------------
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment advisor (not including any non-affiliated
sub-advisor whose role is primarily portfolio management and is
subcontracted with or overseen by the registrant's investment
advisor), and any entity controlling, controlled by, or under common
control with the investment advisor that provides ongoing services
to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $287,500, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals
are members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):
Kent Dixon (term began effective November 1, 2007)
Frank J. Fabozzi (term began effective November 1, 2007)
James T. Flynn (term began effective November 1, 2007)
Ronald W. Forbes (term ended effective November 1, 2007)
W. Carl Kester (term began effective November 1, 2007)
Cynthia A. Montgomery (term ended effective November 1, 2007)
Jean Margo Reid (term ended effective November 1, 2007)
Karen P. Robards (term began effective November 1, 2007)
Robert S. Salomon, Jr. (term began effective November 1, 2007)
Roscoe S. Suddarth (not reappointed to audit committee effective
November 1, 2007; retired effective December 31, 2007)
Richard R. West (term ended effective November 1, 2007)
Item 6 - Investments
(a) The registrant's Schedule of Investments is included as part of
the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable due to no such divestments during the semi-annual
period covered since the previous Form N-CSR filing.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - The board of directors has
delegated the voting of proxies for the Fund securities to the
Fund's investment advisor ("Investment Advisor") pursuant to the
Investment Advisor's proxy voting guidelines. Under these
guidelines, the Investment Advisor will vote proxies related to Fund
securities in the best interests of the Fund and its stockholders.
From time to time, a vote may present a conflict between the
interests of the Fund's stockholders, on the one hand, and those of
the Investment Advisor, or any affiliated person of the Fund or the
Investment Advisor, on the other. In such event, provided that the
Investment Advisor's Equity Investment Policy Oversight Committee,
or a sub-committee thereof (the "Oversight Committee") is aware of
the real or potential conflict or material non-routine matter and if
the Oversight Committee does not reasonably believe it is able to
follow its general voting guidelines (or if the particular proxy
matter is not addressed in the guidelines) and vote impartially, the
Oversight Committee may retain an independent fiduciary to advise
the Oversight Committee on how to vote or to cast votes on behalf of
the Investment Advisor's clients. If the Investment Advisor
determines not to retain an independent fiduciary, or does not
desire to follow the advice of such independent fiduciary, the
Oversight Committee shall determine how to vote the proxy after
consulting with the Investment Advisor's Portfolio Management Group
and/or the Investment Advisor's Legal and Compliance Department and
concluding that the vote cast is in its client's best interest
notwithstanding the conflict. A copy of the Fund's Proxy Voting
Policy and Procedures are attached as Exhibit 99.PROXYPOL.
Information on how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is
available without charge, (i) at www.blackrock.com and (ii) on the
SEC's website at http://www.sec.gov.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
as of August 31, 2008.
(a)(1) BlackRock MuniHoldings Insured Investment Fund is managed by
a team of investment professionals comprised of Robert D. Sneeden,
Theodore R. Jaeckel, Jr., CFA, and Walter O'Connor. Each is a member
of BlackRock's municipal tax-exempt management group. Each is
jointly responsible for the day-to-day management of the Fund's
portfolio, which includes setting the Fund's overall investment
strategy, overseeing the management of the Fund and/or selection of
its investments. Messrs. Jaeckel and O'Connor have been members of
the Fund's management team since 2006. Mr. Sneeden has been a member
of the Fund's management team since 1998.
Mr. Jaeckel joined BlackRock in 2006. Prior to joining BlackRock, he
was a Managing Director (Municipal Tax-Exempt Fund Management) of
Merrill Lynch Investment Managers, L.P. ("MLIM") from 2005 to 2006
and a Director of MLIM from 1997 to 2005. He has been a portfolio
manager with BlackRock or MLIM since 1991.
Mr. O'Connor joined BlackRock in 2006. Prior to joining BlackRock,
he was a Managing Director (Municipal Tax-Exempt Fund Management) of
MLIM from 2003 to 2006 and was a Director of MLIM from 1997 to 2002.
He has been a portfolio manager with BlackRock or MLIM since 1991.
Mr. Sneeden joined BlackRock in 2006. Prior to joining BlackRock, he
was a Director (Municipal Tax-Exempt Fund Management) of MLIM since
2006 and was a Vice President of MLIM from 1998 to 2006. Mr. Sneeden
has been a portfolio manager with BlackRock or MLIM since 1994.
(a)(2) As of August 31, 2008:
-----------------------------------------------------------------------------------------------------------------------
Number of Other Accounts and
Number of Other Accounts Managed Assets for Which Advisory Fee is
and Assets by Account Type Performance-Based
-----------------------------------------------------------------------------------------------------------------------
Other Other Other Other
Name of Registered Pooled Registered Pooled
Portfolio Investment Investment Other Investment Investment Other
Manager Companies Vehicles Accounts Companies Vehicles Accounts
-----------------------------------------------------------------------------------------------------------------------
Theodore R.
Jaeckel, Jr. 81 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
$19.2 Billion $0 $0 $0 $0 $0
-----------------------------------------------------------------------------------------------------------------------
Walter
O'Connor 81 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
$19.2 Billion $0 $0 $0 $0 $0
-----------------------------------------------------------------------------------------------------------------------
Robert D.
Sneeden 10 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
$1.16 Billion $0 $0 $0 $0 $0
-----------------------------------------------------------------------------------------------------------------------
(iv) Potential Material Conflicts of Interest
BlackRock, Inc. and its affiliates (collectively, herein
"BlackRock") has built a professional working environment, firm-wide
compliance culture and compliance procedures and systems designed to
protect against potential incentives that may favor one account over
another. BlackRock has adopted policies and procedures that address
the allocation of investment opportunities, execution of portfolio
transactions, personal trading by employees and other potential
conflicts of interest that are designed to ensure that all client
accounts are treated equitably over time. Nevertheless, BlackRock
furnishes investment management and advisory services to numerous
clients in addition to the Fund, and BlackRock may, consistent with
applicable law, make investment recommendations to other clients or
accounts (including accounts which are hedge funds or have
performance or higher fees paid to BlackRock, or in which portfolio
managers have a personal interest in the receipt of such fees),
which may be the same as or different from those made for the Fund.
In addition, BlackRock, its affiliates and any officer, director,
stockholder or employee may or may not have an interest in the
securities whose purchase and sale BlackRock recommends to the Fund.
BlackRock, or any of its affiliates, or any officer, director,
stockholder, employee or any member of their families may take
different actions than those recommended to the Fund by BlackRock
with respect to the same securities. Moreover, BlackRock may refrain
from rendering any advice or services concerning securities of
companies of which any of BlackRock's (or its affiliates') officers,
directors or employees are directors or officers, or companies as to
which BlackRock or any of its affiliates or the officers, directors
or employees of any of them has any substantial economic interest or
possesses material non-public information. Each portfolio manager
also may manage accounts whose investment strategies may at times be
opposed to the strategy utilized for a fund. In this regard, it
should be noted that a portfolio manager may currently manage
certain accounts that are subject to performance fees. In addition,
a portfolio manager may assist in managing certain hedge funds and
may be entitled to receive a portion of any incentive fees earned on
such funds and a portion of such incentive fees may be voluntarily
or involuntarily deferred. Additional portfolio managers may in the
future manage other such accounts or funds and may be entitled to
receive incentive fees.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and
must treat each client fairly. When BlackRock purchases or sells
securities for more than one account, the trades must be allocated
in a manner consistent with its fiduciary duties. BlackRock attempts
to allocate investments in a fair and equitable manner among client
accounts, with no account receiving preferential treatment. To this
end, BlackRock has adopted a policy that is intended to ensure that
investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve
reasonable efficiency in client transactions and provide BlackRock
with sufficient flexibility to allocate investments in a manner that
is consistent with the particular investment discipline and client
base.
(a)(3) As of August 31, 2008:
Portfolio Manager Compensation Overview
BlackRock's financial arrangements with its portfolio managers, its
competitive compensation and its career path emphasis at all levels
reflect the value senior management places on key resources.
Compensation may include a variety of components and may vary from
year to year based on a number of factors. The principal components
of compensation include a base salary, a performance-based
discretionary bonus, participation in various benefits programs and
one or more of the incentive compensation programs established by
BlackRock such as its Long-Term Retention and Incentive Plan.
Base compensation. Generally, portfolio managers receive base
compensation based on their seniority and/or their position with the
firm. Senior portfolio managers who perform additional management
functions within the portfolio management group or within BlackRock
may receive additional compensation for serving in these other
capacities.
Discretionary Incentive Compensation
Discretionary incentive compensation is a function of several
components: the performance of BlackRock, Inc., the performance of
the portfolio manager's group within BlackRock, the investment
performance, including risk-adjusted returns, of the firm's assets
under management or supervision by that portfolio manager relative
to predetermined benchmarks, and the individual's seniority, role
within the portfolio management team, teamwork and contribution to
the overall performance of these portfolios and BlackRock. In most
cases, including for the portfolio managers of the Fund, these
benchmarks are the same as the benchmark or benchmarks against which
the performance of the Fund or other accounts managed by the
portfolio managers are measured. BlackRock's Chief Investment
Officers determine the benchmarks against which the performance of
funds and other accounts managed by each portfolio manager is
compared and the period of time over which performance is evaluated.
With respect to the portfolio managers, such benchmarks for the Fund
include a combination of market-based indices (e.g. Lehman Brothers
Municipal Bond Index), certain customized indices and certain fund
industry peer groups.
BlackRock's Chief Investment Officers make a subjective
determination with respect to the portfolio managers' compensation
based on the performance of the funds and other accounts managed by
each portfolio manager relative to the various benchmarks noted
above. Performance is measured on both a pre-tax and after-tax basis
over various time periods including 1, 3, 5 and 10-year periods, as
applicable.
Distribution of Discretionary Incentive Compensation
Discretionary incentive compensation is distributed to portfolio
managers in a combination of cash and BlackRock, Inc. restricted
stock units which vest ratably over a number of years. The
BlackRock, Inc. restricted stock units, if properly vested, will be
settled in BlackRock, Inc. common stock. Typically, the cash bonus,
when combined with base salary, represents more than 60% of total
compensation for the portfolio managers. Paying a portion of annual
bonuses in stock puts compensation earned by a portfolio manager for
a given year "at risk" based on BlackRock's ability to sustain and
improve its performance over future periods.
Long-Term Retention and Incentive Plan ("LTIP") -- The LTIP is
a long-term incentive plan that seeks to reward certain key
employees. Beginning in 2006, awards are granted under the LTIP in
the form of BlackRock, Inc. restricted stock units that, if properly
vested and subject to the attainment of certain performance goals,
will be settled in BlackRock, Inc. common stock. Messrs. Jaeckel and
O'Connor have each received awards under the LTIP.
Deferred Compensation Program -- A portion of the compensation
paid to eligible BlackRock employees may be voluntarily deferred
into an account that tracks the performance of certain of the firm's
investment products. Each participant in the deferred compensation
program is permitted to allocate his deferred amounts among the
various investment options. Each portfolio manager has participated
in the deferred compensation program.
Other compensation benefits. In addition to base compensation and
discretionary incentive compensation, portfolio managers may be
eligible to receive or participate in one or more of the following:
Incentive Savings Plans -- BlackRock, Inc. has created a
variety of incentive savings plans in which BlackRock employees are
eligible to participate, including a 401(k) plan, the BlackRock
Retirement Savings Plan (RSP), and the BlackRock Employee Stock
Purchase Plan (ESPP). The employer contribution components of the
RSP include a company match equal to 50% of the first 6% of eligible
pay contributed to the plan capped at $4,000 per year, and a company
retirement contribution equal to 3% of eligible compensation, plus
an additional contribution of 2% for any year in which BlackRock has
positive net operating income. The RSP offers a range of investment
options, including registered investment companies managed by the
firm. BlackRock contributions follow the investment direction set by
participants for their own contributions or, absent employee
investment direction, are invested into a balanced portfolio. The
ESPP allows for investment in BlackRock common stock at a 5%
discount on the fair market value of the stock on the purchase date.
Annual participation in the ESPP is limited to the purchase of 1,000
shares or a dollar value of $25,000. Each portfolio manager is
eligible to participate in these plans.
(a)(4) Beneficial Ownership of Securities. As of August 31, 2008,
none of Messrs. Jaeckel, O'Connor or Sneeden beneficially
owned any stock issued by the Fund.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable due to no such
purchases during the period covered by this report.
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's 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 registrant's Secretary. There have been no material changes
to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's principal executive and principal financial
officers or persons performing similar functions have concluded that
the registrant's disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940, as amended
(the "1940 Act")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
13a-15(b) under the Securities Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act)
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 registrant's internal control over
financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock MuniHoldings Insured Investment Fund
By: /s/ Donald C. Burke
-------------------
Donald C. Burke
Chief Executive Officer of
BlackRock MuniHoldings Insured Investment Fund
Date: October 20, 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 Insured Investment Fund
Date: October 20, 2008
By: /s/ Neal J. Andrews
-------------------
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniHoldings Insured Investment Fund
Date: October 20, 2008