UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-08181
Name of Fund: BlackRock MuniHoldings Fund, Inc. (MHD)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive
Officer, BlackRock MuniHoldings Fund, Inc., 800 Scudders Mill Road,
Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ,
08543-9011
Registrant's telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 04/30/2008
Date of reporting period: 05/01/2007 - 10/31/2007
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES
BLACKROCK SOLUTIONS
Semi-Annual Report
OCTOBER 31, 2007 (UNAUDITED)
BlackRock MuniHoldings Fund, Inc. (MHD)
BlackRock MuniHoldings Insured Fund, Inc. (MUS)
(BLACKROCK logo)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
This report, including the financial information herein, is transmitted to
shareholders of BlackRock MuniHoldings Fund, Inc. and BlackRock MuniHoldings
Insured Fund, Inc. for their information. This 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
Stock and intend to remain leveraged by issuing Preferred Stock to provide the
Common Stock shareholders with potentially higher rates of return. Leverage
creates risks for Common Stock shareholders, including the likelihood of
greater volatility of net asset value and market price of shares of the Common
Stock, and the risk that fluctuations in the short-term dividend rates of the
Preferred Stock may affect the yield to Common Stock shareholders. Statements
and other information herein are as dated and are subject to change.
A description of the policies and procedures that the Funds use to determine
how to vote proxies relating to portfolio securities is available (1)
without charge, upon request, by calling toll-free 1-800-441-7762; (2) on
www.blackrock.com; and (3) on the Securities and Exchange Commission's Web
site at http://www.sec.gov. Information about how the Funds vote proxies
relating to securities held in the Funds' portfolios during the most recent
12-month period ended June 30 is available (1) at www.blackrock.com and (2)
on the Securities and Exchange Commission's Web site at http://www.sec.gov.
BlackRock MuniHoldings Fund, Inc.
BlackRock MuniHoldings Insured Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
(GO PAPERLESS... logo)
It's Fast, Convenient, & Timely!
Table of Contents
Page
A Letter to Shareholders 3
Semi-Annual Report:
Fund Summary 4
The Benefits and Risks of Leveraging 6
Swap Agreements 6
Financial Statements:
Schedule of Investments 7
Statements of Net Assets 16
Statements of Operations 17
Statements of Changes in Net Assets 18
Financial Highlights 19
Notes to Financial Statements 21
Officers and Directors 24
Additional Information 25
SEMI-ANNUAL REPORT OCTOBER 31, 2007
A Letter to Shareholders
Dear Shareholder
The October reporting period was fairly tumultuous for financial markets, but
culminated in positive performance for most major benchmarks:
Total Returns as of October 31, 2007 6-month 12-month
U.S. equities (S&P 500 Index) +5.49% +14.56%
Small cap U.S. equities (Russell 2000 Index) +2.25% + 9.27%
International equities (MSCI Europe, Australasia, Far East Index) +8.19% +24.91%
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) +2.68% + 5.38%
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +1.30% + 2.91%
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) -0.07% + 6.89%
Past performance is no guarantee of future results. Index performance shown
for illustrative purposes only. You cannot invest directly in an index.
Subprime mortgage woes dominated headlines for much of 2007, but intensified
in the summer and fall, spawning a widespread liquidity and credit crisis with
ramifications across global markets. The Federal Reserve Board (the "Fed") and
other countries' central banks stepped in to inject liquidity into the markets
and bolster investor confidence. The Fed cut the federal funds rate by 0.50%
in September and another 0.25% on the final day of the reporting period,
bringing its target rate to 4.50%. In taking action, the central bankers, who
had long deemed themselves inflation fighters, were seeking to stem the
fallout from the credit crunch and forestall a wider economic unraveling. By
period-end, the Fed had cited the risks between slower economic growth and
faster inflation as equally balanced.
Amid the volatility throughout the past year, equity markets have displayed
surprising resilience. Most recently, the credit turmoil dampened corporate
merger-and-acquisition (M&A) activity, a key source of strength for equity
markets. Still, market fundamentals have held firm, dividend payouts and share
buybacks have continued to grow, and valuations remain attractive. These
tailwinds generally have prevailed over the headwinds created by the slowing
U.S. economy, troubled housing market and, recently, a more difficult
corporate earnings backdrop. International markets fared even better than U.S.
equities, benefiting from robust M&A activity and generally stronger economies.
In fixed income markets, mixed economic signals and the credit woes resulted
in a flight to quality. At the height of the uncertainty, investors shunned
bonds associated with the housing and credit markets in favor of higher-
quality Treasury issues. The yield on 10-year Treasury issues, which touched
5.30% in June (its highest level in five years), fell to 4.48% by period-end,
while prices correspondingly rose. The tax-exempt bond market has been
challenged by a combination of record-setting supply year-to-date, economic
uncertainty and concerns around the credit worthiness of bond insurers. This
has brought municipal bond prices to relatively attractive levels and, as
such, demand generally has remained firm.
As you navigate market volatility, we encourage you to review your investment
goals with your financial professional and to make portfolio changes, as
needed. For more market insight and commentary from BlackRock investment
professionals, we invite you to visit www.blackrock.com/funds. As always, we
thank you for entrusting BlackRock with your investment assets, and we look
forward to continuing to serve you in the months and years ahead.
Sincerely,
/s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.
Vice Chairman, BlackRock, Inc.
/s/ Peter J. Hayes
------------------
Peter J. Hayes
Managing Director, BlackRock, Inc.
THIS PAGE NOT PART OF YOUR FUND REPORT
Fund Summary as of October 31, 2007 BlackRock MuniHoldings Fund, Inc.
Investment Objective
BlackRock MuniHoldings Fund, Inc. (MHD) seeks to provide shareholders with
current income exempt from federal income taxes by investing primarily in a
portfolio of long-term, investment grade municipal obligations the interest on
which, in the opinion of bond counsel to the issuer, is exempt from federal
income taxes.
Fund Information
Symbol on New York Stock Exchange MHD
Initial Offering Date May 2, 1997
Yield on Closing Market Price as of October 31, 2007 ($14.77)* 5.77%
Tax Equivalent Yield** 8.88%
Current Monthly Distribution per share of Common Stock*** $.071
Current Annualized Distribution per share of Common Stock*** $.852
Leverage as of October 31, 2007**** 35.81%
* 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.
** Tax equivalent yield assumes the maximum federal tax rate of 35%.
*** The distribution is not constant and is subject to change. A portion of
the distribution may be deemed a tax return of capital or net realized
gain at fiscal year end.
**** As a percentage of managed assets, which is the total assets of the Fund
(including any assets attributable to Auction Market Preferred Stock that
may be outstanding) minus the sum of accrued liabilities (other than debt
representing financial leverage).
The table below summarizes the changes in the Fund's market price and net
asset value per share:
10/31/07 4/30/07 Change High Low
Market Price $14.77 $16.49 (10.43%) $16.68 $14.42
Net Asset Value $16.09 $16.51 (2.54%) $16.53 $15.63
The following charts show the portfolio composition and credit quality
allocations of the Fund's long-term investments:
Portfolio Composition
Credit Quality Allocations*
Sector 10/31/07 4/30/07
Industrial & Pollution Control 19% 19%
Hospital 18 19
City, County & State 14 14
Sales Tax 13 10
Transportation 9 11
Education 9 10
Power 6 3
Tobacco 4 6
Housing 4 4
Lease Revenue 3 3
Water & Sewer 1 1
Credit Rating 10/31/07 4/30/07
AAA/Aaa 35% 37%
AA/Aa 12 10
A/A 18 16
BBB/Baa 13 15
BB/Ba 1 1
B/B 1 1
CCC/Caa 2 2
NR (Not Rated) 18 18
* Using the higher of S&P's or Moody's ratings.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Fund Summary as of October 31, 2007 BlackRock MuniHoldings Insured Fund, Inc.
Investment Objective
BlackRock MuniHoldings Insured Fund, Inc. (MUS) seeks to provide shareholders
with current income exempt from federal income taxes by investing primarily in
a portfolio of long-term, investment grade municipal obligations the interest
on which, in the opinion of bond counsel to the issuer, is exempt from federal
income taxes. Under normal circumstances, the Fund also invests at least 80%
of its total assets in municipal bonds that are covered by insurance.
Fund Information
Symbol on New York Stock Exchange MUS
Initial Offering Date May 1, 1998
Yield on Closing Market Price as of October 31, 2007 ($12.14)* 4.79%
Tax Equivalent Yield** 7.37%
Current Monthly Distribution per share of Common Stock*** $.0485
Current Annualized Distribution per share of Common Stock*** $.582
Leverage as of October 31, 2007**** 43.03%
* 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.
** Tax equivalent yield assumes the maximum federal tax rate of 35%.
*** The distribution is not constant and is subject to change. A portion of
the distribution may be deemed a tax return of capital or net realized
gain at fiscal year end.
**** As a percentage of managed assets, which is the total assets of the Fund
(including any assets attributable to Auction Market Preferred Stock that
may be outstanding) minus the sum of accrued liabilities (other than debt
representing financial leverage).
The table below summarizes the changes in the Fund's market price and net
asset value per share:
10/31/07 4/30/07 Change High Low
Market Price $12.14 $13.13 (7.54%) $13.18 $11.85
Net Asset Value $13.74 $14.10 (2.55%) $14.11 $13.25
The following charts show the portfolio composition and credit quality
allocations of the Fund's long-term investments:
Portfolio Composition
Credit Quality Allocations*
Sector 10/31/07 4/30/07
City, County & State 17% 23%
Sales Tax 15 17
Education 13 14
Hospital 11 6
Lease Revenue 10 10
Housing 9 7
Power 9 2
Transportation 9 10
Industrial & Pollution Control 4 6
Water & Sewer 2 2
Resource Recovery 1 1
Tobacco 0 2
Credit Rating 10/31/07 4/30/07
AAA/Aaa 90% 89%
AA/Aa 2 4
A/A 5 3
BBB/Baa 3 4
* Using the higher of S&P's or Moody's ratings.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
The Benefits and Risks of Leveraging
The Funds utilize leverage to seek to enhance the yield and net asset value of
their Common Stock. However, these objectives cannot be achieved in all
interest rate environments. To leverage, each Fund issues Preferred Stock,
which pays 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 Stock shareholders in the form of dividends, and the value of
these portfolio holdings is reflected in the per share net asset value of each
Fund's Common Stock. However, in order to benefit Common Stock 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 Stock shareholders. If
either of these conditions change, then the risks of leveraging will begin to
outweigh the benefits.
To illustrate these concepts, assume a fund's Common Stock capitalization of
$100 million and the issuance of Preferred Stock 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 Stock based on the lower short-term interest rates. At the same
time, the fund's total portfolio of $150 million earns the income based on
long-term interest rates.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock 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 Stock will be reduced or eliminated
completely. At the same time, the market value on the fund's Common Stock
(that is, its price as listed on the New York Stock Exchange), may, as a
result, decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price of the
portfolio's investments, since the value of the fund's Preferred Stock does
not fluctuate. In addition to the decline in net asset value, the market value
of the fund's Common Stock may also decline.
As of October 31, 2007, BlackRock MuniHoldings Fund, Inc. and BlackRock
MuniHoldings Insured Fund, Inc. had leverage amounts, due to Auction Market
Preferred Stock, of 35.81% and 43.03% of total net assets, respectively,
before the deduction of Preferred Stock.
As a part of their investment strategy, the Funds may invest in certain
securities whose potential income return is inversely related to changes in a
floating interest rate ("inverse floaters"). In general, income on inverse
floaters will decrease when short-term interest rates increase and increase
when short-term interest rates decrease. Investments in inverse floaters may
be characterized as derivative securities and may subject the Funds to the
risks of reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of providing
investment leverage and, as a result, the market value of such securities will
generally be more volatile than that of fixed-rate, tax-exempt securities. To
the extent the Funds invest in inverse floaters, the market value of each
Fund's portfolio and the net asset value of each Fund's shares may also be
more volatile than if the Funds did not invest in these securities. (See Note
1(c) to Financial Statements for details of municipal bonds held in trust.)
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.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Schedule of Investments as of October 31, 2007 (Unaudited)
BlackRock MuniHoldings Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Alabama--2.9%
$ 1,750 Camden, Alabama, IDB, Exempt Facilities Revenue
Bonds (Weyerhaeuser Company), Series A,
6.125% due 12/01/2024 $ 1,868
4,550 Jefferson County, Alabama, Limited Obligation School
Warrants, Series A, 5% due 1/01/2024 4,698
Arizona--6.6%
Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1), Series A:
900 6.50% due 7/01/2012 898
2,200 6.75% due 7/01/2029 2,141
2,215 Phoenix, Arizona, IDA, Airport Facility, Revenue
Refunding Bonds (America West Airlines Inc.
Project), AMT, 6.30% due 4/01/2023 2,220
1,000 Pinal County, Arizona, COP, 5% due 12/01/2029 1,002
Salt Verde Financial Corporation, Arizona, Senior
Gas Revenue Bonds:
3,505 5% due 12/01/2032 3,383
4,905 5% due 12/01/2037 4,692
510 Show Low, Arizona, Improvement District Number 5,
Special Assessment Bonds, 6.375% due 1/01/2015 516
Arkansas--0.9%
2,000 University of Arkansas, University Construction
Revenue Bonds (UAMS Campus), Series B, 5%
due 11/01/2023 (d) 2,088
California--17.0%
875 Agua Caliente Band of Cahuilla Indians, California,
Casino Revenue Bonds, 5.60% due 7/01/2013 899
2,965 California Infrastructure and Economic Development
Bank, Insured Revenue Bonds (Rand Corporation),
Series A, 5.50% due 4/01/2012 (a)(f) 3,138
6,800 California State Public Works Board, Lease Revenue
Bonds (Department of Corrections), Series C, 5.25%
due 6/01/2028 7,019
California State, GO (f):
300 5.50% due 4/01/2014 334
2,100 5.50% due 4/01/2014 2,338
100 5.50% due 4/01/2014 111
3,955 California State, GO, Refunding, 5% due 6/01/2032 4,017
3,870 California Statewide Communities Development Authority,
Health Facility Revenue Bonds (Memorial Health
Services), Series A, 6% due 10/01/2023 4,123
2,000 East Side Union High School District, California, Santa
Clara County, GO (Election of 2002), Series D, 5%
due 8/01/2021 (g) 2,109
1,165 Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds,
Series A-3, 7.875% due 6/01/2013 (f) 1,412
Face
Amount Municipal Bonds Value
California (concluded)
Montebello, California, Unified School District,
GO (b)(m):
$ 2,405 5.61% due 8/01/2022 $ 1,240
2,455 5.61% due 8/01/2023 1,198
2,095 Oceanside, California, Unified School District, GO
(Election of 2000), Series C, 5.25%
due 8/01/2032 (d) 2,202
3,490 Sequoia, California, Unified High School District, GO,
Refunding, Series B, 5.50% due 7/01/2035 (c) 3,785
1,000 Sunnyvale, California, School District, GO (Election
of 2004), Series A, 5% due 9/01/2026 (c) 1,046
2,915 Tustin, California, Unified School District, Senior Lien
Special Tax Bonds (Community Facilities District
Number 97-1), Series A, 5% due 9/01/2032 (c) 2,976
Colorado--1.7%
2,645 Elk Valley, Colorado, Public Improvement Revenue
Bonds (Public Improvement Fee), Series A, 7.35%
due 9/01/2031 2,752
1,000 Plaza Metropolitan District Number 1, Colorado, Tax
Allocation Revenue Bonds (Public Improvement Fees),
8.125% due 12/01/2025 985
Connecticut--2.4%
2,165 Connecticut State Development Authority, Airport
Facility Revenue Bonds (Learjet Inc. Project), AMT,
7.95% due 4/01/2026 2,515
2,735 Connecticut State Development Authority, IDR (AFCO
Cargo BDL-LLC Project), AMT, 8% due 4/01/2030 2,908
Florida--7.7%
3,190 Hillsborough County, Florida, IDA, Hospital Revenue
Bonds (H. Lee Moffitt Cancer Center Project), Series A,
5.25% due 7/01/2037 3,216
2,340 Miami-Dade County, Florida, Subordinate Special
Obligation Revenue Bonds, Series A, 5.24%
due 10/01/2037 (d)(m) 501
Midtown Miami, Florida, Community Development
District, Special Assessment Revenue Bonds:
2,250 Series A, 6.25% due 5/01/2037 2,205
2,550 Series B, 6.50% due 5/01/2037 2,567
3,225 Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Orlando Regional Healthcare),
6% due 12/01/2012 (f) 3,578
2,095 Orlando, Florida, Greater Orlando Aviation Authority,
Airport Facilities Revenue Bonds (JetBlue Airways
Corp.), AMT, 6.50% due 11/15/2036 2,126
800 Orlando, Florida, Urban Community Development
District, Capital Improvement Special Assessment
Bonds, Series A, 6.95% due 5/01/2033 842
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedule of Investments,
we have abbreviated the names and descriptions of many of the securities
according to the list below and at 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
HDA Housing Development Authority
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
S/F Single-Family
VRDN Variable Rate Demand Notes
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Schedule of Investments (continued)
BlackRock MuniHoldings Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Florida (concluded)
$ 725 Palm Coast Park Community Development District,
Florida, Special Assessment Revenue Bonds, 5.70%
due 5/01/2037 $ 655
1,615 Preserve at Wilderness Lake, Florida, Community
Development District, Capital Improvement Bonds,
Series A, 5.90% due 5/01/2034 1,581
Georgia--2.9%
1,750 Atlanta, Georgia, Tax Allocation Bonds (Atlantic Station
Project), 7.90% due 12/01/2011 (f) 2,051
Atlanta, Georgia, Tax Allocation Refunding Bonds
(Atlantic Station Project) (e):
1,000 5.25% due 12/01/2020 1,080
2,000 5.25% due 12/01/2021 2,152
1,000 5.25% due 12/01/2022 1,074
Illinois--3.0%
1,200 Chicago, Illinois, Special Assessment Bonds (Lake Shore
East), 6.75% due 12/01/2032 1,260
4,000 Illinois HDA, Homeowner Mortgage Revenue Bonds,
AMT, Sub-Series C-2, 5.35% due 2/01/2027 4,050
700 Illinois State Finance Authority Revenue Bonds
(Landing At Plymouth Place Project), Series A, 6%
due 5/15/2025 712
625 Naperville, Illinois, IDR (General Motors Corporation),
Refunding, VRDN, 6.50% due 12/01/2012 (i) 625
Indiana--2.4%
7,645 Allen County, Indiana, Redevelopment District Tax
Increment Revenue Bonds (General Motors
Development Area), 7% due 5/15/2008 (f)(m) 5,340
Kentucky--1.3%
2,000 Louisville and Jefferson Counties, Kentucky, Metropolitan
Sewer District, Sewer and Drain System Revenue
Bonds, Series A, 5.50% due 5/15/2034 (d) 2,129
800 Public Energy Authority of Kentucky, Inc., Gas Supply
Revenue Bonds (BP Corporation of North America),
VRDN, Series A, 3.54% due 8/01/2016 (i) 800
Louisiana--4.3%
4,115 Louisiana Public Facilities Authority, Hospital Revenue
Bonds (Franciscan Missionaries of Our Lady Health
System, Inc.), Series A, 5.25% due 8/15/2036 4,172
1,750 New Orleans, Louisiana, Financing Authority Revenue
Bonds (Xavier University of Louisiana Project), 5.30%
due 6/01/2026 (d) 1,815
3,540 New Orleans, Louisiana, GO (Public Improvements),
5% due 10/01/2033 (d) 3,626
Maryland--3.0%
1,870 Anne Arundel County, Maryland, Special Obligation
Revenue Bonds (Arundel Mills Project), 7.10%
due 7/01/2009 (f) 2,009
1,760 Maryland State Economic Development Corporation,
Student Housing Revenue Bonds (University
of Maryland College Park Project), 6%
due 6/01/2013 (f) 1,976
2,750 Maryland State Energy Financing Administration,
Limited Obligation Revenue Bonds (Cogeneration-AES
Warrior Run), AMT, 7.40% due 9/01/2019 2,757
Face
Amount Municipal Bonds Value
Massachusetts--3.6%
$ 5,000 Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A, 5%
due 8/15/2030 (c) $ 5,189
2,900 Massachusetts State, HFA, Housing Revenue Bonds,
AMT, Series A, 5.25% due 12/01/2048 2,903
Michigan--2.6%
1,400 Flint, Michigan, Hospital Building Authority, Revenue
Refunding Bonds (Hurley Medical Center), Series A,
6% due 7/01/2020 (e) 1,477
3,000 Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds (Detroit Edison Company
Pollution Control Project), AMT, Series B, 5.65%
due 9/01/2029 3,081
1,300 Michigan State Strategic Fund, PCR (General Motors
Corporation Project), VRDN, 7% due 12/01/2008 (i) 1,300
Minnesota--1.7%
3,499 Minneapolis, Minnesota, Community Development Agency,
Supported Development Revenue Refunding Bonds,
Series G-3, 5.45% due 12/01/2011 (f) 3,753
Mississippi--5.5%
7,675 Claiborne County, Mississippi, PCR, Refunding
(System Energy Resources Inc. Project), 6.20%
due 2/01/2026 7,707
2,500 Mississippi Business Finance Corporation, Mississippi,
PCR, Refunding (System Energy Resources Inc. Project),
5.90% due 5/01/2022 2,528
Mississippi Development Bank, Special Obligation
Revenue Refunding Bonds (Gulfport Water and
Sewer System Project) (c):
1,000 5.25% due 7/01/2017 1,097
810 5.25% due 7/01/2019 881
Missouri--1.4%
1,915 Fenton, Missouri, Tax Increment Revenue Refunding
and Improvement Bonds (Gravois Bluffs), 7%
due 10/01/2011 (f) 2,172
1,000 Missouri State Development Finance Board, Infrastructure
Facilities Revenue Refunding Bonds (Branson), Series A,
5.50% due 12/01/2032 1,007
New Jersey--12.9%
New Jersey EDA, Cigarette Tax Revenue Bonds:
5,385 5.75% due 6/15/2029 5,641
2,280 5.75% due 6/15/2034 2,396
New Jersey EDA, Retirement Community Revenue
Bonds (f):
1,475 (Cedar Crest Village Inc. Facility), Series A,
7.25% due 11/15/2011 1,684
2,600 (Seabrook Village Inc.), Series A, 8.25%
due 11/15/2010 2,975
1,965 New Jersey EDA, School Facilities Construction Revenue
Bonds, Series O, 5.125% due 3/01/2030 2,045
New Jersey EDA, Special Facility Revenue Bonds
(Continental Airlines Inc. Project), AMT:
2,950 6.25% due 9/15/2029 2,982
1,000 6.625% due 9/15/2012 1,032
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Schedule of Investments (continued)
BlackRock MuniHoldings Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
New Jersey (concluded)
$ 3,325 New Jersey Health Care Facilities Financing Authority
Revenue Bonds (South Jersey Hospital), 6%
due 7/01/2012 (f) $ 3,656
3,500 New Jersey State Turnpike Authority, Turnpike Revenue
Bonds, Series C, 5% due 1/01/2030 (c) 3,630
2,315 Tobacco Settlement Financing Corporation of New
Jersey, Asset-Backed Revenue Bonds, 7%
due 6/01/2013 (f) 2,706
New Mexico--0.9%
2,000 Farmington, New Mexico, PCR, Refunding (Public
Service Company of New Mexico--San Juan Project),
Series A, 6.30% due 12/01/2016 2,044
New York--12.4%
1,155 Dutchess County, New York, IDA, Civic Facility Revenue
Refunding Bonds (Saint Francis Hospital), Series A,
7.50% due 3/01/2029 1,253
535 New York City, New York, City IDA, Civic Facility Revenue
Bonds, Series C, 6.80% due 6/01/2028 573
New York City, New York, City IDA, Special Facility Revenue
Bonds (Continental Airlines Inc. Project), AMT:
725 8% due 11/01/2012 774
725 8.375% due 11/01/2016 780
9,115 New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A, 5%
due 10/15/2020 (d) 9,675
3,680 New York State Dormitory Authority Revenue Bonds
(School Districts Financing Program), Series D, 5.25%
due 10/01/2023 (d) 3,912
Tobacco Settlement Financing Corporation of New York
Revenue Bonds:
3,150 Series A-1, 5.50% due 6/01/2018 3,357
3,500 Series C-1, 5.50% due 6/01/2017 3,689
1,400 Series C-1, 5.50% due 6/01/2022 1,492
2,080 Westchester County, New York, IDA, Continuing Care
Retirement, Mortgage Revenue Bonds (Kendal on
Hudson Project), Series A, 6.50% due 1/01/2034 2,164
Pennsylvania--5.8%
1,700 Bucks County, Pennsylvania, IDA, Retirement Community
Revenue Bonds (Ann's Choice Inc.), Series A, 6.25%
due 1/01/2035 1,743
3,500 Pennsylvania Economic Development Financing Authority,
Exempt Facilities Revenue Bonds (National Gypsum
Company), AMT, Series B, 6.125% due 11/01/2027 3,559
725 Philadelphia, Pennsylvania, Authority for IDR, Commercial
Development, 7.75% due 12/01/2017 726
Philadelphia, Pennsylvania, Authority for Industrial
Development, Senior Living Revenue Bonds:
1,105 (Arbor House Inc. Project), Series E, 6.10%
due 7/01/2033 1,141
1,245 (Saligman House Project), Series C, 6.10%
due 7/01/2033 1,285
Face
Amount Municipal Bonds Value
Pennsylvania (concluded)
$ 300 Philadelphia, Pennsylvania, Hospitals and Higher
Education Facilities Authority, Hospital Revenue
Refunding Bonds (Children's Hospital Project),
VRDN, Series A, 3.48% due 2/15/2014 (i) $ 300
3,500 Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Bonds (Guthrie Healthcare System),
Series B, 7.125% due 12/01/2011 (f) 4,195
Rhode Island--1.4%
2,820 Rhode Island State Health and Educational Building
Corporation, Hospital Financing Revenue Bonds
(Lifespan Obligation Group), 6.50% due 8/15/2012 (f) 3,178
South Carolina--1.5%
3,020 Medical University Hospital Authority, South Carolina,
Hospital Facilities Revenue Refunding Bonds, Series A,
6.375% due 8/15/2012 (f) 3,387
South Dakota--0.8%
1,825 South Dakota State Health and Educational Facilities
Authority Revenue Bonds (Sanford Health), 5%
due 11/01/2040 1,827
Tennessee--6.6%
4,030 Hardeman County, Tennessee, Correctional Facilities
Corporation Revenue Bonds, 7.75% due 8/01/2017 4,114
Shelby County, Tennessee, Health, Educational and
Housing Facility Board, Hospital Revenue Refunding
Bonds:
4,575 (Methodist Healthcare), 6.50% due 9/01/2012 (f) 5,172
2,250 (Saint Jude Children's Research Hospital), 5%
due 7/01/2031 2,277
3,160 Tennessee Educational Loan Revenue Bonds (Educational
Funding South Inc.), AMT, Senior Series B, 6.20%
due 12/01/2021 3,166
Texas--13.6%
4,000 Austin, Texas, Convention Center Revenue Bonds
(Convention Enterprises Inc.), First Tier, Series A,
6.70% due 1/01/2011 (f) 4,379
300 Bell County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Scott & White
Memorial Hospital), VRDN, Series B-1, 3.55%
due 8/15/2029 (d)(i) 300
2,340 Brazos River Authority, Texas, Revenue Refunding Bonds
(Reliant Energy Inc. Project), Series B, 7.75%
due 12/01/2018 2,420
3,655 Brazos River, Texas, Harbor Navigation District,
Brazoria County Environmental Revenue Refunding
Bonds (Dow Chemical Company Project), AMT,
Series A-7, 6.625% due 5/15/2033 3,898
1,800 Houston, Texas, Health Facilities Development
Corporation, Retirement Facility Revenue Bonds
(Buckingham Senior Living Community), Series A,
7.125% due 2/15/2014 (f) 2,149
3,000 Lower Colorado River Authority, Texas, PCR (Samsung
Austin Semiconductor), AMT, 6.375% due 4/01/2027 3,049
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Schedule of Investments (continued)
BlackRock MuniHoldings Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Texas (concluded)
$ 1,485 Matagorda County, Texas, Navigation District Number 1,
Revenue Refunding Bonds (Reliant Energy Inc.),
Series C, 8% due 5/01/2029 $ 1,532
200 North Central Texas, Health Facility Development
Corporation Revenue Bonds (Methodist Hospitals-
Dallas), VRDN, Series B, 3.55% due 10/01/2015 (d)(i) 200
1,425 Port Corpus Christi, Texas, Individual Development
Corporation, Environmental Facilities Revenue Bonds
(Citgo Petroleum Corporation Project), AMT, 8.25%
due 11/01/2031 1,457
SA Energy Acquisition Public Facilities Corporation,
Texas, Gas Supply Revenue Bonds:
2,425 5.50% due 8/01/2023 2,526
1,100 5.50% due 8/01/2024 1,144
1,120 5.50% due 8/01/2025 1,163
3,225 Texas State Department of Housing and Community
Affairs, Residential Mortgage Revenue Bonds, AMT,
Series A, 5.70% due 1/01/2033 (j) 3,274
2,770 Texas State Department of Housing and Community
Affairs, Residential Mortgage Revenue Refunding
Bonds, AMT, Series B, 5.25% due 7/01/2022 (j) 2,853
Vermont--1.1%
2,370 Vermont Educational and Health Buildings Financing
Agency, Revenue Bonds (Developmental and Mental
Health), Series A, 6% due 6/15/2017 2,487
Virginia--3.7%
1,150 Chesterfield County, Virginia, IDA, PCR (Virginia Electric
and Power Company), Series A, 5.875%
due 6/01/2017 1,220
3,000 Fairfax County, Virginia, EDA, Resource Recovery
Revenue Refunding Bonds, AMT, Series A, 6.10%
due 2/01/2011 (a) 3,217
1,800 Pocahontas Parkway Association, Virginia, Toll
Road Revenue Bonds, Senior Series B, 8.40%
due 8/15/2008 (f)(m) 522
3,035 Tobacco Settlement Financing Corporation of Virginia,
Asset-Backed Revenue Bonds, 5.625%
due 6/01/2015 (f) 3,399
Washington--0.6%
1,340 Seattle, Washington, Housing Authority Revenue
Bonds (Replacement Housing Project), 6.125%
due 12/01/2032 1,355
Wisconsin--1.2%
Wisconsin State Health and Educational Facilities
Authority Revenue Bonds:
825 (New Castle Place Project), Series A, 7%
due 12/01/2031 845
1,755 (SynergyHealth Inc.), 6% due 11/15/2032 1,820
Puerto Rico--2.1%
2,060 Puerto Rico Industrial, Medical and Environmental
Pollution Control Facilities Financing Authority,
Special Facilities Revenue Bonds (American
Airlines Inc.), Series A, 6.45% due 12/01/2025 2,069
19,236 Puerto Rico Sales Tax Financing Corporation, Sales
Tax Revenue Refunding Bonds, Series A, 5.06%
due 8/01/2047 (a)(m) 2,623
Face
Amount Municipal Bonds Value
U.S. Virgin Islands--1.6%
$ 3,460 Virgin Islands Government Refinery Facilities, Revenue
Refunding Bonds (Hovensa Coker Project), AMT,
6.50% due 7/01/2021 $ 3,672
Total Municipal Bonds
(Cost--$292,603)--137.1% 306,710
Municipal Bonds Held in Trust (h)
California--5.6%
6,810 California Pollution Control Financing Authority, PCR,
Refunding (Pacific Gas and Electric), AMT, Series A,
5.35%, due 12/01/2016 (d) 7,157
5,210 San Jose, California, Airport Revenue Refunding Bonds,
Series A, 5.50% due 3/01/2032 (a) 5,514
Maryland--5.1%
10,835 Baltimore, Maryland, Convention Center Hotel Revenue
Bonds, Senior Series A, 5.25% due 9/01/2039 (g) 11,357
New York--2.0%
4,240 New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A, 5.25%
due 10/15/2027 (a) 4,503
South Carolina--5.3%
11,600 South Carolina State Ports Authority, Ports Revenue
Bonds, AMT, 5.30% due 7/01/2026 (c) 11,790
Texas--5.5%
11,760 Harris County, Texas, Toll Road Revenue Refunding
Bonds, Senior Lien, Series A, 5.25%
due 8/15/2035 (c) 12,319
Total Municipal Bonds Held in Trust
(Cost--$53,013)--23.5% 52,640
Shares
Held Short-Term Securities
9 Merrill Lynch Institutional Tax-Exempt
Fund, 3.43% (k)(l) 9
Total Short-Term Securities
(Cost--$9)--0.0% 9
Total Investments (Cost--$345,625*)--160.6% 359,359
Other Assets Less Liabilities--6.6% 14,837
Liability for Trust Certificates, Including Interest Expense
Payable--(11.3%) (25,454)
Preferred Stock, at Redemption Value--(55.9%) (125,040)
----------
Net Assets Applicable to Common Stock--100.0% $ 223,702
==========
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Schedule of Investments (concluded)
BlackRock MuniHoldings Fund, Inc. (In Thousands)
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 320,193
===============
Gross unrealized appreciation $ 15,228
Gross unrealized depreciation (1,290)
---------------
Net unrealized appreciation $ 13,938
===============
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) ACA Insured.
(f) Prerefunded.
(g) XL Capital Insured.
(h) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund may have acquired the residual interest certificates.
These securities serve as collateral in a financing transaction. See Note
1(c) to Financial Statements for details of municipal bonds held in trust.
(i) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(j) FNMA/GNMA Collateralized.
(k) 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 Dividend
Affiliate Activity Income
Merrill Lynch Institutional Tax-Exempt Fund -- --++
++ Amount is less than $1,000.
(l) Represents the current yield as of October 31, 2007.
(m) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
See Notes to Financial Statements.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Schedule of Investments as of October 31, 2007 (Unaudited)
BlackRock MuniHoldings Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Alabama--1.3%
$ 2,170 Jefferson County, Alabama, Limited Obligation School
Warrants, Series A, 5.50% due 1/01/2022 $ 2,324
Arizona--1.1%
2,100 Salt Verde Financial Corporation, Arizona, Senior Gas
Revenue Bonds, 5% due 12/01/2037 2,009
California--26.7%
2,000 California State Public Works Board, Lease Revenue
Bonds (Department of General Services--Capitol East
End Complex), Series A, 5% due 12/01/2027 (a) 2,080
1,300 California State, GO, 5.50% due 4/01/2014 (f) 1,448
5,955 California State, Various Purpose, GO, 5.25%
due 12/01/2022 (d) 6,325
East Side Union High School District, California, Santa
Clara County, GO (Election of 2002):
1,800 Series B, 5% due 8/01/2027 (b) 1,871
5,155 Series D, 5% due 8/01/2029 (g) 5,359
2,565 Modesto, California, Schools Infrastructure Financing
Agency, Special Tax Bonds, 5.50% due 9/01/2036 (a) 2,714
1,265 San Jose, California, GO (Libraries, Parks and Public
Safety Projects), 5% due 9/01/2030 (e) 1,305
San Pablo, California, Joint Powers Financing Authority,
Tax Allocation Revenue Refunding Bonds (e)(q):
2,635 5.66% due 12/01/2024 1,110
2,355 5.66% due 12/01/2025 935
2,355 5.66% due 12/01/2026 886
4,265 Santa Ana, California, Unified School District, GO, 5%
due 8/01/2032 (e) 4,363
3,145 Sequoia, California, Unified High School District, GO,
Refunding, Series B, 5.50% due 7/01/2035 (d) 3,411
4,540 Stockton, California, Public Financing Revenue Bonds
(Redevelopment Projects), Series A, 5.25%
due 9/01/2031 (h) 4,575
Tustin, California, Unified School District, Senior Lien
Special Tax Bonds (Community Facilities District
Number 97-1), Series A (d):
2,180 5% due 9/01/2032 2,226
2,800 5% due 9/01/2038 2,854
2,000 University of California Revenue Bonds (Multiple
Purpose Projects), Series Q, 5% due 9/01/2022 (d) 2,088
3,480 West Contra Costa, California, Unified School District,
GO, Series C, 5% due 8/01/2021 (b) 3,654
Colorado--6.4%
10,620 Aurora, Colorado, COP, 5.75% due 12/01/2010 (a)(f) 11,321
Connecticut--0.1%
200 Connecticut State Health and Educational Facilities
Authority Revenue Bonds (Quinnipiac University),
VRDN, Series F, 4.60% due 7/01/2031 (h)(i) 200
Face
Amount Municipal Bonds Value
District of Columbia - 0.9%
$ 1,500 District of Columbia, Deed Tax Revenue Bonds
(Housing Production Trust Fund--New Communities
Project), Series A, 5% due 6/01/2032 (e) $ 1,557
Florida - 23.8%
1,470 Broward County, Florida, HFA, S/F Mortgage Revenue
Refunding Bonds, AMT, Series E, 5.90%
due 10/01/2039 (n)(o) 1,559
2,100 Hillsborough County, Florida, HFA, S/F Mortgage Revenue
Bonds, AMT, Series 1, 5.375% due 10/01/2049 (n)(o) 2,226
3,300 Hillsborough County, Florida, IDA, Hospital Revenue
Bonds (H. Lee Moffitt Cancer Center Project), Series A,
5.25% due 7/01/2037 3,327
4,515 Jacksonville, Florida, Health Facilities Authority, Hospital
Revenue Bonds (Baptist Medical Center Project), 5%
due 8/15/2037 (d) 4,602
2,500 Lee County, Florida, HFA, S/F Mortgage Revenue Bonds
(Multi-County Program), AMT, Series A-2, 6%
due 9/01/2040 (n)(o) 2,717
Lee Memorial Health System, Florida, Hospital Revenue
Bonds, Series A:
1,060 5% due 4/01/2032 1,062
3,000 5% due 4/01/2032 (a) 3,070
7,225 Miami-Dade County, Florida, Aviation Revenue Refunding
Bonds (Miami International Airport), AMT, Series A, 5%
due 10/01/2040 (g) 7,234
2,225 Miami-Dade County, Florida, Subordinate Special
Obligation Revenue Bonds, Series A, 5.24%
due 10/01/2037 (e)(q) 476
1,000 Okaloosa County, Florida, Water and Sewer Revenue
Refunding Bonds, 5% due 7/01/2036 (d) 1,030
1,500 Orange County, Florida, School Board, COP, Series A,
5% due 8/01/2032 (b) 1,542
3,850 Pasco County, Florida, Half-Cent Sales Tax Revenue
Bonds, 5.125% due 12/01/2028 (a) 3,983
4,295 Saint Petersburg, Florida, Public Utilities Revenue
Refunding Bonds, 5% due 10/01/2035 (e) 4,411
2,275 South Florida Water Management District, COP, 5%
due 10/01/2036 (a) 2,327
University of North Florida Financing Corporation,
Capital Improvement Revenue Bonds (Housing
Project) (b):
1,210 5% due 11/01/2032 1,254
1,290 5% due 11/01/2037 1,325
Georgia--2.4%
4,000 Augusta, Georgia, Water and Sewer Revenue Bonds,
5.25% due 10/01/2034 (d) 4,189
Illinois--7.5%
7,965 Chicago, Illinois, GO, Series A, 6% due 7/01/2010 (b)(f) 8,553
4,500 Illinois State, GO, First Series, 6% due 1/01/2018 (b) 4,712
45 Lake, Cook, Kane and McHenry Counties, Illinois,
Community Unit School District Number 220, GO,
5.75% due 12/01/2019 (b) 48
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Schedule of Investments (continued)
BlackRock MuniHoldings Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Indiana--3.5%
$ 6,000 Indiana Municipal Power Agency, Power Supply System
Revenue Bonds, Series A, 5% due 1/01/2042 (e) $ 6,141
Louisiana--3.9%
6,650 Louisiana State, Gas and Fuels Tax Revenue Bonds,
Series A, 5% due 5/01/2041 (b) 6,831
Massachusetts--11.6%
3,375 Massachusetts Bay Transportation Authority, Sales Tax
Revenue Refunding Bonds, Senior Series A, 5%
due 7/01/2035 3,407
5,600 Massachusetts State Health and Educational Facilities
Authority Revenue Bonds (Lahey Clinic Medical
Center), Series D, 5.25% due 8/15/2037 5,685
8,000 Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A, 5%
due 8/15/2030 (d) 8,302
565 Massachusetts State, HFA, Housing Development
Revenue Refunding Bonds, AMT, Series A, 5.15%
due 6/01/2011 (e) 574
2,440 Massachusetts State, HFA, Rental Housing Mortgage
Revenue Bonds, AMT, Series C, 5.50%
due 7/01/2032 (d) 2,536
Michigan--2.3%
2,035 Boyne City, Michigan, Public School District, GO, 5.75%
due 5/01/2009 (b)(f) 2,103
Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds (g):
400 DRIVERS, AMT, Series 858Z, 7.161%
due 12/01/2011 (j) 434
1,500 (Detroit Edison Company Pollution Control
Project), AMT, Series B, 5.65% due 9/01/2029 1,554
Minnesota--2.4%
4,015 Sauk Rapids, Minnesota, Independent School District
Number 47, GO, Series A, 5.65% due 2/01/2019 (e) 4,268
Missouri--5.2%
2,000 Cape Girardeau, Missouri, School District Number 063,
GO (Missouri Direct Deposit Program), 5.50%
due 3/01/2018 (b) 2,081
Mehlville, Missouri, School District Number R-9, COP,
Series A (d):
1,925 5.50% due 3/01/2014 2,039
2,175 5.50% due 3/01/2015 2,304
1,170 5.50% due 3/01/2016 1,239
1,500 5.50% due 3/01/2017 1,584
Nebraska--1.8%
2,000 Omaha Convention Hotel Corporation, Nebraska,
Convention Center Revenue Bonds, First Tier,
Series A, 5.50% due 4/01/2012 (a)(f) 2,159
1,000 Scotts Bluff County, Nebraska, Hospital Authority
Number 1, Hospital Revenue Refunding Bonds
(Regional West Medical Center Project), VRDN,
5.50% due 12/01/2028 (h)(i) 1,000
Face
Amount Municipal Bonds Value
New Jersey--13.7%
New Jersey EDA, Cigarette Tax Revenue Bonds:
$ 1,800 5.625% due 6/15/2018 $ 1,822
5,295 5.75% due 6/15/2029 5,546
3,800 5.75% due 6/15/2034 (l) 4,128
6,700 New Jersey EDA, Motor Vehicle Surcharge Revenue
Bonds, Series A, 5.25% due 7/01/2033 (e) 7,037
5,500 New Jersey State Turnpike Authority, Turnpike Revenue
Bonds, Series C, 5% due 1/01/2030 (d) 5,704
New Mexico--2.0%
3,325 New Mexico Finance Authority, Senior Lien State
Transportation Revenue Bonds, Series A, 5.125%
due 6/15/2018 (e) 3,550
New York--16.4%
10,000 Nassau Health Care Corporation, New York,
Health System Revenue Bonds, 5.75%
due 8/01/2009 (d)(f) 10,584
4,000 New York City, New York, GO, Series E, 5%
due 11/01/2017 (d) 4,283
New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A (a):
4,000 5% due 10/15/2032 4,155
4,095 5.25% due 10/15/2027 4,349
3,505 New York State Dormitory Authority Revenue Bonds
(School Districts Financing Program), Series D,
5.25% due 10/01/2023 (e) 3,726
1,800 New York State Dormitory Authority, Non-State Supported
Debt Revenue Bonds (New York University), Series A,
5% due 7/01/2032 (a) 1,875
Ohio--0.3%
600 Trumbull County, Ohio, Health Care Facilities Revenue
Bonds (Shepherd of the Valley), VRDN, 5.10%
due 10/01/2031 (h)(i) 600
Oregon--0.8%
1,400 Portland, Oregon, Urban Renewal and Redevelopment
Tax Allocation Bonds (Oregon Convention Center),
Series A, 5.75% due 6/15/2015 (a) 1,488
Pennsylvania--3.8%
3,900 Pennsylvania State Higher Educational Facilities Authority,
State System of Higher Education Revenue Bonds,
Series O, 5.125% due 6/15/2024 (a) 3,904
2,615 Pittsburgh, Pennsylvania, GO, Series C, 5.25%
due 9/01/2017 (d) 2,864
Rhode Island--4.7%
5,000 Providence, Rhode Island, Redevelopment Agency
Revenue Refunding Bonds (Public Safety and
Municipal Buildings), Series A, 5.75%
due 4/01/2010 (a)(f) 5,312
2,870 Rhode Island State Health and Educational Building
Corporation Revenue Bonds (Rhode Island School
of Design), Series D, 5.50% due 8/15/2031 (g) 3,055
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Schedule of Investments (continued)
BlackRock MuniHoldings Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
South Carolina--8.6%
$ 1,525 Medical University Hospital Authority, South Carolina,
Hospital Facilities Revenue Refunding Bonds,
Series A, 5.25% due 2/15/2025 (c)(e) $ 1,602
3,400 South Carolina Jobs EDA, Hospital Revenue Bonds
(Oconee Memorial Hospital Project), VRDN, Series A,
6% due 10/01/2036 (h)(i) 3,400
10,000 South Carolina State Public Service Authority, Revenue
Refunding Bonds, Series A, 5% due 1/01/2042 (a) 10,296
Tennessee--2.9%
600 Sevier County, Tennessee, Public Building Authority,
Local Government Public Improvement Revenue Bonds,
VRDN, Series IV-E-5, 3.57% due 6/01/2020 (a)(i) 600
Tennessee HDA, Revenue Refunding Bonds
(Homeownership Program), AMT, Series A (d):
2,355 5.25% due 7/01/2022 2,384
2,165 5.35% due 1/01/2026 2,189
Texas--3.1%
2,651 Houston, Texas, Community College System, Participation
Interests, COP (Alief Center Project), 5.75%
due 8/15/2022 (e) 2,739
2,700 Tarrant County, Texas, Health Facilities Development
Corporation, Hospital Revenue Refunding Bonds
(Cumberland Rest, Inc. Project), VRDN, Series, 4.95%
due 8/15/2032 (h)(i) 2,700
Virginia--0.9%
1,500 Virginia State, HDA, Commonwealth Mortgage Revenue
Bonds, Series H, Sub-Series H-1, 5.35%
due 7/01/2031 (e) 1,533
Washington--4.9%
4,000 Bellevue, Washington, GO, Refunding, 5.50%
due 12/01/2039 (e) 4,305
2,310 Chelan County, Washington, Public Utility District
Number 001, Consolidated Revenue Bonds (Chelan
Hydro System), AMT, Series A, 5.45%
due 7/01/2037 (a) 2,376
1,810 Snohomish County, Washington, Public Utility District
Number 001, Electric Revenue Bonds, 5.50%
due 12/01/2022 (d) 1,939
West Virginia--2.9%
5,000 West Virginia State Housing Development Fund,
Housing Finance Revenue Refunding Bonds,
Series D, 5.20% due 11/01/2021 (e) 5,112
Wisconsin--0.3%
500 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Blood Center of Southeastern
Wisconsin Project), 5.50% due 6/01/2024 511
Face
Amount Municipal Bonds Value
Puerto Rico--2.0%
$ 605 Puerto Rico Commonwealth, Public Improvement, GO,
Refunding, Series B, 5.25% due 7/01/2032 $ 624
1,000 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Series TT, 5% due 7/01/2037 1,015
1,870 Puerto Rico Public Buildings Authority, Government
Facilities Revenue Refunding Bonds, Series D, 5.25%
due 7/01/2036 1,906
Total Municipal Bonds
(Cost--$291,586)--168.2% 297,716
Municipal Bonds Held in Trust (p)
Arkansas--4.3%
7,420 Arkansas State Development Finance Authority,
M/F Mortgage Revenue Refunding Bonds, Series C,
5.35% due 12/01/2035 (c)(e) 7,578
Illinois--2.6%
4,300 Chicago, Illinois, O'Hare International Airport Revenue
Bonds, Third Lien, AMT, Series B-2, 6%,
due 1/01/2027 (e)(g) 4,657
Michigan--2.8%
Michigan State Strategic Fund, Limited Obligation Revenue
Refunding Bonds (Detroit Edison Company Pollution
Control Project), AMT (g):
1,200 Series A, 5.50%, due 6/01/2030 1,251
3,500 Series C, 5.65%, due 9/01/2029 3,625
Texas--4.7%
8,000 Dallas-Fort Worth, Texas, International Airport Revenue
Bonds, AMT, Series A, 5.50% due 11/01/2033 (e) 8,306
Total Municipal Bonds Held in Trust
(Cost--$25,879)--14.4% 25,417
Shares
Held Short-Term Securities
21 Merrill Lynch Institutional Tax-Exempt
Fund, 3.43% (k)(m) 21
Total Short-Term Securities
(Cost--$21)--0.0% 21
Total Investments (Cost--$317,486*)--182.6% 323,154
Other Assets Less Liabilities--0.1% 290
Liability for Trust Certificates, Including Interest Expense
Payable--(7.0%) (12,394)
Preferred Stock, at Redemption Value--(75.7%) (134,052)
----------
Net Assets Applicable to Common Stock--100.0% $ 176,998
==========
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Schedule of Investments (concluded)
BlackRock MuniHoldings Insured Fund, Inc. (In Thousands)
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 305,416
==============
Gross unrealized appreciation $ 6,238
Gross unrealized depreciation (710)
--------------
Net unrealized appreciation $ 5,528
==============
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FHA Insured.
(d) FSA Insured.
(e) MBIA Insured.
(f) Prerefunded.
(g) XL Capital Insured.
(h) Radian Insured.
(i) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(j) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(k) 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 Dividend
Affiliate Activity Income
Merrill Lynch Institutional Tax-Exempt Fund -- --++
++ Amount is less than $1,000.
(l) Assured Guaranty Insured.
(m) Represents the current yield as of October 31, 2007.
(n) FHLMC Collateralized.
(o) FNMA/GNMA Collateralized.
(p) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund may have acquired the residual interest certificates.
These securities serve as a collateral in financing transaction. See Note
1(c) to Financial Statements for details of municipal bonds held in trust.
(q) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
See Notes to Financial Statements.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Statements of Net Assets
BlackRock
BlackRock MuniHoldings
MuniHoldings Insured
As of October 31, 2007 (Unaudited) Fund, Inc. Fund, Inc.
Assets
Investments in unaffiliated securities, at value* $ 359,350,004 $ 323,133,238
Investments in affiliated securities, at value** 8,920 20,846
Cash 29,504 7,454
Receivable for securities sold 13,540,861 --
Interest receivable 5,672,089 4,390,232
Prepaid expenses and other assets 2,779 2,887
--------------- ---------------
Total assets 378,604,157 327,554,657
--------------- ---------------
Liabilities
Trust certificates 25,227,500 12,210,000
Payable for securities purchased 3,225,856 3,337,092
Interest expense payable 226,409 183,671
Payable to investment adviser 162,852 127,322
Payable to other affiliates 2,027 1,806
Dividends payable to shareholders 987,321 624,981
Accrued expenses and other liabilities 30,258 19,738
--------------- ---------------
Total liabilities 29,862,223 16,504,610
--------------- ---------------
Preferred Stock
Preferred Stock, at redemption value, par value $.10 per share*** of AMPS+++
at $25,000 per share liquidation preference 125,040,289 134,051,764
--------------- ---------------
Net Assets Applicable to Common Stock
Net assets applicable to Common Stock $ 223,701,645 $ 176,998,283
=============== ===============
Net Assets Consist of
Undistributed investment income--net $ 1,590,320 $ 909,745
Accumulated realized capital gains (losses)--net 1,296,590 (21,334,205)
Unrealized appreciation--net 13,733,968 5,667,608
--------------- ---------------
Total accumulated earnings (losses)--net 16,620,878 (14,756,852)
--------------- ---------------
Common Stock, par value $.10 per share++ 1,390,593 1,288,620
Paid-in capital in excess of par 205,690,174 190,466,515
--------------- ---------------
Net Assets $ 223,701,645 $ 176,998,283
=============== ===============
Net asset value per share of Common Stock $ 16.09 $ 13.74
=============== ===============
Market price $ 14.77 $ 12.14
=============== ===============
* Identified cost of unaffiliated securities $ 345,616,036 $ 317,465,630
=============== ===============
** Identified cost of affiliated securities $ 8,920 $ 20,846
=============== ===============
*** Preferred Stock authorized, issued and outstanding:
Series A Shares 2,200 2,680
=============== ===============
Series B Shares 2,200 2,680
=============== ===============
Series C Shares 600 --
=============== ===============
++ Common Stock issued and outstanding 13,905,925 12,886,200
=============== ===============
+++ Auction Market Preferred Stock.
See Notes to Financial Statements.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Statements of Operations
BlackRock
BlackRock MuniHoldings
MuniHoldings Insured
For the Six Months Ended October 31, 2007 (Unaudited) Fund, Inc. Fund, Inc.
Investment Income
Interest and amortization of premium and discount earned $ 9,857,660 $ 8,644,694
Dividends from affiliates 158 369
--------------- ---------------
Total income 9,857,818 8,645,063
--------------- ---------------
Expenses
Investment advisory fees 965,459 859,610
Interest expense and fees 464,139 289,517
Commission fees 154,667 169,925
Accounting services 61,560 58,845
Professional fees 58,424 55,052
Transfer agent fees 22,616 18,211
Directors' fees and expenses 13,521 13,898
Printing and shareholder reports 22,122 16,206
Custodian fees 10,020 9,801
Pricing fees 10,599 8,199
Listing fees 4,659 4,715
Other 19,695 20,961
--------------- ---------------
Total expenses before waiver and/or reimbursement 1,807,481 1,524,940
Waiver and/or reimbursement of expenses (9) (107,375)
--------------- ---------------
Total expenses after waiver and/or reimbursement 1,807,472 1,417,565
--------------- ---------------
Investment income--net 8,050,346 7,227,498
--------------- ---------------
Realized and Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net 162,036 (453,214)
Forward interest rate swaps--net 66,610 207,457
--------------- ---------------
Total realized gain (loss)--net 228,646 (245,757)
--------------- ---------------
Change in unrealized appreciation/depreciation on:
Investments--net (5,865,345) (5,213,294)
Forward interest rate swaps--net -- (31,667)
--------------- ---------------
Total change in unrealized appreciation/depreciation--net (5,865,345) (5,244,961)
--------------- ---------------
Total realized and unrealized loss--net (5,636,699) (5,490,718)
--------------- ---------------
Dividends to Preferred Stock Shareholders
Investment income--net (2,314,383) (2,500,087)
--------------- ---------------
Net Increase (Decrease) in Net Assets Resulting from Operations $ 99,264 $ (763,307)
=============== ===============
See Notes to Financial Statements.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Statements of Changes in Net Assets
BlackRock MuniHoldings BlackRock MuniHoldings
Fund, Inc. Insured Fund, Inc.
For the For the For the For the
Six Months Ended Year Ended Six Months Ended Year Ended
October 31, 2007 April 30, October 31, 2007 April 30,
Increase (Decrease) in Net Assets: (Unaudited) 2007 (Unaudited) 2007
Operations
Investment income--net $ 8,050,346 $ 16,239,704 $ 7,227,498 $ 11,974,605
Realized gain (loss)--net 228,646 1,240,725 (245,757) 611,540
Change in unrealized appreciation/depreciation--net (5,865,345) 4,521,157 (5,244,961) 4,113,935
Dividends to Preferred Stock shareholders (2,314,383) (4,394,391) (2,500,087) (4,679,918)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets resulting from operations 99,264 17,607,195 (763,307) 12,020,162
-------------- -------------- -------------- --------------
Dividends to Common Stock Shareholders
Investment income--net (5,923,592) (12,475,627) (3,878,746) (8,169,851)
-------------- -------------- -------------- --------------
Stock Transactions
Value of shares issued to Common Stock shareholders in
reinvestment of dividends 149,627 587,176 -- --
-------------- -------------- -------------- --------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to
Common Stock (5,674,701) 5,718,744 (4,642,053) 3,850,311
Beginning of period 229,376,346 223,657,602 181,640,336 177,790,025
-------------- -------------- -------------- --------------
End of period* $ 223,701,645 $ 229,376,346 $ 176,998,283 $ 181,640,336
============== ============== ============== ==============
* Undistributed investment income--net $ 1,590,320 $ 1,777,949 $ 909,745 $ 61,080
============== ============== ============== ==============
See Notes to Financial Statements.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Financial Highlights BlackRock MuniHoldings Fund, Inc.
For the
The following per share data and ratios Six Months Ended
have been derived from information October 31, 2007 For the Year Ended April 30,
provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 16.51 $ 16.14 $ 16.31 $ 15.54 $ 15.07 $ 14.50
------------ ---------- ---------- ---------- ---------- ----------
Investment income--net++++ .58 1.17 1.16 1.20 1.25 1.25
Realized and unrealized gain (loss)--net (.40) .42 --++++++ .84 .40 .40
Less dividends to Preferred Stock shareholders
from investment income--net (.17) (.32) (.23) (.12) (.07) (.10)
------------ ---------- ---------- ---------- ---------- ----------
Total from investment operations .01 1.27 .93 1.92 1.58 1.55
------------ ---------- ---------- ---------- ---------- ----------
Less dividends to Common Stock shareholders
from investment income--net (.43) (.90) (1.08) (1.15) (1.11) (.98)
------------ ---------- ---------- ---------- ---------- ----------
Offering and underwriting costs resulting from
the issuance of Preferred Stock -- -- (.02) -- -- --
------------ ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 16.09 $ 16.51 $ 16.14 $ 16.31 $ 15.54 $ 15.07
============ ========== ========== ========== ========== ==========
Market price per share, end of period $ 14.77 $ 16.49 $ 16.20 $ 16.12 $ 14.43 $ 14.43
============ ========== ========== ========== ========== ==========
Total Investment Return++
Based on net asset value per share .19%+++++ 8.06% 5.69% 12.95% 10.94% 11.54%
============ ========== ========== ========== ========== ==========
Based on market price per share (7.92%)+++++ 7.52% 7.34% 20.22% 7.58% 15.75%
============ ========== ========== ========== ========== ==========
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of reimbursement and excluding
interest expense and fees* 1.19%+++ 1.17% 1.15% 1.13% 1.14% 1.18%
============ ========== ========== ========== ========== ==========
Total expenses, net of reimbursement* 1.60%+++ 1.54% 1.30% 1.15% 1.23% 1.37%
============ ========== ========== ========== ========== ==========
Total expenses* 1.60%+++ 1.54% 1.30% 1.15% 1.24% 1.37%
============ ========== ========== ========== ========== ==========
Total investment income--net* 7.12%+++ 7.14% 7.15% 7.61% 7.98% 8.40%
============ ========== ========== ========== ========== ==========
Amount of dividends to Preferred Stock shareholders 2.05%+++ 1.93% 1.45% .74% .45% .66%
============ ========== ========== ========== ========== ==========
Investment income to Common Stock shareholders--net 5.08%+++ 5.20% 5.70% 6.87% 7.53% 7.74%
============ ========== ========== ========== ========== ==========
Supplemental Data
Net assets applicable to Common Stock,
end of period (in thousands) $ 223,702 $ 229,376 $ 223,658 $ 225,218 $ 214,473 $ 207,960
============ ========== ========== ========== ========== ==========
Preferred Stock outstanding at liquidation
preference, end of period (in thousands) $ 125,000 $ 125,000 $ 125,000 $ 110,000 $ 110,000 $ 110,000
============ ========== ========== ========== ========== ==========
Portfolio turnover 10% 20% 45% 34% 41% 46%
============ ========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,790 $ 2,835 $ 2,789 $ 3,047 $ 2,950 $ 2,891
============ ========== ========== ========== ========== ==========
* Do not reflect the effect of dividends to Preferred Stock shareholders.
++ 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.
++++ Based on average shares outstanding.
++++++ Amount is less than $(.01).
+++ Annualized.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Financial Highlights BlackRock MuniHoldings Insured Fund, Inc
For the
The following per share data and ratios Six Months Ended
have been derived from information October 31, 2007 For the Year Ended April 30,
provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 14.10 $ 13.80 $ 14.44 $ 14.12 $ 14.48 $ 13.78
------------ ---------- ---------- ---------- ---------- ----------
Investment income--net*** .56 .93 .97 1.01 1.04 1.06
Realized and unrealized gain (loss)--net (.43) .36 (.50) .38 (.42) .62
Less dividends to Preferred Stock shareholders
from investment income--net (.19) (.36) (.28) (.16) (.09) (.13)
------------ ---------- ---------- ---------- ---------- ----------
Total from investment operations (.06) .93 .19 1.23 .53 1.55
------------ ---------- ---------- ---------- ---------- ----------
Less dividends to Common Stock shareholders
from investment income--net (.30) (.63) (.83) (.91) (.89) (.85)
------------ ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 13.74 $ 14.10 $ 13.80 $ 14.44 $ 14.12 $ 14.48
============ ========== ========== ========== ========== ==========
Market price per share, end of period $ 12.14 $ 13.13 $ 13.10 $ 13.70 $ 12.64 $ 13.50
============ ========== ========== ========== ========== ==========
Total Investment Return**
Based on net asset value per share (.18%)++++ 7.29% 1.46% 9.35% 4.07% 12.04%
============ ========== ========== ========== ========== ==========
Based on market price per share (5.29%)++++ 5.25% 1.51% 15.90% (.07%) 13.79%
============ ========== ========== ========== ========== ==========
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of waiver and/or reimbursement
and excluding interest expense and fees* 1.27%++ 1.23% 1.24% 1.24% 1.24% 1.28%
============ ========== ========== ========== ========== ==========
Total expenses, net of waiver and/or reimbursement* 1.59%++ 1.56% 1.54% 1.60% 1.57% 1.69%
============ ========== ========== ========== ========== ==========
Total expenses* 1.71%++ 1.67% 1.65% 1.70% 1.67% 1.79%
============ ========== ========== ========== ========== ==========
Total investment income--net* 8.11%++ 6.62% 6.87% 7.09% 7.12% 7.55%
============ ========== ========== ========== ========== ==========
Amount of dividends to Preferred Stock shareholders 2.81%++ 2.59% 2.00% 1.09% .65% .91%
============ ========== ========== ========== ========== ==========
Investment income to Common Stock shareholders--net 5.30%++ 4.03% 4.87% 6.00% 6.47% 6.64%
============ ========== ========== ========== ========== ==========
Supplemental Data
Net assets applicable to Common Stock,
end of period (in thousands) $ 176,998 $ 181,640 $ 177,790 $ 185,821 $ 181,726 $ 186,372
============ ========== ========== ========== ========== ==========
Preferred Stock outstanding at liquidation
preference, end of period (in thousands) $ 134,000 $ 134,000 $ 134,000 $ 134,000 $ 134,000 $ 134,000
============ ========== ========== ========== ========== ==========
Portfolio turnover 28% 29% 59% 43% 41% 48%
============ ========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,321 $ 2,356 $ 2,327 $ 2,387 $ 2,356 $ 2,391
============ ========== ========== ========== ========== ==========
* Do not reflect the effect of dividends to Preferred Stock shareholders.
** 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.
*** Based on average shares outstanding.
++ Annualized.
++++ Aggregate total investment return.
See Notes to Financial Statements.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Notes to Financial Statements (Unaudited)
1. Significant Accounting Policies:
BlackRock MuniHoldings Fund, Inc. and BlackRock MuniHoldings Insured Fund,
Inc. (the "Funds" or individually as the "Fund") are registered under the
Investment Company Act of 1940, as amended, as non-diversified, closed-end
management investment companies. The Funds' financial statements are prepared
in conformity with U.S. generally accepted accounting principles, which may
require the use of management accruals and estimates. Actual results may
differ from these estimates. These unaudited financial statements reflect all
adjustments, which are, in the opinion of management, necessary to present a
fair statement of the results for the interim period. All such adjustments are
of a normal, recurring nature. The Funds determine and make available for
publication the net asset values of their Common Stock on a daily basis. The
Funds' Common Stock shares are listed on the New York Stock Exchange under the
symbols MHD and MUS, respectively. The following is a summary of significant
accounting policies followed by the Funds.
(a) Valuation of investments--Municipal bonds are traded primarily in the over-
the-counter ("OTC") markets and are valued at the last available bid price in
the OTC market or on the basis of values as obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Funds under the general
direction of the respective Board of Directors. Such valuations and procedures
are reviewed periodically by the Board of Directors of the Funds. Financial
futures contracts and options thereon, which are traded on exchanges, are
valued at their closing prices as of the close of such exchanges. Effective
September 4, 2007, exchange-traded options are valued at the mean between the
last bid and ask prices at the close of the options market in which the
options trade and previously were valued at the last sales price as of the
close of options trading on the applicable exchanges. Options traded in the
OTC market are valued at the last asked price (options written) or the last
bid price (options purchased). Swap agreements are valued by quoted fair
values received daily by the Funds' pricing service. Investments in open-end
investment companies are valued at their net asset value each business day.
Securities and other assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Boards of Directors of the Funds.
(b) Derivative financial instruments--Each Fund may engage in various
portfolio investment strategies both to increase the return of the Fund and to
hedge, or protect, its exposure to interest rate movements and movements in
the securities markets. Losses may arise due to changes in the value of the
contract due to an unfavorable change in the price of the underlying security
or index or if the counterparty does not perform under the contract. The
counterparty for certain instruments may pledge cash or securities as
collateral.
* Financial futures contracts--Each Fund may purchase or sell financial
futures contracts and options on such financial futures contracts. Financial
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, the 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 variation margin and are recorded 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.
* Options--Each Fund may write covered call options and purchase call and put
options. When the Fund writes an option, an amount equal to the premium
received by the Fund is reflected as an asset and an equivalent liability. The
amount of the liability is subsequently marked-to-market to reflect the
current market value of the option written. When a security is purchased or
sold through an exercise of an option, the related premium paid (or received)
is added to (or deducted from) the basis of the security acquired or deducted
from (or added to) the proceeds of the security sold. When an option expires
(or the Fund enters into a closing transaction), the Fund realizes a gain or
loss on the option to the extent of the premiums received or paid (or gain or
loss to the extent the cost of the closing transaction exceeds the premium
paid or received).
Written and purchased options are non-income producing investments.
* Forward interest rate swaps--Each Fund may enter into forward interest rate
swaps. In a forward interest rate swap, the 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. When the
agreement is closed, the Fund records a realized gain or loss in an amount
equal to the value of the agreement.
* Swaps--Each Fund may enter into swap agreements, which are OTC contracts in
which the Fund and a counterparty agree to make periodic net payments on a
specified notional amount. The net payments can be made for a set period of
time or may be triggered by a predetermined credit event. The net periodic
payments may be based on a fixed or variable interest rate; the change in
market value of a specified security, basket of securities, or index; or the
return generated by a security. These periodic payments received or made by
the Fund are recorded in the accompanying Statements of Operations as realized
gains or losses, respectively. Gains or losses are also realized upon
termination of the swap agreements. Swaps are marked- to-market daily and
changes in value are recorded as unrealized appreciation (depreciation). Risks
include changes in the returns of the underlying instruments, failure of the
counterparties to perform under the contracts' terms and the possible lack of
liquidity with respect to the swap agreements.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Notes to Financial Statements (continued)
(c) Municipal bonds held in trust--Certain Funds invest in leveraged residual
certificates ("TOB Residuals") issued by tender option bond trusts ("TOBs"). A
TOB is established by a third party sponsor forming a special purpose entity,
into which a Fund, or an agent on behalf of the Fund, transfers municipal
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, which are generally issued to the Fund which made the
transfer or to affiliates of the Fund. Each Fund transfers of the municipal
securities to a TOB do not qualify for sale treatment under Statement of
Financial Accounting Standards No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities" ("FAS 140"),
therefore the municipal securities deposited into a TOB are presented in the
Funds' schedules of investments and the proceeds from the transactions are
reported as liability for trust certificates of the Funds. Similarly, proceeds
from residual certificates issued to affiliates, if any, from the transaction
are included in the liability for trust certificates. Interest income from the
underlying security 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 services to a TOB are reported as
expenses of a Fund. 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. The residual
interests held by the Funds include the right of the Funds (1) to cause the
holders of a proportional share of floating rate certificates to tender their
certificates at par, and (2) to transfer a corresponding share of the
municipal securities from the TOB to the Funds. At October 31, 2007, the
aggregate value of the underlying municipal securities transferred to TOBs and
the related liability for trust certificates were:
Underlying
Municipal
Liability for Range of Bonds
Trust Interest Transferred
Certificates Rates to TOBs
BlackRock MuniHoldings 3.704%--
Fund, Inc. $25,227,500 3.801% $52,640,265
BlackRock MuniHoldings 3.776%--
Insured Fund, Inc. $12,210,000 3.806% $25,416,859
Financial transactions executed through TOBs generally will under perform 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 TOB Residuals likely will adversely affect the
Funds' investment income--net and distributions to shareholders. Fluctuations
in the market value of municipal securities deposited into the TOB may
adversely affect the Funds' net asset values per share.
While the Funds' investment policies and restrictions expressly permit
investments in inverse floating rate securities such as TOB Residuals, they
generally do not allow the Funds to borrow money for purposes of making
investments. Fund management believes that the Funds' restrictions on
borrowings do not apply to the liabilities for trust certificates reflected as
a result of the Funds' investment in TOB Residuals.
(d) Security transactions and investment income--Security 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 basis. The Funds amortize all
premiums and discounts on debt securities.
(e) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
(f) 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.
(g) Recent accounting pronouncements--Effective June 29, 2007, the Funds
implemented Financial Accounting Standards Board ("FASB") Interpretation No.
48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes--an interpretation
of FASB Statement No. 109." 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. Management has evaluated the application of FIN
48 to the Funds, and has determined that the adoption of FIN 48 does not have
a material impact on the Funds' financial statements. The Funds file U.S. and
various state tax returns. No income tax returns are currently under
examination. The statute of limitations on the Funds' tax returns remains open
for the years ended April 30, 2004 through April 30, 2007.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Notes to Financial Statements (continued)
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. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS
157 and its impact on each of the Funds' financial statements, if any, has not
been determined.
In addition, in February 2007, FASB issued Statement of Financial Accounting
Standards No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities" ("FAS 159"), which is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also
elects to apply the provisions of FAS 157. FAS 159 permits entities to choose
to measure many financial instruments and certain other items at fair value
that are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. At this time, management is
evaluating the implications of FAS 159 and its impact on each of the Funds'
financial statements, if any, has not been determined.
2. Investment Advisory Agreement and Transactions with Affiliates:
Each Fund has entered into an Investment Advisory Agreement with BlackRock
Advisors, LLC (the "Manager"), an indirect, wholly owned subsidiary of
BlackRock Inc. Merrill Lynch & Co., Inc. ("Merrill Lynch") and The PNC
Financial Services Group, Inc. are the principal owners of BlackRock, Inc.
The Manager 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 a monthly fee at an annual rate of .55% of the Fund's average daily
net assets, including proceeds from the issuance of Preferred Stock. The
Manager has agreed to reimburse its management fee by the amount of management
fees each Fund pays to the Manager indirectly through its investment in the
Merrill Lynch Institutional Tax-Exempt Fund. The reimbursements for the six
months ended October 31, 2007 were as follows:
Reimbursement
by the Manager
BlackRock MuniHoldings Fund, Inc. $ 9
BlackRock MuniHoldings Insured Fund, Inc. $ 21
In addition, the Manager has agreed to waive its management fee based on the
proceeds of Preferred Stock that exceeds 35% of each Fund's total net assets.
The waivers for the six months ended October 31, 2007 were as follows:
Fees Waived
by the Manager
BlackRock MuniHoldings Fund, Inc. $ --
BlackRock MuniHoldings Insured Fund, Inc. $ 107,354
In addition, the Manager has entered into separate sub-advisory agreements
with BlackRock Investment Management, LLC, an affiliate of the Manager, with
respect to each Fund, under which the Manager pays the sub-adviser for
services it provides a monthly fee at an annual rate equal to a percentage of
the management fee paid by each Fund to the Manager.
The Funds reimbursed the Manager for certain accounting services. The
reimbursements for the six months ended October 31, 2007 were as follows:
Reimbursement
Fund to the Manager
BlackRock MuniHoldings Fund, Inc. $ 3,014
BlackRock MuniHoldings Insured Fund, Inc. $ 2,754
Certain officers and/or directors of the Funds are officers and/or directors
of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
six months ended October 31, 2007 were as follows:
Total Total
Purchases Sales
BlackRock MuniHoldings Fund, Inc. $37,239,299 $44,130,919
BlackRock MuniHoldings Insured
Fund, Inc. $90,625,096 $99,228,887
4. Stock Transactions:
Each Fund is authorized to issue 200,000,000 shares of stock, including
Preferred Stock, par value $.10 per share, all of which were initially
classified as Common Stock. Each Board of Directors is authorized, however, to
reclassify any unissued shares of stock without approval of holders of Common
Stock.
Common Stock
BlackRock MuniHoldings Fund, Inc.
Shares issued and outstanding during the six months ended October 31, 2007 and
during the year ended April 30, 2007 increased by 9,125 and 35,650,
respectively, as a result of dividend reinvestment.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Notes to Financial Statements (concluded)
BlackRock MuniHoldings Insured Fund, Inc.
Shares issued and outstanding during the six months ended October 31, 2007 and
during the year ended April 30, 2007 remained constant.
Preferred Stock
Auction Market Preferred Stock are shares of Preferred Stock of the Funds,
with a par value of $.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 an annual rate that may vary for the successive dividend
periods. The yields in effect at October 31, 2007 were as follows:
BlackRock BlackRock
MuniHoldings MuniHoldings
Fund, Inc. Insured Fund, Inc.
Series A 3.50% 3.55%
Series B 3.55% 3.45%
Series C 3.55% --
Each Fund pays commissions to certain broker-dealers at the end of each
auction at an annual rate ranging from .25% to .375%, calculated on the
proceeds of each auction. For the six months ended October 31, 2007, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, a wholly owned subsidiary of
Merrill Lynch, earned commissions as follows:
Commissions
BlackRock MuniHoldings Fund, Inc. $64,063
BlackRock MuniHoldings Insured Fund, Inc. $75,697
5. Capital Loss Carryforward:
On April 30, 2007, BlackRock MuniHoldings Insured Fund, Inc. had a net capital
loss carryforward of $18,093,121, of which $8,509,208 expires in 2008 and
$9,583,913 expires in 2009. This amount will be available to offset like
amounts of any future taxable gains.
6. Subsequent Event:
Each Fund paid a tax-exempt income dividend to holders of Common Stock in the
amounts of $.071000 and $.048500 per share relating to BlackRock MuniHoldings
Fund, Inc. and BlackRock MuniHoldings Insured Fund, Inc., respectively, on
December 3, 2007 to shareholders of record on November 15, 2007.
Officers and Directors as of October 31, 2007
Robert C. Doll, Jr., Fund President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Jean Margo Reid, Director
Roscoe S. Suddarth, Director
Richard R. West, Director
Donald C. Burke, Vice President and Treasurer
Karen Clark, Chief Compliance Officer
Howard Surloff, Secretary
Custodian
The Bank of New York Mellon
One Wall Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York Mellon
101 Barclay Street--11 East
New York, NY 10286
Preferred Stock:
The Bank of New York Mellon
101 Barclay Street--7 West
New York, NY 10286
Accounting Agent
State Street Bank and
Trust Company
Princeton, NJ 08540
Independent Registered Public
Accounting Firm
Deloitte & Touche LLP
Princeton, NJ 08540
Legal Counsel
Sidley Austin LLP
New York, NY 10019
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Additional Information
Proxy Results BlackRock MuniHoldings Fund, Inc.
During the six-month period ended October 31, 2007, the Common Stock and
Auction Market Preferred Stock (Series A-C) shareholders of BlackRock
MuniHoldings Fund, Inc. voted on the following proposal, which was approved at
an annual shareholders' meeting on August 16, 2007. This proposal was part of
the reorganization of the Fund's Board of Directors to take effect on or about
November 1, 2007. A description of the proposal and number of shares voted are
as follows:
Shares Voted Shares Withheld
For From Voting
To elect the Fund's Directors: G. Nicholas Beckwith, III 12,886,357 292,177
Richard E. Cavanagh 12,889,538 288,996
Richard S. Davis 12,889,534 289,000
Kent Dixon 12,882,622 295,912
Kathleen F. Feldstein 12,888,926 289,608
James T. Flynn 12,890,303 288,231
Henry Gabbay 12,885,034 293,500
Jerrold B. Harris 12,886,357 292,177
R. Glenn Hubbard 12,889,538 288,996
Karen P. Robards 12,889,035 279,499
Robert S. Salomon, Jr. 12,897,147 281,387
During the six-month period ended October 31, 2007, the Auction Market
Preferred Stock shareholders (Series A-C) of BlackRock MuniHoldings Fund, Inc.
voted on the following proposal, which was approved at an annual shareholders'
meeting on August 16, 2007. This proposal was part of the reorganization of
the Fund's Board of Directors to take effect on or about November 1, 2007. A
description of the proposal and number of shares voted for each Director are
as follows:
Shares Voted Shares Withheld
For From Voting
To elect the Fund's Directors: Frank J. Fabozzi and W. Carl Kester 4,236 43
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Additional Information (continued)
Proxy Results BlackRock MuniHoldings Insured Fund, Inc.
During the six-month period ended October 31, 2007, the Common Stock and
Auction Market Preferred Stock (Series A&B) shareholders of BlackRock
MuniHoldings Insured Fund, Inc. voted on the following proposal, which was
approved at an annual shareholders' meeting on August 16, 2007. This proposal
was part of the reorganization of the Fund's Board of Directors to take effect
on or about November 1, 2007. A description of the proposal and number of
shares voted are as follows:
Shares Voted Shares Withheld
For From Voting
To elect the Fund's Directors: G. Nicholas Beckwith, III 11,247,765 837,611
Richard E. Cavanagh 11,247,476 837,900
Richard S. Davis 11,248,595 836,781
Kent Dixon 11,245,005 840,371
Kathleen F. Feldstein 11,249,229 836,147
James T. Flynn 11,251,705 833,671
Henry Gabbay 11,518,344 567,032
Jerrold B. Harris 11,247,476 837,900
R. Glenn Hubbard 11,245,495 839,881
Karen P. Robards 11,257,738 827,638
Robert S. Salomon, Jr. 11,251,416 833,960
During the six-month period ended October 31, 2007, the Auction Market
Preferred Stock shareholders (Series A&B) of BlackRock MuniHoldings Insured
Fund, Inc. voted on the following proposal, which was approved at an annual
shareholders' meeting on August 16, 2007. This proposal was part of the
reorganization of the Fund's Board of Directors to take effect on or about
November 1, 2007. A description of the proposal and number of shares voted for
each Director are as follows:
Shares Voted Shares Withheld
For From Voting
To elect the Fund's Directors: Frank J. Fabozzi and W. Carl Kester 4,874 1
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 Statements of Net Assets, which comprises part of the financial
information included in these reports.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Additional Information (concluded)
Availability of Quarterly Schedule of Investments
The Funds file their complete schedules of portfolio holdings with the
Securities and Exchange Commission ("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 Web site at http://www.sec.gov. The Funds' Forms N-Q 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 1-800-SEC-0330.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
each Fund's Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Funds' electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisers, banks or brokerages may offer this service.
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 nonpublic 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 nonpublic 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 Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any
nonpublic 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 nonaffiliated 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
nonpublic 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 nonpublic personal information of its Clients, including procedures
relating to the proper storage and disposal of such information.
SEMI-ANNUAL REPORT OCTOBER 31, 2007
Item 2 - Code of Ethics - Not Applicable to this semi-annual report
Item 3 - Audit Committee Financial Expert - Not Applicable to this
semi-annual report
Item 4 - Principal Accountant Fees and Services - Not Applicable to this
semi-annual report
Item 5 - Audit Committee of Listed Registrants - Not Applicable to this
semi-annual report
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable to this semi-annual
report
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
Not Applicable to this semi-annual report
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's Nominating Committee will consider nominees to the
Board recommended by shareholders when a vacancy becomes available.
Shareholders who wish to recommend a nominee should send nominations
which 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 and 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 - Not Applicable to this semi-annual report
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock MuniHoldings Fund, Inc.
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer of
BlackRock MuniHoldings Fund, Inc.
Date: December 19, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
BlackRock MuniHoldings Fund, Inc.
Date: December 19, 2007
By: /s/ Neal J. Andrews
--------------------
Neal J. Andrews,
Chief Financial Officer (principal financial officer) of
BlackRock MuniHoldings Fund, Inc.
Date: December 19, 2007