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 811-07642
Name of Fund: BlackRock MuniAssets Fund, Inc. (MUA)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive
Officer, BlackRock MuniAssets 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: 05/31/2008
Date of reporting period: 06/01/2007 - 11/30/2007
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE
LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
BlackRock MuniAssets BLACKROCK
Fund, Inc. (MUA)
SEMI-ANNUAL REPORT
NOVEMBER 30, 2007 | (UNAUDITED)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
Table of Contents
================================================================================
Page
--------------------------------------------------------------------------------
A Letter to Shareholders ................................................. 3
Semi-Annual Report:
Fund Summary ............................................................. 4
Financial Statements:
Schedule of Investments .............................................. 5
Statement of Assets and Liabilities .................................. 10
Statement of Operations .............................................. 10
Statements of Changes in Net Assets .................................. 11
Financial Highlights ..................................................... 12
Notes to Financial Statements ............................................ 13
Officers and Directors ................................................... 16
Additional Information ................................................... 17
2 BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007
A Letter to Shareholders
Dear Shareholder
The November reporting period was fairly tumultuous for financial markets,
culminating in mixed results for some of the major benchmark indexes:
Total Returns as of November 30, 2007 6-month 12-month
================================================================================================================
U.S. equities (S&P 500 Index) -2.33% + 7.72%
----------------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) -8.82 - 1.17
----------------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) +2.82 +17.30
----------------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) +5.32 + 6.05
----------------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +2.40 + 2.71
----------------------------------------------------------------------------------------------------------------
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) -2.84 + 3.01
----------------------------------------------------------------------------------------------------------------
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")
stepped in to inject liquidity into the markets and bolster investor confidence,
cutting the federal funds rate by 0.50% in September, 0.25% in October and 0.25%
in December, which brought the target short-term interest rate to 4.25%. 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.
Amid the volatility throughout 2007, equity markets displayed surprising
resilience. To some extent, the credit turmoil dampened corporate
merger-and-acquisition (M&A) activity, a key source of strength for equity
markets. Still, market fundamentals generally held firm, dividend payouts and
share buybacks continued, and valuations remained attractive. As the returns
indicate, the most recent six months were more trying, reflecting the slowing
U.S. economy, a troubled housing market and a more difficult corporate earnings
backdrop. Overall, large cap stocks outperformed small caps as investors grew
increasingly risk averse. International markets fared better than their U.S.
counterparts, benefiting from generally stronger economies.
In fixed income markets, mixed economic signals and the credit woes resulted in
a flight to quality. 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 3.97% by period-end, while prices correspondingly rose. Meanwhile, the
tax-exempt bond market has been challenged by a combination of record-setting
supply, economic uncertainty and concerns around the credit worthiness of bond
insurers. This brought municipal bond prices to relatively attractive levels
and, as such, demand generally held 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/ Rob Kapito
Rob Kapito
President, BlackRock Advisors, LLC
3
THIS PAGE NOT PART OF YOUR FUND REPORT
Fund Summary as of November 30, 2007
Investment Objective
BlackRock MuniAssets Fund, Inc. (MUA) seeks to provide shareholders with current
income exempt from federal income taxes by investing primarily in a portfolio of
medium-to-lower grade or unrated municipal obligations the interest on which, in
the opinion of bond counsel to the issuer, is exempt from federal income taxes.
Fund Information
Symbol on New York Stock Exchange .............................. MUA
Initial Offering Date .......................................... June 25, 1993
Yield on Closing Market Price as of November 30, 2007 ($12.48)* 6.49%
Tax Equivalent Yield** ......................................... 9.98%
Current Monthly Distribution per share of Common Stock*** ...... $ .0675
Current Annualized Distribution per share of Common Stock*** ... $ .810
--------------------------------------------------------------------------------
* 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.
The table below summarizes the changes in the Fund's market price and net asset
value per share:
---------------------------------------------------------------------------------------------
11/30/07 5/31/07 Change High Low
---------------------------------------------------------------------------------------------
Market Price ......... $12.48 $15.29 (18.38%) $15.31 $12.45
Net Asset Value ...... $13.36 $13.87 (3.68%) $13.87 $13.29
---------------------------------------------------------------------------------------------
The following charts show the portfolio composition and credit quality
allocations of the Fund's long-term investments:
Portfolio Composition
Sector 11/30/07 5/31/07
--------------------------------------------------------------------------------
Industrial & Pollution Control ................ 27% 31%
Hospital ...................................... 26 27
City, County, State ........................... 13 13
Transportation ................................ 9 7
Tax Revenue ................................... 8 8
Power ......................................... 6 3
Education ..................................... 4 6
Tobacco ....................................... 3 3
Housing ....................................... 3 1
Water & Sewer ................................. 1 1
--------------------------------------------------------------------------------
Credit Quality Allocations*
Credit Rating 11/30/07 5/31/07
--------------------------------------------------------------------------------
AAA/Aaa ....................................... 13% 10
AA/Aa ......................................... 5 --
A/A ........................................... 5 3
BBB/Baa ....................................... 17 21
BB/Ba ......................................... 9 9
B/B ........................................... 4 6
CCC/Caa ....................................... 5 6
CC/Ca ......................................... 1 --
NR (Not Rated) ................................ 41 45
--------------------------------------------------------------------------------
* Using the higher of S&P's or Moody's ratings.
4 BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007
Schedule of Investments as of November 30, 2007 (Unaudited) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================
Alabama -- 0.6%
$1,820 Tuscaloosa, Alabama, Special Care Facilities Financing
Authority, Residential Care Facility Revenue Bonds
(Capstone Village, Inc. Project), Series A, 5.875%
due 8/01/2036 $ 1,760
===============================================================================
Alaska -- 0.4%
1,015 Alaska Industrial Development and Export Authority
Revenue Bonds (Williams Lynxs Alaska Cargoport),
AMT, 7.80% due 5/01/2014 1,081
===============================================================================
Arizona -- 8.6%
Coconino County, Arizona, Pollution Control
Corporation Revenue Refunding Bonds (Tucson
Electric Power -- Navajo), AMT:
3,000 Series A, 7.125% due 10/01/2032 3,064
2,500 Series B, 7% due 10/01/2032 2,553
1,325 Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1), Series A,
6.625% due 7/01/2020 1,295
1,615 Maricopa County, Arizona, IDA, M/F Housing Revenue
Bonds (Sun King Apartments Project), Series A,
6.75% due 5/01/2031 1,629
4,800 Phoenix, Arizona, IDA, Airport Facility, Revenue
Refunding Bonds (America West Airlines Inc. Project),
AMT, 6.30% due 4/01/2023 4,682
1,420 Pima County, Arizona, IDA, Education Revenue Bonds
(Arizona Charter Schools Project), Series E, 7.25%
due 7/01/2031 1,512
Pima County, Arizona, IDA, Education Revenue
Refunding Bonds (Arizona Charter Schools Project II),
Series A:
415 6.75% due 7/01/2011 (b) 461
675 6.75% due 7/01/2031 698
500 Pima County, Arizona, IDA, Education Revenue
Refunding Bonds (Arizona Charter Schools Project),
Series O, 5.25% due 7/01/2031 467
Salt Verde Financial Corporation, Arizona, Senior Gas
Revenue Bonds:
2,840 5% due 12/01/2032 2,738
3,975 5% due 12/01/2037 3,808
1,095 Show Low, Arizona, Improveme]nt District Number 5,
Special Assessment Bonds, 6.375%
due 1/01/2015 1,107
===============================================================================
California -- 2.6%
California State, Various Purpose, GO:
1,900 5.25% due 11/01/2025 2,007
1,300 5.50% due 11/01/2033 1,381
1,320 Fontana, California, Special Tax, Refunding
(Community Facilities District Number 22 -- Sierra),
6% due 9/01/2034 1,336
2,585 Southern California Public Power Authority, Natural
Gas Project Number 1 Revenue Bonds, Series A, 5%
due 11/01/2029 2,514
===============================================================================
Colorado -- 4.9%
650 Colorado Health Facilities Authority, Revenue
Refunding Bonds (Christian Living Communities
Project), Series A, 5.75% due 1/01/2026 627
1,805 Denver, Colorado, City and County Airport Revenue
Bonds, AMT, Series D, 7.75% due 11/15/2013 (a) 2,034
Elk Valley, Colorado, Public Improvement Revenue
Bonds (Public Improvement Fee):
1,430 Series A, 7.10% due 9/01/2014 1,506
2,095 Series A, 7.30% due 9/01/2022 2,180
275 Series B, 7.45% due 9/01/2031 285
1,760 North Range Metropolitan District Number 1, Colorado,
GO, 7.25% due 12/15/2011 (b) 1,989
Plaza Metropolitan District Number 1, Colorado, Tax
Allocation Revenue Bonds (Public Improvement Fees):
2,850 8% due 12/01/2025 3,044
525 8.125% due 12/01/2025 523
1,170 Southlands Metropolitan District Number 1, Colorado,
GO, 7.125% due 12/01/2014 (b) 1,428
===============================================================================
Connecticut -- 3.6%
680 Connecticut State Development Authority, Airport
Facility Revenue Bonds (Learjet Inc. Project), AMT,
7.95% due 4/01/2026 781
3,490 Connecticut State Development Authority, IDR (AFCO
Cargo BDL-LLC Project), AMT, 8% due 4/01/2030 3,686
5,500 Connecticut State, HFA, Housing Mortgage Finance
Program Revenue Bonds, AMT, Sub-Series A-2,
5.15% due 5/15/2038 5,466
===============================================================================
Florida -- 10.7%
1,130 Capital Projects Finance Authority, Florida, Continuing
Care Retirement Revenue Bonds (Glenridge on
Palmer Ranch), Series A, 8% due 6/01/2012 (b) 1,359
1,180 Greater Orlando Aviation Authority, Florida, Airport
Facilities Revenue Bonds (JetBlue Airways Corp.),
AMT, 6.375% due 11/15/2026 1,162
1,160 Halifax Hospital Medical Center, Florida, Hospital
Revenue Refunding Bonds, Series A, 5%
due 6/01/2038 1,107
490 Harbor Bay, Florida, Community Development District,
Capital Improvement Special Assessment Revenue
Bonds, Series A, 7% due 5/01/2033 520
1,195 Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System),
Series C, 5.25% due 11/15/2036 1,207
2,000 Hillsborough County, Florida, IDA, Exempt Facilities
Revenue Bonds (National Gypsum Company), AMT,
Series A, 7.125% due 4/01/2030 2,067
Portfolio Abbreviations
To simplify the listings of BlackRock MuniAssets Fund, Inc.'s portfolio holdings
in the Schedule of Investments, we have abbreviated the names of many of the
securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
EDA Economic Development Authority
EDR Economic Development Revenue Bonds
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
VRDN Variable Rate Demand Notes
BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007 5
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================
Florida (concluded)
$4,300 Hillsborough County, Florida, IDA, Hospital Revenue
Bonds (Tampa General Hospital Project), 5%
due 10/01/2036 $ 4,184
Jacksonville, Florida, Economic Development
Commission:
1,000 Health Care Facilities, Revenue Refunding Bonds
(Florida Proton Therapy Institute), Series A, 6%
due 9/01/2017 1,017
1,300 IDR (Gerdau Ameristeel US, Inc.), AMT, 5.30%
due 5/01/2037 1,173
2,620 Lee County, Florida, IDA, IDR (Lee Charter Foundation),
Series A, 5.375% due 6/15/2037 2,342
3,255 Midtown Miami, Florida, Community Development
District, Special Assessment Revenue Bonds,
Series A, 6.25% due 5/01/2037 3,032
2,295 Orlando, Florida, Urban Community Development
District, Capital Improvement Special Assessment
Bonds, Series A, 6.95% due 5/01/2011 (b) 2,538
3,040 Santa Rosa Bay Bridge Authority, Florida, Revenue
Bonds, 6.25% due 7/01/2028 2,911
Sarasota County, Florida, Health Facilities Authority,
Retirement Facility Revenue Refunding Bonds
(Village on the Isle Project):
860 5.50% due 1/01/2027 826
795 5.50% due 1/01/2032 744
2,680 Tolomato Community Development District, Florida,
Special Assessment Bonds, 6.65% due 5/01/2040 2,634
900 Waterchase, Florida, Community Development District,
Capital Improvement Revenue Bonds, Series A,
6.70% due 5/01/2011 (b) 988
===============================================================================
Georgia -- 3.6%
Atlanta, Georgia, Tax Allocation Bonds:
3,000 (Atlantic Station Project), 7.90%
due 12/01/2011 (b) 3,535
740 (Princeton Lakes Project), 5.50% due 1/01/2031 710
Brunswick and Glynn County, Georgia, Development
Authority, First Mortgage Revenue Bonds (Coastal
Community Retirement Corporation Project), Series A (g):
1,165 7.125% due 1/01/2025 884
1,690 7.25% due 1/01/2035 1,271
1,060 Fulton County, Georgia, Development Authority, PCR,
Refunding (General Motors Corporation), VRDN,
6.50% due 4/01/2010 (e) 1,060
2,435 Rockdale County, Georgia, Development Authority
Revenue Bonds (Visy Paper Project), AMT, Series A,
6.125% due 1/01/2034 2,375
===============================================================================
Idaho -- 0.4%
1,000 Idaho Health Facilities Authority, Revenue Refunding
Bonds (Valley Vista Care Corporation), Series A,
7.75% due 11/15/2016 1,095
===============================================================================
Illinois -- 5.8%
2,630 Caseyville, Illinois, Senior Tax Increment Revenue
Bonds (Forest Lakes Project), 7% due 12/30/2022 2,433
4,140 Chicago, Illinois, O'Hare International Airport, Special
Facility Revenue Refunding Bonds (American Airlines
Inc. Project), 5.50% due 12/01/2030 3,640
Illinois State Finance Authority Revenue Bonds:
2,950 (Clare At Water Tower Project), Series A, 6.125%
due 5/15/2038 2,908
600 (Landing At Plymouth Place Project), Series A, 6%
due 5/15/2037 588
685 (Primary Health Care Centers Program), 6.60%
due 7/01/2024 691
1,070 Lincolnshire, Illinois, Special Service Area Number 1,
Special Tax Bonds (Sedgebrook Project), 6.25%
due 3/01/2034 1,089
2,600 Lombard, Illinois, Public Facilities Corporation, First
Tier Revenue Bonds (Conference Center and Hotel),
Series A-1, 7.125% due 1/01/2036 2,737
1,165 Naperville, Illinois, IDR (General Motors Corporation),
Refunding, VRDN, 6.50% due 12/01/2012 (e) 1,165
825 Village of Wheeling, Illinois, Revenue Bonds (North
Milwaukee/Lake-Cook Tax Increment Financing (TIF)
Redevelopment Project), 6% due 1/01/2025 798
===============================================================================
Indiana -- 1.9%
2,830 Indiana Health and Educational Facilities Financing
Authority, Hospital Revenue Bonds (Community
Foundation of Northwest Indiana), 5.50%
due 3/01/2037 2,738
1,200 Vanderburgh County, Indiana, Redevelopment
Commission, Redevelopment District Tax Allocation
Bonds, 5.25% due 2/01/2031 1,164
Vigo County, Indiana, Hospital Authority Revenue
Bonds (Union Hospital, Inc.):
615 5.70% due 9/01/2037 572
765 5.75% due 9/01/2042 702
===============================================================================
Iowa -- 0.9%
2,180 Iowa Finance Authority, Health Care Facilities, Revenue
Refunding Bonds (Care Initiatives Project), 9.25%
due 7/01/2011 (b) 2,632
===============================================================================
Kansas -- 0.6%
1,770 Wyandotte County, Kansas, Kansas City Unified
Government Revenue Refunding Bonds (General
Motors Corporation Project), 6% due 6/01/2025 1,700
===============================================================================
Kentucky -- 1.0%
2,850 Kenton County, Kentucky, Airport Board, Special
Facilities Revenue Bonds (Mesaba Aviation Inc.
Project), AMT, Series A, 6.70% due 7/01/2029 2,751
===============================================================================
Louisiana -- 1.8%
3,000 Louisiana Local Government Environmental Facilities
and Community Development Authority Revenue
Bonds (Westlake Chemical Corporation), 6.75%
due 11/01/2032 2,993
1,870 Louisiana Public Facilities Authority, Hospital Revenue
Bonds (Franciscan Missionaries of Our Lady Health
System, Inc.), Series A, 5.25% due 8/15/2036 1,876
===============================================================================
6 BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================
Maryland -- 1.9%
$1,855 Maryland State Economic Development Corporation
Revenue Refunding Bonds (Baltimore Association
for Retarded Citizens -- Health and Mental Hygiene
Program), Series A, 7.75% due 3/01/2025 $ 1,982
1,500 Maryland State Energy Financing Administration,
Limited Obligation Revenue Bonds (Cogeneration --
AES Warrior Run), AMT, 7.40% due 9/01/2019 1,504
Maryland State Health and Higher Educational
Facilities Authority Revenue Bonds:
1,250 (King Farm Presbyterian Community), Series A,
5.30% due 1/01/2037 1,104
590 (Washington Christian Academy), 5.50%
due 7/01/2038 567
===============================================================================
Massachusetts -- 1.1%
1,150 Massachusetts State Health and Educational Facilities
Authority Revenue Bonds (Jordan Hospital), Series E,
6.75% due 10/01/2033 1,213
1,945 Massachusetts State Health and Educational Facilities
Authority, Revenue Refunding Bonds (Bay Cove
Human Services Issue), Series A, 5.90%
due 4/01/2028 1,924
===============================================================================
Michigan -- 1.2%
1,635 Macomb County, Michigan, Hospital Finance Authority,
Hospital Revenue Bonds (Mount Clemens General
Hospital), Series B, 5.875% due 11/15/2034 1,587
1,740 Monroe County, Michigan, Hospital Financing Authority,
Hospital Revenue Refunding Bonds (Mercy Memorial
Hospital Corporation), 5.50% due 6/01/2035 1,699
===============================================================================
Mississippi -- 0.4%
1,335 Mississippi Business Finance Corporation Revenue
Bonds (Northrop Grumman Ship System), 4.55%
due 12/01/2028 1,224
===============================================================================
Missouri -- 0.8%
920 Fenton, Missouri, Tax Increment Revenue Refunding
and Improvement Bonds (Gravois Bluffs), 7%
due 10/01/2011 (b) 1,049
1,000 Kansas City, Missouri, IDA, First Mortgage Health
Facilities Revenue Bonds (Bishop Spencer Place),
Series A, 6.50% due 1/01/2035 1,020
===============================================================================
Nevada -- 0.2%
645 Clark County, Nevada, Improvement District Number
142, Special Assessment Bonds, 6.375%
due 8/01/2023 665
===============================================================================
New Hampshire -- 0.4%
1,165 New Hampshire Health and Education Facilities
Authority, Hospital Revenue Bonds (Catholic
Medical Center), 5% due 7/01/2036 1,086
===============================================================================
New Jersey -- 13.4%
Camden County, New Jersey, Pollution Control
Financing Authority, Solid Waste Resource Recovery,
Revenue Refunding Bonds, AMT:
9,000 Series A, 7.50% due 12/01/2010 9,130
345 Series B, 7.50% due 12/01/2009 350
3,065 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50%
due 6/15/2024 3,032
2,500 New Jersey EDA, IDR, Refunding (Newark Airport
Marriott Hotel), 7% due 10/01/2014 2,572
New Jersey EDA, Retirement Community Revenue
Bonds, Series A (b):
1,665 (Cedar Crest Village Inc. Facility), 7.25%
due 11/15/2011 1,912
5,800 (Seabrook Village Inc.), 8.125%
due 11/15/2010 6,624
New Jersey EDA, Special Facility Revenue Bonds
(Continental Airlines Inc. Project), AMT:
2,000 6.25% due 9/15/2019 1,946
3,330 6.25% due 9/15/2029 3,189
1,250 9% due 6/01/2033 1,400
2,000 New Jersey Health Care Facilities Financing Authority
Revenue Bonds (Pascack Valley Hospital Association),
6.625% due 7/01/2036 1,088
3,450 New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Bonds, Series C,
5.05% due 12/15/2035 (a)(f) 895
Tobacco Settlement Financing Corporation of New
Jersey, Asset-Backed Revenue Bonds:
1,425 7% due 6/01/2013 (b) 1,680
1,800 5.75% due 6/01/2032 1,949
1,845 Tobacco Settlement Financing Corporation of New
Jersey, Asset-Backed Revenue Refunding Bonds,
Series 1A, 5% due 6/01/2041 1,545
===============================================================================
New Mexico -- 0.9%
2,500 Farmington, New Mexico, PCR, Refunding (Tucson
Electric Power Company -- San Juan Project),
Series A, 6.95% due 10/01/2020 2,552
===============================================================================
New York -- 3.6%
1,400 Dutchess County, New York, IDA, Civic Facility Revenue
Refunding Bonds (Saint Francis Hospital), Series A,
7.50% due 3/01/2029 1,505
New York City, New York, City IDA, Civic Facility
Revenue Bonds:
510 Series C, 6.80% due 6/01/2028 543
1,515 (Special Needs Facilities Pooled Program),
Series C-1, 6.625% due 7/01/2029 1,529
2,400 New York City, New York, City IDA, Special Facility
Revenue Bonds (British Airways Plc Project), AMT,
7.625% due 12/01/2032 2,546
870 New York Liberty Development Corporation Revenue
Bonds (National Sports Museum Project), Series A,
6.125% due 2/15/2019 874
1,470 New York State Dormitory Authority, Non-State
Supported Debt, Revenue Refunding Bonds (Mount
Sinai-NYU Medical Center Health System), Series C,
5.50% due 7/01/2026 1,479
1,575 Westchester County, New York, IDA, Continuing Care
Retirement, Mortgage Revenue Bonds (Kendal on
Hudson Project), Series A, 6.50% due 1/01/2034 1,626
===============================================================================
North Carolina -- 0.6%
1,500 North Carolina Medical Care Commission, Retirement
Facilities, First Mortgage Revenue Bonds
(Givens Estates Project), Series A, 6.50%
due 7/01/2013 (b) 1,743
===============================================================================
BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007 7
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================
Ohio -- 0.9%
$1,915 Buckeye Tobacco Settlement Financing Authority, Ohio,
Tobacco Settlement Asset-Backed Bonds,
Series A-2, 6.50% due 6/01/2047 $ 1,971
500 Trumbull County, Ohio, Health Care Facilities Revenue
Bonds (Shepherd of the Valley), VRDN,
5.10% due 10/01/2031 (d)(e) 500
===============================================================================
Oklahoma -- 0.5%
1,475 Oklahoma State Development Finance Authority,
Revenue Refunding Bonds (Saint John Health System),
5% due 2/15/2042 1,475
===============================================================================
Pennsylvania -- 7.9%
3,015 Allegheny County, Pennsylvania, Hospital Development
Authority, Health System Revenue Refunding Bonds
(West Penn Allegheny Health System), Series A,
5.375% due 11/15/2040 2,742
Bucks County, Pennsylvania, IDA, Retirement
Community Revenue Bonds (Ann's Choice Inc.),
Series A:
200 6.125% due 1/01/2025 204
1,550 6.25% due 1/01/2035 1,577
2,250 Hampton Township, Pennsylvania, School District, GO,
Refunding, Series B, 4.25% due 8/15/2031 (c) 2,103
900 Harrisburg, Pennsylvania, Authority, University Revenue
Bonds (Harrisburg University of Science),
Series B, 6% due 9/01/2036 896
2,330 Montgomery County, Pennsylvania, IDA, Revenue Bonds
(Whitemarsh Continuing Care Project),
6.125% due 2/01/2028 2,355
3,250 Pennsylvania Economic Development Financing
Authority, Exempt Facilities Revenue Bonds
(National Gypsum Company), AMT, Series A,
6.25% due 11/01/2027 3,268
Philadelphia, Pennsylvania, Authority for IDR:
2,270 (Air Cargo), AMT, Series A, 7.50% due 1/01/2025 2,389
6,440 Commercial Development, 7.75%
due 12/01/2017 6,449
===============================================================================
Rhode Island -- 1.0%
2,495 Central Falls, Rhode Island, Detention Facility
Corporation, Detention Facility, Revenue
Refunding Bonds, 7.25% due 7/15/2035 2,697
===============================================================================
South Carolina -- 1.4%
Connector 2000 Association, Inc., South Carolina,
Toll Road and Capital Appreciation Revenue Bonds,
Senior-Series B (f):
1,500 6.50% due 1/01/2009 1,392
1,485 7.969% due 1/01/2014 838
1,500 South Carolina Jobs, EDA, EDR (Westminster
Presbyterian Center), 7.75% due 11/15/2010 (b) 1,713
===============================================================================
Tennessee -- 1.4%
6,785 Knox County, Tennessee, Health, Educational and
Housing Facilities Board, Hospital Facilities Revenue
Refunding Bonds (Covenant Health), Series A,
5.06% due 1/01/2040 (f) 1,186
Shelby County, Tennessee, Health, Educational and
Housing Facilities Board Revenue Bonds
(Germantown Village):
355 6.25% due 12/01/2034 311
2,500 Series A, 7.25% due 12/01/2034 2,485
===============================================================================
Texas -- 4.5%
1,000 Austin, Texas, Convention Center Revenue Bonds
(Convention Enterprises Inc.), First Tier, Series A,
6.70% due 1/01/2011 (b) 1,100
2,550 Brazos River Authority, Texas, PCR, Refunding
(TXU Energy Company LLC Project), AMT, Series A,
7.70% due 4/01/2033 2,654
1,680 Brazos River Authority, Texas, Revenue Refunding
Bonds (Reliant Energy Inc. Project), Series B,
7.75% due 12/01/2018 1,732
1,400 Houston, Texas, Health Facilities Development
Corporation, Retirement Facility Revenue Bonds
(Buckingham Senior Living Community), Series A,
7.125% due 2/15/2014 (b) 1,686
500 Kerrville, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Sid
Peterson Memorial Hospital Project), 5.375%
due 8/15/2035 481
3,190 Matagorda County, Texas, Navigation District Number 1,
Revenue Refunding Bonds (Reliant Energy Inc.),
Series C, 8% due 5/01/2029 3,282
1,400 Tarrant County, Texas, Health Facilities Development
Corporation, Hospital Revenue Refunding Bonds
(Cumberland Rest, Inc. Project), VRDN, Series, 4.90%
due 8/15/2032 (d)(e) 1,400
===============================================================================
Utah -- 0.6%
1,660 Carbon County, Utah, Solid Waste Disposal, Revenue
Refunding Bonds (Laidlaw Environmental), AMT,
Series A, 7.45% due 7/01/2017 1,696
===============================================================================
Virginia -- 6.5%
1,465 Dulles Town Center, Virginia, Community Development
Authority, Special Assessment Tax (Dulles Town
Center Project), 6.25% due 3/01/2026 1,491
Fairfax County, Virginia, EDA, Residential Care
Facilities,Mortgage Revenue Refunding Bonds
(Goodwin House, Inc.):
750 5.125% due 10/01/2037 702
450 5.125% due 10/01/2042 415
440 Farms of New Kent Community Development Authority,
Virginia, Special Assessment Bonds, Series C,
5.80% due 3/01/2036 412
540 Lexington, Virginia, IDA, Residential Care Facility,
Mortgage Revenue Refunding Bonds (Kendal at
Lexington), Series A, 5.375% due 1/01/2028 506
48,400 Pocahontas Parkway Association, Virginia, Toll Road
Revenue Bonds, Capital Appreciation, Senior
Series B, 5.95% due 8/15/2008 (b)(f) 12,514
2,180 Tobacco Settlement Financing Corporation of Virginia,
Revenue Refunding Bonds, Senior Series B-1,
5% due 6/01/2047 1,807
===============================================================================
Washington -- 0.6%
1,750 Washington State Housing Financing Commission,
Nonprofit Revenue Bonds (Skyline at First Hill Project),
Series A, 5.625% due 1/01/2038 1,661
===============================================================================
8 BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007
Schedule of Investments (concluded) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================
Wisconsin -- 0.7%
$1,855 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (New Castle Place Project),
Series A, 7% due 12/01/2031 $ 1,912
-------------------------------------------------------------------------------
U.S. Virgin Islands -- 1.1%
3,000 Virgin Islands Government Refinery Facilities, Revenue
Refunding Bonds (Hovensa Coker Project), AMT,
6.50% due 7/01/2021 3,174
===============================================================================
Total Municipal Bonds (Cost -- $268,411) -- 99.0% 275,069
===============================================================================
Face
Amount Municipal Bonds Held in Trust (h) Value
===============================================================================
California -- 1.6%
$4,290 San Jose, California, Airport Revenue Refunding
Bonds, Series A, 5.50%, due 3/01/2032 (a) $ 4,505
-------------------------------------------------------------------------------
Total Municipal Bonds Held in Trust
(Cost -- $4,422) -- 1.6% 4,505
===============================================================================
Total Investments (Cost -- $272,833*) -- 100.6% 279,574
Other Assets Less Liabilities -- 0.2% 519
Liability for Trust Certificates, Including Interest
Expense Payable -- (0.8%) (2,162)
--------
Net Assets -- 100.0% $277,931
========
* The cost and unrealized appreciation (depreciation) of investments as of
November 30, 2007, as computed for federal income tax purposes, were as
follows:
Aggregate cost ............................................. $ 270,458
=========
Gross unrealized appreciation .............................. $ 12,967
Gross unrealized depreciation .............................. (5,996)
---------
Net unrealized appreciation ................................ $ 6,971
=========
(a) AMBAC Insured.
(b) Prerefunded.
(c) FSA Insured.
(d) Radian Insured.
(e) 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.
(f) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(g) Non-income producing security; issuer filed for bankruptcy or is in
default of interest payments.
(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 a collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of municipal bonds held in trust.
o Investments in securities 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 (9,410) $67
--------------------------------------------------------------------------------
See Notes to Financial Statements.
BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007 9
Statement of Assets and Liabilities
As of November 30, 2007 (Unaudited)
===============================================================================
Assets
-------------------------------------------------------------------------------
Investments in unaffiliated securities, at value
(identified cost -- $272,832,762) ............................. $ 279,573,795
Cash ............................................................ 50,022
Receivables:
Interest ...................................................... 4,877,170
Securities sold ............................................... 220,000
Prepaid expenses ................................................ 2,440
-------------
Total assets .................................................... 284,723,427
-------------
===============================================================================
Liabilities
-------------------------------------------------------------------------------
Trust certificates .............................................. 2,145,000
Payables:
Securities purchased .......................................... 3,000,000
Dividends to shareholders ..................................... 1,404,111
Investment adviser ............................................ 133,858
Interest expense .............................................. 16,902
Other affiliates .............................................. 2,063
Accrued expenses ................................................ 90,936
-------------
Total liabilities ............................................... 6,792,870
-------------
===============================================================================
Net Assets
-------------------------------------------------------------------------------
Net Assets ...................................................... $ 277,930,557
=============
===============================================================================
Capital
-------------------------------------------------------------------------------
Common Stock, par value $.10 per share; 200,000,000 shares
authorized; 20,801,646 shares issued and outstanding .......... $ 2,080,165
Paid-in capital in excess of par ................................ 302,084,853
Undistributed investment income -- net .......................... 1,876,917
Accumulated realized capital losses -- net ...................... (34,852,411)
Unrealized appreciation -- net .................................. 6,741,033
-------------
Total capital -- Equivalent to $13.36 net asset value per share
of Common Stock (market price -- $12.48) ...................... $ 277,930,557
=============
See Notes to Financial Statements.
Statement of Operations
For the Six Months Ended November 30, 2007 (Unaudited)
===============================================================================
Investment Income
-------------------------------------------------------------------------------
Interest ........................................................ $ 8,822,385
Dividends from affiliates ....................................... 66,939
-------------
Total income .................................................... 8,889,324
-------------
===============================================================================
Expenses
-------------------------------------------------------------------------------
Investment advisory fees ........................................ $ 782,874
Accounting services ............................................. 55,674
Printing and shareholder reports ................................ 24,218
Professional fees ............................................... 21,129
Interest expense and fees ....................................... 17,902
Transfer agent fees ............................................. 14,680
Pricing fees .................................................... 11,722
Directors' fees and expenses .................................... 9,990
Custodian fees .................................................. 9,293
Listing fees .................................................... 5,173
Other ........................................................... 20,113
-------------
Total expenses before reimbursement ............................. 972,768
Reimbursement of expenses ....................................... (3,811)
-------------
Total expenses after reimbursement .............................. 968,957
-------------
Investment income -- net ........................................ 7,920,367
-------------
===============================================================================
Realized & Unrealized Gain (Loss) -- Net
-------------------------------------------------------------------------------
Realized gain (loss) on:
Investments -- net ............................................ (664,984)
Forward interest rate swaps -- net ............................ 127,102
Change in unrealized appreciation/depreciation on:
Investments -- net ............................................ (9,449,016)
Forward interest rate swaps -- net ............................ 56,774
-------------
Total realized and unrealized loss -- net ....................... (9,930,124)
-------------
Net Decrease in Net Assets Resulting from Operations ............ $ (2,009,757)
=============
See Notes to Financial Statements.
10 BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007
Statements of Changes in Net Assets
For the Six
Months Ended For the
November 30, Year Ended
2007 May 31,
Increase (Decrease) in Net Assets: (Unaudited) 2007
===================================================================================================================
Operations
-------------------------------------------------------------------------------------------------------------------
Investment income -- net ....................................................... $ 7,920,367 $ 16,973,304
Realized loss -- net ........................................................... (537,882) (5,079,543)
Change in unrealized appreciation/depreciation -- net .......................... (9,392,242) 9,799,343
-------------------------------
Net increase (decrease) in net assets resulting from operations ................ (2,009,757) 21,693,104
-------------------------------
===================================================================================================================
Dividends to Shareholders
-------------------------------------------------------------------------------------------------------------------
Investment income -- net ....................................................... (8,566,195) (17,339,322)
-------------------------------
===================================================================================================================
Common Stock Transactions
-------------------------------------------------------------------------------------------------------------------
Value of shares issued to Common Stock shareholders in reinvestment of dividends 1,139,386 2,220,383
-------------------------------
===================================================================================================================
Net Assets
-------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................................ (9,436,566) 6,574,165
Beginning of period ............................................................ 287,367,123 280,792,958
-------------------------------
End of period* ................................................................. $ 277,930,557 $ 287,367,123
===============================
* Undistributed investment income -- net ................................... $ 1,876,917 $ 2,522,745
===============================
See Notes to Financial Statements.
BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007 11
Financial Highlights
For the Six
Months Ended For the Year Ended
The following per share data and ratios November 30, May 31,
have been derived from information 2007 ----------------------------------------------------------------
provided in the financial statements. (Unaudited) 2007 2006 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ........... $ 13.87 $ 13.65 $ 13.40 $ 12.36 $ 11.94 $ 12.55
-------------------------------------------------------------------------------
Investment income -- net*** .................... .38 .82 .81 .81 .83 .81
Realized and unrealized gain (loss) -- net ..... (.48) .24 .27 1.04 .38 (.64)
-------------------------------------------------------------------------------
Total from investment operations ............... (.10) 1.06 1.08 1.85 1.21 .17
-------------------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ................... (.41) (.84) (.83) (.81) (.78) (.78)
Realized gain -- net ....................... -- -- -- -- (.01) --
-------------------------------------------------------------------------------
Total dividends and distributions .............. (.41) (.84) (.83) (.81) (.79) (.78)
-------------------------------------------------------------------------------
Net asset value, end of period ................. $ 13.36 $ 13.87 $ 13.65 $ 13.40 $ 12.36 $ 11.94
===============================================================================
Market price per share, end of period .......... $ 12.48 $ 15.29 $ 14.13 $ 13.27 $ 11.38 $ 11.91
===============================================================================
===================================================================================================================================
Total Investment Return**
-----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ............. (.69%)+ 7.72% 8.31% 15.65% 10.74% 1.61%
===============================================================================
Based on market price per share ................ (15.85%)+ 14.71% 13.22% 24.39% 2.22% 9.09%
===============================================================================
===================================================================================================================================
Ratios to Average Net Assets
-----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement and excluding
interest expense and fees .................... .67%* .68% .68% .67% .67% .78%
===============================================================================
Expenses, net of reimbursement ................. .68%* .68% .68% .67% .67% .78%
===============================================================================
Expenses ....................................... .68%* .68% .68% .67% .67% .78%
===============================================================================
Investment income -- net ....................... 5.56%* 5.91% 5.97% 6.30% 6.71% 6.76%
===============================================================================
===================================================================================================================================
Supplemental Data
-----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ....... $277,931 $287,367 $280,793 $273,382 $252,203 $243,671
===============================================================================
Portfolio turnover ............................. 13% 25% 17% 20% 19% 27%
===============================================================================
* Annualized.
** Total investment returns based on market value, which can be significantly
greater or lesser than net asset value, may result in substantially
different returns. Total investment returns exclude the effects of sales
charges.
*** Based on average shares outstanding.
+ Aggregate total investment return.
See Notes to Financial Statements.
12 BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007
Notes to Financial Statements (Unaudited)
1. Significant Accounting Policies:
BlackRock MuniAssets Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as a non-diversified, closed-end management
investment company. The Fund's financial statements are prepared in conformity
with U.S. generally accepted accounting principles, which may require the use of
management accruals and 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. Actual results may differ from these estimates.
The Fund determines and makes available for publication the net asset value of
its Common Stock on a daily basis. The Fund's Common Stock shares are listed on
the New York Stock Exchange under the symbol MUA. The following is a summary of
significant accounting policies followed by the Fund.
(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 Fund under the general direction
of the Board of Directors. Such valuations and procedures are reviewed
periodically by the Board of Directors of the Fund. 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 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 Fund's 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 Fund's Board of
Directors. Such valuations and procedures will be reviewed periodically by the
Fund's Board of Directors.
(b) Derivative financial instruments -- The 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.
o Financial futures contracts -- The 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.
o Options -- The Fund may write covered call options and purchase 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.
o Forward interest rate swaps -- The 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. The value of the agreement is determined by quoted fair values
received daily by the Fund from the counterparty. When the agreement is
closed, the Fund records a realized gain or loss in an amount equal to the
value of the agreement.
o Swaps -- The 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 Statement 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
BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007 13
Notes to Financial Statements (continued)
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.
(c) Municipal bonds held in trust -- The Fund invests 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 the 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. The Fund's transfers of the municipal
securities to a TOB does 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," therefore the municipal
securities deposited into a TOB are presented in the Fund's schedule of
investments and the proceeds from the transaction are reported as a liability
for trust certificates of the Fund. 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 Fund 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 the
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 Fund
include the right of the Fund (1) to cause the holders of a proportional share
of the 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 Fund. At November 30, 2007, the aggregate value of the underlying municipal
securities transferred to TOBs was $4,505,358, the related liability for trust
certificates was $2,145,000 and the interest rate on the liability of trust
certificates was 3.642%.
Financial transactions executed through TOBs generally will underperform the
market for fixed rate municipal bonds in a rising interest rate environment, but
tend to outperform the market for fixed rate bonds when interest rates decline
or remain relatively stable. Should short-term interest rates rise, the Fund's
investments in TOB Residuals likely will adversely affect the Fund's investment
income -- net and distributions to shareholders. Fluctuations in the market
value of municipal securities deposited into the TOB may adversely affect the
Fund's net asset value per share.
While the Fund's investment policies and restrictions expressly permit
investments in inverse floating rate securities such as TOB Residuals, they
generally do not allow the Fund to borrow money for purposes of making
investments. The Fund's management believes that the Fund's restrictions on
borrowings do not apply to the secured borrowings deemed to have occurred for
accounting purposes.
(d) Income taxes -- It is the 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.
(e) 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. Interest income is recognized on the accrual basis. The
Fund amortizes all premiums and discounts on debt securities.
(f) Dividends and distributions -- Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
(g) Recent accounting pronouncements -- Effective June 29, 2007, the Fund
implemented Financial Accounting Standards Board ("FASB") Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes -- an interpretation of FASB
Statement No. 109" ("FIN 48"). FIN 48 prescribes the minimum recognition
threshold a tax position must meet in connection with accounting for
uncertainties in income tax positions taken or expected to be taken by an
entity, including investment companies, before being measured and recognized in
the financial statements. Management has evaluated the application of FIN 48 to
the Fund, and has determined that the adoption of FIN 48 does not have a
material impact on the Fund's financial statements. The Fund files U.S. and
various state tax returns. No income tax returns are currently under
examination. The statute of limitations on the Fund's tax returns remains open
for the years ended May 31, 2004 through May 31, 2007.
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. Management is currently evaluating the implication of FAS 157. At
this time, its impact on the Fund's financial statements has not been
determined.
In addition, in February 2007, Statement of Financial Accounting Standards No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and 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
14 BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007
Notes to Financial Statements (concluded)
FAS 159 and its impact on the Fund's financial statements, if any, has not been
determined.
2. Investment Advisory Agreement and Transactions with Affiliates:
The 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. and The PNC Financial Services Group,
Inc. are the principal owners of BlackRock, Inc.
The Manager is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Fund. For such services, the Fund
pays a monthly fee of .55% based upon the average daily value of the Fund's net
assets. The Manager has agreed to reimburse its management fee by the amount of
management fees the Fund pays to the Manager indirectly through its investments
in Merrill Lynch Institutional Tax-Exempt Fund. For the six months ended
November 30, 2007, the Manager reimbursed the Fund in the amount of $3,811.
In addition, the Manager has entered into a sub-advisory agreement with
BlackRock Investment Management, LLC, an affiliate of the Manager, under which
the Manager pays the sub-adviser for services it provides a monthly fee at an
annual rate that is a percentage of the management fee paid by the Fund to the
Manager.
For the six months ended November 30, 2007, the Fund reimbursed the Manager
$2,759 for certain accounting services.
Certain officers and/or directors of the Fund 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 November 30, 2007, were $48,430,956 and $36,165,561, respectively.
4. Common Stock Transactions:
At November 30, 2007, the Fund had one class of shares of Common Stock, par
value $.10 per share, of which 200,000,000 shares were authorized.
Shares issued and outstanding during the six months ended November 30, 2007 and
the year ended May 31, 2007, increased by 83,094 and 154,369, respectively, as a
result of dividend reinvestment.
5. Capital Loss Carryforward:
On May 31, 2007, the Fund had a net capital loss carryforward of $34,375,204, of
which $6,860,553 expires in 2008, $3,487,083 expires in 2009, $2,260,830 expires
in 2010, $7,452,325 expires in 2011, $5,486,273 expires in 2012, $3,762,613
expires in 2013 and $5,065,527 expires in 2015. This amount will be available to
offset like amounts of any future taxable gains.
6. Subsequent Event:
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of $.067500 per share on December 31, 2007 to shareholders of record on
December 14, 2007.
BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007 15
Officers and Directors
G. Nicholas Beckwith, III, Director
Richard E. Cavanagh, Director
Richard S. Davis, Director
Kent Dixon, Director
Frank J. Fabozzi, Director
Kathleen F. Feldstein, Director
James T. Flynn, Director
Henry Gabbay, Director
Jerrold B. Harris, Director
R. Glenn Hubbard, Director
W. Carl Kester, Director
Karen P. Robards, Director
Robert S. Salomon, Jr., Director
Roscoe S. Suddarth, Advisory Board Member
Donald C. Burke, Fund President and Chief Executive Officer
Anne F. Ackerley, Vice President
Howard Surloff, Secretary
Brian P. Kindelan, Chief Compliance Officer
Neal J. Andrews, Chief Financial Officer
Jay M. Fife, Treasurer
Custodian
The Bank of New York Mellon
New York, NY 10286
Transfer Agent
The Bank of New York Mellon
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
Skadden, Arps, Slate, Meagher & Flom LLP
New York, NY 10036
16 BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007
Additional Information
Proxy Results
During the six-month period ended November 30, 2007, the shareholders of
BlackRock MuniAssets 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 that took effect
on 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 18,937,281 365,292
Richard E. Cavanagh 18,937,281 365,292
Richard S. Davis 18,937,281 365,292
Kent Dixon 18,933,247 369,326
Frank J. Fabozzi 18,936,685 365,888
Kathleen F. Feldstein 18,937,514 365,059
James T. Flynn 18,934,781 367,792
Henry Gabbay 18,934,781 367,792
Jerrold B. Harris 18,934,781 367,792
R. Glenn Hubbard 18,932,472 370,101
W. Carl Kester 18,935,348 367,225
Karen P. Robards 18,943,074 359,499
Robert S. Salomon, Jr. 18,927,525 375,048
---------------------------------------------------------------------------------------------------
About Inverse Floaters
As a part of its investment strategy, the Fund 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 Fund 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 Fund invests in
inverse floaters, the market value of the Fund's portfolio and the net asset
value of the Fund's shares may also be more volatile than if the Fund did not
invest in these securities.
Swap Agreements
The Fund 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 the
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. The swap agreements in which the Fund may invest
includes credit default swap agreements.
BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007 17
Additional Information (continued)
Dividend Policy
The Fund's dividend policy is to distribute all or a portion of its net
investment income to its shareholders on a monthly basis. In order to provide
shareholders with a more stable level of dividend distributions, the Fund 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 Fund for any particular
month may be more or less than the amount of net investment income earned by the
Fund during such month. The Fund's current accumulated but undistributed net
investment income, if any, is disclosed in the Statement of Assets and
Liabilities, which comprises part of the financial information included in this
report.
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule 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 Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's 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 are available on the Fund's Web
site. Shareholders can sign up for e-mail notifications of quarterly statements
and annual and semi-annual reports by enrolling in the Fund's 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.
18 BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007
Additional Information (concluded)
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their non-public personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to non-affiliated third parties any
non-public personal information about its Clients, except as permitted by law or
as is necessary to respond to regulatory requests or to service Client accounts.
These non-affiliated third parties are required to protect the confidentiality
and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to non-public
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the non-public
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
BLACKROCK MUNIASSETS FUND, INC. NOVEMBER 30, 2007 19
This report, including the financial information herein, is transmitted to
shareholders of BlackRock MuniAssets Fund, Inc. for their information. It is not
a prospectus. Past performance results shown in this report should not be
considered a representation of future performance. Statements and other
information herein are as dated and are subject to change.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's Web site
at http://www.sec.gov. Information about how the Fund voted proxies relating to
securities held in the Fund's portfolio 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 MuniAssets Fund, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
BLACKROCK
#16716-11/07
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 and Governance 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 MuniAssets Fund, Inc.
By: /s/ Donald C. Burke
-----------------------------------
Donald C. Burke,
Chief Executive Officer of
BlackRock MuniAssets Fund, Inc.
Date: January 16, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Donald C. Burke
-----------------------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
BlackRock MuniAssets Fund, Inc.
Date: January 16, 2008
By: /s/ Neal J. Andrews
-----------------------------------
Neal J. Andrews,
Chief Financial Officer (principal financial officer) of
BlackRock MuniAssets Fund, Inc.
Date: January 16, 2008