Edgar Filing: BLACKROCK MUNIHOLDINGS INVESTMENT QUALITY FUND

BLACKROCK MUNIHOLDINGS INVESTMENT QUALITY FUND

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-08349

Name of Fund: BlackRock MuniHoldings Investment Quality Fund (MFL)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniHoldings

Investment Quality Fund, 55 East 52^nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 08/31/2013

Date of reporting period: 02/28/2013

Item 1 – Report to Stockholders

FEBRUARY 28, 2013

SEMI-ANNUAL REPORT (UNAUDITED)

BlackRock Municipal Bond Investment Trust (BIE)

BlackRock Municipal Bond Trust (BBK)

BlackRock Municipal Income Investment Quality Trust (BAF)

BlackRock Municipal Income Quality Trust (BYM)

BlackRock Municipal Income Trust II (BLE)

BlackRock MuniHoldings Investment Quality Fund (MFL)

BlackRock MuniVest Fund, Inc. (MVF)

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents


	Page
Dear Shareholder		3
Semi-Annual Report:
Municipal Market Overview		4
The Benefits and Risks of Leveraging		5
Derivative Financial Instruments		5
Trust Summaries		6
Financial Statements:
Schedules of Investments		20
Statements of Assets and Liabilities		56
Statements of Operations		57
Statements of Changes in Net Assets		58
Statements of Cash Flows		60
Financial Highlights		61
Notes to Financial Statements		68
Officers and Trustees		78
Additional Information		79



2	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013

Dear Shareholder

Despite a number of headwinds, risk assets generated strong returns during the 6- and 12-month periods as investors sought meaningful yields in the ongoing low-interest-rate environment. About this time one year ago, the European debt crisis returned to the headlines as unresolved policy decisions left it unclear as to how troubled peripheral countries would finance their sovereign debt, causing yields to soar. In the second quarter of 2012, political instability in Greece and severe deficit and liquidity problems in Spain raised the specter of a full-blown euro collapse. Alongside the drama in Europe, investors were discouraged by gloomy economic reports from various parts of the world. A slowdown in China, a key powerhouse for global growth, emerged as a particular concern. As the outlook for the global economy worsened, however, investors grew increasingly optimistic that the world’s largest central banks would soon intervene to stimulate growth. This theme, along with the announcement of the European Central Bank’s (“ECB’s”) firm commitment to preserve the euro currency bloc, drove most asset classes higher through the summer. Policy relief came in early September, when the ECB announced its decision to support the eurozone’s debt-laden countries with unlimited purchases of short term sovereign debt. Days later, the US Federal Reserve announced its own much-anticipated stimulus package.

Although financial markets world-wide were buoyed by accommodative monetary policies, risk assets weakened in the fall. Global trade began to slow as many European countries fell into recession and growth continued to decelerate in China, where a once-a-decade leadership change compounded uncertainty. In the United States, stocks slid on lackluster corporate earnings reports and market volatility rose in advance of the US Presidential election. In the post-election environment, investors grew increasingly concerned over the “fiscal cliff,” the automatic tax increases and spending cuts that had been scheduled to take effect at the beginning of 2013. There was widespread fear that the fiscal cliff would push the United States into recession unless politicians could agree upon alternate measures to reduce the deficit before the end of 2012. Worries that bipartisan gridlock would preclude a timely budget deal triggered higher levels of volatility in financial markets around the world in the months leading up to the last day of the year. Ultimately, the worst of the fiscal cliff was averted with a last-minute tax deal; however, decisions relating to spending cuts and the debt ceiling continued to weigh on investors’ minds.

Investors shook off the nerve-wracking finale to 2012 and began the New Year with a powerful equity rally. Money that had been pulled to the sidelines amid year-end tax-rate uncertainty poured back into the markets in January. Key indicators signaled modest but broad-based improvements in the world’s major economies, particularly in China. Global equities soared through January while rising US Treasury yields pressured high-quality fixed income assets. However, bond markets strengthened in February when economic momentum slowed and investors toned down their risk appetite. US stocks continued to rise, but at a more moderate pace. Uncertainty about how long the Federal Reserve would maintain its easing bias drove high levels of volatility later in the month, but these fears abated as the budget sequester (automatic spending cuts scheduled to take effect March 1) began to appear imminent and was deemed likely to deter any near-term curtailment of monetary easing policies. Outside the United States, equities largely declined as political uncertainty escalated after the Italian presidential election ended in a stalemate.

On the whole, riskier asset classes outperformed lower-risk investments for the 6- and 12-month periods ended February 28, 2013. International, US small cap and emerging market equities were the leading asset classes for the 6-month period, while US stocks and high yield bonds generated the strongest returns for the 12-month period. US Treasury yields remained relatively low overall, but have inched higher in recent months, pressuring Treasuries and investment-grade bonds. Tax-exempt municipal bonds, however, continued to benefit from favorable supply-and-demand dynamics. Near-zero short term interest rates continued to keep yields on money market securities near their all-time lows.

Investors continue to face many of the same risks as in years past. But we see a world of possibilities. BlackRock was built to provide the global market insight, breadth of capabilities, unbiased investment advice and deep risk management expertise these times require. Investors everywhere are asking, “So what do I do with my money?” Visit www.blackrock.com for answers.

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

“Despite a number of headwinds, risk assets generated strong returns during the 6- and 12-month periods as investors sought meaningful yields in the ongoing low-interest-rate environment.”

Rob Kapito

President, BlackRock Advisors, LLC


Total Returns as of February 28, 2013
	6-month			12-month
US large cap equities (S&P 500^® Index)		8.95	%		13.46	%
US small cap equities (Russell 2000^® Index)		13.02			14.02
International equities (MSCI Europe, Australasia, Far East Index)		14.41			9.84
Emerging market equities (MSCI Emerging Markets Index)		12.06			0.28
3-month Treasury bill (BofA Merrill Lynch 3-Month US Treasury Bill Index)		0.05			0.11
US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index)		(1.51	)		3.66
US investment grade bonds (Barclays US Aggregate Bond Index)		0.15			3.12
Tax-exempt municipal bonds (S&P Municipal Bond Index)		2.40			5.71
US high yield bonds (Barclays US Corporate High Yield 2% Issuer Capped Index)		6.67			11.79
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



		THIS PAGE NOT PART OF YOUR FUND REPORT				3


Municipal Market Overview


For the Reporting Period Ended February 28, 2013

Municipal Bonds Performed Well

Market conditions remained favorable even though supply picked up considerably in the past year. Total new issuance for the 12 months ended February 28, 2013 was $383 billion as compared to $303 billion in the prior 12-month period. However, it is important to note that a significant portion (roughly 60%) of the new supply during the most recent 12-month period was attributable to refinancing activity as issuers took advantage of lower interest rates to reduce their borrowing costs.

Increased supply was met with strong demand during the period as investors were starved for yield in the low- rate environment. Investors poured into municipal bond mutual funds, particularly long-duration and high-yield funds as they tend to provide higher levels of income. For the 12 months ended February 28, 2013, municipal bond fund inflows exceeded $46 billion (according to the Investment Company Institute).

S&P Municipal Bond Index

Total Returns as of February 28, 2013

6 months: 2.40%

12 months: 5.71%

A Closer Look at Yields

LOGO

From February 29, 2012 to February 28, 2013, muni yields declined by 32 basis points (“bps”) from 3.23% to 2.91% on AAA-rated 30-year municipal bonds, while falling a modest 4 bps from 1.85% to 1.81% on 10-year bonds and rising 9 bps from 0.68% to 0.77% on 5-year bonds (as measured by Thomson Municipal Market Data). (Bond prices rise as yields fall.) Overall, the municipal yield curve remained relatively steep, but flattened over the 12-month period as the spread between 2- and 30-year maturities tightened by 37 bps and the spread between 2- and 10-year maturities tightened by 9 bps.

During the same time period, US Treasury rates fell by 10 bps in both the 5- and 10-year space while rising 1 bp on 30-year bonds. Accordingly, tax-exempt municipal bonds moderately underperformed Treasuries in the 5- and 10-year space, but significantly outperformed Treasury bonds on the long end of the curve. This outperformance was driven largely by a supply/demand imbalance within the municipal market while evidence of a recovering domestic economy pushed interest rates higher. Additionally, as higher US tax rates began to appear imminent late in 2012, municipal bonds benefited from the increased appeal of tax-exempt investing. Municipals have become an appropriate avenue for investors seeking yield in the low-rate environment as the asset class is known for its lower volatility and preservation of earnings as tax rates rise.

Financial Conditions of Municipal Issuers Continue to Improve

Austerity and de-leveraging have been the general themes across the country as states seek to balance their budgets, although a small number of states continue to rely on a “kick-the-can” approach to close their budget gaps. Broadly speaking, state governments have demonstrated better fiscal health as their revenues have steadily improved in recent years. Many local municipalities, however, continue to face higher costs passed down from the state level. BlackRock maintains the view that municipal bond defaults will be minimal and remain in the periphery, and that the overall market is fundamentally sound. We continue to recognize that careful credit research and security selection remain imperative amid uncertainty in this economic environment.

Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.



4	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013


The Benefits and Risks of Leveraging

The Trusts may utilize leverage to seek to enhance the yield and net asset value (“NAV”) of their common shares (“Common Shares”). However, these objectives cannot be achieved in all interest rate environments.

To obtain leverage, the Trusts issue Variable Rate Demand Preferred Shares (“VRDP Shares”) or Variable Rate Muni Term Preferred Shares (“VMTP Shares”) (VRDP Shares and VMTP Shares are collectively referred to as “Preferred Shares”). Preferred Shares pay dividends at prevailing short-term interest rates, and the Trusts invest the proceeds in long-term municipal bonds. In general, the concept of leveraging is based on the premise that the financing cost of assets to be obtained from leverage, which will be based on short-term interest rates, will normally be lower than the income earned by each Trust on its longer-term portfolio investments. To the extent that the total assets of each Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Trust’s shareholders will benefit from the incremental net income.

The interest earned on securities purchased with the proceeds from leverage is paid to shareholders in the form of dividends, and the value of these portfolio holdings is reflected in the per share NAV. However, in order to benefit shareholders, the yield curve must be positively sloped; that is, short-term interest rates must be lower than long-term interest rates. If the yield curve becomes negatively sloped, meaning short-term interest rates exceed long-term interest rates, income to shareholders will be lower than if the Trusts had not used leverage.

To illustrate these concepts, assume a Trust’s Common Shares capitalization is $100 million and it issues Preferred Shares for an additional $50 million, creating a total value of $150 million available for investment in long-term municipal bonds. If prevailing short-term interest rates are 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Trust pays dividends on the $50 million of Preferred Shares based on the lower short-term interest rates. At the same time, the securities purchased by the Trust with assets received from Preferred Shares issuance earn income based on long-term interest rates. In this case, the dividends paid to holders of Preferred Shares (“Preferred Shareholders”) are significantly lower than the income earned on the Trust’s long-term investments, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.

If short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental net income pickup will be reduced or eliminated completely. Furthermore, if prevailing short-term interest rates rise above long-term interest rates, the yield curve has a negative slope. In this case, the Trust pays higher short-term interest rates whereas the Trust’s total portfolio earns income based on lower long-term interest rates.

Furthermore, the value of the Trusts’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the redemption value of the Trusts’ Preferred Shares and/or debt securities does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Trusts’ NAVs positively or negatively in addition to the impact on Trust performance from leverage from Preferred Shares and borrowings discussed above.

The Trusts may also leverage their assets through the use of tender option bond trusts (“TOBs”), as described in Note 1 of the Notes to Financial Statements. TOB investments generally will provide the Trusts with economic benefits in periods of declining short-term interest rates, but expose the Trusts to risks during periods of rising short-term interest rates similar to those associated with Preferred Shares issued by the Trusts, as described above. Additionally, fluctuations in the market value of municipal bonds deposited into the TOB trust may adversely affect each Trust’s NAV per share.

The use of leverage may enhance opportunities for increased income to the Trusts and Common Shareholders, but as described above, it also creates risks as short- or long-term interest rates fluctuate. Leverage also will generally cause greater changes in the Trusts’ NAVs, market prices and dividend rates than comparable portfolios without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, the Trusts’ net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, each Trust’s net income will be less than if leverage had not been used, and therefore the amount available for distribution to Common Shareholders will be reduced. Each Trust may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause a Trust to incur losses. The use of leverage may limit each Trust’s ability to invest in certain types of securities or use certain types of hedging strategies, such as in the case of certain restrictions imposed by rating agencies that rate the Preferred Shares issued by the Trusts. Each Trust will incur expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares.

Under the Investment Company Act of 1940, as amended (the “1940 Act”), the Trusts are permitted to issue senior securities in the form of equity securities (e.g., Preferred Shares) up to 50% of their total managed assets (each Trust’s total assets less the sum of its accrued liabilities). In addition, each Trust with VRDP or VMTP Shares limits its economic leverage to 45% of its total managed assets. As of February 28, 2013, the Trusts had economic leverage from Preferred Shares and/or TOBs as a percentage of their total managed assets as follows:


	Percent of Economic Leverage
BIE		39	%
BBK		36	%
BAF		36	%
BYM		37	%
BLE		39	%
MFL		40	%
MVF		39	%


Derivative Financial Instruments

The Trusts may invest in various derivative financial instruments, including financial futures contracts and options, as specified in Note 2 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to hedge market and/or interest rate risks. Derivative financial instruments involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The Trusts’ ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may require a Trust to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation a Trust can realize on an investment, may result in lower dividends paid to shareholders or may cause a Trust to hold an investment that it might otherwise sell. The Trusts’ investments in these instruments are discussed in detail in the Notes to Financial Statements.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	5


Trust Summary as of February 28, 2013		BlackRock Municipal Bond Investment Trust


Trust Overview

BlackRock Municipal Bond Investment Trust’s (BIE) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax and Florida intangible personal property tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Trust invests at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.


Performance

For the six months ended February 28, 2013, the Trust returned 4.15% based on market price and 3.94% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV.

The Trust’s holdings in the State of California contributed positively to performance. While federal tax rate increases were supportive of municipal bonds overall, the addition of a state tax rate increase in California made these issues even more compelling on an after-tax basis. Also enhancing results were holdings in the health, education and transportation sectors. Particularly strong returns came from the Trust’s lower-quality holdings in those sectors, which benefited from strong demand as investors sought higher-yielding investments in the low interest rate environment.

Conversely, exposure to Puerto Rico sales tax bonds had a negative impact on performance as the continued decline of the local economy and concerns about credit rating downgrades resulted in falling prices across Puerto Rico-issued securities broadly.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


Trust Information


Symbol on New York Stock Exchange (“NYSE”)		BIE
Initial Offering Date		April 30, 2002
Yield on Closing Market Price as of February 28, 2013 ($16.83)¹		5.56%
Tax Equivalent Yield²		9.82%
Current Monthly Distribution per Common Share³		$0.0780
Current Annualized Distribution per Common Share³		$0.9360
Economic Leverage as of February 28, 2013⁴		39%

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 marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

The Monthly Distribution per Common Share, declared on March 1, 2013, was decreased to $0.076 per share. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

⁴

Represents VRDP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VRDP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 5.



6	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013


		BlackRock Municipal Bond Investment Trust


Market Price and Net Asset Value

The table below summarizes the changes in the Trust’s market price and NAV per share:


	2/28/13		8/31/12		Change			High		Low
Market Price	$	16.83	$	16.61		1.32	%	$	17.99	$	16.20
Net Asset Value	$	17.07	$	16.88		1.13	%	$	17.70	$	16.61

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:


Sector Allocation


	2/28/13			8/31/12
County/City/Special District/School District		21	%		19	%
Transportation		21			18
Health		16			17
Utilities		16			16
Education		11			12
State		9			12
Housing		4			4
Corporate		1			1
Tobacco		1			1


Credit Quality Allocation¹


	2/28/13			8/31/12
AAA/Aaa		13	%		15	%
AA/Aa		57			60
A		26			20
BBB/Baa		4			5

Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investors Service (“Moody’s”) ratings.


Call/Maturity Schedule²


Calendar Year Ended December 31,
2013	—
2014	4	%
2015	—
2016	2
2017	1

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	7


Trust Summary as of February 28, 2013				BlackRock Municipal Bond Trust

Trust Overview

BlackRock Municipal Bond Trust’s (BBK) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from regular federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, at least 80% of its assets in municipal bonds that are investment grade quality. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.

Performance

For the six months ended February 28, 2013, the Trust returned 4.98% based on market price and 5.01% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

The Trust’s lower-quality investment grade holdings contributed positively to performance as the tightening of credit spreads drove their outperformance over higher-quality bonds during the period. Additional positive performance came from the Trust’s allocations to the higher-yielding health, corporate and school district sectors. Heavy exposure to California credits, the best performing state for the period, boosted returns. The Trust also benefited from the roll-down effect, whereby effective maturities become shorter with the passing of the year and therefore bonds are evaluated at lower yield levels, which, in a steep yield curve environment, results in higher prices.

Detracting from performance was the Trust’s neutral-to-long average duration (greater sensitivity to interest rates) as most of the municipal yield curve experienced slightly higher yields and lower bond prices. The Trust’s yield curve positioning favoring longer-dated maturities also had a negative effect. Exposure to Puerto Rico credits detracted from results as the commonwealth’s deteriorating credit metrics and ratings downgrades led to the underperformance of those issues.

Trust Information


Symbol on NYSE		BBK
Initial Offering Date		April 30, 2002
Yield on Closing Market Price as of February 28, 2013 ($17.35)¹		5.78%
Tax Equivalent Yield²		10.21%
Current Monthly Distribution per Common Share³		$0.0835
Current Annualized Distribution per Common Share³		$1.0020
Economic Leverage as of February 28, 2013⁴		36%

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.

The Monthly Distribution per Common Share, declared on March 1, 2013, was decreased to $0.0785 per share. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

⁴

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 5.



8	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013


		BlackRock Municipal Bond Trust

Market Price and Net Asset Value

The table below summarizes the changes in the Trust’s market price and NAV per share:


	2/28/13		8/31/12		Change			High		Low
Market Price	$	17.35	$	17.16		1.11	%	$	18.74	$	16.85
Net Asset Value.	$	16.98	$	16.79		1.13	%	$	17.62	$	16.56

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:


Sector Allocation


	2/28/13			8/31/12
Health		23	%		25	%
County/City/Special District/School District		14			13
Utilities		14			8
Transportation		13			13
State		12			14
Education		11			11
Housing		6			8
Corporate		6			5
Tobacco		1			3


Credit Quality Allocation¹


	2/28/13			8/31/12
AAA/Aaa		6	%		9	%
AA/Aa		40			35
A		30			26
BBB/Baa		12			18
BB/Ba		5			4
B		1			2
Not Rated²		6			6

Using the higher of S&P’s or Moody’s ratings.

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2013 and August 31, 2012, the market value of these securities was $4,854,688, representing 2%, and $3,199,110, representing 1%, respectively, of the Trust’s long-term investments.


Call/Maturity Schedule³


Calendar Year Ended December 31,
2013	9	%
2014	5
2015	2
2016	3
2017	3

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	9


Trust Summary as of February 28, 2013		BlackRock Municipal Income Investment Quality Trust

Trust Overview

BlackRock Municipal Income Investment Quality Trust’s (BAF) (the “Trust”) investment objective is to provide current income exempt from federal income tax, including the alternative minimum tax and Florida intangible property tax. The Trust seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in municipal bonds exempt from federal income taxes, including the alternative minimum tax. The Trust also invests at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.

Performance

For the six months ended February 28, 2013, the Trust returned 2.83% based on market price and 3.50% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

Trust Information


Symbol on NYSE		BAF
Initial Offering Date		October 31, 2002
Yield on Closing Market Price as of February 28, 2013 ($16.29)¹		5.05%
Tax Equivalent Yield²		8.92%
Current Monthly Distribution per Common Share³		$0.0685
Current Annualized Distribution per Common Share³		$0.8220
Economic Leverage as of February 28, 2013⁴		36%

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.

The distribution rate is not constant and is subject to change.

⁴



10	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013


		BlackRock Municipal Income Investment Quality Trust

Market Price and Net Asset Value

The table below summarizes the changes in the Trust’s market price and NAV per share:


	2/28/13		8/31/12		Change			High		Low
Market Price	$	16.29	$	16.24		0.31	%	$	17.49	$	15.80
Net Asset Value	$	16.69	$	16.53		0.97	%	$	17.35	$	16.26

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:


Sector Allocation


	2/28/13			8/31/12
County/City/Special District/School District		31	%		29	%
Transportation		20			19
Utilities		17			20
Health		11			12
State		10			8
Education		9			10
Housing		1			1
Tobacco		1			1


Credit Quality Allocation¹


	2/28/13			8/31/12
AAA/Aaa		10	%		11	%
AA/Aa		69			74
A		19			14
BBB/Baa		—			1
Not Rated		2			—

Using the higher of S&P’s or Moody’s ratings.


Call/Maturity Schedule²


Calendar Year Ended December 31,
2013	—
2014	—
2015	—
2016	1	%
2017	1

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	11


Trust Summary as of February 28, 2013				BlackRock Municipal Income Quality Trust

Trust Overview

BlackRock Municipal Income Quality Trust’s (BYM) (the “Trust”) investment objective is to provide current income exempt from federal income taxes, including the alternative minimum tax. The Trust seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in municipal bonds exempt from federal income taxes, including the alternative minimum tax. The Trust also invests at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.

Performance

For the six months ended February 28, 2013, the Trust returned (1.32)% based on market price and 3.62% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

The Trust’s positive performance was derived largely from income accrual as well as spread compression (price appreciation) in certain sectors, most notably health and transportation. Exposure to capital appreciation bonds (zero coupons) also had a positive impact on results as spreads generally tightened in this segment.

Trust performance was negatively impacted by a slight rise in interest rates during the period (bond prices fall as rates rise). Exposure to certain Puerto Rico credits detracted from performance as concerns about credit rating agency downgrades resulted in wider credit spreads (falling prices) for Puerto Rico municipal securities broadly.

Trust Information


Symbol on NYSE		BYM
Initial Offering Date		October 31, 2002
Yield on Closing Market Price as of February 28, 2013 ($16.04)¹		5.84%
Tax Equivalent Yield²		10.32%
Current Monthly Distribution per Common Share³		$0.0780
Current Annualized Distribution per Common Share³		$0.9360
Economic Leverage as of February 28, 2013⁴		37%

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.

The distribution rate is not constant and is subject to change.

⁴



12	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013


		BlackRock Municipal Income Quality Trust


Market Price and Net Asset Value

The table below summarizes the changes in the Trust’s market price and NAV per share:


	2/28/13		8/31/12		Change			High		Low
Market Price	$	16.04	$	16.73		(4.12	)%	$	17.79	$	15.71
Net Asset Value	$	16.22	$	16.11		0.68	%	$	16.64	$	15.88

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:


Sector Allocation


	2/28/13			8/31/12
County/City/Special District/School District		25	%		19	%
Transportation		19			21
Utilities		19			19
State		16			17
Health		7			9
Tobacco		5			5
Education		4			6
Corporate		4			3
Housing		1			1


Credit Quality Allocation¹


	2/28/13			8/31/12
AAA/Aaa		22	%		17	%
AA/Aa		52			55
A		21			19
BBB/Baa		4			7
B		1			1
Not Rated		—			1	²

Using the higher of S&P’s or Moody’s ratings.

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2012, the market value of these securities was $8,360,761, representing 1% of the Trust’s long-term investments.


Call/Maturity Schedule³


Calendar Year Ended December 31,
2013	9	%
2014	7
2015	5
2016	5
2017	8

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	13


Trust Summary as of February 28, 2013		BlackRock Municipal Income Trust II

Trust Overview

BlackRock Municipal Income Trust II’s (BLE) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.

Performance

For the six months ended February 28, 2013, the Trust returned 2.29% based on market price and 4.17% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

The Trust’s holdings generated a high distribution yield, which in the aggregate, had a meaningful impact on returns. Credit spread compression drove price appreciation, particularly within the Trust’s concentration of holdings in lower-quality investment grade and non-investment grade municipal bonds. Also boosting returns were the Trust’s allocations to corporate, health and transportation-related debt. Exposure to capital appreciation bonds (zero coupons) had a positive impact on results as this segment tends to outperform in a spread tightening environment.

Conversely, security selection within the corporate and tax-backed sectors hindered performance. The Trust’s long duration (greater sensitivity to interest rate movements) detracted as yields slightly rose during the period. Modest exposure to certain Puerto Rico credits had a negative impact on results as concerns about the commonwealth’s deteriorating credit metrics and ratings downgrades led to the underperformance of those issues.

Trust Information


Symbol on NYSE MKT		BLE
Initial Offering Date		July 30, 2002
Yield on Closing Market Price as of February 28, 2013 ($16.59)¹		6.15%
Tax Equivalent Yield²		10.87%
Current Monthly Distribution per Common Share³		$0.0850
Current Annualized Distribution per Common Share³		$1.0200
Economic Leverage as of February 28, 2013⁴		39%

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.

The distribution rate is not constant and is subject to change.

⁴



14	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013


		BlackRock Municipal Income Trust II


Market Price and Net Asset Value

The table below summarizes the changes in the Trust’s market price and NAV per share:


	2/28/13		8/31/12		Change			High		Low
Market Price	$	16.59	$	16.74		(0.90	)%	$	17.61	$	15.85
Net Asset Value	$	16.25	$	16.10		0.93	%	$	16.78	$	15.88

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:


Sector Allocation


	2/28/13			8/31/12
Transportation		20	%		17	%
Health		17			18
Utilities		17			15
State		13			16
County/City/Special District/School District		12			11
Corporate		8			7
Education		8			9
Tobacco		3			4
Housing		2			3


Credit Quality Allocation¹


	2/28/13			8/31/12
AAA/Aaa		10	%		13	%
AA/Aa		35			36
A		30			25
BBB/Baa		18			17
BB/Ba		—			2
B		1			1
Not Rated²		6			6

Using the higher of S&P’s or Moody’s ratings.

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2013 and August 31, 2012, the market value of these securities was $12,353,604 and $12,361,560, each representing 2%, respectively, of the Trust’s long-term investments.


Call/Maturity Schedule³


Calendar Year Ended December 31,
2013	6	%
2014	1
2015	6
2016	5
2017	5

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	15


Trust Summary as of February 28, 2013				BlackRock MuniHoldings Investment Quality Fund

Trust Overview

BlackRock MuniHoldings Investment Quality Fund’s (MFL) (the “Trust”) investment objective is to provide shareholders with current income exempt from federal income tax and to provide shareholders with the opportunity to own shares the value of which is exempt from Florida intangible personal property tax. The Trust seeks to achieve its investment objective by investing primarily in long-term, investment grade municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Trust invests at least 80% of its assets in municipal obligations with remaining maturities of one year or more at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.

Performance

For the six months ended February 28, 2013, the Trust returned 0.13% based on market price and 3.97% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

Trust Information


Symbol on NYSE		MFL
Initial Offering Date		September 26, 1997
Yield on Closing Market Price as of February 28, 2013 ($15.70)¹		5.85%
Tax Equivalent Yield²		10.34%
Current Monthly Distribution per Common Share³		$0.0765
Current Annualized Distribution per Common Share³		$0.9180
Economic Leverage as of February 28, 2013⁴		40%

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.

The distribution rate is not constant and is subject to change.

⁴



16	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013


		BlackRock MuniHoldings Investment Quality Fund


Market Price and Net Asset Value

The table below summarizes the changes in the Trust’s market price and NAV per share:


	2/28/13		8/31/12		Change			High		Low
Market Price	$	15.70	$	16.13		(2.67	)%	$	17.20	$	15.52
Net Asset Value	$	16.13	$	15.96		1.07	%	$	16.77	$	15.70

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:


Sector Allocation


	2/28/13			8/31/12
Transportation		28	%		21	%
Utilities		18			18
County/City/Special District/School District		15			16
State		14			16
Health		12			14
Education		10			11
Housing		2			3
Tobacco		1			1


Credit Quality Allocation¹


	2/28/13			8/31/12
AAA/Aaa		13	%		14	%
AA/Aa		59			66
A		26			18
BBB/Baa		—			1
Not Rated²		2			1

Using the higher of S&P’s or Moody’s ratings.

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2013 and August 31, 2012, the market value of these securities was $8,585,448 and $4,206,588, each representing less than 1%, respectively, of the Trust’s long-term investments.


Call/Maturity Schedule³


Calendar Year Ended December 31,
2013	1	%
2014	1
2015	—
2016	1
2017	3

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	17


Trust Summary as of February 28, 2013		BlackRock MuniVest Fund, Inc.

Trust Overview

BlackRock MuniVest Fund, Inc.’s (MVF) (the “Trust”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Trust seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, primarily in long term municipal obligations rated investment grade at the time of investment and invests primarily in long term municipal obligations with maturities of more than ten years at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.

Performance

For the six months ended February 28, 2013, the Trust returned 3.39% based on market price and 3.97% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

The Trust’s positive performance was derived mainly from its coupon income component as municipal market performance during the six-month period, although positive, was less robust than it had been in the prior eighteen months. The Trust benefited from its zero-coupon bond holdings due to positive price movement in that segment. Exposure to lower-quality investment grade credits boosted results given strong demand from investors seeking higher-yielding investments in the low interest rate environment.

Interest rates inched higher during the period, which negatively impacted performance (bond prices fall as rates rise). Exposure to Puerto Rico debt detracted from performance as concerns about credit rating agency downgrades resulted in wider credit spreads (falling prices) for Puerto Rico municipal securities broadly.


Trust Information


Symbol on NYSE MKT		MVF
Initial Offering Date		September 29, 1988
Yield on Closing Market Price as of February 28, 2013 ($11.29)¹		6.27%
Tax Equivalent Yield²		11.08%
Current Monthly Distribution per Common Share³		$0.0590
Current Annualized Distribution per Common Share³		$0.7080
Economic Leverage as of February 28, 2013⁴		39%

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.

The distribution rate is not constant and is subject to change.

⁴



18	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013


		BlackRock MuniVest Fund, Inc.


Market Price and Net Asset Value

The table below summarizes the changes in the Trust’s market price and NAV per share:


	2/28/13		8/31/12		Change			High		Low
Market Price	$	11.29	$	11.28		0.09	%	$	12.29	$	10.87
Net Asset Value	$	10.75	$	10.68		0.66	%	$	11.06	$	10.53

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:


Sector Allocation


	2/28/13			8/31/12
Health		23	%		28	%
Transportation		21			17
Utilities		13			6
Corporate		11			10
County/City/Special District/School District		11			8
Education		8			10
State		6			6
Housing		5			9
Tobacco		2			6


Credit Quality Allocation¹


	2/28/13			8/31/12
AAA/Aaa		12	%		12	%
AA/Aa		47			46
A		26			25
BBB/Baa		12			12
BB/Ba		—			2
B		1			—
Not Rated²		2			3

Using the higher of S&P’s or Moody’s ratings.

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2013 and August 31, 2012, the market value of these securities was $20,449,481, representing 2%, and $30,422,382, representing 3%, respectively, of the Trust’s long-term investments.


Call/Maturity Schedule³


Calendar Year Ended December 31,
2013	9	%
2014	5
2015	1
2016	6
2017	7

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	19

Schedule of Investments February 28, 2013 (Unaudited)

BlackRock Municipal Bond Investment Trust (BIE)

(Percentages shown are based on Net Assets)


Municipal Bonds	Par (000)		Value
Alabama — 3.3%
Alabama Incentives Financing Authority, RB, Series A, 5.00%, 9/01/42	$	1,500	$	1,700,115
Selma IDB, RB, International Paper Co. Project, Series A, 5.38%, 12/01/35		145		159,938

				1,860,053
Alaska — 0.3%
Northern Tobacco Securitization Corp., Refunding RB, Asset-Backed, Series A, 5.00%, 6/01/46		180		157,910
Arizona — 0.5%
Arizona Board of Regents, Refunding RB, University of Arizona, Series A, 5.00%, 6/01/42		250		284,510
California — 8.3%
California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/38		700		826,273
California Health Facilities Financing Authority, Refunding RB, Catholic Healthcare West, Series A, 6.00%, 7/01/39		120		142,472
Los Angeles Department of Water & Power, RB, Power System, Sub-Series A-1, 5.25%, 7/01/38		1,660		1,928,339
San Diego Regional Building Authority California, RB, County Operations Center & Annex, Series A, 5.38%, 2/01/36		850		969,714
State of California, GO, Various Purpose, 6.00%, 3/01/33		685		849,688

				4,716,486
Colorado — 1.6%
City & County of Denver Colorado, Refunding ARB, Airport System, Series B, 5.00%, 11/15/37		235		269,221
Colorado Health Facilities Authority, Refunding RB, Catholic Healthcare Initiatives, Series A, 5.50%, 7/01/34		580		662,064

				931,285
Florida — 1.1%
City of Jacksonville Florida, Refunding RB, Better Jacksonville Sale Tax, Series A, 5.00%, 10/01/30		295		344,120
Orlando-Orange County Expressway Authority, Refunding RB, Series A, 5.00%, 7/01/29		250		293,083

				637,203
Georgia — 1.2%
Municipal Electric Authority of Georgia, Refunding RB, Project One, Sub-Series D, 6.00%, 1/01/23		555		678,676
Illinois — 13.8%
Chicago Illinois Board of Education, GO, Series A:
5.50%, 12/01/39		500		579,340
5.00%, 12/01/42		715		778,285
Municipal Bonds	Par (000)		Value
Illinois (concluded)
Chicago Transit Authority, RB, Sales Tax Receipts Revenue, 5.25%, 12/01/36	$	165	$	189,697
City of Chicago Illinois, ARB, O’Hare International Airport, General, Third Lien, Series C, 6.50%, 1/01/41		1,590		2,056,013
City of Chicago Illinois, Refunding RB, Sales Tax Revenue, Series A, 5.25%, 1/01/38		205		235,430
City of Chicago Illinois Wastewater Transmission, RB, Second Lien, 5.00%, 1/01/42 (a)		310		345,585
Cook County Forest Preserve District, GO, Series C, 5.00%, 12/15/32		150		172,207
Cook County Forest Preserve District, GO, Refunding, Limited Tax Project, Series B, 5.00%, 12/15/32		70		80,364
Illinois Finance Authority, RB, Carle Foundation, Series A, 6.00%, 8/15/41		750		897,855
Illinois Finance Authority, Refunding RB:
Northwestern Memorial Healthcare, 5.00%, 8/15/37		115		130,879
Northwestern Memorial Hospital, 6.00%, 8/15/39		1,000		1,186,630
Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Project, Series B, 5.00%, 12/15/28		530		621,054
Railsplitter Tobacco Settlement Authority, RB:
5.50%, 6/01/23		365		440,394
6.00%, 6/01/28		105		125,677

				7,839,410
Indiana — 2.5%
Indiana Municipal Power Agency, RB, Series B, 6.00%, 1/01/39		1,190		1,424,311
Kansas — 3.4%
Kansas Development Finance Authority, Refunding RB, Adventist Health System/Sunbelt Obligated Group:
Series A, 5.00%, 11/15/32		750		871,252
Series C, 5.50%, 11/15/29		900		1,054,359

				1,925,611
Kentucky — 2.5%
Kentucky Economic Development Finance Authority, RB, Owensboro Medical Health System, Series A, 6.38%, 6/01/40		350		420,693
Louisville & Jefferson County Metropolitan Government Parking Authority, RB, Series A, 5.75%, 12/01/34		800		984,808

				1,405,501
Louisiana — 0.8%
Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp., Series A-1, 6.50%, 11/01/35		380		448,833

Portfolio Abbreviations


To simplify the listings of portfolio holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:	AGC	Assured Guaranty Corp.	HRB	Housing Revenue Bonds
	AGM	Assured Guaranty Municipal Corp.	IDA	Industrial Development Authority
	AMBAC	American Municipal Bond Assurance Corp.	IDB	Industrial Development Board
	AMT	Alternative Minimum Tax (subject to)	IDRB	Industrial Development Revenue Bonds
	ARB	Airport Revenue Bonds	ISD	Independent School District
	BARB	Building Aid Revenue Bonds	LRB	Lease Revenue Bonds
	BHAC	Berkshire Hathaway Assurance Corp.	MRB	Mortgage Revenue Bonds
	CAB	Capital Appreciation Bonds	M/F	Multi-Family
	COP	Certificates of Participation	NPFGC	National Public Finance Guarantee Corp.
	EDC	Economic Development Corp.	PSF-GTD	Permanent School Fund Guaranteed
	EDA	Economic Development Authority	Q-SBLF	Qualified School Bond Loan Fund
	ERB	Education Revenue Bonds	RB	Revenue Bonds
	GARB	General Airport Revenue Bonds	SAN	State Aid Notes
	GO	General Obligation Bonds	SBPA	Stand-by Bond Purchase Agreements
	HDA	Housing Development Authority	S/F	Single-Family
	HFA	Housing Finance Agency	VRDN	Variable Rate Demand Notes

See Notes to Financial Statements.



20	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013

Schedule of Investments (continued)

BlackRock Municipal Bond Investment Trust (BIE)

(Percentages shown are based on Net Assets)


Municipal Bonds	Par (000)		Value
Maine — 1.5%
Maine Health & Higher Educational Facilities Authority, RB, Maine General Medical Center, 7.50%, 7/01/32	$	675	$	869,387
Massachusetts — 0.7%
Massachusetts Development Finance Agency, Refunding RB, Trustees of Deerfield Academy, 5.00%, 10/01/40		375		430,234
Michigan — 3.2%
Lansing Board of Water & Light Utilities System, RB, Series A, 5.50%, 7/01/41		485		573,478
Michigan State Building Authority, Refunding RB, Facilities Program, Series I, 6.00%, 10/15/38		500		603,235
Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, 8.25%, 9/01/39		530		675,252

				1,851,965
Mississippi — 2.4%
Mississippi Development Bank, Refunding RB:
Jackson Mississippi Water & Sewer (AGM), 5.00%, 9/01/30		535		623,425
Jackson Public School District Project, Series A, 5.00%, 4/01/28		645		735,474

				1,358,899
Multi-State — 5.7%
Centerline Equity Issuer Trust, 7.20%, 11/15/52 (b)(c)		3,000		3,269,220
Nevada — 4.1%
City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/34		1,000		1,173,150
County of Clark Nevada, ARB, Series B, 5.75%, 7/01/42		1,000		1,175,670

				2,348,820
New Jersey — 5.2%
New Jersey EDA, Refunding RB, School Facilities Construction, Series AA, 5.50%, 12/15/29		750		871,305
New Jersey State Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC, 5.25%, 10/01/29		610		676,917
New Jersey Transportation Trust Fund Authority, RB, Transportation System:
5.50%, 6/15/41		500		582,405
5.88%, 12/15/38		695		822,637

				2,953,264
New York — 2.0%
Hudson New York Yards Infrastructure Corp., RB, Series A, 5.75%, 2/15/47		145		172,573
New York Liberty Development Corp., Refunding RB, Second Priority, Bank of America Tower at One Bryant Park Project, 6.38%, 7/15/49		325		386,493
New York State Dormitory Authority, RB, Series B, 5.00%, 3/15/42		500		570,630

				1,129,696
North Carolina — 1.1%
North Carolina Medical Care Commission, RB, Duke University Health System, Series A, 5.00%, 6/01/32		530		618,378
Ohio — 1.1%
Ohio State University, RB, Special Purpose General Receipts, Series A, 5.00%, 6/01/38		545		632,772
Municipal Bonds	Par (000)		Value
Pennsylvania — 6.2%
Pennsylvania Economic Development Financing Authority, RB, American Water Co. Project, 6.20%, 4/01/39	$	300	$	349,263
Pennsylvania Turnpike Commission, RB:
Sub-Series A, 5.63%, 12/01/31		750		880,230
Sub-Series A, 6.00%, 12/01/41		1,500		1,708,665
Sub-Series C, (AGC), 6.25%, 6/01/38		500		605,185

				3,543,343
Texas — 12.6%
Central Texas Regional Mobility Authority, Refunding RB, Senior Lien, 6.00%, 1/01/41		890		1,035,417
City of Houston Texas, Refunding RB, Utility System, Series D, 5.00%, 11/15/42		500		574,610
Conroe ISD Texas, GO, School Building, Series A, 5.75%, 2/15/35		470		560,489
Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.13%, 12/01/31		250		319,305
Houston Community College System, GO, 5.00%, 2/15/36 (a)		205		232,798
North Texas Tollway Authority, RB, Special Projects System, Series A, 5.50%, 9/01/41		500		594,080
North Texas Tollway Authority, Refunding RB, First Tier:
Series B, 5.00%, 1/01/42		750		833,677
Series K-1 (AGC), 5.75%, 1/01/38		250		281,723
Tarrant County Cultural Education Facilities Finance Corp., RB, Scott & White Healthcare, 6.00%, 8/15/45		1,020		1,232,354
Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien, NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39		500		596,450
Texas Transportation Commission, Refunding RB, First Tier, Series A, 5.00%, 8/15/41		175		191,998
University of Texas System, Refunding RB, Financing System Bonds, Series B, 5.00%, 8/15/43		615		718,996

				7,171,897
Utah — 2.0%
Utah Transit Authority, Refunding RB, Subordinated Sales Tax, 5.00%, 6/15/42		1,000		1,128,270
Virginia — 3.7%
Fairfax County IDA, RB, Health Care, Inova Health System, Series A, 5.00%, 5/15/40		275		312,571
Norfolk EDA, Refunding RB, Sentara Healthcare, Series B, 5.00%, 11/01/36		500		571,670
Virginia Public School Authority, RB, School Financing, 6.50%, 12/01/18 (d)		500		657,335
Virginia Resources Authority, RB, Series A-1, 5.00%, 11/01/42		485		561,499

				2,103,075
Washington — 2.0%
Port of Seattle, Refunding RB, Intermediate Lien, Series A, 5.00%, 8/01/32		1,000		1,165,790
Wisconsin — 3.2%
University of Wisconsin Hospitals & Clinics Authority, Refunding RB, Series A, 5.00%, 4/01/38 (a)		145		162,175
Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Alliiance, Series D, 5.00%, 11/15/41		485		545,019

See Notes to Financial Statements.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	21

Schedule of Investments (continued)

BlackRock Municipal Bond Investment Trust (BIE)

(Percentages shown are based on Net Assets)


Municipal Bonds	Par (000)		Value
Wisconsin (concluded)
Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert Health, Inc.:
Series A, 5.00%, 4/01/42	$	125	$	140,486
Series C, 5.25%, 4/01/39		890		985,560

				1,833,240
Total Municipal Bonds – 96.0%				54,718,039



Municipal Bonds Transferred to Tender Option Bond Trusts (e)
California — 19.4%
California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/39 (f)		1,005		1,178,121
Grossmont Union High School District, GO, Election of 2008, Series B, 5.00%, 8/01/40		1,300		1,451,710
Los Angeles Community College District California, GO, Election of 2008, Series C, 5.25%, 8/01/39 (f)		1,410		1,705,381
Los Angeles Community College District California, GO, Refunding, Series A, 6.00%, 8/01/33		2,079		2,597,309
Los Angeles Unified School District California, GO, Series I, 5.00%, 1/01/34		200		224,448
San Diego Public Facilities Financing Authority, Refunding RB, Series B, 5.50%, 8/01/39		2,234		2,615,912
University of California, RB, Series O, 5.75%, 5/15/34		810		976,158
University of California, Refunding RB, Limited Project, Series G, 5.00%, 5/15/37		250		288,684

				11,037,723
District of Columbia — 3.4%
District of Columbia, RB, Series A, 5.50%, 12/01/30 (f)		735		893,662
District of Columbia Water & Sewer Authority, Refunding RB, Series A, 5.50%, 10/01/39		899		1,061,426

				1,955,088
Florida — 0.5%
County of Miami-Dade Florida, Refunding RB, Transit System Sales Surtax, 5.00%, 7/01/42		260		292,159
Illinois — 8.1%
City of Chicago Illinois Waterworks, Refunding RB, Second Lien, 5.00%, 11/01/42		400		451,474
Illinois Finance Authority, RB, University of Chicago, Series B, 6.25%, 7/01/38		1,500		1,860,045
Illinois State Toll Highway Authority, RB, Series B, 5.50%, 1/01/33		2,000		2,283,353

				4,594,872
Massachusetts — 1.6%
Massachusetts School Building Authority, Sales Tax RB, Senior Lien, Series B, 5.00%, 10/15/41		790		906,091
Nevada — 3.2%
Clark County Water Reclamation District, GO, Limited Tax, 6.00%, 7/01/38		1,500		1,813,485
New Hampshire — 1.2%
New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/39 (f)		585		684,893
New Jersey — 3.7%
New Jersey Transportation Trust Fund Authority, RB, Transportation System:
Series A (AGM), 5.00%, 12/15/32		1,000		1,138,810
Series B, 5.25%, 6/15/36		840		959,314

				2,098,124


Municipal Bonds Transferred to Tender Option Bond Trusts (e)	Par (000)		Value
New York — 14.3%
New York City Municipal Water Finance Authority, RB, Fiscal 2009, Series A, 5.75%, 6/15/40	$	750	$	894,809
New York City Municipal Water Finance Authority, Refunding RB:
Series FF, 5.00%, 6/15/45		1,000		1,130,475
Series FF-2, 5.50%, 6/15/40		990		1,172,004
New York City Transitional Finance Authority, BARB, Building Aid, Fiscal 2009, Series S-3, 5.25%, 1/15/39		1,000		1,117,917
New York City Transitional Finance Authority, RB, Future Tax Secured, Fiscal 2012, Series E, 5.00%, 2/01/42		460		524,110
New York Liberty Development Corp., RB, 1 World Trade Center Project, 5.25%, 12/15/43		1,170		1,342,884
New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51		680		805,800
New York State Dormitory Authority, ERB, Series B, 5.25%, 3/15/38		1,000		1,171,800

				8,159,799
Ohio — 1.6%
County of Allen Ohio, Refunding RB, Catholic Healthcare, Series A, 5.25%, 6/01/38		840		939,170
Puerto Rico — 0.9%
Puerto Rico Sales Tax Financing Corp., Sales Tax, Refunding RB, Sales Tax Revenue, Series C, 5.25%, 8/01/40		460		502,154
Texas — 7.2%
City of San Antonio Texas, Refunding RB, Electric and Gas Systems Revenue, Series A, 5.25%, 2/01/31 (f)		1,050		1,250,462
Harris County Cultural Education Facilities Finance Corp., RB, Texas Children’s Hospital Project, 5.50%, 10/01/39		1,450		1,715,713
Waco Educational Finance Corp., Refunding RB, Baylor University, 5.00%, 3/01/43		1,005		1,144,765

				4,110,940
Virginia — 0.9%
Fairfax County IDA Virginia, Refunding RB, Health Care, Inova Health System, Series A, 5.50%, 5/15/35		460		528,879
Washington — 1.5%
University of Washington, Refunding RB, Series A, 5.00%, 7/01/41		735		850,540
Total Municipal Bonds Transferred to Tender Option Bond Trusts — 67.5%				38,473,917
Total Long-Term Investments (Cost — $82,732,308) — 163.5%				93,191,956



Short-Term Securities	Shares
FFI Institutional Tax-Exempt Fund, 0.01% (g)(h)		1,154,435		1,154,435
Total Short-Term Securities (Cost — $1,154,435) — 2.0%				1,154,435
Total Investments (Cost — $83,886,743) — 165.5%				94,346,391
Liabilities in Excess of Other Assets — (0.4)%				(206,749	)
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (33.9)%				(19,347,621	)
VRDP Shares, at Liquidation Value — (31.2)%				(17,800,000	)

Net Assets Applicable to Common Shares — 100.0%			$	56,992,021

See Notes to Financial Statements.



22	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013


Schedule of Investments (concluded)		BlackRock Municipal Bond Investment Trust (BIE)

Notes to Schedule of investments

(a)

When-issued security. Unsettled when-issued transactions were as follows:


Counterparty	Value		Unrealized Appreciation (Depreciation)
Stifel Nicolaus & Co.	$	345,585	$	(180	)
JPMorgan Securities, Inc.	$	394,973	$	16

(b)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity.

(c)

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(d)

US government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par.

(e)

Securities represent bonds transferred to a TOB in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

(f)

All or a portion of security is subject to a recourse agreement, which may require the Trust to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Trust could ultimately be required to pay under the agreements is $2,954,469.

(g)

Investments in issuers considered to be an affiliate of the Trust during the six months ended February 28, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:


Affiliate	Shares Held at August 31, 2012		Net Activity		Shares Held at February 28, 2013		Income
FFI Institutional Tax-Exempt Fund		159,677		994,758		1,154,435	$	94

(h)

Represents the current yield as of report date.

Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the Trust’s investments categorized in the disclosure hierarchy as of February 28, 2013:


	Level 1			Level 2				Level 3		Total
Assets:
Investments:
Long-Term Investments¹			—		$	93,191,956			—		$	93,191,956
Short-Term Securities		$	1,154,435			—			—			1,154,435

Total		$	1,154,435		$	93,191,956			—		$	94,346,391

¹ See above Schedule of Investments for values in each state or political subdivision.
Certain of the Trust’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of February 28, 2013, such liabilities are categorized within the disclosure hierarchy as follows:
	Level 1			Level 2				Level 3		Total
Liabilities:
TOB trust certificates			—		$	(19,340,052	)		—		$	(19,340,052	)
VRDP Shares			—			(17,800,000	)		—			(17,800,000	)

Total			—		$	(37,140,052	)		—		$	(37,140,052	)

There were no transfers between levels during the six months ended February 28, 2013.

See Notes to Financial Statements.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	23

Schedule of Investments February 28, 2013 (Unaudited)

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)


Municipal Bonds	Par (000)		Value
Alabama — 4.0%
Birmingham Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC):
6.00%, 6/01/34	$	1,150	$	1,352,940
6.00%, 6/01/39		450		529,547
Birmingham Water Works Board, RB, 4.75%, 1/01/36		2,100		2,295,132
Hoover City Board of Education, Special Tax, Refunding, 4.25%, 2/15/40		2,750		2,930,702

				7,108,321
Arizona — 9.4%
Arizona Health Facilities Authority, Refunding RB, Phoenix Children’s Hospital, Series A, 5.00%, 2/01/42		2,200		2,372,260
Arizona Sports & Tourism Authority, RB, Multipurpose Stadium Facilities, Series A (NPFGC), 5.00%, 7/01/13 (a)		1,500		1,524,570
Arizona State University, RB, Series D, 5.50%, 7/01/26		200		241,648
County of Pinal Arizona Election District No. 3, Refunding RB, 4.75%, 7/01/31		3,750		4,106,287
Pima County IDA, Refunding IDRB, Tucson Electric Power, 5.75%, 9/01/29		900		952,470
Salt Verde Financial Corp., RB, Senior:
5.00%, 12/01/32		1,500		1,737,090
5.00%, 12/01/37		2,065		2,387,512
San Luis Facility Development Corp., RB, Senior Lien, Regional Detention Center Project:
6.25%, 5/01/15		185		184,273
7.00%, 5/01/20		300		305,130
7.25%, 5/01/27		600		576,858
State of Arizona, COP, Department of Administration, Series A (AGM), 5.00%, 10/01/29		750		851,085
University Medical Center Corp. Arizona, RB, 6.50%, 7/01/39		500		580,915
University Medical Center Corp. Arizona, Refunding RB, 6.00%, 7/01/39		900		1,040,364

				16,860,462
Arkansas — 1.2%
City of Conway Arkansas, RB, Wastewater Revenue Improvement, Series A, 4.20%, 10/01/37		500		534,840
City of Springdale Arkansas, RB, Sales and Tax Use:
3.00%, 11/01/30		650		628,778
3.00%, 11/01/31		1,010		969,347

				2,132,965
California — 19.6%
California County Tobacco Securitization Agency, RB, CAB, Stanislaus, Sub-Series C, 11.06%, 6/01/55 (b)		4,500		47,655
California Educational Facilities Authority, Refunding RB, Santa Clara University, 5.00%, 2/01/40		1,000		1,114,270
California Health Facilities Financing Authority, RB, Sutter Health, Series B, 5.88%, 8/15/31		1,900		2,322,560
California HFA, RB, Home Mortgage, Series G, AMT, 5.05%, 2/01/29		2,285		2,269,850
Carlsbad Unified School District, GO, Election of 2006, Series B, 4.99%, 5/01/34 (c)		1,000		823,790
City of Manteca California Sewer, Refunding RB, 4.00%, 12/01/33		3,395		3,557,077
City of San Jose California, Refunding ARB, San Jose Airport, Series A1, AMT, 5.75%, 3/01/34		2,000		2,314,940
Dinuba Unified School District, GO, Election of 2006 (AGM):
5.63%, 8/01/31		250		288,243
5.75%, 8/01/33		500		578,845
Hartnell Community College District California, GO, CAB, Election of 2002, Series D, 4.94%, 8/01/34 (c)		1,650		1,247,945
Municipal Bonds	Par (000)		Value
California (concluded)
Norwalk-La Mirada Unified School District California, GO, CAB, Refunding, Election of 2002, Series E (AGC), 4.81%, 8/01/38 (b)	$	8,000	$	2,392,240
Palomar Community College District, GO, CAB, Election of 2006, Series B:
4.36%, 8/01/30 (b)		1,500		707,445
5.53%, 8/01/33 (b)		4,000		1,312,560
4.76%, 8/01/39 (c)		2,000		1,293,800
San Diego Community College District California, GO, CAB, Election of 2002, 4.73%, 8/01/33 (c)		2,800		2,361,240
San Jose Evergreen Community College District, GO, Election of 2010, Series B, 3.50%, 8/01/32		1,200		1,224,948
State of California, GO, Various Purpose:
5.75%, 4/01/31		2,000		2,390,080
6.00%, 3/01/33		1,000		1,240,420
6.50%, 4/01/33		1,950		2,444,500
5.50%, 3/01/40		2,350		2,779,110
State of California, GO, Refunding, Veterans, AMT, 5.05%, 12/01/36		555		567,549
Val Verde Unified School District California, Special Tax Bonds, Refunding, Junior Lien, 6.25%, 10/01/28		1,585		1,627,953

				34,907,020
Colorado — 1.2%
Colorado Health Facilities Authority, RB, Catholic Health Initiatives, Series D, 6.25%, 10/01/33		1,070		1,293,673
Park Creek Metropolitan District, Refunding RB, Limited Property Tax (AGM), 6.00%, 12/01/38		750		875,272

				2,168,945
Connecticut — 1.4%
Connecticut State Health & Educational Facilities Authority, Refunding RB:
Hartford Healthcare, Series A, 5.00%, 7/01/32		1,250		1,392,225
Lawrence & Memorial Hospital, Series F, 5.00%, 7/01/36		550		606,700
Sacred Heart University, Series G, 5.38%, 7/01/31		400		444,356

				2,443,281
Delaware — 0.9%
County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Project, 6.00%, 10/01/40		1,200		1,353,948
Florida — 1.7%
County of Lee Florida, Refunding ARB, Lee Airport, Series A, AMT (AGM), 5.00%, 10/01/28		2,000		2,233,620
Orange County Health Facilities Authority, Refunding RB, Mayflower Retirement Center, 5.00%, 6/01/36		125		132,177
Stevens Plantation Community Development District, Special Assessment Bonds, Series A, 7.10%, 5/01/35 (d)(e)		910		682,846

				3,048,643
Hawaii — 0.2%
Hawaii State Department of Budget & Finance Senior Living, Refunding RB, Special Purpose, Kahala Nui, 5.25%, 11/15/37		400		432,528
Idaho — 1.2%
Idaho Health Facilities Authority, Refunding RB, Trinity Health Group, Series B, 6.25%, 12/01/33		1,750		2,097,445
Illinois — 8.5%
Chicago Transit Authority, RB, Sales Tax Receipts Revenue, 5.25%, 12/01/40		665		760,181
City of Chicago, Refunding ARB, O’Hare International Airport, Passenger Facility Charge, Series B, AMT, 4.00%, 1/01/29		4,000		4,080,560

See Notes to Financial Statements.



24	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013

Schedule of Investments (continued)

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)


Municipal Bonds	Par (000)		Value
Illinois (concluded)
Illinois Finance Authority, RB:
Navistar International, Recovery Zone, 6.50%, 10/15/40	$	560	$	605,438
Rush University Medical Center, Series C, 6.63%, 11/01/39		650		795,594
Illinois Finance Authority, Refunding RB:
Friendship Village Schaumburg, Series A, 5.63%, 2/15/37		210		211,117
OSF Healthcare System, 6.00%, 5/15/39		1,025		1,189,185
Roosevelt University Project, 6.50%, 4/01/44		1,000		1,136,730
Railsplitter Tobacco Settlement Authority, RB:
6.25%, 6/01/24		1,000		1,117,890
6.00%, 6/01/28		1,150		1,376,458
Village of Bolingbrook Illinois, GO, Refunding, Series B (NPFGC), 6.25%, 1/01/36 (b)		16,065		3,936,728

				15,209,881
Indiana — 0.6%
Indiana Finance Authority, Refunding RB, Improvement, U.S. Steel Corp., 6.00%, 12/01/26		1,000		1,060,780
Iowa — 0.9%
Iowa Higher Education Loan Authority, Refunding RB, Private College Facility:
5.75%, 9/01/30		500		566,310
6.00%, 9/01/39		1,000		1,124,680

				1,690,990
Kansas — 0.6%
Pratt County Public Building Commission, RB, 3.25%, 12/01/32		1,000		989,880
Louisiana — 2.5%
Lafayette Public Trust Financing Authority, Refunding RB, Ragin Cajun Facilities Project (AGM), 3.75%, 10/01/32		520		534,264
Louisiana Local Government Environmental Facilities & Community Development Authority, RB:
Parish of Plaquemines Project (AGM), 4.00%, 9/01/42		480		487,214
Westlake Chemical Corp, Series A-1, 6.50%, 11/01/35		1,050		1,240,197
Louisiana Public Facilities Authority, RB:
Belle Chasse Educational Foundation Project, 6.50%, 5/01/31		400		466,688
Franciscan Missionaries of Our Lady Health System Project, Series B, 5.00%, 7/01/42		1,600		1,764,272

				4,492,635
Maryland — 2.0%
Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25		250		278,648
Maryland Health & Higher Educational Facilities Authority, Refunding RB, Doctor’s Community Hospital, 5.63%, 7/01/30		2,900		3,273,781

				3,552,429
Michigan — 3.0%
Board of Control of Michigan Technological University, Refunding RB, General, Series A, 4.00%, 10/01/30		1,290		1,357,635
Michigan State Building Authority, Refunding RB, Facilities Program, Series I, 6.25%, 10/15/38		1,250		1,524,600
Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, 8.25%, 9/01/39		1,950		2,484,417

				5,366,652
Municipal Bonds	Par (000)		Value
Minnesota — 3.2%
City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC), 6.50%, 11/15/38	$	4,600	$	5,667,522
Mississippi — 3.2%
Mississippi Development Bank, RB, Special Obligation:
Hinds Community College District, CAB (AGM), 5.00%, 4/01/36		845		943,713
Jackson County Limited Tax Note (AGC), 5.50%, 7/01/32		1,750		1,990,047
University of Southern Mississippi, RB, Campus Facilities Improvements Project, 5.38%, 9/01/36		2,100		2,384,907
Warren County Mississippi, RB, Gulf Opportunity Zone Bonds, International Paper Co. Project, Series A, AMT, 5.38%, 12/01/35		400		441,208

				5,759,875
Missouri — 3.1%
Missouri State Development Finance Board, RB:
St. Joseph Sewage System Improvements, Series E, 5.25%, 5/01/31		580		623,674
Annual Appropriation Sewer System, Series B, 5.00%, 11/01/41		900		978,435
Missouri State Development Finance Board, Refunding RB, Electric System Projects, Series F, 4.00%, 6/01/32		2,490		2,553,894
Missouri State Health & Educational Facilities Authority, RB:
A.T. Still University Health Sciences, 5.25%, 10/01/31		500		568,005
Heartland Regional Medical Center, 4.13%, 2/15/43		770		769,330

				5,493,338
Montana — 0.8%
Montana Facility Finance Authority, Refunding RB, Sisters of Leavenworth, Series A, 4.75%, 1/01/40		1,350		1,468,949
Multi-State — 6.4%
Centerline Equity Issuer Trust, 7.20%, 11/15/14 (f)(g)		10,500		11,442,270
Nebraska — 3.8%
Central Plains Energy Project Nebraska, RB, Gas Project No. 3, Gas Project No. 3, 5.00%, 9/01/42		600		655,014
Omaha Nebraska Sanitation Sewer, RB, System:
3.25%, 11/15/37		2,400		2,294,688
4.25%, 11/15/38		1,440		1,541,678
4.00%, 11/15/42		2,200		2,310,198

				6,801,578
Nevada — 1.1%
City of Las Vegas Nevada, Special Assessment Bonds, Summerlin Area, 5.65%, 6/01/23		1,265		1,252,274
County of Clark Nevada, Refunding RB, Alexander Dawson School Nevada Project, 5.00%, 5/15/29		575		631,287

				1,883,561
New Jersey — 10.3%
Middlesex County Improvement Authority, RB, Subordinate, Heldrich Center Hotel, Series B, 6.25%, 1/01/37 (d)(e)		915		68,094
New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT, 7.25%, 11/15/30 (h)		3,000		3,011,910
New Jersey EDA, Refunding RB:
First Mortgage, Winchester, Series A, 5.80%, 11/01/31		1,500		1,535,745
Kapkowski Road Landfill Project, 6.50%, 4/01/28		7,500		8,983,275

See Notes to Financial Statements.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	25

Schedule of Investments (continued)

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)


Municipal Bonds	Par (000)		Value
New Jersey (concluded)
New Jersey Educational Facilities Authority, Refunding RB, University of Medicine & Dentistry, Series B:
7.13%, 12/01/23	$	630	$	805,487
7.50%, 12/01/32		800		1,000,344
New Jersey Health Care Facilities Financing Authority, Refunding RB Barnabas Health, Series A:
4.63%, 7/01/23		510		577,779
5.63%, 7/01/37		1,700		1,916,036
New Jersey State Housing & Mortgage Finance Agency, RB, Series AA, 6.50%, 10/01/38		485		507,349

				18,406,019
New York — 5.8%
Albany Industrial Development Agency, RB, New Covenant Charter School Project, Series A, 7.00%, 5/01/35 (d)(e)		455		68,218
Hudson New York Yards Infrastructure Corp., RB, Series A (NPFGC), 4.50%, 2/15/47		750		782,242
New York City Industrial Development Agency, RB, American Airlines Inc., JFK International Airport, AMT, 7.75%, 8/01/31 (d)(e)(h)		3,165		3,599,270
New York Liberty Development Corp., Refunding RB, Second Priority, Bank of America Tower at One Bryant Park Project, 6.38%, 7/15/49		800		951,368
New York State Dormitory Authority, RB, Rochester Institute of Technology, Series A, 6.00%, 7/01/18 (a)		1,000		1,258,540
Niagara Area Development Corp., Refunding RB, Covanta Energy Project, Series A, AMT, 5.25%, 11/01/42		400		419,020
Onondaga Civic Development Corp., Refunding RB, Saint Joseph’s Hospital Health Center Project:
4.50%, 7/01/32		1,110		1,093,028
5.00%, 7/01/42		540		553,743
Westchester County Healthcare Corp. New York, Refunding RB, Senior Lien, Series A, Remarketing, 5.00%, 11/01/30		1,500		1,676,535

				10,401,964
North Carolina — 3.3%
Gaston County Industrial Facilities & Pollution Control Financing Authority North Carolina, RB, Exempt Facilities, National Gypsum Co. Project, AMT, 5.75%, 8/01/35		2,945		2,725,126
North Carolina Capital Facilities Finance Agency, Refunding RB, Duke Energy Carolinas, Series B, 4.38%, 10/01/31		1,000		1,074,430
North Carolina Medical Care Commission, Refunding RB:
South Eastern Regional Medical Center, 3.25%, 6/01/27		300		301,425
South Eastern Regional Medical Center, 5.00%, 6/01/32		660		760,221
University Health System, Series D, 6.25%, 12/01/33		800		962,160

				5,823,362
North Dakota — 1.1%
City of Fargo North Dakota, Refunding RB, University Facilities Development Foundation Project, 3.00%, 12/01/30		400		388,208
City of Grand Forks North Dakota, Refunding RB, Healthcare Systems, 5.00%, 12/01/32		1,415		1,541,515

				1,929,723
Ohio — 0.9%
Kent State University, RB, General Receipts, Series A, 5.00%, 5/01/42		800		901,472
Municipal Bonds	Par (000)		Value
Ohio (concluded)
Miami University/Oxford Ohio, RB, General Receipts, 3.25%, 9/01/34	$	800	$	770,184

				1,671,656
Oklahoma — 1.3%
Oklahoma Municipal Power Authority, RB, Power Supply System, Series A, 4.00%, 1/01/38		2,250		2,312,663
Oregon — 3.5%
City of Madras Oregon, GO, Refunding, 4.00%, 2/15/33		500		492,550
Clackamas County Housing Authority, RB, M/F Housing, Easton Ridge Apartments Project, Series A (i):
3.50%, 9/01/33		755		745,193
4.00%, 9/01/43		660		653,103
4.00%, 9/01/49		1,000		981,150
Oregon Health & Science University, RB, Series A, 5.75%, 7/01/39		750		886,552
Oregon Health & Science University, Refunding RB:
Series A, 3.00%, 7/01/24		1,000		1,016,150
Series E, 5.00%, 7/01/32		750		868,073
Oregon State Facilities Authority, Refunding RB, Limited College Project, Series A, 5.25%, 10/01/40		500		553,310

				6,196,081
Pennsylvania — 3.3%
County of Allegheny Pennsylvania IDA, Refunding RB, U.S. Steel Corp. Project, 6.55%, 12/01/27		1,695		1,880,602
Delaware River Port Authority, RB, Series D (AGM), 5.00%, 1/01/40		2,600		2,897,258
Pennsylvania Higher Educational Facilities Authority, RB, University of the Sciences Philadelphia, 5.00%, 11/01/42		1,000		1,102,300

				5,880,160
Puerto Rico — 1.3%
Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 5.75%, 8/01/37		1,000		1,080,610
Puerto Rico Sales Tax Financing Corp., RB, CAB, Series A, 5.79%, 8/01/35 (b)		1,000		278,110
Puerto Rico Sales Tax Financing Corp., Refunding RB, CAB, Series A (NPFGC), 5.60%, 8/01/41 (b)		5,000		1,040,900

				2,399,620
Rhode Island — 1.2%
Rhode Island Health & Educational Building Corp., RB, Hospital Financing, LifeSpan Obligation, Series A (AGC), 7.00%, 5/15/39		1,000		1,204,150
State of Rhode Island, COP, Series C, School for the Deaf (AGC), 5.38%, 4/01/28		900		1,021,392

				2,225,542
Tennessee — 1.4%
Johnson City Health & Educational Facilities Board, RB, Mountain States Health, 5.00%, 8/15/42		800		874,368
Memphis-Shelby County Sports Authority, Inc., Refunding RB, Memphis Arena Project, Series A, 5.38%, 11/01/28		275		310,415
Shelby County Health Educational & Housing Facilities Board, RB, Methodist Le Bonheur Healthcare, 5.00%, 5/01/42		1,200		1,338,168

				2,522,951
Texas — 16.6%
Harris County Cultural Education Facilities Finance Corp., Refunding RB, Young Men’s Christian Association of the Greater Houston Area, Series A, 5.00%, 6/01/38		345		370,468

See Notes to Financial Statements.



26	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013

Schedule of Investments (continued)

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)


Municipal Bonds	Par (000)		Value
Texas (concluded)
Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B:
7.13%, 12/01/31	$	500	$	638,610
7.25%, 12/01/35		1,750		2,174,025
Harris County-Houston Sports Authority, Refunding RB, CAB, Senior Lien, Series G (NPFGC), 5.58%, 11/15/41 (b)		11,690		2,409,894
Matagorda County Navigation District No. 1 Texas, Refunding RB, Central Power & Light Co. Project, Series A, 6.30%, 11/01/29		1,500		1,765,695
Midland County Fresh Water Supply District No. 1, Refunding RB:
CAB, City of Midland Project, Series A, 4.49%, 9/15/36 (b)		4,900		1,724,261
CAB, City of Midland Project, Series A, 4.67%, 9/15/38 (b)		10,760		3,306,440
City of Midland Project, 3.38%, 9/15/32		1,575		1,582,796
Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien, LBJ Infrastructure Group LLC, LBJ Freeway Managed Lanes Project, 7.00%, 6/30/40		2,000		2,426,380
Texas State Turnpike Authority, RB, CAB (AMBAC), 6.02%, 8/15/35 (b)		50,000		13,201,500

				29,600,069
Vermont — 1.7%
University of Vermont & State Agricultural College, Refunding RB, Series A, 4.00%, 10/01/38		1,200		1,245,924
Vermont Educational & Health Buildings Financing Agency, RB, Hospital, Fletcher Allen Health, Series A, 4.75%, 12/01/36		800		838,536
Vermont Educational & Health Buildings Financing Agency, Refunding RB, St. Michaels College, 5.00%, 10/01/42		900		988,380

				3,072,840
Virginia — 0.6%
Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT, 5.50%, 1/01/42		940		1,038,155
Washington — 0.9%
Washington Healthcare Facilities Authority, RB, MultiCare Health System, Series B (AGC), 6.00%, 8/15/39		1,400		1,632,932
West Virginia — 0.7%
West Virginia State University, RB, West Virginia University Projects, Series B, 5.00%, 10/01/36		1,100		1,279,080
Wyoming — 0.8%
County of Sweetwater Wyoming, Refunding RB, Idaho Power Co. Project, 5.25%, 7/15/26		1,200		1,363,236
Total Municipal Bonds – 135.2%				241,189,951



Municipal Bonds Transferred to Tender Option Bond Trusts (j)
Colorado — 2.3%
Colorado Health Facilities Authority, RB, Catholic Health, Series C-7 (AGM), 5.00%, 9/01/36		3,750		4,031,625
Massachusetts — 0.9%
Massachusetts Water Resources Authority, Refunding RB, General, Series A, 5.00%, 8/01/41		1,450		1,636,847
Municipal Bonds Transferred to Tender Option Bond Trusts (j)	Par (000)		Value
Michigan — 2.3%
Michigan State Hospital Finance Authority, Refunding RB, Trinity Health Credit Group, Series C, 4.00%, 12/01/32	$	4,000	$	4,131,240
New Jersey — 0.9%
New Jersey Transportation Trust Fund Authority, RB, Series B, 5.25%, 6/15/36		1,400		1,598,856
New York — 12.5%
Hudson New York Yards Infrastructure Corp., RB, Series A, 5.75%, 2/15/47		2,500		2,975,139
New York City Municipal Water Finance Authority, RB, Fiscal 2009, Series A, 5.75%, 6/15/40		450		536,885
New York City Municipal Water Finance Authority, Refunding RB:
5.50%, 6/15/40		405		479,456
Second General Resolution, Series CC, 5.00%, 6/15/47		6,000		6,804,420
Water & Sewer System, Series A, 4.75%, 6/15/30		3,000		3,365,250
New York Liberty Development Corp., RB, 1 World Trade Center Port Authority, 5.25%, 12/15/43		2,505		2,875,150
New York State Dormitory Authority, RB, New York University, Series A, 5.00%, 7/01/38		2,199		2,498,221
New York State Dormitory Authority, Refunding LRB, State University Dormitory Facilities, Series A, 5.00%, 7/01/42		760		874,311
New York State Thruway Authority, Refunding RB, Transportation, Series A, 5.00%, 3/15/31		1,560		1,833,515

				22,242,347
Ohio — 2.0%
County of Montgomery Ohio, RB, Catholic Health, Series C-1 (AGM), 5.00%, 10/01/41		1,260		1,344,269
Ohio Higher Educational Facility Commission, Refunding RB, Hospital, Cleveland Clinic Health, Series A, 5.25%, 1/01/33		2,000		2,227,060

				3,571,329
Total Municipal Bonds Transferred to Tender Option Bond Trusts — 20.9%				37,212,244
Total Long-Term Investments (Cost — $253,103,120) — 156.1%				278,402,195



Short-Term Securities	Shares
FFI Institutional Tax-Exempt Fund, 0.01% (k)(l)		3,101,522		3,101,522
Total Short-Term Securities (Cost — $3,101,522) — 1.7%				3,101,522
Total Investments (Cost—$256,204,642) — 157.8%				281,503,717
Liabilities in Excess of Other Assets — (1.4)%				(2,513,458	)
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (11.6)%				(20,615,148	)
VMTP Shares, at Liquidation Value — (44.8)%				(79,900,000	)

Net Assets Applicable to Common Shares — 100.0%			$	178,475,111

See Notes to Financial Statements.



SEMI-ANNUAL REPORT	FEBRUARY 28, 2013	27


Schedule of Investments (continued)		BlackRock Municipal Bond Trust (BBK)

Notes to Schedule of Investments

(a)

US government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par.

(b)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

(c)

Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown is as of report date.

(d)

Issuer filed for bankruptcy and/or is in default of principal and/or interest payments.

(e)

Non-income producing security.

(f)

(g)

(h)

Variable rate security. Rate shown is as of report date.

(i)

When-issued security. Unsettled when-issued transactions were as follows:


Counterparty	Value		Unrealized Appreciation
Wedbush Morgan Securities	$	2,379,446	$	2,207

(j)

(k)

Investments in issuers considered to be an affiliate of the Trust during the six months ended February 28, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:


Affiliate	Shares Held at August 31, 2012		Net Activity		Shares Held at February 28, 2013		Income
FFI Institutional Tax-Exempt Fund		583,607		2,517,915		3,101,522	$	340

(l)

Represents the current yield as of report date.

Financial futures contracts as of February 28, 2013 were as follows:


Contracts Sold			Issue	Exchange	Expiration	Notional Value		Unrealized Depreciation
	(22	)	30-Year US Treasury Bond	Chicago Board of Trade	June 2013	$	3,163,188	$	(1,409	)

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer Note 1 of the Notes to Financial Statements.

See Notes to Financial Statements.



28	SEMI-ANNUAL REPORT	FEBRUARY 28, 2013


Schedule of Investments (concluded)		BlackRock Municipal Bond Trust (BBK)

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of February 28, 2013:


	Level 1				Level 2				Level 3		Total
Assets:
Investments:
Long-Term Investments¹			—			$	278,402,195			—		$	278,402,195
Short-Term Securities		$	3,101,522				—			—			3,101,522

Total		$	3,101,522			$	278,402,195			—		$	281,503,717

¹ See above Schedule of Investments for values in each state or political subdivision.
	Level 1				Level 2				Level 3		Total
Derivative Financial Instruments²
Liabilities:
Interest rate contracts		$	(1,409	)			—			—		$	(1,409	)
² Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.
Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of February 28, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:
	Level 1				Level 2				Level 3		Total
Assets:
Investments:
Cash		$	122,644				—			—		$	122,644
Cash pledged as collateral for financial futures contracts			—			$	66,000			—			66,000
Liabilities:
TOB trust certificates			—				(20,608,872	)		—			(20,608,872	)
VMTP Shares			—				(79,900,000	)		—			(79,900,000	)

Total		$	122,644			$	(100,442,872	)		—		$	(100,320,228	)

There were no transfers between levels during the six months ended February 28, 2013.

See Notes to Financial Statements.