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 811-07642
Name of Fund: BlackRock MuniAssets Fund, Inc. (MUA)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive
Officer, BlackRock MuniAssets Fund, Inc., 800 Scudders Mill Road,
Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton, NJ
08543-9011
Registrant's telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 05/31/2008
Date of reporting period: 06/01/2007 - 05/31/2008
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE
LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
BlackRock MuniAssets BLACKROCK
Fund, Inc. (MUA)
ANNUAL REPORT | MAY 31, 2008
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
Table of Contents
================================================================================
Page
--------------------------------------------------------------------------------
A Letter to Shareholders ............................................ 3
Annual Report:
Fund Summary ........................................................ 4
The Benefits and Risks of Leveraging ................................ 5
Swap Agreements ..................................................... 5
Financial Statements:
Schedule of Investments ........................................... 6
Statement of Assets and Liabilities ............................... 11
Statement of Operations ........................................... 11
Statements of Changes in Net Assets ............................... 12
Financial Highlights ................................................ 13
Notes to Financial Statements ....................................... 14
Report of Independent Registered Public Accounting Firm ............. 18
Important Tax Information (Unaudited) ............................... 18
Disclosure of Investment Advisory Agreement and Subadvisory Agreement 19
Automatic Dividend Reinvestment Plan ................................ 23
Officers and Directors .............................................. 24
Additional Information .............................................. 28
2 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
A Letter to Shareholders
Dear Shareholder
For much of the reporting period, investors grappled with the repercussions of
the credit crisis that surfaced last summer, and with the effects of a weakening
economy and surging energy and food prices. These factors were offset by the
positive impact from robust export activity, strength in the non-financial
corporate sector and monetary and fiscal stimuli.
Amid the market turbulence, the Federal Reserve Board (the "Fed") initiated a
series of moves to restore liquidity and bolster financial market stability.
Since September 2007, the central bank slashed the target federal funds rate 325
basis points (3.25%), bringing the rate to 2.0% as of period-end. Also of
significance were its other policy decisions, which included extending use of
the discount window to broker-dealers and investment banks and backstopping the
rescue of ill-fated Bear Stearns. Notably, on April 30, the Fed dropped previous
references to downside growth risks and added more emphasis on inflationary
pressures, indicating the central bankers have likely concluded the current
cycle of monetary easing.
Nevertheless, the Fed's response to the financial crisis helped to ease credit
turmoil and investor anxiety. Since hitting a low point on March 17, following
the collapse of Bear Stearns, stocks appreciated 10% (through May 30). Most
international markets, which had outperformed U.S. stocks for some time, saw a
reversal in that trend, as the troubled credit situation and downward pressures
on growth fanned recession fears.
In fixed income markets, Treasury securities rallied (yields fell as prices
correspondingly rose), as a broad "flight-to-quality" theme persisted. The yield
on 10-year Treasury issues, which touched 5.30% in June 2007 (its highest level
in five years), fell to a low of 3.34% in March 2008 before rising to 4.06% by
May 31 as investors grew more risk tolerant and shifted out of Treasury issues
in favor of stocks and other high-quality fixed income sectors. Tax-exempt
issues underperformed throughout most of the reporting period, pressured by
problems among municipal bond insurers and the freeze in the market for auction
rate securities. However, the final two months saw a firmer tone in the
municipal market, as investors took advantage of unusually high yields.
On the whole, results for the major benchmark indexes generally reflected
heightened investor risk aversion:
Total Returns as of May 31, 2008 6-month 12-month
===============================================================================================================
U.S. equities (S&P 500 Index) (4.47%) (6.70%)
---------------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) (1.87) (10.53)
---------------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) (5.21) (2.53)
---------------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers U.S. Aggregate Index) 1.49 6.89
---------------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) 1.44 3.87
---------------------------------------------------------------------------------------------------------------
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Capped Index) 1.81 (1.08)
---------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future results. Index performance shown for
illustrative purposes only. You cannot invest directly in an index.
As you navigate today's volatile markets, we encourage you to review your
investment goals with your financial professional and to make portfolio changes,
as needed. For more up-to-date commentary on the economy and financial markets,
we invite you to visit www.blackrock.com/funds. As always, we thank you for
entrusting BlackRock with your investment assets, and we look forward to
continuing to serve you in the months and years ahead.
Sincerely,
/s/ Rob Kapito
Rob Kapito
President, BlackRock Advisors, LLC
3
THIS PAGE NOT PART OF YOUR FUND REPORT
Fund Summary as of May 31, 2008
Investment Objective
BlackRock MuniAssets Fund, Inc. (MUA) (the "Fund") seeks to provide shareholders
with current income exempt from federal income taxes by investing primarily in a
portfolio of medium-to-lower grade or unrated municipal obligations the interest
on which, in the opinion of bond counsel to the issuer, is exempt from federal
income taxes.
Performance
For the 12 months ended May 31, 2008, the Fund returned (7.12%) based on market
price and (1.90%) based on net asset value ("NAV"). For the same period, the
closed-end Lipper High Yield Municipal Debt Funds category posted an average
return of (4.75%) on a NAV basis. All returns reflect reinvestment of dividends.
The Fund's outperformance during the period was attributed largely to a bias
towards higher-quality issues, which helped shield it from the stress
experienced in the high yield municipal sector as a result of substantial
widening in credit spreads. In addition, a strong emphasis on high-quality,
short-dated prerefunded bonds proved beneficial, as the municipal yield curve
steepened sharply over the last 12 months.
The views expressed reflect the opinions of BlackRock as of the date of
this report and are subject to change based on changes in market, economic
or other conditions. These views are not intended to be a forecast of
future events and are no guarantee of future results.
Fund Information
Symbol on New York Stock Exchange .......................... MUA
Initial Offering Date ...................................... June 25, 1993
Yield on Closing Market Price as of May 31, 2008 ($13.35)1 . 6.07%
Tax Equivalent Yield2 ...................................... 9.34%
Current Monthly Distribution per share of Common Stock3 .... $0.0675
Current Annualized Distribution per share of Common Stock3 . $ 0.810
Leverage as of May 31, 20084 ............................... 2%
--------------------------------------------------------------------------------
1 Yield on closing market price is calculated by dividing the current
annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution is not constant and is subject to change.
4 As a percentage of total managed assets, which is the total assets of the
Fund (including any assets attributable to tender option bond trusts
("TOBs")) minus the sum of accrued liabilities.
The table below summarizes the changes in the Fund's market price and net asset
value per share:
--------------------------------------------------------------------------------
5/31/08 5/31/07 Change High Low
--------------------------------------------------------------------------------
Market Price ................ $13.35 $15.29 (12.69%) $15.31 $12.28
Net Asset Value ............. $12.79 $13.87 (7.79%) $13.87 $12.63
--------------------------------------------------------------------------------
The following charts show the portfolio composition and credit quality
allocations of the Fund's long-term investments:
Portfolio Composition
Sector 5/31/08 5/31/07
--------------------------------------------------------------------------------
Hospital ................................................... 27% 27%
Industrial & Pollution Control ............................. 25 31
City, County, State ........................................ 13 13
Transportation ............................................. 8 7
Tax Revenue ................................................ 7 8
Power ...................................................... 7 3
Housing .................................................... 5 1
Education .................................................. 4 6
Tobacco .................................................... 3 3
Water & Sewer .............................................. 1 1
--------------------------------------------------------------------------------
Credit Quality Allocations5
Credit Rating 5/31/08 5/31/07
--------------------------------------------------------------------------------
AAA/Aaa .................................................... 12% 10%
AA/Aa ...................................................... 4 1
A/A ........................................................ 7 3
BBB/Baa .................................................... 15 22
BB/Ba ...................................................... 10 8
B/B ........................................................ 5 6
CCC/Caa .................................................... 4 5
Not Rated6 ................................................. 43 45
--------------------------------------------------------------------------------
5 Using the higher of Standard & Poor's or Moody's Investors Service
ratings.
6 The investment advisor has deemed certain of these non-rated securities to
be of investment grade quality. As of May 31, 2008 and May 31, 2007, the
market value of these securities was $12,388,252 representing 5% and
$13,264,602 representing 5%, respectively, of the Fund's long-term
investments.
4 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
The Benefits and Risks of Leveraging
The Fund utilizes leverage to seek to enhance the yield and NAV. However, these
objectives cannot be achieved in all interest rate environments.
The Fund may from time to time leverage its assets through the use of tender
option bond ("TOB") programs. In a typical TOB program, the Fund transfers one
or more municipal bonds to a TOB trust, which issues short-term variable rate
securities to third-party investors and a residual interest to the Fund. The
cash received by the TOB trust from the issuance of the short-term securities
(less transaction expenses) is paid to the Fund, which invests the cash in
additional portfolio securities. The distribution rate of the short-term
securities is reset periodically (typically every seven days) through a
remarketing of the short-term securities. Any income earned on the bonds in the
TOB trust, net of expenses incurred by the TOB trust, that is not paid to the
holders of the short-term securities is paid to the Fund. In connection with
managing the Fund's assets, the Fund's investment advisor may at any time
retrieve the bonds out of the TOB trust typically within seven days. TOB
investments generally will provide the Fund with economic benefits in periods of
declining short-term interest rates, but expose the Fund to risks during periods
of rising short-term interest rates. Additionally, fluctuations in the market
value of municipal securities deposited into the TOB trust may adversely affect
the Fund's NAVs per share. (See Note 1 of the Notes to Financial Statements for
details of municipal bonds transferred to TOB trusts.)
The Fund anticipates that its total economic leverage, which includes TOBs, will
not exceed 5% of its total managed assets. As of May 31, 2008, the Fund had
economic leverage of 2% of its total managed assets.
Swap Agreements
The Fund may invest in swap agreements, which are over-the-counter contracts in
which one party agrees to make periodic payments based on the change in market
value of a specified bond, basket of bonds, or index in return for periodic
payments based on a fixed or variable interest rate or the change in market
value of a different bond, basket of bonds or index. Swap agreements may be used
to obtain exposure to a bond or market without owning or taking physical custody
of securities. Swap agreements involve the risk that the party with whom the
Fund has entered into a swap will default on its obligation to pay the Fund and
the risk that the Fund will not be able to meet its obligations to pay the other
party to the agreement.
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 5
Schedule of Investments May 31, 2008 (Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
===============================================================================
Alabama -- 0.6%
Tuscaloosa, Alabama, Special Care Facilities
Financing Authority, Residential Care Facility
Revenue Bonds (Capstone Village, Inc. Project),
Series A, 5.875%, 8/01/36 $ 1,820 $ 1,564,072
===============================================================================
Alaska -- 0.3%
Alaska Industrial Development and Export Authority
Revenue Bonds (Williams Lynxs Alaska Cargoport),
AMT, 7.80%, 5/01/14 770 799,183
===============================================================================
Arizona -- 8.5%
Coconino County, Arizona, Pollution Control
Corporation Revenue Refunding Bonds (Tucson
Electric Power -- Navajo):
AMT, Series A, 7.125%, 10/01/32 3,000 3,035,850
Series B, 7%, 10/01/32 2,500 2,525,925
Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1),
Series A, 6.625%, 7/01/20 1,625 1,478,929
Maricopa County, Arizona, IDA, M/F Housing
Revenue Bonds (Sun King Apartments Project),
Series A, 6.75%, 5/01/31 1,615 1,581,731
Phoenix, Arizona, IDA, Airport Facility, Revenue
Refunding Bonds (America West Airlines Inc.
Project), AMT, 6.30%, 4/01/23 4,800 4,039,200
Pima County, Arizona, IDA, Education Revenue Bonds
(Arizona Charter Schools Project), Series E,
7.25%, 7/01/31 1,390 1,437,316
Pima County, Arizona, IDA, Education Revenue
Refunding Bonds:
(Arizona Charter Schools Project), Series O,
5.25%, 7/01/31 500 429,500
(Arizona Charter Schools Project II), Series A,
6.75%, 7/01/11 (a) 415 462,476
(Arizona Charter Schools Project II), Series A,
6.75%, 7/01/31 675 682,783
Salt Verde Financial Corporation, Arizona, Senior
Gas Revenue Bonds:
5%, 12/01/32 2,840 2,555,034
5%, 12/01/37 3,975 3,518,034
Show Low, Arizona, Improvement District Number 5,
Special Assessment Bonds, 6.375%, 1/01/15 1,000 1,009,140
------------
22,755,918
===============================================================================
California -- 2.5%
California State, Various Purpose, GO:
5.25%, 11/01/25 1,900 1,967,792
5.50%, 11/01/33 1,300 1,341,041
Fontana, California, Special Tax, Refunding
(Community Facilities District Number 22 --
Sierra), 6%, 9/01/34 1,320 1,243,559
Southern California Public Power Authority, Natural
Gas Project Number 1 Revenue Bonds, Series A,
5%, 11/01/29 2,085 2,047,262
------------
6,599,654
===============================================================================
Colorado -- 5.0%
Colorado Health Facilities Authority, Revenue
Refunding Bonds (Christian Living Communities
Project), Series A, 5.75%, 1/01/26 650 601,230
Denver, Colorado, City and County Airport Revenue
Bonds, AMT, Series D, 7.75%, 11/15/13 (b) 1,805 2,015,697
Elk Valley, Colorado, Public Improvement Revenue
Bonds (Public Improvement Fee):
Series A, 7.10%, 9/01/14 1,430 1,492,977
Series A, 7.30%, 9/01/22 2,095 2,141,781
Series B, 7.45%, 9/01/31 275 277,464
North Range Metropolitan District Number 1,
Colorado, GO, 7.25%, 12/15/11 (a) 1,760 1,990,437
Plaza Metropolitan District Number 1, Colorado,
Tax Allocation Revenue Bonds (Public
Improvement Fees):
8%, 12/01/25 2,850 3,006,779
8.125%, 12/01/25 525 527,446
Southlands Metropolitan District Number 1,
Colorado, GO, 7.125%, 12/01/14 (a) 1,170 1,418,321
------------
13,472,132
===============================================================================
Connecticut -- 2.4%
Connecticut State Development Authority, Airport
Facility Revenue Bonds (Learjet Inc. Project), AMT,
7.95%, 4/01/26 680 734,250
Connecticut State Development Authority, IDR (AFCO
Cargo BDL-LLC Project), AMT, 8%, 4/01/30 3,490 3,606,566
Connecticut State, HFA, Housing Mortgage Finance
Program Revenue Bonds, AMT, Sub-Series A-2,
5.15%, 5/15/38 2,250 2,170,125
------------
6,510,941
===============================================================================
Portfolio Abbreviations
To simplify the listings of BlackRock MuniAssets Fund, Inc.'s portfolio holdings
in the Schedule of Investments, the names of many of the securities have been
abbreviated according to the list on the right.
AMT Alternative Minimum Tax (subject to)
EDA Economic Development Authority
EDR Economic Development Reserve Bonds
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
VRDN Variable Rate Demand Notes
See Notes to Financial Statements.
6 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Schedule of Investments (continued) (Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
===============================================================================
Florida -- 10.7%
Capital Projects Finance Authority, Florida, Continuing
Care Retirement Revenue Bonds (Glenridge on
Palmer Ranch), Series A, 8%, 6/01/12 (a) $ 1,130 $ 1,352,971
Greater Orlando Aviation Authority, Florida, Airport
Facilities Revenue Bonds (JetBlue Airways Corp.),
AMT, 6.375%, 11/15/26 1,180 966,314
Halifax Hospital Medical Center, Florida, Hospital
Revenue Refunding Bonds, Series A, 5%, 6/01/38 1,160 1,024,303
Harbor Bay, Florida, Community Development
District, Capital Improvement Special Assessment
Revenue Bonds, Series A, 7%, 5/01/33 490 510,502
Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System),
Series C, 5.25%, 11/15/36 1,195 1,174,171
Hillsborough County, Florida, IDA, Exempt Facilities
Revenue Bonds (National Gypsum Company),
AMT, Series A, 7.125%, 4/01/30 2,000 1,940,600
Hillsborough County, Florida, IDA, Hospital Revenue
Bonds (Tampa General Hospital Project),
5%, 10/01/36 4,300 4,022,005
Jacksonville, Florida, Economic Development
Commission, Health Care Facilities, Revenue
Refunding Bonds (Florida Proton Therapy Institute),
Series A, 6%, 9/01/17 1,000 1,009,780
Jacksonville, Florida, Economic Development
Commission, IDR (Gerdau Ameristeel US, Inc.),
AMT, 5.30%, 5/01/37 1,300 1,063,023
Lee County, Florida, IDA, IDR (Lee Charter Foundation),
Series A, 5.375%, 6/15/37 2,620 2,129,929
Midtown Miami, Florida, Community Development
District, Special Assessment Revenue Bonds,
Series A, 6.25%, 5/01/37 3,255 3,014,163
Orlando, Florida, Urban Community Development
District, Capital Improvement Special Assessment
Bonds, Series A, 6.95%, 5/01/11 (a) 2,245 2,486,989
Santa Rosa Bay Bridge Authority, Florida, Revenue
Bonds, 6.25%, 7/01/28 3,040 2,753,115
Sarasota County, Florida, Health Facilities Authority,
Retirement Facility Revenue Refunding Bonds
(Village on the Isle Project):
5.50%, 1/01/27 860 788,740
5.50%, 1/01/32 795 706,691
Tolomato Community Development District, Florida,
Special Assessment Bonds, 6.65%, 5/01/40 2,680 2,607,292
Waterchase, Florida, Community Development
District, Capital Improvement Revenue Bonds,
Series A, 6.70%, 5/01/11 (a) 895 985,270
------------
28,535,858
===============================================================================
Georgia -- 4.4%
Atlanta, Georgia, Tax Allocation Bonds:
(Atlantic Station Project), 7.90%, 12/01/11 (a)(m) 3,000 3,530,130
(Princeton Lakes Project), 5.50%, 1/01/31 740 666,673
Brunswick and Glynn County, Georgia, Development
Authority, First Mortgage Revenue Bonds (Coastal
Community Retirement Corporation Project),
Series A (c)(d)(e):
7.125%, 1/01/25 1,165 781,715
7.25%, 1/01/35 1,690 1,133,990
Clayton County, Georgia, Tax Allocation Bonds
(Ellenwood Project), 7.50%, 7/01/33 2,375 2,276,699
Main Street Natural Gas, Inc., Georgia, Gas Project
Revenue Bonds, Series A, 6.375%, 7/15/38 940 960,934
Rockdale County, Georgia, Development Authority
Revenue Bonds (Visy Paper Project), AMT, Series A,
6.125%, 1/01/34 2,435 2,402,347
------------
11,752,488
===============================================================================
Idaho -- 0.4%
Idaho Health Facilities Authority, Revenue Refunding
Bonds (Valley Vista Care Corporation), Series A,
7.75%, 11/15/16 1,000 1,092,700
===============================================================================
Illinois -- 4.3%
Chicago, Illinois, O'Hare International Airport, Special
Facility Revenue Refunding Bonds (American
Airlines Inc. Project), 5.50%, 12/01/30 4,140 2,243,383
Illinois State Finance Authority Revenue Bonds:
(Clare At Water Tower Project), Series A,
6.125%, 5/15/38 2,950 2,708,838
(Landing At Plymouth Place Project), Series A,
6%, 5/15/37 600 542,358
(Monarch Landing, Inc. Project), Series A,
7%, 12/01/37 820 812,923
(Primary Health Care Centers Program),
6.60%, 7/01/24 685 658,360
Lincolnshire, Illinois, Special Service Area Number 1,
Special Tax Bonds (Sedgebrook Project),
6.25%, 3/01/34 1,070 1,032,753
Lombard, Illinois, Public Facilities Corporation, First
Tier Revenue Bonds (Conference Center and Hotel),
Series A-1, 7.125%, 1/01/36 2,600 2,656,940
Village of Wheeling, Illinois, Revenue Bonds (North
Milwaukee/Lake-Cook Tax Increment Financing
(Redevelopment Project), 6%, 1/01/25 825 756,063
------------
11,411,618
===============================================================================
Indiana -- 2.8%
Daviess County, Indiana, EDR (Daviess Community
Hospital Project), Refunding, VRDN,
8%, 1/01/29 (f)(g) 5,000 5,000,000
Vanderburgh County, Indiana, Redevelopment
Commission, Redevelopment District Tax
Allocation Bonds, 5.25%, 2/01/31 1,200 1,159,800
Vigo County, Indiana, Hospital Authority Revenue
Bonds (Union Hospital, Inc.):
5.70%, 9/01/37 615 543,469
5.75%, 9/01/42 765 673,223
------------
7,376,492
===============================================================================
Iowa -- 1.0%
Iowa Finance Authority, Health Care Facilities,
Revenue Refunding Bonds (Care Initiatives
Project), 9.25%, 7/01/11 (a) 2,180 2,622,038
===============================================================================
Kansas -- 0.5%
Wyandotte County, Kansas, Kansas City Unified
Government Revenue Refunding Bonds (General
Motors Corporation Project), 6%, 6/01/25 1,770 1,434,249
===============================================================================
See Notes to Financial Statements.
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 7
Schedule of Investments (continued) (Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
===============================================================================
Kentucky -- 1.0%
Kenton County, Kentucky, Airport Board, Special
Facilities Revenue Bonds (Mesaba Aviation Inc.
Project), AMT, Series A, 6.70%, 7/01/29 $ 2,850 $ 2,759,285
===============================================================================
Louisiana -- 1.8%
Louisiana Local Government Environmental
Facilities and Community Development Authority
Revenue Bonds (Westlake Chemical Corporation),
6.75%, 11/01/32 3,000 3,006,180
Louisiana Public Facilities Authority, Hospital
Revenue Bonds (Franciscan Missionaries of Our
Lady Health System, Inc.), Series A,
5.25%, 8/15/36 1,870 1,867,120
------------
4,873,300
===============================================================================
Maryland -- 1.8%
Maryland State Economic Development Corporation
Revenue Refunding Bonds (Baltimore Association
for Retarded Citizens -- Health and Mental Hygiene
Program), Series A, 7.75%, 3/01/25 1,815 1,913,627
Maryland State Energy Financing Administration,
Limited Obligation Revenue Bonds (Cogeneration --
AES Warrior Run), AMT, 7.40%, 9/01/19 1,500 1,491,405
Maryland State Health and Higher Educational
Facilities Authority Revenue Bonds:
(King Farm Presbyterian Community), Series A,
5.30%, 1/01/37 1,250 1,029,525
(Washington Christian Academy),
5.50%, 7/01/38 590 487,080
------------
4,921,637
===============================================================================
Massachusetts -- 1.1%
Massachusetts State Health and Educational
Facilities Authority Revenue Bonds (Jordan
Hospital), Series E, 6.75%, 10/01/33 1,150 1,178,762
Massachusetts State Health and Educational
Facilities Authority, Revenue Refunding Bonds
(Bay Cove Human Services Issue), Series A,
5.90%, 4/01/28 1,945 1,865,877
------------
3,044,639
===============================================================================
Michigan -- 1.1%
Macomb County, Michigan, Hospital Finance
Authority, Hospital Revenue Bonds (Mount
Clemens General Hospital), Series B,
5.875%, 11/15/34 1,635 1,534,644
Monroe County, Michigan, Hospital Financing
Authority, Hospital Revenue Refunding Bonds
(Mercy Memorial Hospital Corporation),
5.50%, 6/01/35 1,740 1,395,202
------------
2,929,846
===============================================================================
Missouri -- 0.4%
Kansas City, Missouri, IDA, First Mortgage Health
Facilities Revenue Bonds (Bishop Spencer Place),
Series A, 6.50%, 1/01/35 1,000 977,670
===============================================================================
Nevada -- 0.7%
Clark County, Nevada, IDR (Nevada Power Company
Project), AMT, Series A, 5.60%, 10/01/30 1,380 1,186,358
Clark County, Nevada, Improvement District Number
142, Special Assessment Bonds,
6.375%, 8/01/23 640 610,073
------------
1,796,431
===============================================================================
New Hampshire -- 0.4%
New Hampshire Health and Education Facilities
Authority, Hospital Revenue Bonds (Catholic
Medical Center), 5%, 7/01/36 1,165 1,040,939
===============================================================================
New Jersey -- 12.1%
Camden County, New Jersey, Pollution Control
Financing Authority, Solid Waste Resource
Recovery, Revenue Refunding Bonds, AMT:
Series A, 7.50%, 12/01/10 9,000 9,023,670
Series B, 7.50%, 12/01/09 345 345,980
New Jersey EDA, Cigarette Tax Revenue Bonds,
5.50%, 6/15/24 3,065 2,982,184
New Jersey EDA, IDR, Refunding (Newark Airport
Marriott Hotel), 7%, 10/01/14 2,500 2,515,750
New Jersey EDA, Retirement Community
Revenue Bonds:
(Cedar Crest Village Inc. Facility), Series A,
7.25%, 11/15/11 (a) 1,665 1,912,869
(Seabrook Village Inc.), Series A, 8.125%,
11/15/10 (a) 5,800 6,623,890
New Jersey EDA, Special Facility Revenue Bonds
(Continental Airlines Inc. Project), AMT:
6.25%, 9/15/19 2,000 1,719,320
6.25%, 9/15/29 3,330 2,686,344
9%, 6/01/33 1,250 1,300,800
New Jersey Health Care Facilities Financing Authority
Revenue Bonds (Pascack Valley Hospital
Association), 6.625%, 7/01/36 (e) 2,000 1,293,000
New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Bonds, Series C,
5.05%, 12/15/35 (b)(h) 3,450 813,338
Tobacco Settlement Financing Corporation of New
Jersey, Asset-Backed Revenue Refunding Bonds,
Series 1A, 5%, 6/01/41 1,545 1,194,192
------------
32,411,337
===============================================================================
New Mexico -- 0.9%
Farmington, New Mexico, PCR, Refunding (Tucson
Electric Power Company -- San Juan Project),
Series A, 6.95%, 10/01/20 2,500 2,522,600
===============================================================================
New York -- 4.7%
Dutchess County, New York, IDA, Civic Facility
Revenue Refunding Bonds (Saint Francis Hospital),
Series A, 7.50%, 3/01/29 1,400 1,491,224
New York City, New York, City IDA, Civic Facility
Revenue Bonds:
Series C, 6.80%, 6/01/28 510 534,929
(Special Needs Facilities Pooled Program),
Series C-1, 6.625%, 7/01/29 1,515 1,456,763
New York City, New York, City IDA, Special Facility
Revenue Bonds (British Airways Plc Project), AMT,
7.625%, 12/01/32 2,400 2,240,880
New York Liberty Development Corporation Revenue
Bonds (National Sports Museum Project), Series A,
6.125%, 2/15/19 870 872,758
See Notes to Financial Statements.
8 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Schedule of Investments (continued) (Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
===============================================================================
New York (concluded)
New York State Dormitory Authority, Non-State
Supported Debt, Revenue Refunding Bonds:
(Mount Sinai-NYU Medical Center Health
System), Series C, 5.50%, 7/01/26 $ 1,470 $ 1,470,044
(New York University Hospital Center), Series A,
5%, 7/01/20 2,960 2,850,658
Westchester County, New York, IDA, Continuing Care
Retirement, Mortgage Revenue Bonds (Kendal on
Hudson Project), Series A, 6.50%, 1/01/13 (a) 1,575 1,784,948
------------
12,702,204
===============================================================================
North Carolina -- 0.7%
North Carolina Medical Care Commission,
Retirement Facilities, First Mortgage Revenue
Bonds (Givens Estates Project), Series A, 6.50%,
7/01/13 (a) 1,500 1,743,360
===============================================================================
Ohio -- 1.4%
Buckeye Tobacco Settlement Financing Authority,
Ohio, Tobacco Settlement Asset-Backed Bonds,
Series A-2, 6.50%, 6/01/47 3,935 3,673,126
===============================================================================
Pennsylvania -- 7.6%
Allegheny County, Pennsylvania, Hospital
Development Authority, Revenue Refunding Bonds
(West Penn Allegheny Health System), Series A,
5.375%, 11/15/40 3,015 2,554,941
Bucks County, Pennsylvania, IDA, Retirement
Community Revenue Bonds (Ann's Choice Inc.),
Series A:
6.125%, 1/01/25 200 200,080
6.25%, 1/01/35 1,550 1,522,317
Harrisburg, Pennsylvania, Authority, University
Revenue Bonds (Harrisburg University of Science),
Series B, 6%, 9/01/36 900 854,253
Lancaster County, Pennsylvania, Hospital Authority
Revenue Bonds (Brethren Village Project), Series A:
6.25%, 7/01/26 685 677,650
6.50%, 7/01/40 590 585,239
Montgomery County, Pennsylvania, IDA, Revenue
Bonds (Whitemarsh Continuing Care Project),
6.125%, 2/01/28 2,330 2,166,481
Pennsylvania Economic Development Financing
Authority, Exempt Facilities Revenue Bonds
(National Gypsum Company), AMT, Series A,
6.25%, 11/01/27 3,250 2,837,738
Philadelphia, Pennsylvania, Authority for IDR (Air
Cargo), AMT, Series A, 7.50%, 1/01/25 2,270 2,331,971
Philadelphia, Pennsylvania, Authority for IDR,
Commercial Development, 7.75%, 12/01/17 6,440 6,446,569
------------
20,177,239
===============================================================================
Rhode Island -- 1.0%
Central Falls, Rhode Island, Detention Facility
Corporation, Detention Facility, Revenue Refunding
Bonds, 7.25%, 7/15/35 2,495 2,573,168
===============================================================================
South Carolina -- 1.5%
Connector 2000 Association, Inc., South Carolina,
Toll Road and Capital Appreciation Revenue
Bonds, Senior-Series B (h):
6.5%, 1/01/09 1,500 1,435,260
7.969%, 1/01/14 1,485 850,519
South Carolina Jobs, EDA, EDR (Westminster
Presbyterian Center), 7.75%, 11/15/10 (a) 1,500 1,714,830
------------
4,000,609
===============================================================================
Tennessee -- 1.4%
Knox County, Tennessee, Health, Educational and
Housing Facilities Board, Hospital Facilities
Revenue Refunding Bonds (Covenant Health),
Series A, 5.06%, 1/01/40 (h) 6,785 936,194
Shelby County, Tennessee, Health, Educational and
Housing Facilities Board Revenue Bonds
(Germantown Village):
6.25%, 12/01/34 355 294,078
Series A, 7.25%, 12/01/34 2,500 2,453,575
------------
3,683,847
===============================================================================
Texas -- 2.0%
Austin, Texas, Convention Center Revenue Bonds
(Convention Enterprises Inc.), First Tier, Series A,
6.70%, 1/01/11 (a) 1,000 1,095,820
Brazos River Authority, Texas, PCR, Refunding (TXU
Energy Company LLC Project), AMT, Series A,
7.70%, 4/01/33 2,550 2,531,742
Houston, Texas, Health Facilities Development
Corporation, Retirement Facility Revenue Bonds
(Buckingham Senior Living Community), Series A,
7.125%, 2/15/14 (a) 1,400 1,689,282
------------
5,316,844
===============================================================================
Utah -- 0.6%
Carbon County, Utah, Solid Waste Disposal,
Revenue Refunding Bonds (Laidlaw
Environmental), AMT, Series A, 7.45%, 7/01/17 1,660 1,674,409
===============================================================================
Virginia -- 5.6%
Dulles Town Center, Virginia, Community
Development Authority, Special Assessment Tax
(Dulles Town Center Project), 6.25%, 3/01/26 1,455 1,457,692
Fairfax County, Virginia, EDA, Residential Care
Facilities, Mortgage Revenue Refunding Bonds
(Goodwin House, Inc.):
5.125%, 10/01/37 750 677,992
5.125%, 10/01/42 450 400,684
Lexington, Virginia, IDA, Residential Care Facility,
Mortgage Revenue Refunding Bonds (Kendal at
Lexington), Series A, 5.375%, 1/01/28 540 486,734
Pocahontas Parkway Association, Virginia, Toll Road
Revenue Bonds, Capital Appreciation, Senior
Series B, 5.95%, 8/15/08 (a)(h) 38,400 10,126,464
Tobacco Settlement Financing Corporation of
Virginia, Revenue Refunding Bonds, Senior
Series B-1, 5%, 6/01/47 2,180 1,664,386
------------
14,813,952
===============================================================================
See Notes to Financial Statements.
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 9
Schedule of Investments (concluded) (Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
===============================================================================
Washington -- 0.6%
Washington State Housing Financing Commission,
Nonprofit Revenue Bonds (Skyline at First Hill
Project), Series A, 5.625%, 1/01/38 $ 1,750 $ 1,494,605
===============================================================================
Wisconsin -- 0.7%
Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (New Castle Place
Project), Series A, 7%, 12/01/31 1,855 1,874,886
===============================================================================
Wyoming -- 1.1%
Wyoming Municipal Power Agency, Power Supply
Revenue Bonds, Series A, 5.375%, 1/01/42 3,030 3,013,517
===============================================================================
U.S. Virgin Islands -- 1.2%
Virgin Islands Government Refinery Facilities,
Revenue Refunding Bonds (Hovensa Coker
Project), AMT, 6.50%, 7/01/21 3,000 3,078,450
-------------------------------------------------------------------------------
Total Municipal Bonds
(Cost -- $256,793,913) -- 94.8% 253,025,243
===============================================================================
Municipal Bonds Transferred to Tender Par
Option Bond Trusts (i) (000) Value
===============================================================================
California -- 1.6%
San Jose, California, Airport Revenue Refunding
Bonds, AMT, Series A, 5.50%, 3/01/32 (b) 4,290 4,349,073
===============================================================================
Virginia -- 3.3%
Virginia State, HDA, Commonwealth Mortgage
Revenue Bonds, Series H, Sub-Series H-1,
5.375%, 7/01/36 (j) 8,690 8,733,624
-------------------------------------------------------------------------------
Total Municipal Bonds Transferred to Tender
Option Bond Trusts (Cost -- $13,281,165) -- 4.9% 13,082,697
===============================================================================
===============================================================================
Short-Term Securities Shares
===============================================================================
Merrill Lynch Institutional Tax-Exempt Fund,
1.71% (k)(l) 3,200,441 3,200,441
-------------------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $3,200,441) -- 1.2% 3,200,441
===============================================================================
Total Investments (Cost -- $273,275,519*) -- 100.9% 269,308,381
Other Assets Less Liabilities -- 1.6% 4,158,276
Liability for Trust Certificates, Including Interest
Expense and Fees Payable -- (2.5%) (6,553,384)
------------
Net Assets Applicable to Common Shares -- 100.0% $266,913,273
============
* The cost and unrealized appreciation (depreciation) of investments as of
May 31, 2008, as computed for federal income tax purposes, were as
follows:
Aggregate cost ....................................... $ 266,413,321
=============
Gross unrealized appreciation ........................ $ 8,505,642
Gross unrealized depreciation ........................ (12,100,582)
-------------
Net unrealized depreciation .......................... $ (3,594,940)
=============
(a) U.S. government securities, held in escrow, are used to pay interest on
this security, as well as to retire the bond in full at the date
indicated, typically at a premium to par.
(b) AMBAC Insured.
(c) Non-income producing security.
(d) Issuer filed for bankruptcy or is in default of interest payments.
(e) Illiquid security.
(f) Variable rate security. Rate shown is as of report date. Maturity shown is
the final maturity date.
(g) Radian Insured.
(h) Represents a zero-coupon bond. Rate shown reflects the effective yield at
the time of purchase.
(i) Securities represent bonds transferred to a tender option bond trust in
exchange for which the Fund acquired residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1 of
the Notes to Financial Statements for details of municipal bonds
transferred to tender option bond trusts.
(j) MBIA Insured.
(k) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
--------------------------------------------------------------------------
Net Dividend
Affiliate Activity Income
--------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund $(6,209,130) $107,637
--------------------------------------------------------------------------
(l) Represents the current yield as of report date.
(m) All or a portion of security has been pledged as collateral in connection
with open financial futures contracts.
o Financial futures contracts purchased as of May 31, 2008 were as follows:
--------------------------------------------------------------------------
Number of Expiration Face Unrealized
Contracts Issue Exchange Date Value Appreciation
--------------------------------------------------------------------------
185 10-Year U.S.
Treasury Bond Chicago September 2008 $20,679,938 $115,218
--------------------------------------------------------------------------
See Notes to Financial Statements.
10 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Statement of Assets and Liabilities
May 31, 2008
================================================================================
Assets
--------------------------------------------------------------------------------
Investments at value -- unaffiliated (cost -- $270,075,078) $ 266,107,940
Investments at value -- affiliated (cost -- $3,200,441) .... 3,200,441
Cash ....................................................... 47,159
Interest receivable ........................................ 5,103,308
Investments sold receivable ................................ 493,542
Margin variation receivable ................................ 115,218
Prepaid expenses ........................................... 11,858
-------------
Total assets ............................................... 275,079,466
-------------
================================================================================
Accrued Liabilities
--------------------------------------------------------------------------------
Income dividends payable ................................... 1,408,369
Investment advisory fees payable ........................... 127,554
Interest expense and fees payable .......................... 63,384
Other affiliates payable ................................... 1,957
Officer fees payable ....................................... 360
Other accrued expenses payable ............................. 74,569
-------------
Total accrued liabilities .................................. 1,676,193
-------------
================================================================================
Other Liabilities
--------------------------------------------------------------------------------
Trust certificates 1 ....................................... 6,490,000
-------------
Total Liabilities .......................................... 8,166,193
-------------
================================================================================
Net Assets
--------------------------------------------------------------------------------
Net assets ................................................. $ 266,913,273
=============
================================================================================
Net Assets Consist of
--------------------------------------------------------------------------------
Par value $0.10 per share (20,864,724 shares issued
and outstanding) ......................................... $ 2,086,472
Paid-in capital in excess of par ........................... 296,039,979
Undistributed net investment income ........................ 1,666,151
Accumulated net realized loss .............................. (29,027,409)
Net unrealized appreciation/depreciation ................... (3,851,920)
-------------
Net Assets, $12.79 net asset value per share ............... $ 266,913,273
=============
1 Represents short-term floating rate certificates issued by tender option
bond trusts.
2 Related to tender option bond trusts.
Statement of Operations
Year Ended May 31, 2008
================================================================================
Investment Income
--------------------------------------------------------------------------------
Interest ................................................... $ 17,963,762
Dividends from affiliates .................................. 107,637
-------------
Total income ............................................... 18,071,399
-------------
================================================================================
Expenses
--------------------------------------------------------------------------------
Investment advisory ........................................ 1,523,956
Accounting services ........................................ 99,443
Professional ............................................... 51,074
Printing ................................................... 43,250
Officer and Directors ...................................... 21,971
Custodian .................................................. 16,758
Registration ............................................... 8,868
Transfer agent ............................................. 5,881
Miscellaneous .............................................. 53,838
-------------
Total expenses excluding interest expense and fees ......... 1,825,039
Interest expense and fees 2 ................................ 107,312
-------------
Total expenses ............................................. 1,932,351
Less fees waived by advisor ................................ (7,246)
-------------
Total expenses after waiver ................................ 1,925,105
-------------
Net investment income ...................................... 16,146,294
-------------
================================================================================
Realized and Unrealized Gain (Loss)
--------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments .............................................. (1,634,734)
Swaps .................................................... 127,102
-------------
(1,507,632)
-------------
Net change in unrealized appreciation/depreciation on:
Investments .............................................. (20,157,187)
Futures and swaps ........................................ 171,992
-------------
(19,985,195)
-------------
Total realized and unrealized loss ......................... (21,492,827)
-------------
Net Decrease in Net Assets Resulting from Operations ....... $ (5,346,533)
=============
See Notes to Financial Statements.
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 11
Statements of Changes in Net Assets
Year Ended May 31,
---------------------------------
Increase (Decrease) in Net Assets: 2008 2007
===================================================================================================================================
Operations
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income ...................................................................... $ 16,146,294 $ 16,973,304
Net realized loss .......................................................................... (1,507,632) (5,079,543)
Net change in unrealized appreciation/depreciation ......................................... (19,985,195) 9,799,343
---------------------------------
Net increase (decrease) in net assets resulting from operations ............................ (5,346,533) 21,693,104
---------------------------------
===================================================================================================================================
Dividends and Distributions to Shareholders From
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income ...................................................................... (17,002,831) (17,339,322)
Net realized gain .......................................................................... (65,858) --
---------------------------------
Decrease in net assets resulting from dividends and distributions to shareholders .......... (17,068,689) (17,339,322)
---------------------------------
===================================================================================================================================
Capital Share Transactions
-----------------------------------------------------------------------------------------------------------------------------------
Reinvestment of dividends and distributions ................................................ 1,961,372 2,220,383
---------------------------------
===================================================================================================================================
Net Assets
-----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets. ................................................... (20,453,850) 6,574,165
Beginning of year .......................................................................... 287,367,123 280,792,958
---------------------------------
End of year ................................................................................ $ 266,913,273 $ 287,367,123
=================================
End of year undistributed net investment income ............................................ $ 1,666,151 $ 2,522,745
=================================
See Notes to Financial Statements.
12 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Financial Highlights
Ended May 31,
-------------------------------------------------------------
2008 2007 2006 2005 2004
===================================================================================================================================
Per Share Operating Performance
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ................................. $ 13.87 $ 13.65 $ 13.40 $ 12.36 $ 11.94
-------------------------------------------------------------
Net investment income 1 ............................................ 0.78 0.82 0.81 0.81 0.83
Net realized and unrealized gain (loss) ............................ (1.04) 0.24 0.27 1.04 0.38
-------------------------------------------------------------
Net increase (decrease) from investment operations ................. (0.26) 1.06 1.08 1.85 1.21
-------------------------------------------------------------
Dividends and distributions from:
Net investment income ......................................... (0.82) (0.84) (0.83) (0.81) (0.78)
Net realized gain ............................................. -- 2 -- -- -- (0.01)
-------------------------------------------------------------
Total dividends and distributions .................................. (0.82) (0.84) (0.83) (0.81) (0.79)
-------------------------------------------------------------
Net asset value, end of year ....................................... $ 12.79 $ 13.87 $ 13.65 $ 13.40 $ 12.36
-------------------------------------------------------------
Market price, end of year .......................................... $ 13.35 $ 15.29 $ 14.13 $ 13.27 $ 11.38
-------------------------------------------------------------
===================================================================================================================================
Total Investment Return 3
-----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value ........................................... (1.90%) 7.72% 8.31% 15.65% 10.74%
=============================================================
Based on market price .............................................. (7.12%) 14.71% 13.22% 24.39% 2.22%
=============================================================
===================================================================================================================================
Ratios to Average Net Assets
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses after waiver and excluding interest expense and fees 4 0.66% 0.68% 0.68% 0.67% 0.67%
=============================================================
Total expenses after waiver ........................................ 0.69% 0.68% 0.68% 0.67% 0.67%
=============================================================
Total expenses ..................................................... 0.70% 0.68% 0.68% 0.67% 0.67%
=============================================================
Net investment income .............................................. 5.81% 5.91% 5.97% 6.30% 6.71%
=============================================================
===================================================================================================================================
Supplemental Data
-----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000) ...................................... $ 266,913 $ 287,367 $ 280,793 $ 273,382 $ 252,203
=============================================================
Portfolio turnover ................................................. 23% 25% 17% 20% 19%
=============================================================
1 Based on average shares outstanding.
2 Amount is less than $(0.01).
3 Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially
different returns. Total investment returns exclude the effects of sales
charges.
4 Interest expense and fees relate to tender option bond trusts. See Note 1
of the Notes to Financial Statements for details of municipal bonds
transferred to tender option bond trusts.
See Notes to Financial Statements.
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 13
Notes to Financial Statements
1. Significant Accounting Policies:
BlackRock MuniAssets Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a non-diversified,
closed-end management investment company. The Fund's financial statements are
prepared in conformity with accounting principles generally accepted in the
United States of America, which may require the use of management accruals and
estimates. Actual results may differ from these estimates. The Fund determines,
and makes available for publication, the net asset value of its Common Stock on
a daily basis.
The following is a summary of significant accounting policies followed by the
Fund:
Valuation of Investments: Municipal investments (including commitments to
purchase such investments on a "when-issued" basis) are valued on the basis of
prices provided by dealers or pricing services selected under the supervision of
the Fund's Board of Directors (the "Board"). In determining the value of a
particular investment, pricing services may use certain information with respect
to transactions in such investments, quotations from dealers, pricing matrixes,
market transactions in comparable investments and various relationships between
investments. Short-term securities are valued at amortized cost. Swap agreements
are valued by quoted fair values received by the Fund's pricing service.
In the event that application of these methods of valuation results in a price
for an investment which is deemed not to be representative of the market value
of such investment, the investment will be valued by a method approved by the
Board as reflecting fair value ("Fair Value Assets"). When determining the price
for Fair Value Assets, the investment advisor and/or sub-advisor seeks to
determine the price that the Fund might reasonably expect to receive from the
current sale of that asset in an arm's-length transaction. Fair value
determinations shall be based upon all available factors that the investment
advisor and/or sub-advisor deems relevant. The pricing of all Fair Value Assets
is subsequently reported to the Board or a committee thereof.
Derivative Financial Instruments: The Fund may engage in various portfolio
investment strategies to increase the return of the Fund and to hedge, or
protect, its exposure to interest rate movements and movements in the securities
markets. Losses may arise if the value of the contract decreases due to an
unfavorable change in the price of the underlying security or if the
counterparty does not perform under the contract.
o Financial futures contracts -- The Fund may purchase or sell financial
futures contracts and options on such financial futures contracts.
Financial futures contracts are contracts for delayed delivery of
securities at a specific future date and at a specific price or yield.
Upon entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which the
transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known
as margin variation and are recognized by the Fund as unrealized gains or
losses. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value of the contract at the time
it was opened and the value at the time it was closed.
o Forward interest rate swaps -- The Fund may enter into forward interest
rate swaps. In a forward interest rate swap, the Fund and the counterparty
agree to make periodic net payments on a specified notional contract
amount, commencing on a specified future effective date, unless terminated
earlier. These periodic payments received or made by the Fund are recorded
in the accompanying Statement of Operations as realized gains or losses,
respectively. Gains or losses are also realized upon termination of the
swap agreements. Swaps are marked-to-market daily and changes in value are
recorded as unrealized appreciation (depreciation). The Fund generally
intends to close each forward interest rate swap before the effective date
specified in the agreement and therefore avoid entering into the interest
rate swap underlying each forward interest rate swap.
Forward Commitments and When-Issued Delayed Delivery Securities: The Fund may
purchase securities on a when-issued basis and may purchase or sell securities
on a forward commitment basis. Settlement of such transactions normally occurs
within a month or more after the purchase or sale commitment is made. The Fund
may purchase securities under such conditions only with the intention of
actually acquiring them, but may enter into a separate agreement to sell the
securities before the settlement date. Since the value of securities purchased
may fluctuate prior to settlement, the Fund may be required to pay more at
settlement than the security is worth. In addition, the purchaser is not
entitled to any of the interest earned prior to settlement. Upon making a
commitment to purchase a security on a when-issued basis, the Fund will hold
liquid assets worth at least the equivalent of the amount due.
Municipal Bonds Transferred to Tender Option Bond Trusts: The Fund leverages its
assets through the use of tender option bond trusts ("TOBs"). A TOB is
established by a third party sponsor forming a special purpose entity, into
which one or more funds, or an agent on behalf of the funds, transfers municipal
securities. Other funds managed by the investment advisor may also contribute
municipal securities to a TOB into which the Fund has contributed securities. A
TOB typically issues two classes of beneficial interests: short-term floating
rate certificates, which are sold to third party investors, and residual
certificates ("TOB Residuals"), which are generally issued to the participating
funds that made the transfer. The TOB Residuals held by the Fund include the
right of the Fund (1) to cause the holders of a proportional share of the
floating rate certificates to tender their certificates at par, and (2) to
transfer, within seven days, a corresponding share of the municipal securities
from the TOB to the Fund. The cash received by the TOB from the sale of the
short-term floating rate certificates, less transaction expenses, is paid to the
Fund, which typically invests the cash in additional municipal securities. The
Fund's transfer of
14 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Notes to Financial Statements (continued)
the municipal securities to a TOB is accounted for as a secured borrowing,
therefore the municipal securities deposited into a TOB are presented in the
Fund's Schedule of Investments and the proceeds from the transaction are
reported as a liability of the Fund.
Interest income from the underlying securities is recorded by the Fund on an
accrual basis. Interest expense incurred on the secured borrowing and other
expenses related to remarketing, administration and trustee services to a TOB
are reported as expenses of the Fund. The floating rate certificates have
interest rates that generally reset weekly and their holders have the option to
tender certificates to the TOB for redemption at par at each reset date. At May
31, 2008, the aggregate value of the underlying municipal securities transferred
to TOBs was $13,082,697, the related liablility for trust certificates was
$6,490,000 and the range of interest rates on the liability for trust
certificates was 2.555% to 3.102%.
Financial transactions executed through TOBs generally will underperform the
market for fixed rate municipal bonds in a rising interest rate environment, but
tend to outperform the market for fixed rate bonds when interest rates decline
or remain relatively stable. Should short-term interest rates rise, the Fund's
investment in TOBs likely will adversely affect the Fund's net investment income
and dividends to shareholders. Fluctuations in the market value of municipal
securities deposited into the TOB may adversely affect the Fund's net asset
value per share.
Zero-Coupon Bonds: The Fund may invest in zero-coupon bonds, which are normally
issued at a significant discount from face value and do not provide for periodic
interest payments. Zero-coupon bonds may experience greater volatility in market
value than similar maturity debt obligations which provide for regular interest
payments.
Segregation: In cases in which the 1940 Act and the interpretive positions of
the Securities and Exchange Commission ("SEC") require that the Fund segregate
assets in connection with certain investments (e.g., swaps and when-issued
securities), the Fund will, consistent with certain interpretive letters issued
by the SEC, designate on its books and records cash or other liquid debt
securities having a market value at least equal to the amount that would
otherwise be required to be physically segregated.
Investment Transactions and Investment Income: Investment transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual method. The Fund amortizes all
premiums and discounts on debt securities.
Dividends and Distributions: Dividends from net investment income are declared
and paid monthly. Distributions of capital gains are recorded on the ex-dividend
dates.
Income Taxes: It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
Effective November 30, 2007, the Fund implemented Financial Accounting Standards
Board ("FASB") Interpretation No. 48, "Accounting for Uncertainty in Income
Taxes -- an interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48
prescribes the minimum recognition threshold a tax position must meet in
connection with accounting for uncertainties in income tax positions taken or
expected to be taken by an entity, including investment companies, before being
measured and recognized in the financial statements. The investment advisor has
evaluated the application of FIN 48 to the Fund, and has determined that the
adoption of FIN 48 does not have a material impact on the Fund's financial
statements. The Fund files U.S. federal and various state and local tax returns.
No income tax returns are currently under examination. The statute of
limitations on the Fund's U.S. federal tax returns remain open for the years
ended May 31, 2005 through May 31, 2007. The statutes of limitations on the
Fund's state and local tax returns may remain open for an additional year
depending upon the jurisdiction.
Recent Accounting Pronouncements: In September 2006, Statement of Financial
Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), was issued
and is effective for fiscal years beginning after November 15, 2007. FAS 157
defines fair value, establishes a framework for measuring fair value and expands
disclosures about fair value measurements. The impact on the Fund's financial
statements disclosures, if any, is currently being assessed.
In addition, in February 2007, Statement of Financial Accounting Standards No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. FAS 159 permits entities to choose to measure many financial
instruments and certain other items at fair value that are not currently
required to be measured at fair value. FAS 159 also establishes presentation and
disclosure requirements designed to facilitate comparisons between entities that
choose different measurement attributes for similar types of assets and
liabilities. The impact on the Fund's financial statement disclosures, if any,
is currently being assessed.
In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures
about Derivative Instruments and Hedging Activities -- an amendment of FASB
Statement No. 133" ("FAS 161"), was issued and is effective for fiscal years
beginning after November 15, 2008. FAS 161 is intended to improve financial
reporting for derivative instruments by requiring enhanced disclosure that
enables investors to understand how and why an entity uses derivatives, how
derivatives are accounted for, and how derivative instruments affect an entity's
results of operations and financial position. The impact on the Fund's financial
statement disclosures, if any, is currently being assessed.
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 15
Notes to Financial Statements (continued)
Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan:
Under the deferred compensation plan approved by the Fund's Board,
non-interested Directors ("Independent Directors") may defer a portion of their
annual complex-wide compensation. Deferred amounts earn an approximate return as
though equivalent dollar amounts have been invested in common shares of other
certain BlackRock Closed-End Funds selected by the Independent Directors. This
has approximately the same economic effect for the Independent Directors as if
the Independent Directors had invested the deferred amounts directly in other
certain BlackRock Closed-End Funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Fund. The
Fund may, however, elect to invest in common stock of other certain BlackRock
Closed-End Funds selected by the Independent Directors in order to match its
deferred compensation obligations.
Other: Expenses directly related to the Fund are charged to the Fund. Other
operating expenses shared by several funds are pro-rated among those funds on
the basis of relative net assets or other appropriate methods.
2. Investment Advisory Agreement and Other Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with BlackRock
Advisors, LLC (the "Advisor"), an indirect, wholly owned subsidiary of
BlackRock, Inc., to provide investment advisory and administration services.
Merrill Lynch & Co., Inc. ("Merrill Lynch") and The PNC Financial Services
Group, Inc. are principal owners of BlackRock, Inc.
The Advisor is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Fund. For such services, the Fund
pays the Advisor a monthly fee at an annual rate of 0.55% of the Fund's average
daily net assets, plus the proceeds from the issuance of TOBs. Average daily net
assets is the average daily value of the Fund's total assets minus the sum of
its accrued liabilities.
The Advisor has agreed to waive its advisory fees by the amount of investment
advisory fees the Fund pays to the Advisor indirectly through its investment in
affiliated money market funds. This amount is included in fees waived by the
advisor on the Statement of Operations. For the year ended May 31, 2008, the
amount was $7,246.
The Advisor has entered into a separate sub-advisory agreement with BlackRock
Investment Management, LLC ("BIM"), an affiliate of the Advisor, under which the
Advisor pays BIM for services it provides, a monthly fee that is a percentage of
the investment advisory fee paid by the Fund to the Advisor.
For the year ended May 31, 2008, the Fund reimbursed the Advisor $4,953 for
certain accounting services expenses, which is included in accounting services
in the Statement of Operations.
Certain officers and/or directors of the Fund are officers and/or directors of
BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended May 31, 2008, were $71,794,140 and $63,004,720, respectively.
4. Capital Share Transactions:
The Fund is authorized to issue 200,000,000 shares, par value $0.10 per share.
Shares issued and outstanding for the years ended May 31, 2008 and May 31, 2007,
increased by 146,172 and 154,369, respectively, as a result of dividend and
distribution reinvestment.
5. Income Tax Information:
Reclassifications: Accounting principles generally accepted in the United States
of America require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting. Accordingly, during
the current year, $6,860,553 has been reclassified between paid-in capital in
excess of par and accumulated net realized loss as a result of permanent
differences attributable to the expiration of capital loss carryforwards and $57
has been reclassified between undistributed net investment income and
accumulated net realized loss as a result of reclassification of distributions.
These reclassifications have no effect on net assets or net asset value per
share.
The tax character of distributions paid during the fiscal years ended May 31,
2008 and May 31, 2007 was as follows:
--------------------------------------------------------------------------------
5/31/2008 5/31/2007
--------------------------------------------------------------------------------
Distributions paid from:
Net tax-exempt income ...................... $17,002,831 $17,339,322
Ordinary income ............................ 65,858 --
----------------------------
Total distributions .......................... $17,068,689 $17,339,322
----------------------------
16 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Notes to Financial Statements (concluded)
As of May 31, 2008, the components of accumulated losses on a tax basis were as
follows:
-----------------------------------------------------------------------------
Net undistributed tax-exempt income ....................... $ 1,313,590
Net undistributed long-term capital gains ................. --
------------
Total net undistributed earnings .......................... 1,313,590
Capital loss carryforward ................................. (28,042,434)*
Net unrealized losses ..................................... (4,484,334)**
------------
Total accumulated net losses .............................. $(31,213,178)
============
* As of May 31, 2008, the Fund had a capital loss carryforward of
$28,042,434, of which $3,487,083 expires in 2009, $2,260,830 expires in
2010, $7,452,325 expires in 2011, $5,486,273 expires in 2012, $3,762,613
expires in 2013, $5,065,527 expires in 2015 and $527,783 expires in 2016.
This amount will be available to offset future realized capital gains.
** The difference between book-basis and tax-basis net unrealized losses is
attributable primarily to the difference between book and tax amortization
methods for premiums and discounts on fixed income securities, book/tax
differences in the accrual of income on securities in default, the
realization for tax purposes of unrealized gains on certain futures
contracts, the deferral of post-October capital losses for tax purposes
and the difference between the book and tax treatment of residual
interests in tender option bond trusts.
6. Concentration Risk:
The Fund's investments are concentrated in certain states, which may be affected
by adverse financial, social, environmental, economic, regulatory and political
factors.
Many municipalities insure repayment of their bonds, which reduces the risk of
loss due to issuer default. The market value of these bonds may fluctuate for
other reasons and there is no assurance that the issuer will meet its
obligation.
7. Subsequent Event:
The Fund paid a net investment income dividend to holders in the amount of
$0.067500 per share on July 1, 2008 to shareholders of record on June 16, 2008.
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 17
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of BlackRock MuniAssets Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of BlackRock MuniAssets Fund, Inc. (the "Fund") as
of May 31, 2008, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal controls over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purposes
of expressing an opinion on the effectiveness of the Fund's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of May 31, 2008, by correspondence with the custodian. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
BlackRock MuniAssets Fund, Inc. as of May 31, 2008, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
July 25, 2008
Important Tax Information (Unaudited)
All of the net investment income distributions paid by BlackRock MuniAssets
Fund, Inc. during the taxable year ended May 31, 2008 qualify as tax-exempt
interest dividends for federal income tax purposes.
Additionally, the Fund paid an ordinary income distribution of $0.003166 per
share to shareholders of record on December 14, 2007.
18 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
The Board of Directors (the "Board," the members of which are referred to as
"Directors") of the BlackRock MuniAssets Fund, Inc. (the "Fund") met in April
and May 2008 to consider approving the continuation of the Fund's investment
advisory agreement (the "Advisory Agreement") with BlackRock Advisors, LLC (the
"Advisor"), the Fund's investment adviser. The Board also considered the
approval of the Fund's subadvisory agreement (the "Subadvisory Agreement" and,
together with the "Advisory Agreement," the "Agreements") between the Advisor
and BlackRock Investment Management, LLC (the "Subadvisor"). The Advisor and the
Subadvisor are collectively referred to herein as the "Advisors" and, together
with BlackRock, Inc., "BlackRock."
Activities and Composition of the Board
The Board of Directors of the Fund consists of thirteen individuals, eleven of
whom are not "interested persons" of the Fund as defined in the Investment
Company Act of 1940 (the "1940 Act") (the "Independent Directors"). The
Directors are responsible for the oversight of the operations of he Fund and
perform the various duties imposed on the directors of investment companies by
the 1940 Act. The Independent Directors have retained independent legal counsel
to assist them in connection with their duties. The Chairman of the Board is an
Independent Director. The Board has established four standing committees: an
Audit Committee, a Governance and Nominating Committee, a Compliance Committee
and a Performance Oversight Committee.
Advisory Agreement and Subadvisory Agreement
Upon the consummation of the combination of BlackRock, Inc.'s investment
management business with Merrill Lynch & Co., Inc.'s investment management
business, including Merrill Lynch Investment Managers, L.P., and certain
affiliates, the Fund entered into the Advisory Agreement and the Subadvisory
Agreement, each with an initial two-year term. Consistent with the 1940 Act,
after the Advisory and Subadvisory Agreement's respective initial two-year term,
the Board is required to consider the continuation of the Fund's Advisory
Agreement and Subadvisory Agreement on an annual basis. In connection with this
process, the Board assessed, among other things, the nature, scope and quality
of the services provided to the Fund by the personnel of BlackRock and its
affiliates, including investment management, administrative services, secondary
market support services, oversight of fund accounting, and assistance in meeting
legal and regulatory requirements. The Board also received and assessed
information regarding the services provided to the Fund by certain unaffiliated
service providers.
Throughout the year, the Board also considered a range of information in
connection with its oversight of the services provided by BlackRock and its
affiliates. Among the matters the Board considered were: (a) investment
performance for one, three and five years, as applicable, against peer funds, as
well as senior management and portfolio managers' analysis of the reasons for
underperformance, if applicable; (b) fees, including advisory and other fees
paid to BlackRock and its affiliates by the Fund, such as transfer agency fees
and fees for marketing and distribution; (c) Fund operating expenses paid to
third parties; (d) the resources devoted to and compliance reports relating to
the Fund's investment objective, policies and restrictions; (e) the Fund's
compliance with its Code of Ethics and compliance policies and procedures; (f)
the nature, cost and character of non-investment management services provided by
BlackRock and its affiliates; (g) BlackRock's and other service providers'
internal controls; (h) BlackRock's implementation of the proxy voting guidelines
approved by the Board; (i) the use of equity brokerage commissions and execution
quality; (j) valuation and liquidity procedures; and (k) reviews of BlackRock's
business, including BlackRock's response to the increasing scale of its
business.
Board Considerations in Approving the Advisory Agreement and Subadvisory
Agreement
To assist the Board in its evaluation of the Agreements, the Directors received
information from BlackRock in advance of the April 22, 2008 meeting which
detailed, among other things, the organization, business lines and capabilities
of the Advisors, including: (a) the responsibilities of various departments and
key personnel and biographical information relating to key personnel; (b)
financial statements for BlackRock; (c) the advisory and/or administrative fees
paid by the Fund to the Advisors, including comparisons, compiled by Lipper, an
independent third party, with the management fees of funds with similar
investment objectives ("Peers"); (d) the profitability of BlackRock and certain
industry profitability analyses for advisers to registered investment companies;
(e) the expenses of BlackRock in providing various services; (f) non-investment
advisory reimbursements, if applicable, and "fallout" benefits to BlackRock; (g)
economies of scale, if any, generated through the Advisors' management of all of
the BlackRock closed-end funds (the "Fund Complex"); (h) the expenses of the
Fund, including comparisons of the Fund's expense ratios (both before and after
any fee waivers) with the expense ratios of its Peers; and (i) the Fund's
performance for the past one-, three- and five-year periods, when applicable, as
well as the Fund's performance compared to its Peers.
The Board also considered other matters it deemed important to the approval
process, where applicable, such as payments made to BlackRock or its affiliates
relating to the distribution of Fund shares, services related to the valuation
and pricing of Fund portfolio holdings, allocation of Fund brokerage fees
(including the related benefits to BlackRock of "soft dollars") and direct and
indirect benefits to BlackRock and its affiliates from their relationship with
the Fund.
In addition to the foregoing materials, independent legal counsel to the
Independent Directors provided a legal memorandum outlining, among other things,
the duties of the Board under the 1940 Act, as well as the general principles of
relevant law in reviewing and approving advisory contracts, the requirements of
the 1940 Act in such matters, an adviser's fiduciary duty with respect to
advisory agreements and compensation,
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 19
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
(continued)
and the standards used by courts in determining whether investment company
boards of directors have fulfilled their duties and the factors to be considered
by boards in voting on advisory agreements.
The Independent Directors reviewed this information and discussed it with
independent legal counsel prior to the meeting on April 22, 2008. At the Board
meeting on April 22, 2008, BlackRock made a presentation to and responded to
questions from the Board. Following the meeting on April 22, 2008, the Board
presented BlackRock with questions and requests for additional information.
BlackRock responded to these requests with additional written materials provided
to the Directors prior to the meetings on May 29 and 30, 2008. At the Board
meeting on May 29 and 30, 2008, BlackRock responded to further questions from
the Board. In connection with BlackRock's presentations, the Board considered
each Agreement and, in consultation with independent legal counsel, reviewed the
factors set out in judicial decisions and Securities and Exchange Commission
("SEC") statements relating to the renewal of the Agreements.
I. Matters Considered by the Board
In connection with its deliberations with respect to the Agreements, the Board
considered all factors it believed relevant with respect to the Fund, including
the following: the nature, extent and quality of the services provided by the
Advisors; the investment performance of the Fund; the costs of the services to
be provided and profits to be realized by the Advisors and their affiliates from
their relationship with the Fund; the extent to which economies of scale would
be realized as the Fund Complex grows; and whether BlackRock realizes other
benefits from its relationship with the Fund.
A. Nature, Extent and Quality of the Services: In evaluating the nature, extent
and quality of the Advisors' services, the Board reviewed information concerning
the types of services that the Advisors provide and are expected to provide to
the Fund, narrative and statistical information concerning the Fund's
performance record and how such performance compares to the Fund's Peers,
information describing BlackRock's organization and its various departments, the
experience and responsibilities of key personnel and available resources. The
Board noted the willingness of the personnel of BlackRock to engage in open,
candid discussions with the Board. The Board further considered the quality of
the Advisors' investment process in making portfolio management decisions.
In addition to advisory services, the Directors considered the quality of the
administrative or non-investment advisory services provided to the Fund. In this
regard, the Advisors and their affiliates provided the Fund with such
administrative, transfer agency, shareholder and other services, as applicable
(exclusive of, and in addition to, any such services provided by others for the
Fund), and officers and other personnel as are necessary for the operations of
the Fund. In addition to investment management services, the Advisors and their
affiliates provided the Fund with services such as: preparing shareholder
reports and communications, including annual and semi-annual financial
statements and Fund websites; communications with analysts to support secondary
market trading; assisting with daily accounting and pricing; preparing periodic
filings with regulators and stock exchanges; overseeing and coordinating the
activities of other service providers; administering and organizing Board
meetings and preparing the Board materials for such meetings; providing legal
and compliance support (such as helping to prepare proxy statements and
responding to regulatory inquiries); and performing other Fund administrative
tasks necessary for the operation of the Fund (such as tax reporting and
fulfilling regulatory filing requirements). The Board considered the Advisors'
policies and procedures for assuring compliance with applicable laws and
regulations.
B. The Investment Performance of the Fund and BlackRock: As previously noted,
the Board received performance information regarding the Fund and its Peers.
Among other things, the Board received materials reflecting the Fund's historic
performance and the Fund's performance compared to its Peers. More specifically,
the Fund's one-, three- and five-year total returns (when applicable) were
evaluated relative to its respective Peers (including the Peers' median
performance).
The Board reviewed a narrative analysis of the Peer rankings prepared by Lipper
and reviewed by BlackRock at the Board's request. The summary placed the Peer
rankings into context by analyzing various factors that affect these
comparisons.
The Board noted that in general the Fund performed better than its Peers in that
its performance was at or above the median in at least two for the one-, three-
and five-year periods reported.
After considering this information, the Boards concluded that the performance of
the Fund, in light of and after considering the other facts and circumstances
applicable to the Fund, supports a conclusion that the Fund's Agreements should
be renewed.
C. Consideration of the Advisory Fees and the Cost of the Services and Profits
to be Realized by BlackRock and its Affiliates from the Relationship with the
Fund: In evaluating the management fees and expenses that a Fund is expected to
bear, the Board considered the Fund's current management fee structure and the
Fund's expense ratios in absolute terms as well as relative to the fees and
expense ratios of its applicable Peers. The Board, among other things, reviewed
comparisons of the Fund's gross management fees before and after any applicable
reimbursements and fee waivers and total expense ratios before and after any
applicable waivers with those of its applicable Peers. The Board also reviewed a
narrative analysis of the Peer rankings prepared by Lipper and summarized by
BlackRock at the request of the Board. This summary placed the Peer rankings
into context by analyzing various factors that affect these comparisons.
20 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
(continued)
The Board noted that the Fund paid contractual management fees lower than or
equal to the median contractual fees paid by its Peers. This comparison was made
without giving effect to any expense reimbursements or fee waivers.
The Board also compared the management fees charged and services provided to the
closed-end investment companies managed by the Advisors to the management fees
charged by the Advisors to other types of clients (such as open-end investment
companies and separately managed institutional accounts) in similar investment
categories. The Board noted certain differences in services provided and costs
incurred by the Advisors with respect to closed-end funds compared to separately
managed accounts and open-end funds in general and the reasons for such
differences.
In connection with the Board's consideration of the fees and expense
information, the Board reviewed the considerable investment management
experience of the Advisors and considered the high level of investment
management, administrative and other services provided by the Advisors. In light
of these factors and the other facts and circumstances applicable to the Fund,
the Board concluded that the fees paid and level of expenses incurred by the
Fund under its Agreements support a conclusion that the Fund's Agreements should
be renewed.
D. Profitability of BlackRock: The Board also considered BlackRock's
profitability in conjunction with its review of fees. The Board reviewed
BlackRock's profitability with respect to the Fund Complex and other fund
complexes managed by the Advisors. In reviewing profitability, the Board
recognized that one of the most difficult issues in determining profitability is
establishing a method of allocating expenses. The Board also reviewed
BlackRock's assumptions and methodology of allocating expenses, noting the
inherent limitations in allocating costs among various advisory products. The
Board also recognized that individual fund or product line profitability of
other advisors is generally not publicly available.
The Board recognized that profitability may be affected by numerous factors
including, among other things, the types of funds managed, expense allocations
and business mix, and therefore comparability of profitability is somewhat
limited. Nevertheless, to the extent available, the Board considered BlackRock's
operating margin compared to the operating margin estimated by BlackRock for a
leading investment management firm whose operations consist primarily of
advising closed-end funds. The comparison indicated that BlackRock's operating
margin was approximately the same as the operating margin of such firm.
In evaluating the reasonableness of the Advisors' compensation, the Board also
considered any other revenues paid to the Advisors, including partial
reimbursements paid to the Advisors for certain non-investment advisory
services, if applicable. The Board noted that these payments were less than the
Advisors' costs for providing these services. The Board also considered indirect
benefits (such as soft dollar arrangements) that the Advisors and their
affiliates are expected to receive, which are attributable to their management
of the Fund.
The Board concluded that BlackRock's profitability, in light of all the other
facts and circumstances applicable to the Fund, supports a conclusion that the
Fund's Agreements should be renewed.
E. Economies of Scale: In reviewing the Fund's fees and expenses, the Board
examined the potential benefits of economies of scale, and whether any economies
of scale should be reflected in the Fund's fee structure, for example through
the use of breakpoints for the Fund or the Fund Complex. In this regard, the
Board reviewed information provided by BlackRock, noting that most closed-end
fund complexes do not have fund-level breakpoints because closed-end funds
generally do not experience substantial growth after their initial public
offering and each fund is managed independently consistent with its own
investment objectives. The Board noted that only three closed-end funds in the
Fund Complex have breakpoints in their respective fee structures. Information
provided by Lipper also revealed that only one closed-end fund complex used a
complex-level breakpoint structure.
F. Other Factors: In evaluating fees, the Board also considered indirect
benefits or profits the Advisors or their affiliates may receive as a result of
their relationships with the Fund ("fall-out benefits"). The Directors,
including the Independent Directors, considered the intangible benefits that
accrue to the Advisors and their affiliates by virtue of their relationships
with the Fund, including potential benefits accruing to the Advisors and
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 21
Disclosure of Investment Advisory Agreement and Subadvisory Agreement
(concluded)
their affiliates as a result of participating in offerings of the Fund's shares,
potentially stronger relationships with members of the broker-dealer community,
increased name recognition of the Advisors and their affiliates, enhanced sales
of other investment funds and products sponsored by the Advisors and their
affiliates and increased assets under management which may increase the benefits
realized by the Advisors from soft dollar arrangements with broker-dealers. The
Board also considered the unquantifiable nature of these potential benefits.
II. Conclusion with Respect to the Agreements
In reviewing the Agreements, the Directors did not identify any single factor
discussed above as all-important or controlling and different Directors may have
attributed different weights to the various factors considered. The Directors,
including the Independent Directors, unanimously determined that each of the
factors described above, in light of all the other factors and all of the facts
and circumstances applicable to the Fund, was acceptable for the Fund and
supported the Directors' conclusion that the terms of each Agreement were fair
and reasonable, that the Fund's fees are reasonable in light of the services
provided to the Fund and that each Agreement should be approved.
22 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Automatic Dividend Reinvestment Plan
How the Plan Works -- The Fund offers a Dividend Reinvestment Plan (the "Plan")
under which income and capital gains dividends paid by the Fund are
automatically reinvested in additional shares of Common Stock of the Fund. The
Plan is administered on behalf of the shareholders by The BNY Mellon Shareowner
Services (the "Plan Agent"). Under the Plan, whenever the Fund declares a
dividend, participants in the Plan will receive the equivalent in shares of
Common Stock of the Fund. The Plan Agent will acquire the shares for the
participant's account either (i) through receipt of additional unissued but
authorized shares of the Fund ("newly issued shares") or (ii) by purchase of
outstanding shares of Common Stock on the open market on the New York Stock
Exchange or elsewhere. If, on the dividend payment date, the Fund's net asset
value per share is equal to or less than the market price per share plus
estimated brokerage commissions (a condition often referred to as a "market
premium"), the Plan Agent will invest the dividend amount in newly issued
shares. If the Fund's net asset value per share is greater than the market price
per share (a condition often referred to as a "market discount"), the Plan Agent
will invest the dividend amount by purchasing on the open market additional
shares. If the Plan Agent is unable to invest the full dividend amount in open
market purchases, or if the market discount shifts to a market premium during
the purchase period, the Plan Agent will invest any uninvested portion in newly
issued shares. The shares acquired are credited to each shareholder's account.
The amount credited is determined by dividing the dollar amount of the dividend
by either (i) when the shares are newly issued, the net asset value per share on
the date the shares are issued or (ii) when shares are purchased in the open
market, the average purchase price per share.
Participation in the Plan -- Participation in the Plan is automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
shares of Common Stock of the Fund unless the shareholder specifically elects
not to participate in the Plan. Shareholders who elect not to participate will
receive all dividend distributions in cash. Shareholders who do not wish to
participate in the Plan must advise the Plan Agent in writing (at the address
set forth below) that they elect not to participate in the Plan. Participation
in the Plan is completely voluntary and may be terminated or resumed at any time
without penalty by writing to the Plan Agent.
Benefits of the Plan -- The Plan provides an easy, convenient way for
shareholders to make additional, regular investments in the Fund. The Plan
promotes a long-term strategy of investing at a lower cost. All shares acquired
pursuant to the Plan receive voting rights. In addition, if the market price
plus commissions of the Fund's shares is above the net asset value, participants
in the Plan will receive shares of the Fund for less than they could otherwise
purchase them and with a cash value greater than the value of any cash
distribution they would have received. However, there may not be enough shares
available in the market to make distributions in shares at prices below the net
asset value. Also, since the Fund does not redeem shares, the price on resale
may be more or less than the net asset value.
Plan Fees -- There are no enrollment fees or brokerage fees for participating in
the Plan. The Plan Agent's service fees for handling the reinvestment of
distributions are paid for by the Fund. However, brokerage commissions may be
incurred when the Fund purchases shares on the open market and shareholders will
pay a pro rata share of any such commissions.
Tax Implications -- The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income tax that may
be payable (or required to be withheld) on such dividends. Therefore, income and
capital gains may still be realized even though shareholders do not receive
cash. Participation in the Plan generally will not affect the tax-exempt status
of exempt interest dividends paid by the Fund. If, when the Fund's shares are
trading at a market premium, the Fund issues shares pursuant to the Plan that
have a greater fair market value than the amount of cash reinvested, it is
possible that all or a portion of the discount from the market value (which may
not exceed 5% of the fair market value of the Fund's shares) could be viewed as
a taxable distribution. If the discount is viewed as a taxable distribution, it
is also possible that the taxable character of this discount would be allocable
to all the shareholders, including shareholders who do not participate in the
Plan. Thus, shareholders who do not participate in the Plan might be required to
report as ordinary income a portion of their distributions equal to their
allocable share of the discount.
Contact Information -- All correspondence concerning the Plan, including any
questions about the Plan, should be directed to the Plan Agent at The BNY Mellon
Shareowner Services, P.O. Box 358035, Pittsburgh, PA 15252-8035, Telephone:
(866) 216-0242.
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 23
Officers and Directors
Number of
Length of BlackRock-
Position(s) Time Advised Funds
Name, Address Held with Served as a Principal Occupation(s) and Portfolios Public
and Year of Birth Fund Director 2 During Past Five Years Overseen Directorships
====================================================================================================================================
Non-Interested Directors 1
------------------------------------------------------------------------------------------------------------------------------------
Richard E. Cavanagh Chairman Since 2007 Trustee, Aircraft Finance Trust since 113 Funds Arch Chemical
40 East 52nd Street of the Board 1999; Director, The Guardian Life 110 Portfolios (chemical and allied
New York, NY 10022 and Director Insurance Company of America since products)
1946 1998; Chairman and Trustee,
Educational Testing Service since
1997; Director, The Fremont Group
since 1996; Formerly President and
Chief Executive Officer of The
Conference Board, Inc. (global
business research organization) from
1995 to 2007.
------------------------------------------------------------------------------------------------------------------------------------
Karen P. Robards Vice Chair Since 2007 Partner of Robards & Company, LLC 112 Funds AtriCure, Inc.
40 East 52nd Street of the Board, (financial advisory firm) since 1987; 109 Portfolios (medical devices);
New York, NY 10022 Chair of the Co-founder and Director of the Cooke Care Investment Trust,
1950 Audit Center for Learning and Development Inc. (health care
Committee (a not-for-profit organization) since REIT)
and Director 1987; Formerly Director of Enable
Medical Corp. from 1996 to 2005;
Formerly an investment banker at
Morgan Stanley from 1976 to 1987.
------------------------------------------------------------------------------------------------------------------------------------
G. Nicholas Beckwith, III Director Since 2007 Chairman and Chief Executive Officer, 112 Funds None
40 East 52nd Street Arch Street Management, LLC (Beckwith 109 Portfolios
New York, NY 10022 Family Foundation) and various
1945 Beckwith property companies since
2005; Chairman of the Board of
Directors, University of Pittsburgh
Medical Center since 2002; Board of
Directors, Shady Side Hospital
Foundation since 1977; Board of
Directors, Beckwith Institute for
Innovation In Patient Care since 1991;
Member, Advisory Council on Biology
and Medicine, Brown University since
2002; Trustee, Claude Worthington
Benedum Foundation (charitable
foundation) since 1989; Board of
Trustees, Chatham College since 1981;
Board of Trustees, University of
Pittsburgh since 2002; Emeritus
Trustee, Shady Side Academy since
1977; Formerly Chairman and Manager,
Penn West Industrial Trucks LLC
(sales, rental and servicing of
material handling equipment) from 2005
to 2007; Formerly Chairman, President
and Chief Executive Officer, Beckwith
Machinery Company (sales, rental and
servicing of construction and
equipment) from 1985 to 2005; Formerly
Board of Directors, National Retail
Properties (REIT) from 2006 to 2007.
------------------------------------------------------------------------------------------------------------------------------------
Kent Dixon Director and Since 2007 Consultant/Investor since 1988. 113 Funds None
40 East 52nd Street Member of 110 Portfolios
New York, NY 10022 the Audit
1937 Committee
------------------------------------------------------------------------------------------------------------------------------------
Frank J. Fabozzi Director and Since 2007 Consultant/Editor of The Journal of 113 Funds None
40 East 52nd Street Member of Portfolio Management since 2006; 110 Portfolios
New York, NY 10022 the Audit Professor in the Practice of Finance
1948 Committee and Becton Fellow, Yale University,
School of Management, since 2006;
Formerly Adjunct Professor of Finance
and Becton Fellow, Yale University
from 1994 to 2006.
------------------------------------------------------------------------------------------------------------------------------------
Kathleen F. Feldstein Director Since 2007 President of Economics Studies, Inc. 113 Funds The McClatchy
40 East 52nd Street (private economic consulting firm) 110 Portfolios Company
New York, NY 10022 since 1987; Chair, Board of Trustees, (publishing)
1941 McLean Hospital since 2000; Member of
the Board of Partners Community
Healthcare, Inc. since 2005; Member of
the Board of Partners HealthCare since
1995; Member of the Board of Sherrill
House (health care) since 1990;
Trustee, Museum of Fine Arts, Boston
since 1992; Member of the Visiting
Committee to the Harvard University
Art Museum since 2003; Trustee, The
Committee for Economic Development
(research organization) since 1990;
Member of the Advisory Board to the
International School of Business,
Brandeis University since 2002;
Formerly Director of Bell South
(communications) from 1998 to 2006;
Formerly Director of Ionics (water
purification) from 1992 to 2005;
Formerly Director of John Hancock
Financial Services from 1994 to 2003;
Formerly Director of Knight Ridder
(media) from 1998 to 2006.
------------------------------------------------------------------------------------------------------------------------------------
24 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Officers and Directors (continued)
Number of
Length of BlackRock-
Position(s) Time Advised Funds
Name, Address Held with Served as a Principal Occupation(s) and Portfolios Public
and Year of Birth Fund Director 2 During Past Five Years Overseen Directorships
====================================================================================================================================
Non-Interested Directors 1 (concluded)
------------------------------------------------------------------------------------------------------------------------------------
James T. Flynn Director and Since 2007 Formerly Chief Financial Officer of 112 Funds None
40 East 52nd Street Member of JP Morgan & Co., Inc. from 1990 109 Portfolios
New York, NY 10022 the Audit to 1995.
1939 Committee
------------------------------------------------------------------------------------------------------------------------------------
Jerrold B. Harris Director Since 2007 Trustee, Ursinus College since 2000; 112 Funds BlackRock-Kelso
40 East 52nd Street Director, Troemner LLC (scientific 109 Portfolios Capital Corp.
New York, NY 10022 equipment) since 2000.
1942
------------------------------------------------------------------------------------------------------------------------------------
R. Glenn Hubbard Director Since 2007 Dean of Columbia Business School 113 Funds ADP (data and
40 East 52nd Street since 2004; Columbia faculty 110 Portfolios information services);
New York, NY 10022 member since 1988; Formerly KKR Financial
1958 Co-Director of Columbia Business Corporation (finance);
School's Entrepreneurship Duke Realty (real
Program from 1997 to 2004; estate); Metropolitan
Visiting Professor at the John Life Insurance
F. Kennedy School of Government Company (insurance);
at Harvard University and the Information Services
Harvard Business School since Group (media/
1985 and at the University of technology)
Chicago since 1994; Formerly
Chairman of the U.S. Council of
Economic Advisers under the
President of the United States
from 2001 to 2003.
------------------------------------------------------------------------------------------------------------------------------------
W. Carl Kester Director and Since 2007 Mizuho Financial Group Professor 112 Funds None
40 East 52nd Street Member of of Finance, Harvard Business 109 Portfolios
New York, NY 10022 the Audit School; Deputy Dean for Academic
1951 Committee Affairs since 2006; Unit Head,
Finance, Harvard Business School
from 2005 to 2006; Senior
Associate Dean and Chairman of
the MBA Program of Harvard
Business School from 1999 to
2005; Member of the faculty of
Harvard Business School since
1981; Independent Consultant
since 1978.
------------------------------------------------------------------------------------------------------------------------------------
Robert S. Salomon, Jr. Director and Since 2007 Formerly Principal of STI Management 112 Funds None
40 East 52nd Street Member of LLC (investment adviser) from 1994 to 109 Portfolios
New York, NY 10022 the Audit 2005.
1936 Committee
---------------------------------------------------------------------------------------------------------
1 Directors serve until their resignation, removal or death, or until December 31 of the year in
which they turn 72.
2 Following the combination of Merrill Lynch Investment Managers, L.P. ("MLIM") and BlackRock, Inc.
("BlackRock") in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were
realigned and consolidated into three new Fund boards in 2007. As a result, although the chart
shows certain directors as joining the Fund's board in 2007, each director first became a member of
the board of directors of other legacy MLIM or legacy BlackRock Funds as follows: G. Nicholas
Beckwith, III since 1999; Richard E. Cavanagh since 1994; Kent Dixon since 1988; Frank J. Fabozzi
since 1988; Kathleen F. Feldstein since 2005; James T. Flynn since 1996; Jerrold B. Harris since
1999; R. Glenn Hubbard since 2004; W. Carl Kester since 1998; Karen P. Robards since 1998 and
Robert S. Salomon, Jr. since 1996.
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 25
Officers and Directors (continued)
Number of
Length of BlackRock-
Position(s) Time Advised Funds
Name, Address Held with Served as a Principal Occupation(s) and Portfolios Public
and Year of Birth Fund Director During Past Five Years Overseen Directorships
====================================================================================================================================
Interested Directors 1
------------------------------------------------------------------------------------------------------------------------------------
Richard S. Davis Director Since 2007 Managing Director, BlackRock, 185 Funds None
40 East 52nd Street Inc. since 2005; Formerly Chief 295 Portfolios
New York, NY 10022 Executive Officer, State Street
1945 Research & Management Company
from 2000 to 2005; Formerly
Chairman of the Board of
Trustees, State Street Research
Mutual Funds from 2000 to 2005;
Formerly Chairman, SSR Realty
from 2000 to 2004.
------------------------------------------------------------------------------------------------------------------------------------
Henry Gabbay Director Since 2007 Consultant, BlackRock, Inc. 184 Funds None
40 East 52nd Street since 2007; Formerly Managing 294 Portfolios
New York, NY 10022 Director, BlackRock, Inc. from
1947 1989 to 2007; Formerly Chief
Administrative Officer,
BlackRock Advisors, LLC from
1998 to 2007; Formerly President
of BlackRock Funds and BlackRock
Bond Allocation Target Shares
from 2005 to 2007; Formerly
Treasurer of certain closed-end
funds in the BlackRock fund
complex from 1989 to 2006.
---------------------------------------------------------------------------------------------------------
1 Messrs. Davis and Gabbay are both "interested persons," as defined in the Investment Company Act
of 1940, of the Fund based on their positions with BlackRock, Inc. and its affiliates. Trustees
serve until their resignation, removal or death, or until December 31 of the year in which
they turn 72.
26 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Position(s) Length of
Name, Address Held with Time
and Year of Birth Fund Served Principal Occupation(s) During Past Five Years
====================================================================================================================================
Fund Officers 1
------------------------------------------------------------------------------------------------------------------------------------
Donald C. Burke Fund Since 2007 Managing Director of BlackRock, Inc. since 2006; Formerly Managing Director of
40 East 52nd Street President Merrill Lynch Investment Managers, L.P. ("MLIM") and Fund Asset Management,
New York, NY 10022 and L.P. ("FAM") in 2006; First Vice President thereof from 1997 to 2005;
1960 Chief Treasurer thereof from 1999 to 2006 and Vice President thereof from 1990 to
Executive 1997.
Officer
------------------------------------------------------------------------------------------------------------------------------------
Anne F. Ackerley Vice Since 2007 Managing Director of BlackRock, Inc. since 2000; Chief Operating Officer of
40 East 52nd Street President BlackRock's U.S. Retail Group since 2006; Head of BlackRock's Mutual Fund
New York, NY 10022 Group from 2000 to 2006; Merrill Lynch & Co., Inc. from 1984 to 1986 and from
1962 1988 to 2000, most recently as First Vice President and Operating Officer of
the Mergers and Acquisitions Group.
------------------------------------------------------------------------------------------------------------------------------------
Neal J. Andrews Chief Since 2007 Managing Director of BlackRock, Inc. since 2006; Formerly Senior Vice
40 East 52nd Street Financial President and Line of Business Head of Fund Accounting and Administration at
New York, NY 10022 Officer PFPC Inc. from 1992 to 2006.
1966
------------------------------------------------------------------------------------------------------------------------------------
Jay M. Fife Treasurer Since 2007 Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Formerly
40 East 52nd Street Assistant Treasurer of the MLIM/FAM advised funds from 2005 to 2006; Director
New York, NY 10022 of MLIM Fund Services Group from 2001 to 2006.
1970
------------------------------------------------------------------------------------------------------------------------------------
Brian P. Kindelan Chief Since 2007 Chief Compliance Officer of the BlackRock-advised Funds since 2007; Anti-Money
40 East 52nd Street Compliance Laundering Officer of the BlackRock-advised Funds since 2007; Managing
New York, NY 10022 Officer of Director and Senior Counsel of BlackRock, Inc. since 2005; Director and Senior
1959 the Fund Counsel of BlackRock Advisors, Inc. from 2001 to 2004 and Vice President and
Senior Counsel thereof from 1998 to 2000; Formerly Senior Counsel of The PNC
Bank Corp. from 1995 to 1998.
------------------------------------------------------------------------------------------------------------------------------------
Howard Surloff Secretary Since 2007 Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at
40 East 52nd Street BlackRock, Inc. since 2006; Formerly General Counsel (U.S.) of Goldman Sachs
New York, NY 10022 Asset Management, L.P. from 1993 to 2006.
1965
---------------------------------------------------------------------------------------------------------
1 Officers of the Fund serve at the pleasure of the Board of Directors.
------------------------------------------------------------------------------------------------------------------------------------
Custodian
The Bank of New York Mellon
New York, NY 10286
Transfer Agent
BNY Mellon Shareowner Services
Jersey City, NJ 07310
Accounting Agent
State Street Bank and
Trust Company
Princeton, NJ 08540
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Princeton, NJ 08540
Legal Counsel
Skadden, Arps, Slate,
Meagher & Flom LLP
New York, NY 10036
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 27
Additional Information
Dividend Policy
The Fund's dividend policy is to distribute all or a portion of its net
investment income to its shareholders on a monthly basis. In order to provide
shareholders with a more stable level of dividend distributions, the Fund may at
times pay out less than the entire amount of net investment income earned in any
particular month and may at times in any particular month pay out such
accumulated but undistributed income in addition to net investment income earned
in that month. As a result, the dividends paid by the Fund for any particular
month may be more or less than the amount of net investment income earned by the
Fund during such month. The Fund's current accumulated but undistributed net
investment income, if any, is disclosed in the Statement of Assets and
Liabilities, which comprises part of the financial information included in this
report.
Fund Certification
The Fund listed for trading on the New York Stock Exchange ("NYSE") has filed
with the NYSE its annual chief executive officer certification regarding
compliance with the NYSE's listing standards. The Fund filed with the Securities
and Exchange Commission ("SEC") the certification of its chief executive officer
and chief financial officer required by section 302 of the Sabanes-Oxley Act.
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at
http://www.sec.gov and may also be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling (800) SEC-0330. The Fund's Forms N-Q
may also be obtained upon request and without charge by calling (800) 441-7762.
Electronic Delivery
Electronic copies of most financial reports are available on the Fund's website
or shareholders can sign up for e-mail notifications of quarterly statements,
annual and semi-annual reports by enrolling in the Fund's electronic delivery
program.
Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisors, banks or brokerages may offer this service.
28 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Additional Information (continued)
General Information
The Fund does not make available copies of its Statements of Additional
Information because the Fund's shares are not continuously offered, which means
that the Statement of Additional Information of the Fund has not been updated
after completion of the Fund's offering and the information contained in the
Fund's Statement of Additional Information may have become outdated.
During the period, there were no material changes in the Fund's investment
objective or policies or to the Fund's charter or by-laws that were not approved
by the shareholders or in the principal risk factors associated with investment
in the Fund. There have been no changes in the persons who are primarily
responsible for the day-to-day management of the Fund's portfolio.
The Fund will mail only one copy of shareholder documents, including annual and
semi-annual reports and proxy statements, to shareholders with multiple accounts
at the same address. This practice is commonly called "householding" and it is
intended to reduce expenses and eliminate duplicate mailings of shareholder
documents. Mailings of your shareholder documents may be householded
indefinitely unless you instruct us otherwise. If you do not want the mailing of
these documents to be combined with those for other members of your household,
please contact the Fund at (800) 441-7762.
Quarterly performance, semi-annual and annual reports and other information
regarding the Fund may be found on BlackRock's website, which can be accessed at
http://www.blackrock.com. This reference to BlackRock's website is intended to
allow investors public access to information regarding the Fund and does not,
and is not intended to, incorporate BlackRock's website into this report.
Section 19 Notice
The amounts and sources of distributions reported are only estimates and are not
being provided for tax reporting purposes. The actual amounts and sources for
tax reporting purposes will depend upon the Fund's investment experience during
the remainder of its fiscal year and may be subject to changes based on the tax
regulations. The Fund will send you a Form 1099-DIV for the calendar year that
will tell you how to report these distributions for federal income tax purposes.
------------------------------------------------------------------------------------------------------------------------------------
Total Fiscal Year to Date Percentage of Fiscal Year to Date
Cumulative Distributions by Character Cumulative Distributions by Character
--------------------------------------------- -------------------------------------------
Net Net
Net Realized Return Total Per Net Realized Return Total Per
Investment Capital of Common Investment Capital of Common
Income Gains Capital Share Income Gains Capital Share
------------------------------------------------------------------------------------------------------------------------------------
BlackRock MuniAssets Fund, Inc. $0.817500 $0.003166 -- $0.820666 99.6% 0.4% -- 100.0%
------------------------------------------------------------------------------------------------------------------------------------
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 29
Additional Information (concluded)
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their non-public personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our websites.
BlackRock does not sell or disclose to non-affiliated third parties any
non-public personal information about its Clients, except as permitted by law or
as is necessary to respond to regulatory requests or to service Client accounts.
These non-affiliated third parties are required to protect the confidentiality
and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to non-public
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the non-public
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
Proxy Voting Policy
The Board of Directors of the Fund has delegated the voting of proxies for Fund
securities to the Investment Adviser pursuant to the Investment Adviser's proxy
voting guidelines. Under these guidelines, the Investment Adviser will vote
proxies related to Fund securities in the best interests of the Fund and its
stockholders. From time to time, a vote may present a conflict between the
interests of the Fund's stockholders, on the one hand, and those of the
Investment Adviser, or any affiliated person of the Fund or the Investment
Adviser, on the other. In such event, provided that the Investment Adviser's
Equity Investment Policy Oversight Committee, or a sub-committee thereof (the
"Committee") is aware of the real or potential conflict or material non-routine
matter and if the Committee does not reasonably believe it is able to follow its
general voting guidelines (or if the particular proxy matter is not addressed in
the guidelines) and vote impartially, the Committee may retain an independent
fiduciary to advise the Committee on how to vote or to cast votes on behalf of
the Investment Adviser's clients. If the Investment Adviser determines not to
retain an independent fiduciary, or does not desire to follow the advice of such
independent fiduciary, the Committee shall determine how to vote the proxy after
consulting with the Investment Adviser's Portfolio Management Group and/or the
Investment Adviser's Legal and Compliance Department and concluding that the
vote cast is in its client's best interest notwithstanding the conflict.
Information on how the Fund voted proxies relating to portfolio securities
during the most recent 12-month period ended June 30 is available without
charge, (i) at www.blackrock.com and (ii) on the SEC's website at
http://www.sec.gov.
30 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
This report is transmitted to shareholders only. It is not a prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Statements and other information herein
are as dated and are subject to change.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free (800) 441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's website
at http://www.sec.gov. Information about how the Fund voted proxies relating to
securities held in the Fund's portfolio during the most recent 12-month period
ended June 30 is available upon request and without charge (1) at
www.blackrock.com or by calling (800) 441-7762 and (2) on the Securities and
Exchange Commission's website at http://www.sec.gov.
BlackRock MuniAssets Fund, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
BLACKROCK
#16716-5/08
Item 2 - Code of Ethics - The registrant (or the "Fund") has adopted a code
of ethics, as of the end of the period covered by this report,
applicable to the registrant's principal executive officer,
principal financial officer and principal accounting officer, or
persons performing similar functions. During the period covered by
this report, there have been no amendments to or waivers granted
under the code of ethics. A copy of the code of ethics is available
without charge at www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors or trustees, as applicable (the "board of directors") has
determined that (i) the registrant has the following audit committee
financial experts serving on its audit committee and (ii) each audit
committee financial expert is independent:
Kent Dixon (term began effective November 1, 2007)
Frank J. Fabozzi (term began effective November 1, 2007)
James T. Flynn (term began effective November 1, 2007)
Joe Grills (term ended effective November 1, 2007)
W. Carl Kester (term began effective November 1, 2007)
Karen P. Robards (term began effective November 1, 2007)
Robert S. Salomon, Jr.
The registrant's board of directors has determined that W. Carl
Kester and Karen P. Robards qualify as financial experts pursuant to
Item 3(c)(4) of Form N-CSR.
Prof. Kester has a thorough understanding of generally accepted
accounting principles, financial statements and internal control
over financial reporting as well as audit committee functions. Prof.
Kester has been involved in providing valuation and other financial
consulting services to corporate clients since 1978. Prof. Kester's
financial consulting services present a breadth and level of
complexity of accounting issues that are generally comparable to the
breadth and complexity of issues that can reasonably be expected to
be raised by the registrant's financial statements.
Ms. Robards has a thorough understanding of generally accepted
accounting principles, financial statements and internal control
over financial reporting as well as audit committee functions. Ms.
Robards has been President of Robards & Company, a financial
advisory firm, since 1987. Ms. Robards was formerly an investment
banker for more than 10 years where she was responsible for
evaluating and assessing the performance of companies based on their
financial results. Ms. Robards has over 30 years of experience
analyzing financial statements. She also is a member of the audit
committee of one publicly held company and a non-profit
organization.
Under applicable securities laws, a person determined to be an audit
committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11
of the Securities Act of 1933, as a result of being designated or
identified as an audit committee financial expert. The designation
or identification as an audit committee financial expert does not
impose on such person any duties, obligations, or liabilities
greater than the duties, obligations, and liabilities imposed on
such person as a member of the audit committee and board of
directors in the absence of such designation or identification.
Item 4 - Principal Accountant Fees and Services
-----------------------------------------------------------------------------------------------------------------------------------
(a) Audit Fees (b) Audit-Related Fees(1) (c) Tax Fees(2) (d) All Other Fees(3)
-----------------------------------------------------------------------------------------------------------------------------------
Current Previous Current Previous Current Previous Current Previous
Fiscal Year Fiscal Fiscal Year Fiscal Fiscal Year Fiscal Fiscal Year Fiscal
Entity Name End Year End End Year End End Year End End Year End
-----------------------------------------------------------------------------------------------------------------------------------
BlackRock $26,400 $28,000 $0 $0 $6,100 $6,100 $1,049 $0
MuniAssets Fund,
Inc.
-----------------------------------------------------------------------------------------------------------------------------------
1 The nature of the services include assurance and related services reasonably
related to the performance of the audit of financial statements not included in
Audit Fees.
2 The nature of the services include tax compliance, tax advice and tax
planning.
3 The nature of the services include a review of compliance procedures and
attestation thereto.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to
the registrant's affiliated service providers that relate directly
to the operations and the financial reporting of the registrant.
Certain of these non-audit services that the Committee believes are
a) consistent with the SEC's auditor independence rules and b)
routine and recurring services that will not impair the independence
of the independent accountants may be approved by the Committee
without consideration on a specific case-by-case basis ("general
pre-approval"). The term of any general pre-approval is 12 months
from the date of the pre-approval, unless the Committee provides for
a different period. Tax or other non-audit services provided to the
registrant which have a direct impact on the operation or financial
reporting of the registrant will only be deemed pre-approved
provided that any individual project does not exceed $10,000
attributable to the registrant or $50,000 for all of the registrants
the Committee oversees. For this purpose, multiple projects will be
aggregated to determine if they exceed the previously mentioned cost
levels.
Any proposed services exceeding the pre-approved cost levels
will require specific pre-approval by the Committee, as will any
other services not subject to general pre-approval (e.g.,
unanticipated but permissible services). The Committee is informed
of each service approved subject to general pre-approval at the next
regularly scheduled in-person board meeting. At this meeting, an
analysis of such services is presented to the Committee for
ratification. The Committee may delegate to one or more of its
members the authority to approve the provision of and fees for any
specific engagement of permitted non-audit services, including
services exceeding pre-approved cost levels.
(e)(2) None of the services described in each of Items 4(b) through
(d) were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) Affiliates' Aggregate Non-Audit Fees:
--------------------------------------------------------------------
Current Fiscal Previous Fiscal
Entity Name Year End Year End
--------------------------------------------------------------------
BlackRock MuniAssets Fund, $294,649 $2,985,417
Inc.
--------------------------------------------------------------------
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any non-affiliated
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by the registrant's investment
adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services
to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $287,500, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals
are members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):
James H. Bodurtha (term ended effective November 1, 2007)
Kent Dixon (term began effective November 1, 2007)
Frank J. Fabozzi (term began effective November 1, 2007)
James T. Flynn (term began effective November 1, 2007)
Kenneth A. Froot (term ended effective November 1, 2007)
Joe Grills (term ended effective November 1, 2007)
W. Carl Kester (term began effective November 1, 2007)
Herbert I. London (term ended effective November 1, 2007)
Roberta Cooper Ramo (term ended effective November 1, 2007)
Karen P. Robards (term began effective November 1, 2007)
Robert S. Salomon, Jr.
Item 6 - Investments
(a) The registrant's Schedule of Investments is included as part of
the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable due to no such divestments during the semi-annual
period covered since the previous Form N-CSR filing.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - The registrant has delegated the
voting of proxies relating to Fund portfolio securities to its
investment adviser, BlackRock Advisors, LLC and its sub-adviser, as
applicable. The Proxy Voting Policies of the Fund are attached
hereto as Exhibit 99.PROXYPOL.
Information about how the Fund voted proxies relating to securities
held in the Fund's portfolio during the most recent 12 month period
ended June 30 is available without charge (1) at www.blackrock.com
and (2) on the Commission's web site at http://www.sec.gov.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
as of May 31, 2008.
(a)(1) BlackRock MuniAssets Fund, Inc. is managed by a team of
investment professionals comprised of Theodore R. Jaeckel, Jr., CFA,
Managing Director at BlackRock, and Walter O'Connor, Managing
Director at BlackRock. Each is a member of BlackRock's municipal
tax-exempt management group. Mr. Jaeckel and Mr. O'Connor are
responsible for the day-to-day management of the Fund's portfolio,
including setting the Fund's overall investment strategy, overseeing
the management of the Fund and/or selecting the Fund's investments.
Mr. O'Connor has been the Fund's portfolio manager since 2006. Mr.
Jaeckel has been the Fund's portfolio manager since 1997.
Mr. Jaeckel joined BlackRock in 2006. Prior to joining BlackRock, he
was a Managing Director (Municipal Tax-Exempt Fund Management) of
Merrill Lynch Investment Managers, L.P. ("MLIM") from 2005 to 2006
and a Director of MLIM from 1997 to 2005. He has been a portfolio
manager with BlackRock or MLIM since 1991.
Mr. O'Connor joined BlackRock in 2006. Prior to joining BlackRock,
he was a Managing Director (Municipal Tax-Exempt Fund Management) of
MLIM from 2003 to 2006 and was a Director of MLIM from 1997 to 2002.
He has been a portfolio manager with BlackRock or MLIM since 1991.
(a)(2) As of May 31, 2008:
-----------------------------------------------------------------------------------------------------------------------
(iii) Number of Other Accounts and
(ii) Number of Other Accounts Managed Assets for Which Advisory Fee is
and Assets by Account Type Performance-Based
-----------------------------------------------------------------------------------------------------------------------
Other Other Other Other
(i) Name of Registered Pooled Registered Pooled
Portfolio Investment Investment Other Investment Investment Other
Manager Companies Vehicles Accounts Companies Vehicles Accounts
-----------------------------------------------------------------------------------------------------------------------
Theodore R. 81 2 0 0 1 0
Jaeckel, Jr.
-----------------------------------------------------------------------------------------------------------------------
$28.03 Billion $13.55 $0 $0 $13.54 $0
Million Million
-----------------------------------------------------------------------------------------------------------------------
Walter O'Connor 81 1 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
$28.03 Billion $3,209 $0 $0 $0 $0
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(iv) Potential Material Conflicts of Interest
BlackRock has built a professional working environment, firm-wide
compliance culture and compliance procedures and systems designed to
protect against potential incentives that may favor one account over
another. BlackRock has adopted policies and procedures that address
the allocation of investment opportunities, execution of portfolio
transactions, personal trading by employees and other potential
conflicts of interest that are designed to ensure that all client
accounts are treated equitably over time. Nevertheless, BlackRock
furnishes investment management and advisory services to numerous
clients in addition to the Fund, and BlackRock may, consistent with
applicable law, make investment recommendations to other clients or
accounts (including accounts which are hedge funds or have
performance or higher fees paid to BlackRock, or in which portfolio
managers have a personal interest in the receipt of such fees),
which may be the same as or different from those made for the Funds.
In addition, BlackRock, its affiliates and any officer, director,
stockholder or employee may or may not have an interest in the
securities whose purchase and sale BlackRock recommends to the Fund.
BlackRock, or any of its affiliates, or any officer, director,
stockholder, employee or any member of their families may take
different actions than those recommended to the Fund by BlackRock
with respect to the same securities. Moreover, BlackRock may refrain
from rendering any advice or services concerning securities of
companies of which any of BlackRock's (or its affiliates') officers,
directors or employees are directors or officers, or companies as to
which BlackRock or any of its affiliates or the officers, directors
or employees of any of them has any substantial economic interest or
possesses material non-public information. Each portfolio manager
also may manage accounts whose investment strategies may at times be
opposed to the strategy utilized for a Fund. In this regard, it
should be noted that Mr. Jaeckel currently manages certain accounts
that are subject to performance fees. In addition, Mr. Jaeckel
assists in managing certain hedge funds and may be entitled to
receive a portion of any incentive fees earned on such funds and a
portion of such incentive fees may be voluntarily or involuntarily
deferred. Additional portfolio managers may in the future manage
other such accounts or funds and may be entitled to receive
incentive fees.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and
must treat each client fairly. When BlackRock purchases or sells
securities for more than one account, the trades must be allocated
in a manner consistent with its fiduciary duties. BlackRock attempts
to allocate investments in a fair and equitable manner among client
accounts, with no account receiving preferential treatment. To this
end, BlackRock has adopted a policy that is intended to ensure that
investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve
reasonable efficiency in client transactions and provide BlackRock
with sufficient flexibility to allocate investments in a manner that
is consistent with the particular investment discipline and client
base.
(a)(3) As of May 31, 2008:
Portfolio Manager Compensation Overview
BlackRock's financial arrangements with its portfolio managers, its
competitive compensation and its career path emphasis at all levels
reflect the value senior management places on key resources.
Compensation may include a variety of components and may vary from
year to year based on a number of factors. The principal components
of compensation include a base salary, a performance-based
discretionary bonus, participation in various benefits programs and
one or more of the incentive compensation programs established by
BlackRock such as its Long-Term Retention and Incentive Plan.
Base compensation. Generally, portfolio managers receive base
compensation based on their seniority and/or their position with the
firm. Senior portfolio managers who perform additional management
functions within the portfolio management group or within BlackRock
may receive additional compensation for serving in these other
capacities.
Discretionary Incentive Compensation
Discretionary incentive compensation is a function of several
components: the performance of BlackRock, Inc., the performance of
the portfolio manager's group within BlackRock, the investment
performance, including risk-adjusted returns, of the firm's assets
under management or supervision by that portfolio manager relative
to predetermined benchmarks, and the individual's seniority, role
within the portfolio management team, teamwork and contribution to
the overall performance of these portfolios and BlackRock. In most
cases, including for the portfolio managers of the Fund, these
benchmarks are the same as the benchmark or benchmarks against which
the performance of the Fund or other accounts managed by the
portfolio managers are measured. BlackRock's Chief Investment
Officers determine the benchmarks against which the performance of
funds and other accounts managed by each portfolio manager is
compared and the period of time over which performance is evaluated.
With respect to the portfolio managers, such benchmarks for the Fund
include a combination of market-based indices (e.g., Lehman Brothers
Municipal Bond Index), certain customized indices and certain fund
industry peer groups.
BlackRock's Chief Investment Officers make a subjective
determination with respect to the portfolio managers' compensation
based on the performance of the funds and other accounts managed by
each portfolio manager relative to the various benchmarks noted
above. Performance is measured on both a pre-tax and after-tax basis
over various time periods including 1, 3, 5 and 10-year periods, as
applicable.
Distribution of Discretionary Incentive Compensation
Discretionary incentive compensation is distributed to portfolio
managers in a combination of cash and BlackRock, Inc. restricted
stock units which vest ratably over a number of years. The
BlackRock, Inc. restricted stock units, if properly vested, will be
settled in BlackRock, Inc. common stock. Typically, the cash bonus,
when combined with base salary, represents more than 60% of total
compensation for the portfolio managers. Paying a portion of annual
bonuses in stock puts compensation earned by a portfolio manager for
a given year "at risk" based on the BlackRock's ability to sustain
and improve its performance over future periods.
Long-Term Retention and Incentive Plan ("LTIP") --The LTIP is
a long-term incentive plan that seeks to reward certain key
employees. Beginning in 2006, awards are granted under the LTIP in
the form of BlackRock, Inc. restricted stock units that, if properly
vested and subject to the attainment of certain performance goals,
will be settled in BlackRock, Inc. common stock. Each portfolio
manager has received awards under the LTIP.
Deferred Compensation Program --A portion of the compensation
paid to eligible BlackRock employees may be voluntarily deferred
into an account that tracks the performance of certain of the firm's
investment products. Each participant in the deferred compensation
program is permitted to allocate his deferred amounts among the
various investment options. Each portfolio manager has participated
in the deferred compensation program.
Other compensation benefits. In addition to base compensation and
discretionary incentive compensation, portfolio managers may be
eligible to receive or participate in one or more of the following:
Incentive Savings Plans -- BlackRock, Inc. has created a
variety of incentive savings plans in which BlackRock employees are
eligible to participate, including a 401(k) plan, the BlackRock
Retirement Savings Plan (RSP), and the BlackRock Employee Stock
Purchase Plan (ESPP). The employer contribution components of the
RSP include a company match equal to 50% of the first 6% of eligible
pay contributed to the plan capped at $4,000 per year, and a company
retirement contribution equal to 3% of eligible compensation, plus
an additional contribution of 2% for any year in which BlackRock has
positive net operating income. The RSP offers a range of investment
options, including registered investment companies managed by the
firm. BlackRock contributions follow the investment direction set by
participants for their own contributions or, absent employee
investment direction, are invested into a balanced portfolio. The
ESPP allows for investment in BlackRock common stock at a 5%
discount on the fair market value of the stock on the purchase date.
Annual participation in the ESPP is limited to the purchase of 1,000
shares or a dollar value of $25,000. Each portfolio manager is
eligible to participate in these plans.
(a)(4) Beneficial Ownership of Securities. As of May 31, 2008,
neither Mr. Jaeckel or Mr. O'Connor beneficially owned any
stock issued by the Fund.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable due to no such
purchases during the period covered by this report.
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's Nominating and Governance Committee will consider
nominees to the board of directors recommended by shareholders when
a vacancy becomes available. Shareholders who wish to recommend a
nominee should send nominations which include biographical
information and set forth the qualifications of the proposed nominee
to the registrant's Secretary. There have been no material changes
to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's principal executive and principal financial
officers or persons performing similar functions have concluded that
the registrant's disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940, as amended
(the "1940 Act")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
13a-15(b) under the Securities Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act)
that occurred during the second fiscal quarter of the period covered
by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock MuniAssets Fund, Inc.
By: /s/ Donald C. Burke
-----------------------------------
Donald C. Burke
Chief Executive Officer of
BlackRock MuniAssets Fund, Inc.
Date: July 18, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Donald C. Burke
-----------------------------------
Donald C. Burke
Chief Executive Officer (principal executive officer) of
BlackRock MuniAssets Fund, Inc.
Date: July 18, 2008
By: /s/ Neal J. Andrews
-----------------------------------
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniAssets Fund, Inc.
Date: July 18, 2008