BLACKROCK MARYLAND MUNICIPAL BOND TRUST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-21051

Name of Fund: BlackRock Maryland Municipal Bond Trust (BZM)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

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

            Municipal Bond Trust, 55 East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 08/31/2015

Date of reporting period: 11/30/2014

Item 1 –  Schedule of Investments

Schedule of Investments November 30, 2014 (Unaudited)

   

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

Municipal Bonds    Par  
(000)		     Value  

Maryland — 134.3%

                 

Corporate — 2.7%

     

Maryland EDC, Refunding RB:

     

CNX Marine Terminals, Inc., 5.75%, 9/01/25

    $ 500      $ 552,280   

Potomac Electric Power Co., 6.20%, 9/01/22

      250        297,170   
    

 

 

  
               849,450   

County/City/Special District/School District — 28.8%

     

City of Annapolis Maryland, Tax Allocation, Park Place Project, Series A, 5.35%, 1/01/15 (a)

      466        472,869   

City of Baltimore Maryland, RB:

     

Series C, Wastewater Project, 5.00%, 7/01/39 (b)

      1,000        1,143,960   

Special Tax, Harborview Lot No. 2, 6.50%, 7/01/31

      923        925,326   

County of Anne Arundel Maryland Consolidated, Refunding, Special Tax, The Villages of Dorchester and Farmington Project, 5.00%, 7/01/32

      500        561,135   

County of Anne Arundel Maryland Consolidated, Special Tax, The Villages at Two Rivers Project, 5.25%, 7/01/44

      250        253,183   

County of Frederick Maryland, GO, Series A, 5.00%, 8/01/24

      275        342,127   

County of Frederick Maryland, RB, Jefferson Technology Park Project, Series B, 7.13%, 7/01/43

      250        279,190   

County of Montgomery Maryland, GO, Refunding, Consolidated Public Improvement, Series A, 5.00%, 7/01/19 (a)

      175        205,734   

County of Prince George’s Maryland, Special Obligation, Remarketing, National Harbor Project, 5.20%, 7/01/34

      1,500        1,507,575   

State of Maryland, GO, Refunding, State & Local Facilities Loan, 3rd Series C, 5.00%, 11/01/20

      500        601,615   

State of Maryland, GO State & Local Facilities Loan:

     

1st Series B, 5.00%, 3/15/19 (a)

      250        291,812   
Municipal Bonds    Par  
(000)		     Value  

Maryland (continued)

                 

County/City/Special District/School District (concluded)

  

State of Maryland, GO, State & Local Facilities Loan (concluded):

     

2nd Series B, 3.00%, 8/01/27

    $ 2,425      $ 2,451,069   
    

 

 

  
               9,035,595   

Education — 30.4%

     

County of Anne Arundel Maryland, Refunding RB, Maryland Economic Development, Anne Arundel Community College Project:

     

4.00%, 9/01/27

      510        546,261   

3.25%, 9/01/28

      360        361,285   

Maryland EDC, Refunding RB, University Village at Sheppard Pratt, 5.00%, 7/01/33

      1,000        1,078,460   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

     

Goucher College, Series A, 5.00%, 7/01/34

      1,000        1,111,180   

Johns Hopkins University Project, Series A, 5.00%, 7/01/27

      1,000        1,190,150   

Johns Hopkins University Project, Series A, 4.00%, 7/01/37

      500        521,275   

Loyola University Maryland, Series A, 5.00%, 10/01/39

      900        994,437   

Maryland Institute College of Art, 5.00%, 6/01/29

      500        555,065   

Notre Dame Maryland University, 5.00%, 10/01/42

      1,000        1,063,230   

Maryland Industrial Development Financing Authority, RB, Our Lady Of Good Counsel School, Series A, 6.00%, 5/01/15 (a)

      1,000        1,024,060   

University System of Maryland, RB, Auxiliary Facility and Tuition, Series A, 5.00%, 4/01/24

      400        493,624   

 

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2014    1

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

Municipal Bonds    Par  
(000)		     Value  

Maryland (continued)

                 

Education (concluded)

     

University System of Maryland, Refunding RB, Series D, 5.00%, 10/01/21

    $ 500      $ 603,175   
    

 

 

  
               9,542,202   

Health — 31.9%

     

City of Gaithersburg Maryland, Refunding RB, Asbury Maryland Obligation, Series B, 6.00%, 1/01/23

      250        280,642   

County of Howard Maryland, RB, Series A, 5.00%, 6/01/44

      550        595,859   

County of Howard Maryland, Refunding RB, Vantage House Facility, Series A, 5.25%, 4/01/33

      550        526,548   

County of Howard Maryland, Tax Allocation Bonds, Annapolis Junction Town Center Project, 6.10%, 2/15/44

      250        267,605   

County of Montgomery Maryland, Refunding RB, Trinity Health Credit Group, 5.00%, 12/01/40

      1,000        1,097,070   

Maryland Health & Higher Educational Facilities Authority, RB, Ascension Health Alliance, Series B, 5.00%, 11/15/51

      1,000        1,097,810   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

     

Anne Arundel Health System, 5.00%, 7/01/27

      500        565,615   

Anne Arundel Health System, 5.00%, 7/01/40

      1,000        1,060,910   

Charlestown Community Project, 6.25%, 1/01/41

      1,000        1,128,020   

Frederick Memorial Hospital, Series A, 4.00%, 7/01/38

      1,250        1,229,325   

University of Maryland Medical System, 5.13%, 7/01/39

      1,000        1,086,460   

University of Maryland Medical System, Series A, 5.00%, 7/01/43

      1,000        1,092,590   
    

 

 

  
               10,028,454   

Housing — 14.6%

     

Maryland Community Development Administration, HRB:

     

Series A, 4.05%, 7/01/42

      1,220        1,244,864   
Municipal Bonds    Par  
(000)		     Value  

Maryland (continued)

                 

Housing (concluded)

     

Maryland Community Development Administration, HRB (concluded):

     

Series H, AMT, 5.10%, 9/01/37

    $ 1,000      $ 1,020,650   

Maryland Community Development Administration, RB, Residential:

     

5.05%, 9/01/39

      500        525,605   

4.75%, 9/01/39

      150        155,577   

Maryland Community Development Administration, Refunding RB, Residential, 5.25%, 9/01/35

      1,645        1,647,813   
    

 

 

  
               4,594,509   

Transportation — 15.0%

     

Maryland EDC, RB:

     

Term Project, Series B, 5.75%, 6/01/35

      500        538,520   

Transportation Facilities Project, Series A, 5.75%, 6/01/35

      500        538,520   

Maryland State Department of Transportation, RB, Consolidated, 4.00%, 5/15/22

      1,000        1,102,350   

Maryland State Transportation Authority, RB, Baltimore/Washington International Thurgood Marshall Airport Project, Series A, AMT, 4.00%, 6/01/29

      1,925        2,000,441   

Maryland State Transportation Authority, Refunding RB, Baltimore/Washington International Thurgood Marshall Airport Project, Series B, AMT, 5.00%, 3/01/23

      445        514,909   
    

 

 

  
               4,694,740   

Utilities — 10.9%

     

City of Baltimore Maryland, RB:

     

Wastewater Project, Series C, 5.00%, 7/01/38

      1,000        1,142,690   

Water Project, Series A, 5.00%, 7/01/43

      1,000        1,134,240   

County of Montgomery Maryland, RB, Water Quality Protection Charge, Series A:

     

5.00%, 4/01/31

      500        578,090   

 

                
2    BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2014   

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

Municipal Bonds   

Par  

(000)

     Value  

Maryland (concluded)

                 

Utilities (concluded)

     

County of Montgomery Maryland, RB, Water Quality Protection Charge, Series A (concluded):

     

5.00%, 4/01/32

    $ 500      $ 578,090   
    

 

 

  
               3,433,110   
Total Municipal Bonds in Maryland              42,178,060   
    

District of Columbia — 3.6%

                 

Transportation — 3.6%

  

  

Washington Metropolitan Area Transit Authority, Refunding RB, Series A, 5.13%, 7/01/32

      1,000        1,142,580   
    

Guam — 2.3%

                 

State — 2.3%

     

Territory of Guam, RB, Series A:

     

Business Privilege Tax Bonds, 5.13%, 1/01/42

      250        272,685   

Limited Obligation Bonds, Section 30, 5.63%, 12/01/29

      410        451,488   
Total Municipal Bonds in Guam              724,173   
Total Municipal Bonds — 140.2%              44,044,813   
    
                  
Municipal Bonds Transferred to
Tender Option Bond (TOB) Trusts (c)		   

Par  

(000)

     Value  

Maryland — 10.6%

                 

Transportation — 10.6%

     

State of Maryland Transportation Authority, RB, Transportation Facilities Project (AGM), 5.00%, 7/01/41

    $ 3,000      $ 3,320,280   

Total Long-Term Investments

(Cost — $45,329,966) — 150.8%

  

  

     47,365,093   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (d)(e)

      2,017,274        2,017,274   

Total Short-Term Securities

(Cost — $2,017,274) — 6.4%

  

  

     2,017,274   
Total Investments
(Cost — $47,347,240*) — 157.2%		         49,382,367   
Liabilities in Excess of Other Assets — (1.5)%        (477,242 ) 

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (4.8%)

   

     (1,500,578 ) 
VRDP Shares, at Liquidation Value — (50.9%)        (16,000,000 ) 
    

 

 

  
Net Assets Applicable to Common Shares — 100.0%      $ 31,404,547   
    

 

 

  

 

*   As of November 30, 2014, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

   $ 45,762,584   
 

 

 

  

Gross unrealized appreciation

   $ 2,189,559   

Gross unrealized depreciation

     (69,776 ) 
 

 

 

  

Net unrealized appreciation

   $ 2,119,783   
 

 

 

  

 

Notes to Schedule of Investments

 

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

 

Counterparty   Value        Unrealized
Appreciation		  

Wells Fargo Securities LLC

   $ 1,143,960         $ 10,260   

 

(c)   Represent bonds transferred to a TOB. In exchange for which the Trust received cash and residual interest certificates. These bonds serve as collateral in a financing transaction.

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2014    3

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

(d)   Investments in issuers considered to be an affiliate of the Trust during the period ended November 30, 2014, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate      Shares Held
at August 31,
2014		        Net
Activity		        Shares Held
at November 30,
2014		        Income  

FFI Institutional Tax-Exempt Fund

        23,789           1,993,485           2,017,274         $ 27   

 

(e)   Represents the current yield as of report date.

 

Portfolio Abbreviations      

 

AGM    Assured Guaranty Municipal Corp.
AMT    Alternative Minimum Tax (subject to)
EDC    Economic Development Corp.
GO    General Obligation Bonds
HRB    Housing Revenue Bonds
RB    Revenue Bonds

 

Ÿ  

Financial futures contracts outstanding as of November 30, 2014 were as follows:

 

Contracts Sold     Issue   Exchange   Expiration   Notional Value     Unrealized
Depreciation		  
  (17 )    10-Year U.S. Treasury Note   Chicago Board of Trade   March 2015   $ 2,159,797      $ (6,133 ) 

For Trust compliance purposes, the Trust’s sector classifications refer to any one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment advisor. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

Ÿ  

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

Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Trust has the ability to access

 

  Ÿ  

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

 

  Ÿ  

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

 

                
4    BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2014   

Schedule of Investments (concluded)

   

BlackRock Maryland Municipal Bond Trust (BZM)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, please refer to the Trust’s most recent financial statements as contained in its annual report.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of November 30, 2014:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                 
Investments:                 

Long-Term Investments1

     —         $ 47,365,093         —      $ 47,365,093   

Short-Term Securities

   $ 2,017,274           —         —        2,017,274   
 

 

 

  

Total

   $ 2,017,274         $ 47,365,093         —      $ 49,382,367   
 

 

 

  

1   See above Schedule of Investments for values in each sector.

      

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments 2                 

Liabilities:

                 

Interest rate contracts

   $ (6,133 )         —         —      $ (6,133 ) 

2    Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

       

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial reporting purposes. As of November 30, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                 

Cash pledged for financial futures contracts

   $ 38,000           —         —      $ 38,000   

Liabilities:

                 

TOB trust certificates

     —         $ (1,500,000 )       —        (1,500,000 ) 

VRDP Shares

     —           (16,000,000 )       —        (16,000,000 ) 
 

 

 

  

Total

   $ 38,000         $ (17,500,000 )       —      $ (17,462,000 ) 
 

 

 

  

There were no transfers between levels during the period ended November 30, 2014.

 

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    NOVEMBER 30, 2014    5

Item 2 –  Controls and Procedures

 

2(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.

 

2(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 registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3 –  Exhibits

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 Maryland Municipal Bond Trust

 

By:  

/s/ John M. Perlowski

  
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock Maryland Municipal Bond Trust
Date: January 22, 2015  

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/ John M. Perlowski

  
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock Maryland Municipal Bond Trust
Date: January 22, 2015  

 

By:  

/s/ Neal J. Andrews

  
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock Maryland Municipal Bond Trust
Date: January 22, 2015