BLACKROCK 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: 811-21036

Name of Fund: BlackRock Municipal Bond Trust (BBK)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock 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 Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

Municipal Bonds    Par  
(000)		     Value  

Alabama — 1.8%

     

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC):

     

6.00%, 6/01/34

    $ 1,150      $ 1,338,727   

6.00%, 6/01/39

      450        522,171   

City of Hoover Alabama Board of Education, Refunding, Special Tax, Capital Outlay Warrants, 4.25%, 2/15/40

      1,275        1,315,851   
    

 

 

  
        3,176,749   

Arizona — 8.0%

     

Arizona Board of Regents, RB, Arizona State University, Series C, 5.50%, 7/01/26

      200        233,286   

Arizona Health Facilities Authority, Refunding RB, Phoenix Children’s Hospital, Series A, 5.00%, 2/01/42

      2,200        2,358,598   

County of Pima Arizona IDA, Refunding, IDRB, Tucson Electric Power Co. Project, Remarketing, Series B, 5.75%, 9/01/29

      900        903,591   

County of Pinal Arizona Electric District No. 3, Refunding RB, Electric System, 4.75%, 7/01/31

      3,750        4,083,562   

Salt Verde Financial Corp., RB, Senior:

     

5.00%, 12/01/32

      1,500        1,703,670   

5.00%, 12/01/37

      2,065        2,353,481   

State of Arizona, COP, Department of Administration, Series A (AGM), 5.00%, 10/01/29

      750        833,295   

University Medical Center Corp., RB, 6.50%, 7/01/39

      500        582,460   

University Medical Center Corp., Refunding RB, 6.00%, 7/01/39

      900        1,061,550   
    

 

 

  
        14,113,493   

Arkansas — 4.1%

     

Arkansas State University, RB, Jonesboro Campus, Series B:

     

4.00%, 12/01/28

      400        425,840   

4.88%, 12/01/43

      690        752,183   

City of Benton Arkansas, RB, 4.00%, 6/01/39

      905        954,069   

City of Hot Springs Arkansas, RB, Wastewater, 5.00%, 12/01/38

      1,200        1,338,048   

City of Little Rock Arkansas, RB, 4.00%, 7/01/41

      2,250        2,298,172   
Municipal Bonds    Par  
(000)		     Value  

Arkansas (concluded)

     

Pulaski County Public Facilities Board, RB, 5.00%, 12/01/42 (a)

    $ 465      $ 509,068   

University of Arkansas, RB, Fort Smith Campus, Series B, 4.00%, 6/01/39

      920        947,462   
    

 

 

  
        7,224,842   

California — 18.6%

     

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 5.88%, 8/15/31

      1,900        2,278,556   

California HFA, RB, Home Mortgage, Series G, AMT, 5.05%, 2/01/29

      2,285        2,346,809   

Carlsbad California Unified School District, GO, Election of 2006, Series B, 0.00%, 5/01/34 (b)

      1,000        920,200   

City of San Jose California, Refunding ARB, Series A-1, AMT, 5.75%, 3/01/34

      2,000        2,271,280   

County of Stanislaus California Tobacco Securitization Agency, RB, CAB, Sub-Series C, 0.00%, 6/01/55 (c)

      4,500        60,750   

Dinuba California Unified School District, GO, Election of 2006 (AGM), 5.75%, 8/01/33

      500        585,710   

Hartnell Community College District California, GO, CAB, Election of 2002, Series D, 0.00%, 8/01/34 (b)

      1,650        1,344,602   

Norwalk-La Mirada Unified School District, GO, Refunding, CAB, Election of 2002, Series E (AGC), 0.00%, 8/01/38 (c)

      8,000        2,776,640   

Palomar Community College District, GO, CAB, Election of 2006, Series B:

     

0.00%, 8/01/30 (c)

      1,500        823,800   

0.00%, 8/01/33 (c)

      4,000        1,432,360   

0.00%, 8/01/39 (b)

      2,000        1,459,120   

San Diego Community College District, GO, CAB, Election of 2002, 0.00%, 8/01/33 (b)

      2,800        2,749,936   

State of California, GO, Various Purposes, 6.00%, 3/01/33

      1,000        1,222,720   

State of California, Refunding, GO,Various Purposes:

     

5.75%, 4/01/31

      2,000        2,355,020   

6.50%, 4/01/33

      1,950        2,380,346   

5.00%, 2/01/38

      3,000        3,387,900   

5.50%, 3/01/40

      2,350        2,700,267   

 

  

 

                
   BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014    1

Schedule of Investments (continued)

   

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

Municipal Bonds    Par  
(000)		     Value  

California (concluded)

     

State of California, Refunding, GO,Various Purposes (concluded):

     

4.00%, 10/01/44

    $ 1,500      $ 1,526,850   
    

 

 

  
        32,622,866   

Colorado — 1.3%

     

Colorado Health Facilities Authority, RB, Catholic Health Initiatives, Series D, 6.25%, 10/01/33

      1,070        1,241,617   

Park Creek Metropolitan District, Refunding RB, Senior Limited Property Tax (AGM), 6.00%, 12/01/38

      750        866,317   

University of Northern Colorado Greely, Refunding RB, Institutional Enterprise, Series A, 4.00%, 6/01/35

      250        263,138   
    

 

 

  
        2,371,072   

Connecticut — 0.6%

     

Connecticut State Health & Educational Facility Authority, Refunding RB:

     

Hartford Healthcare, Series A, 5.00%, 7/01/32

      350        380,226   

Lawrence & Memorial Hospital, Series F, 5.00%, 7/01/36

      550        598,846   
    

 

 

  
        979,072   

Delaware — 0.8%

     

County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40

      1,200        1,363,344   

Florida — 4.6%

     

County of Lee Florida, Refunding ARB, Series A, AMT (AGM), 5.00%, 10/01/28

      2,000        2,227,360   

County of Miami-Dade Florida, RB, AMT, Seaport, Series B, 6.00%, 10/01/31

      4,135        4,960,346   

County of Orange Florida Health Facilities Authority, Refunding RB, Mayflower Retirement Center, 5.00%, 6/01/36

      125        133,502   
Municipal Bonds    Par  
(000)		     Value  

Florida (concluded)

     

Stevens Plantation Community Development District, Special Assessment, Series A, 7.10%, 5/01/35 (d)(e)

    $ 910      $ 678,824   
    

 

 

  
        8,000,032   

Georgia — 0.5%

     

Savanah Colleges of Art, RB, 4.00%, 4/01/32

      830        828,730   

Hawaii — 0.2%

     

Hawaii State Department of Budget & Finance, Refunding RB, Special Purpose, Senior Living, Kahala Nui, 5.25%, 11/15/37

      400        435,228   

Idaho — 1.9%

     

Idaho Health Facilities Authority, RB, St. Lukes Health system project Series A, 5.00%, 3/01/39

      1,230        1,338,215   

Idaho Health Facilities Authority, Refunding RB, Trinity Health Group, Series B, 6.25%, 12/01/33

      1,750        2,033,640   
    

 

 

  
        3,371,855   

Illinois — 5.1%

     

City of Chicago Illinois, Refunding ARB, O’Hare International Airport Passenger Facility Charge, Series B, AMT, 4.00%, 1/01/29

      2,000        2,036,080   

City of Chicago Illinois Midway International Airport, Refunding ARB, 2nd Lien, Series A, AMT, 5.00%, 1/01/41

      870        935,737   

City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40

      665        745,545   

Illinois Finance Authority, RB, Rush University Medical Center, Series C, 6.63%, 11/01/39

      650        751,023   

Illinois Finance Authority, Refunding RB:

   

Friendship Village Schaumburg, Series A, 5.63%, 2/15/37

      210        210,011   

OSF Healthcare System, Series A, 6.00%, 5/15/39

      1,010        1,146,390   

Roosevelt University Project, 6.50%, 4/01/44

      1,000        1,092,880   

Railsplitter Tobacco Settlement Authority, RB, 6.00%, 6/01/28

      1,150        1,345,190   

 

  

 

                
2    BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014   

Schedule of Investments (continued)

   

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

Municipal Bonds    Par  
(000)		     Value  

Illinois (concluded)

     

State of Illinois, GO, 5.00%, 2/01/39

    $ 665      $ 695,836   
    

 

 

  
               8,958,692   

Indiana — 0.6%

     

Indiana Finance Authority, Refunding RB, U.S. Steel Corp. Project, 6.00%, 12/01/26

      1,000        1,109,200   

Iowa — 2.5%

     

Iowa Higher Education Loan Authority, Refunding RB:

     

4.00%, 12/01/44

      2,800        2,832,284   

Private College Facility, Upper Iowa University Project, 5.75%, 9/01/30

      500        513,740   

Private College Facility, Upper Iowa University Project, 6.00%, 9/01/39

      1,000        1,027,270   
    

 

 

  
               4,373,294   

Kansas — 2.8%

     

County of Seward Kansas Unified School District No. 480, GO, Refunding, 5.00%, 9/01/39

      4,000        4,479,320   

County of Wyandotte-Kansas City Unified Government Utility System, Refunding RB, Series A, 5.00%, 9/01/44

      400        445,020   
    

 

 

  
               4,924,340   

Kentucky — 1.8%

     

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.38%, 1/01/40

      1,830        2,076,812   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier (b):

     

0.00%, 7/01/34

      500        350,795   

Series C, 0.00%, 7/01/39

      830        571,439   

Series C, 0.00%, 7/01/43

      270        183,759   
    

 

 

  
               3,182,805   

Louisiana — 1.5%

     

City of Alexandria Louisiana Utilities, RB, 5.00%, 5/01/39

      860        966,459   

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35

      1,050        1,258,184   
Municipal Bonds    Par  
(000)		     Value  

Louisiana (concluded)

     

Louisiana Public Facilities Authority, RB, Belle Chasse Educational Foundation Project, 6.50%, 5/01/31

    $ 400      $ 445,608   
    

 

 

  
               2,670,251   

Maryland — 0.2%

     

County of Anne Arundel Maryland Consolidated, Special Taxing District, Villages at Two Rivers Prpoject”:

     

5.13%, 7/01/36

      170        172,501   

5.25%, 7/01/44

      170        172,164   
    

 

 

  
               344,665   

Michigan — 3.6%

     

Michigan Finance Authority, RB, Detroit Water and Sewage Disposal System, Senior Lien, Series 2014 C-2, AMT, 5.00%, 7/01/44

      240        247,478   

Michigan State Hospital Finance Authority, Refunding RB, Trinity Health Credit Group, Series C, 4.00%, 12/01/32

      2,100        2,163,189   

Royal Oak Hospital Finance Authority, Refunding RB, William Beaumont Hospital, Series V, 8.25%, 9/01/18 (f)

      1,950        2,480,322   

State of Michigan Building Authority, Refunding RB, Facilities Program, Series I, 6.25%, 10/15/38

      1,250        1,453,238   
    

 

 

  
               6,344,227   

Minnesota — 3.7%

     

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC), 6.50%, 11/15/38

      4,600        5,387,934   

University of Minnesota, GO, Series B, 4.00%, 1/01/35

      1,000        1,060,220   
    

 

 

  
               6,448,154   

Mississippi — 3.3%

     

County of Warren Mississippi, RB, Gulf Opportunity Zone Bonds, International Paper Co. Project,
Series A, 5.38%, 12/01/35

      400        447,020   

 

  

 

                
   BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014    3

Schedule of Investments (continued)

   

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

Municipal Bonds    Par  
(000)		     Value  

Mississippi (concluded)

     

Mississippi Development Bank, RB, Special Obligation:

     

CAB, Hinds Community College District (AGM), 5.00%, 4/01/36

    $ 845      $ 922,512   

County of Jackson Limited Tax Note (AGC), 5.50%, 7/01/32

      1,750        1,990,240   

University of Southern Mississippi, RB, Campus Facilities Improvements Project, 5.38%, 9/01/36

      2,100        2,361,156   
    

 

 

  
               5,720,928   

Missouri — 3.0%

     

Missouri Development Finance Board, RB, Annual Appropriation Sewer System, Series B, 5.00%, 11/01/41

      900        966,321   

Missouri State Health & Educational Facilities Authority, RB:

     

A.T. Still University of Health Sciences, 5.25%, 10/01/31

      500        555,375   

A.T. Still University of Health Sciences, 4.25%, 10/01/32

      320        337,853   

A.T. Still University of Health Sciences, 5.00%, 10/01/39

      500        550,595   

Heartland Regional Medical Center, 4.13%, 2/15/43

      400        406,472   

University of Central Missouri, Series C-2, 4.00%, 10/01/28

      400        423,828   

University of Central Missouri, Series C-2, 5.00%, 10/01/34

      1,000        1,116,400   

Missouri State Health & Educational Facilities Authority, Refunding RB, CoxHealth, Series A, 5.00%, 11/15/38

      800        876,160   
    

 

 

  
               5,233,004   

Montana — 1.1%

     

State of Montana Board of Regents, RB, 5.00%, 11/15/43

      1,750        1,987,930   

Nebraska — 1.6%

     

Central Plains Energy Project Nebraska, RB, Gas Project No. 3, 5.00%, 9/01/42

      600        646,698   
Municipal Bonds    Par  
(000)		     Value  

Nebraska (concluded)

     

Douglas County Hospital Authority No. 2, RB, Madonna Rehabilitation Hospital Project series 2014:

     

4.00%, 5/15/33

    $ 1,220      $ 1,229,565   

5.00%, 5/15/44

      250        269,943   

Nebraska Public Power District, Refunding RB, Series A:

     

5.00%, 1/01/32

      250        283,257   

4.00%, 1/01/44

      400        411,036   
    

 

 

  
               2,840,499   

Nevada — 1.6%

     

City of Las Vegas Nevada, Special Assessment, No. 809 Summerlin Area, 5.65%, 6/01/23

      1,220        1,232,554   

County of Clark Nevada, Refunding ARB, Department of Aviation, Subordinate Lien, Series A-2, 4.25%, 7/01/36

      1,000        1,048,520   

County of Clark Nevada, Refunding RB, Alexander Dawson School Nevada Project, 5.00%, 5/15/29

      575        602,588   
    

 

 

  
               2,883,662   

New Jersey — 10.9%

     

County of Middlesex New Jersey Improvement Authority, RB, Heldrich Center Hotel, Sub-Series B, 6.25%, 1/01/37 (d)(e)

      915        46,391   

New Jersey EDA, RB:

     

Continental Airlines, Inc. Project, Series B, AMT, 5.63%, 11/15/30

      660        715,387   

Rutgers-The State University of New Jersey, College Avenue Redevelopment Project, 5.00%, 6/15/38

      450        510,507   

The Goethals Bridge Replacement Project, AMT (AGM), 5.13%, 7/01/42

      200        218,116   

New Jersey EDA, Refunding RB, Special Assessment, Kapkowski Road Landfill Project, 6.50%, 4/01/28

      7,500        9,256,425   

New Jersey Educational Facilities Authority, Refunding RB, University of Medicine & Dentistry, Series B (f):

     

7.13%, 6/01/19

      630        794,020   

7.50%, 6/01/19

      800        1,021,408   

 

  

 

                
4    BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014   

Schedule of Investments (continued)

   

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

Municipal Bonds    Par  
(000)		     Value  

New Jersey (concluded)

     

New Jersey Health Care Facilities Financing Authority, Refunding RB, St. Barnabas Health Care System, Series A:

     

4.63%, 7/01/23

    $ 510      $ 565,340   

5.00%, 7/01/25

      500        567,800   

5.63%, 7/01/37

      1,700        1,925,913   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series AA, 6.50%, 10/01/38

      235        244,238   

New Jersey Transportation Trust Fund Authority, RB, 5.00%, 6/15/44

      3,030        3,226,344   
    

 

 

  
               19,091,889   

New York — 8.3%

     

Albany Industrial Development Agency, RB, New Covenant Charter School Project, Series A, 7.00%, 5/01/35 (d)(e)

      455        5,678   

City of New York New York, GO, Fiscal 2014, Sub-Series A-1:

     

5.00%, 8/01/29

      400        466,672   

5.00%, 8/01/35

      1,580        1,799,020   

City of New York New York Industrial Development Agency, ARB, American Airlines, Inc., JFK International Airport, AMT,
7.75%, 8/01/31 (g)

      3,165        3,462,099   

City of New York New York Industrial Development Agency, RB, PILOT, Queens Baseball Stadium (AMBAC), 5.00%, 1/01/39

      1,500        1,548,630   

County of Westchester New York Healthcare Corp., Refunding RB, Senior Lien, Remarketing, Series A, 5.00%, 11/01/30

      1,500        1,648,875   

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/39

      3,335        3,836,484   

New York Liberty Development Corp., Refunding RB:

     

2nd Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 7/15/49

      800        904,312   

3 World Trade Center Project, Class 2, 5.38%, 11/15/40 (h)

      405        423,265   
Municipal Bonds    Par  
(000)		     Value  

New York (concluded)

     

Niagara Area Development Corp., Refunding RB, Solid Waste Disposal Facility, Covanta Energy Project, Series A, AMT,
5.25%, 11/01/42 (h)

    $ 400      $ 411,632   
    

 

 

  
               14,506,667   

North Carolina — 2.1%

     

County of Gaston North Carolina Industrial Facilities & Pollution Control Financing Authority, RB, Exempt Facilities, National Gypsum Co. Project, AMT, 5.75%, 8/01/35

      2,695        2,700,336   

North Carolina Medical Care Commission, Refunding RB, University Health System, Series D, 6.25%, 12/01/33

      800        920,664   
    

 

 

  
               3,621,000   

North Dakota — 0.5%

     

City of Fargo North Dakota, Refunding RB, University Facilities Development Foundation Project, 3.00%, 12/01/30

      400        385,188   

County of Burleigh North Dakota, Refunding RB, St. Alexius Medical Center Project, Series A, 5.00%, 7/01/35

      480        516,773   
    

 

 

  
               901,961   

Ohio — 1.1%

     

City of Dayton OH Airport Revenue James M Cox Dayton international airport, Refunding ARB, AMT, 4.00%, 12/01/32

      2,000        2,023,240   

Oklahoma — 0.8%

     

Oklahoma Municipal Power Authority, RB, Power Supply System, Series A, 4.00%, 1/01/38

      1,140        1,176,583   

Stillwater Utilities Authority, RB, Series A, 4.00%, 10/01/42

      250        260,745   
    

 

 

  
               1,437,328   

Oregon — 0.9%

     

Central Oregon Community College District, GO, 4.00%, 6/01/40

      450        467,460   

County of Umatilla Pendleton Oregon School District No. 16R, GO, Series A, 4.00%, 6/15/38

      265        277,426   

 

  

 

                
   BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014    5

Schedule of Investments (continued)

   

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

Municipal Bonds    Par  
(000)		     Value  

Oregon (concluded)

     

Oregon Health & Science University, RB, Series A, 5.75%, 7/01/39

    $ 750      $ 872,437   
    

 

 

  
               1,617,323   

Pennsylvania — 3.7%

     

County of Allegheny Pennsylvania IDA, Refunding RB, U.S. Steel Corp. Project, 6.55%, 12/01/27

      1,695        1,953,538   

Delaware River Port Authority, RB:

     

4.50%, 1/01/32

      1,500        1,651,500   

Series D (AGM), 5.00%, 1/01/40

      2,600        2,877,602   
    

 

 

  
               6,482,640   

Rhode Island — 1.2%

     

Rhode Island Health & Educational Building Corp., RB, Hospital Financing, LifeSpan Obligation, Series A (AGC), 7.00%, 5/15/39

      1,000        1,175,530   

State of Rhode Island, COP, School for the Deaf Project, Series C (AGC), 5.38%, 4/01/28

      900        1,018,746   
    

 

 

  
               2,194,276   

South Carolina — 0.9%

     

Spartanburg Sanitation Sewer District, Refunding RB, 4.00%, 3/01/40 (a)

      1,500        1,497,090   

Tennessee — 2.4%

     

Chattanooga Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/40

      1,950        2,192,989   

Chattanooga-Hamilton County Hospital Authority, Refunding RB, 5.00%, 10/01/44 (a)

      875        933,091   

County of Memphis-Shelby Tennessee Sports Authority, Inc., Refunding RB, Memphis Arena Project, Series A, 5.38%, 11/01/28

      275        316,014   
Municipal Bonds   

Par  

(000)

     Value  

Tennessee (concluded)

     

Johnson City Health & Educational Facilities Board, RB, Mountain States Health, Series A, 5.00%, 8/15/42

    $ 800      $ 860,848   
    

 

 

  
               4,302,942   

Texas — 16.4%

     

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B (f):

     

7.13%, 12/01/18

      500        620,210   

7.25%, 12/01/18

      1,750        2,179,310   

County of Harris Texas Houston Sports Authority, Refunding RB, CAB, Senior Lien, Series G (NPFGC), 0.00%, 11/15/41 (c)

      11,690        2,649,071   

County of Matagorda Texas Navigation District No. 1, Refunding RB, Central Power & Light Co. Project, Series A, 6.30%, 11/01/29

      1,500        1,719,510   

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A, 0.00%, 9/15/38 (c)

      10,760        3,677,660   

Leander ISD, GO, Refunding CAB Series D, 0.00%, 8/15/35 (c)

      4,000        1,673,680   

Red River Education Financing Corp., RB, Texas Christian University Project, 5.25%, 3/15/38

      760        879,305   

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien, LBJ Infrastructure Group LLC, LBJ Freeway Managed Lanes Project, 7.00%, 6/30/40

      2,000        2,407,040   

Texas State Turnpike Authority, RB, CAB (AMBAC), 0.00%, 8/15/35 (c)

      45,000        12,999,600   
    

 

 

  
               28,805,386   

U.S. Virgin Islands — 1.4%

     

Virgin Islands Public Finance Authority, Refunding RB, Series C, 4.50%, 10/01/44

      2,500        2,435,725   

Vermont — 2.9%

     

University of Vermont & State Agricultural College, Refunding RB, 4.00%, 10/01/37

      2,360        2,447,485   

 

  

 

                
6    BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014   

Schedule of Investments (continued)

   

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

Municipal Bonds    Par  
(000)		     Value  

Vermont (concluded)

     

Vermont Educational & Health Buildings Financing Agency, Refunding RB, Fletcher Allen Health Hospital, Series B (AGM), 5.00%, 12/01/34

    $ 1,590      $ 1,692,412   

Vermont Student Assistance Corp., RB, Series A, 4.13%, 6/15/30

      1,000        1,011,790   
    

 

 

  
               5,151,687   

Virginia — 1.3%

     

County of Prince William Virginia IDA, Refunding RB, Novant Health Obligation Group, Series B, 4.00%, 11/01/46

      100        99,885   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT,
6.00%, 1/01/37

      880        998,219   

Winchester EDA, Refunding RB, Valley Health System Obligation, Series A, 5.00%, 1/01/44

      1,000        1,108,520   
    

 

 

  
               2,206,624   

Washington — 0.9%

     

Washington Health Care Facilities Authority, RB, MultiCare Health System, Series B (AGC), 6.00%, 8/15/39

      1,400        1,607,144   

West Virginia — 1.2%

     

City of Wheeling West Virginia Waterworks & Sewerage System, RB, 5.00%, 6/01/38

      1,000        1,110,330   

West Virginia Hospital Finance Authority, Refunding RB, Valley Health System Obligation Group Seriies 2014, 5.00%, 1/01/44

      900        991,791   
    

 

 

  
               2,102,121   

Wisconsin — 1.1%

     

WPPI Energy Power Supply Systems, Refunding RB, Series A:

     

5.00%, 7/01/35

      670        762,386   

5.00%, 7/01/36

      330        374,342   

5.00%, 7/01/37

      665        754,356   
    

 

 

  
               1,891,084   
Total Municipal Bonds — 132.8%              233,385,061   

Municipal Bonds Transferred to

Tender Option Bond (TOB) Trusts (i)

    Par  
(000)		     Value  

Colorado — 2.3%

     

Colorado Health Facilities Authority, RB, Catholic Health, Series C-7 (AGM), 5.00%, 9/01/36

    $ 3,750      $ 3,979,763   

New Jersey — 0.9%

     

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B, 5.25%, 6/15/36 (j)

      1,400        1,528,857   

New York — 14.3%

     

City of New York New York, GO, Fiscal 2015, Series B, 4.00%, 8/01/32

      3,990        4,236,582   

City of New York New York Municipal Water Finance Authority, RB, Fiscal 2009, Series A, 5.75%, 6/15/40

      450        515,803   

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System:

     

2nd General Resolution, Fiscal 2013, Series CC, 5.00%, 6/15/47

      6,000        6,674,295   

2nd General Resolution, Series FF-2, 5.50%, 6/15/40

      405        466,168   

Series A, 4.75%, 6/15/30

      3,000        3,261,870   

Hudson Yards Infrastructure Corp., RB, Fiscal 2012, Series A, 5.75%, 2/15/47 (j)

      2,500        2,874,142   

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43

      2,505        2,869,152   

State of New York Dormitory Authority, RB, New York University, Series A, 5.00%, 7/01/38

      2,199        2,440,713   

State of New York Thruway Authority, Refunding RB, Transportation, Personal Income Tax, Series A, 5.00%, 3/15/31

      1,560        1,810,630   
    

 

 

  
               25,149,355   

Ohio — 2.0%

     

County of Montgomery Ohio, RB, Catholic Health, Series C-1 (AGM), 5.00%, 10/01/41

      1,260        1,333,660   

 

  

 

                
   BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014    7

Schedule of Investments (continued)

   

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to

Tender Option Bond (TOB) Trusts (i)

    Par  
(000)		     Value  

Ohio (concluded)

     

Ohio Higher Educational Facility Commission, RB, Cleveland Clinic Health, Series A, 5.25%, 1/01/33

    $ 2,000      $ 2,202,120   
    

 

 

  
               3,535,780   

Texas — 1.0%

     

City of San Antonio Texas Public Service Board, RB, Electric & Gas Systems, Junior Lien, 5.00%, 2/01/43

      1,580        1,762,616   

Total Municipal Bonds Transferred to

Tender Option Bond (TOB) Trusts — 20.5%

              35,956,371   

Total Long-Term Investments

(Cost — $245,448,504) — 153.3%

              269,341,432   
Short-Term Securities    Shares     Value  

FFI Institutional Tax-Exempt Fund, 0.03%, 12/31/49 (k)(l)

      6,214,695      $ 6,214,695   

Total Short-Term Securities

(Cost — $6,214,695) — 3.5%

              6,214,695   

Total Investments

(Cost — $251,663,199*) — 156.8%

  

  

     275,556,127   

Liabilities in Excess of Other Assets — (0.2)%

        (456,310 ) 

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (11.1%)

   

     (19,500,159 ) 
VMTP Shares, at Liquidation Value — (45.5%)        (79,900,000 ) 
    

 

 

  
Net Assets Applicable to Common Shares — 100.0%      $ 175,699,658   
    

 

 

  

 

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

 

   

Tax cost

      $ 251,663,199   
    

 

 

  

Gross unrealized appreciation

      $ 25,661,848   

Gross unrealized depreciation

        (1,178,599 ) 
    

 

 

  

Net unrealized appreciation

      $ 24,483,249   
    

 

 

  

 

Notes to Schedule of Investments

 

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

 

Counterparty   Value        Unrealized
Appreciation		  

Barclays Capital, Inc.

   $ 933,091         $ 8,846   

Stephens, Inc.

   $ 2,006,158         $ 24,824   

 

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

 

(c)   Zero-coupon bond.

 

(d)   Non-income producing security.

 

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

 

(f)   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.

 

(g)   Variable rate security. Rate shown is as of report date.

 

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

 

(i)   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.

 

(j)   All or a portion of security is subject to a recourse agreement, which may require the Trust to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Trust could ultimately be required to pay under the agreement, which expires from February 15, 2019 to June 15, 2019 is $2,411,645.

 

  

 

                
8    BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014   

Schedule of Investments (continued)

   

BlackRock Municipal Bond Trust (BBK)

    

 

 

(k)   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

        3,426,637           2,788,058           6,214,695         $ 235   

 

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

 

Portfolio Abbreviations
AGC    Assured Guarantee Corp.
AGM    Assured Guaranty Municipal Corp.
AMBAC    American Municipal Bond Assurance Corp.
AMT    Alternative Minimum Tax (subject to)
ARB    Airport Revenue Bonds
CAB    Capital Appreciation Bonds
COP    Certificates of Participation
EDA    Economic Development Authority
GO    General Obligation Bonds
HFA    Housing Finance Agency
IDA    Industrial Development Authority
IDRB    Industrial Development Revenue Bonds
ISD    Independent School District
NPFGC    National Public Finance Guarantee Corp.
PILOT    Payment in Lieu of Taxes
RB    Revenue Bonds
S/F    Single-Family

 

Ÿ  

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

 

Contracts
Sold		     Issue   Exchange   Expiration   Notional Value     Unrealized
Depreciation		  
  (214 )    10-Year U.S. Treasury Note   Chicago Board of Trade   March 2015   $ 27,188,031      $ (81,724 ) 

 

                
   BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014    9

Schedule of Investments (continued)

   

BlackRock Municipal Bond Trust (BBK)

    

 

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. 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 instrument 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)

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

     —         $ 269,341,432         —      $ 269,341,432   

Short-Term Securities

   $ 6,214,695           —         —        6,214,695   
 

 

 

  

Total

   $ 6,214,695         $ 269,341,432         —      $ 275,556,127   
 

 

 

  

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

       

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2                 

Liabilities:

                 

Interest rate contracts

   $ (81,724 )         —         —      $ (81,724 ) 

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

       

 

  

 

                
10    BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014   

Schedule of Investments (continued)

   

BlackRock Municipal Bond Trust (BBK)

    

 

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

   $ 261,000           —         —      $ 261,000   

Liabilities:

                 

TOB trust certificates

     —         $ (19,494,759 )       —        (19,494,759 ) 

VMTP Shares

     —           (79,900,000 )       —        (79,900,000 ) 
 

 

 

  

Total

   $ 261,000         $ (99,394,759 )       —      $ (99,133,759 ) 
 

 

 

  

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

 

                
   BLACKROCK MUNICIPAL BOND TRUST    NOVEMBER 30, 2014    11

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 Municipal Bond Trust

 

By:  

/s/ John M. Perlowski

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

 

By:  

/s/ Neal J. Andrews

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