c56193_nq.htm

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: Donald C. Burke, Chief Executive Officer, BlackRock Municipal Bond Trust, 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: 08/31/2008

Date of reporting period: 09/01/2008 – 11/30/2008

 


Item 1 – Schedule of Investments

 

BlackRock Municipal Bond Trust    
Schedule of Investments November 30, 2008 (Unaudited)   (Percentages shown are based on Net Assets)
                                                     Par        
State   Municipal Bonds        (000)                         Value   
Alabama - 7.4%   Huntsville, Alabama, Health Care Authority Revenue Bonds,            
    Series A, 5.75%, 6/01/11 (a) $ 7,500   $ 8,128,950  
Arizona - 8.4%   Glendale, Arizona, Municipal Property Corporation, Excise Tax            
    Revenue Refunding Bonds, Series A, 4.50%, 7/01/32 (b)   3,655     3,007,517  
    Goodyear, Arizona, GO, 4.25%, 7/01/37 (b)   1,250     946,525  
    McAllister Academic Village, LLC, Arizona, Revenue Refunding            
    Bonds (Arizona State University - Hassayampa Academic Village            
    Project), 5%, 7/01/38   2,000     1,655,340  
    Salt Verde Financial Corporation, Arizona, Senior Gas Revenue            
    Bonds, 5%, 12/01/32   1,500     980,385  
    Salt Verde Financial Corporation, Arizona, Senior Gas Revenue            
    Bonds, 5%, 12/01/37   2,565         1,626,030  
    San Luis, Arizona, Facilities Development Corporation, Senior Lien            
    Revenue Bonds (Regional Detention Center Project), 6.25%,            
    5/01/15   300     260,904  
    San Luis, Arizona, Facilities Development Corporation, Senior Lien            
    Revenue Bonds (Regional Detention Center Project), 7%,            
    5/01/20   300     253,527  
    San Luis, Arizona, Facilities Development Corporation, Senior Lien            
    Revenue Bonds (Regional Detention Center Project), 7.25%,            
    5/01/27   600     493,818  
              9,224,046  
California - 10.1%   California County Tobacco Securitization Agency, Tobacco Revenue            
    Bonds (Stanislaus County Tobacco Funding Corporation),            
    Sub-Series C, 6.30%, 6/01/55 (c)   4,500     33,030  
    California HFA, Home Mortgage Revenue Bonds, AMT, Series G,            
    5.05%, 2/01/29   2,835     2,277,242  
    California State Department of Veteran Affairs, Home Purchase            
    Revenue Bonds, AMT, Series B, 5.25%, 12/01/37   5,000     3,981,850  
    California State, GO, Refunding, AMT, 5.05%, 12/01/36   1,000     770,160  
    Sacramento County, California, Airport System Revenue Bonds,            
    AMT, Senior Series B, 5.25%, 7/01/39 (b)   2,505     1,866,576  
    University of California Revenue Bonds, Series B, 4.75%,            
    5/15/38   1,160     959,262  

  Portfolio Abbreviations

To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated according to the list below.

AMT      Alternative Minimum Tax (subject to)   IDA      Industrial Development Authority
EDA Economic Development Authority   IDR Industrial Development Revenue Bonds
EDR Economic Development Revenue Bonds   M/F Multi-Family
GO General Obligation Bonds   S/F Single-Family
HFA Housing Finance Agency      

1

BlackRock Municipal Bond Trust    
Schedule of Investments November 30, 2008 (Unaudited)   (Percentages shown are based on Net Assets)
                                                    
Par
     
State   Municipal Bonds  
(000)
    Value
    Val Verde, California, Unified School District Financing Authority,          
    Special Tax Refunding Bonds, Junior Lien, 6.25%, 10/01/28 $ 1,585   $ 1,213,492
                 11,101,612
Colorado - 2.3%   Colorado Health Facilities Authority Revenue Bonds (Catholic Health          
    Initiatives), Series D, 6.25%, 10/01/33   1,070     1,035,856
    Colorado Health Facilities Authority, Revenue Refunding Bonds          
    (Poudre Valley Health Care), Series B, 5.25%, 3/01/36 (b)   1,085     960,474
    Colorado Springs, Colorado, Utilities System Improvement Revenue          
    Bonds, Subordinate Lien, Series C, 5%, 11/15/45 (b)   635     573,964
              2,570,294
Connecticut - 0.8%   Connecticut State Health and Educational Facilities Authority          
    Revenue Bonds (Quinnipiac University), Series J, 5%, 7/01/37 (d)  
1,000
    
844,860
District of   District of Columbia, Revenue Refunding Bonds (Friendship Public          
Columbia - 9.6%   Charter School, Inc.), 5.25%, 6/01/33 (e)   595     384,471
    District of Columbia, Tax Increment Revenue Bonds (Gallery Place          
    Project), 5.40%, 7/01/31 (b)   6,000     5,728,620
    District of Columbia Tobacco Settlement Financing Corporation,          
    Asset-Backed Revenue Refunding Bonds, 6.75%, 5/15/40   5,580     4,439,448
              10,552,539
Florida - 22.4%   Halifax Hospital Medical Center, Florida, Hospital Revenue          
    Refunding Bonds, Series A, 5%, 6/01/38   1,535     959,375
    Martin County, Florida, IDA, IDR, Refunding (Indiantown          
    Cogeneration Project), AMT, Series A, 7.875%, 12/15/25   3,000     2,640,930
    Miami Beach, Florida, Health Facilities Authority, Hospital Revenue          
    Refunding Bonds (Mount Sinai Medical Center of Florida), 6.75%,          
    11/15/21   2,420     2,021,087
    Orange County, Florida, Health Facilities Authority, Hospital          
    Revenue Bonds (Adventist Health System), 5.625%, 11/15/12 (a)   10,000     11,168,300
    Orange County, Florida, Tourist Development, Tax Revenue          
    Refunding Bonds, 4.75%, 10/01/32 (f)   1,845     1,406,905
    Palm Beach County, Florida, HFA, M/F Housing Revenue Bonds          
    (Indian Trace Apartment Project), AMT, Series A, 5.625%,          
    1/01/44 (b)   7,255     5,869,730
    Stevens Plantation Community Development District, Florida,          
    Special Assessment Revenue Bonds, Series A, 7.10%, 5/01/35   970     709,943
              24,776,270
Georgia - 4.0%   Atlanta, Georgia, Water and Wastewater Revenue Bonds, 5%,          
    11/01/37 (b)   5,000     4,268,700
    Main Street Natural Gas, Inc., Georgia, Gas Project Revenue Bonds,          
    Series A, 6.375%, 7/15/38 (g)(h)   1,000     170,020
              4,438,720
Idaho - 1.9%   Idaho Health Facilities Authority, Revenue Refunding Bonds (Trinity          
    Health Group), Series B, 6.25%, 12/01/33   1,750     1,696,275

2

BlackRock Municipal Bond Trust    
Schedule of Investments November 30, 2008 (Unaudited)   (Percentages shown are based on Net Assets)
        Par      
State  
Municipal Bonds
  (000 )   Value
   
Idaho Housing and Financing Association, S/F Mortgage Revenue
         
   
Bonds, Series D, Class I, 5.50%, 7/01/40
  510   $ 458,439
              2,154,714
Illinois - 9.6%  
Bolingbrook, Illinois, GO, Refunding, Series B, 6.196%,
         
   
1/01/36 (c)(d)(h)(i)
   23,065     3,671,255
   
Centerpoint Intermodal Center Program Trust, Illinois, Tax
         
   
Allocation Bonds, Class A, 8%, 6/15/23 (j)
  1,150     918,987
   
Illinois Health Facilities Authority, Revenue Refunding Bonds (Lake
         
   
Forest Hospital), Series A, 5.75%, 7/01/29
  6,000     5,089,860
   
Illinois State Finance Authority Revenue Bonds (Friendship Village of
          
   
Schaumburg), Series A, 5.625%, 2/15/37
  420     263,474
   
Illinois State Finance Authority Revenue Bonds (Monarch Landing,
         
   
Inc. Project), Series A, 7%, 12/01/37
  720     550,094
   
Illinois State Finance Authority, Student Housing Revenue Bonds
         
   
(MJH Education Assistance IV LLC), Sub-Series B, 5.375%,
         
   
6/01/35 (g)(h)
   425     76,254
              10,569,924
Indiana - 1.6%  
Bloomington, Indiana, M/F Housing Revenue Bonds (Canterbury
         
   
House Apartments), AIG SunAmerica, Inc., Pass-Through Certificates
          
   
of Beneficial Ownership, AMT, Series 1, 5.90%,
         
   
12/01/34
  1,895     1,771,996
Kansas - 3.5%  
Wichita, Kansas, Airport Authority, Airport Facilities Revenue Bonds
         
   
(Cessna Citation Service Center), AMT, Series A, 6.25%,
         
   
6/15/32
  5,000     3,866,750
Kentucky - 0.4%  
Kentucky Economic Development Financing Authority, Louisville
         
   
Arena Project Revenue Bonds (Louisville Arena Authority, Inc.), Sub-
          
   
Series A-1, 6%, 12/01/38 (k)
  500     470,305
Maryland - 3.5%  
Frederick County, Maryland, Special Obligation Tax Bonds (Urbana
         
   
Community Development Authority), Series B, 6.25%,
         
   
7/01/30
  2,903     1,918,767
   
Maryland State Community Development Administration,
         
   
Department of Housing and Community Development, Residential
         
   
Revenue Refunding Bonds, AMT, Series L, 4.95%, 9/01/38
  1,645     1,198,086
   
Maryland State Health and Higher Educational Facilities Authority,
         
   
Revenue Refunding Bonds (MedStar Health, Inc.),
         
   
5.50%, 8/15/33
  1,040     807,487
              3,924,340
Michigan - 1.8%  
Michigan State Building Authority, Revenue Refunding Bonds
         
   
(Facilities Program), Series I, 6.25%, 10/15/38
  1,250     1,239,025
   
Michigan State Hospital Finance Authority, Revenue Refunding
         
   
Bonds (Henry Ford Health System), Series A, 5.25%, 11/15/46
  1,065     726,490
              1,965,515
Minnesota - 1.2%  
Minneapolis, Minnesota, Health Care System, Revenue Refunding
         
   
Bonds (Fairview Health Services), Series B, 6.50%, 11/15/38 (k)
  1,350     1,306,787

3

BlackRock Municipal Bond Trust    
Schedule of Investments November 30, 2008 (Unaudited)   (Percentages shown are based on Net Assets)
                                                     Par        
State   Municipal Bonds        (000)                         Value   
Missouri - 2.6%   Missouri State Health and Educational Facilities Authority, Health            
    Facilities Revenue Bonds (Saint Luke's Health System), Series A,            
    5.50%, 11/15/35 (b) $ 3,000   $ 2,846,670  
Nebraska - 1.3%   Omaha Public Power District, Nebraska, Electric System Revenue            
    Bonds, Series A, 4.75%, 2/01/44   1,760     1,421,253  
Nevada - 2.0%   Clark County, Nevada, EDR, Refunding (Alexander Dawson School of            
    Nevada Project), 5%, 5/15/29   1,325     1,121,652  
    Las Vegas, Nevada, Special Improvement District Number 809            
    Revenue Bonds (Summerlin Area), 5.65%, 6/01/23   1,370     1,056,448  
              2,178,100  
New Jersey - 13.0%   Middlesex County, New Jersey, Improvement Authority, Subordinate            
   
Revenue Bonds (Heldrich Center Hotel/Conference Project), Series
            
    B, 6.25%, 1/01/37   915     599,709  
    New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50%, 6/15/24   3,710     2,733,639  
    New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50%,            
    6/15/31 (l)   1,500     1,029,075  
    New Jersey EDA, EDR, Refunding (Kapkowski Road Landfill            
    Reclamation Improvement District Project), 6.50%, 4/01/28   7,500     5,991,150  
    New Jersey EDA, First Mortgage Revenue Refunding Bonds (The            
    Winchester Gardens at Ward Homestead Project), Series A, 5.80%,            
    11/01/31   1,500     1,121,535  
    New Jersey EDA, Special Facility Revenue Bonds (Continental            
    Airlines, Inc. Project), AMT, 7.20%, 11/15/30   3,000     1,813,560  
    New Jersey State Housing and Mortgage Finance Agency Revenue            
    Bonds, Series AA, 6.50%, 10/01/38   1,000     1,020,270  
                 14,308,938  
New York - 9.7%   Albany, New York, IDA, Civic Facility Revenue Bonds (New Covenant            
    Charter School Project), Series A, 7%, 5/01/35   455     297,420  
   
Hudson Yards Infrastructure Corporation, New York, Revenue Bonds,
            
    Series A, 5%, 2/15/47 (i)   1,000     764,530  
    Metropolitan Transportation Authority, New York, Service Contract            
    Revenue Refunding Bonds, Series A, 5%, 7/01/30 (m)   1,760     1,531,147  
    New York City, New York, City IDA, Special Facility Revenue Bonds            
    (Continental Airlines, Inc. Project), AMT, 7.75%, 8/01/31   3,165     2,173,121  
    New York City, New York, City Municipal Water Finance Authority,            
    Water and Sewer System Revenue Bonds, Series A, 5.75%,            
    6/15/40   450     451,395  
    New York Liberty Development Corporation Revenue Bonds            
    (Goldman Sachs Headquarters), 5.25%, 10/01/35   2,610     1,879,200  
    New York State Dormitory Authority, Non-State Supported Debt            
    Revenue Bonds (Rochester Institute of Technology), Series A, 6%,            
    7/01/33   1,000     977,330  
    New York State Dormitory Authority, State Personal Income Tax            
    Revenue Bonds (Education), Series B, 5.25%, 3/15/38   2,750     2,596,880  
              10,671,023  

4


BlackRock Municipal Bond Trust    
Schedule of Investments November 30, 2008 (Unaudited)   (Percentages shown are based on Net Assets)
                                                     Par        
State   Municipal Bonds        (000)                         Value   
North Carolina - 2.9%   Gaston County, North Carolina, Industrial Facilities and Pollution            
    Control Financing Authority, Revenue Bonds (National Gypsum            
    Company Project), AMT, 5.75%, 8/01/35 $ 2,945   $    1,597,427  
    North Carolina Medical Care Commission, Health Care Facilities,            
    Revenue Refunding Bonds (University Health System), Series D,            
    6.25%, 12/01/33   1,750     1,659,123  
              3,256,550  
Ohio - 2.7%   Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco            
    Settlement Asset-Backed Bonds, Series A-2, 6.50%, 6/01/47   1,125     767,509  
    Montgomery County, Ohio, Revenue Refunding Bonds (Catholic            
    Health Initiatives), Series D, 6.25%, 10/01/33   500     481,665  
    Ohio State Air Quality Development Authority, Revenue Refunding            
    Bonds (Dayton Power and Light Company Project), Series B, 4.80%,            
    1/01/34 (i)(n)   2,000     1,703,040  
              2,952,214  
Oklahoma - 2.3%   Oklahoma State Development Finance Authority, Revenue Refunding            
    Bonds (Saint John Health System), 5%, 2/15/42   1,355     1,046,656  
    Tulsa, Oklahoma, Municipal Airport Trust, Revenue Refunding            
    Bonds, Series A, 7.75%, 6/01/35   1,725     1,461,679  
              2,508,335  
Oregon - 0.4%   Portland, Oregon, M/F Housing Revenue Bonds (Pacific Tower            
    Apartments), AIG SunAmerica, Inc., Pass-Through Certificates of            
    Beneficial Ownership, AMT, Series 6, 6.05%, 11/01/34   535     456,537  
Pennsylvania - 2.2%   Pennsylvania Economic Development Financing Authority, Exempt            
    Facilities Revenue Bonds (Reliant Energy), AMT, Series A, 6.75%,            
    12/01/36   3,870     2,399,323  
South Carolina - 1.0%   South Carolina Jobs EDA, Hospital Facilities Revenue Refunding            
    Bonds (Palmetto Health Alliance), Series C, 7%, 8/01/13 (a)   1,000     1,159,692  
Tennessee - 0.4%   Chattanooga, Tennessee, Health, Educational and Housing Facility            
   
Board Revenue Bonds (Catholic Health Initiatives), Series D, 6.25%,
            
    10/01/33   500     485,240  
Texas - 23.6%   Harris County-Houston Sports Authority, Texas, Revenue Refunding            
    Bonds, Senior Lien, Series G, 6.121%, 11/15/41 (c)(d)   11,690     965,594  
    Harris County, Texas, Health Facilities Development Corporation,            
    Hospital Revenue Refunding Bonds (Memorial Hermann Healthcare            
    System), Series B, 7.125%, 12/01/31   500     491,950  
    Harris County, Texas, Health Facilities Development Corporation,            
    Hospital Revenue Refunding Bonds (Memorial Hermann Healthcare            
    System), Series B, 7.25%, 12/01/35   1,750     1,753,675  
    Lower Colorado River Authority, Texas, Revenue Refunding Bonds,            
    5%, 5/15/13 (a)(d)   15     16,465  

5


BlackRock Municipal Bond Trust    
Schedule of Investments November 30, 2008 (Unaudited)   (Percentages shown are based on Net Assets)
                                                     Par        
State   Municipal Bonds        (000)                         Value   
    Montgomery County, Texas, Municipal Utility District Number 46,            
    Waterworks and Sewer System, GO, 4.75%, 3/01/30 (d) $ 430   $ 371,903  
   
San Antonio Energy Acquisition Public Facilities Corporation, Texas,
            
    Gas Supply Revenue Bonds, 5.50%, 8/01/23   1,775     1,289,076  
   
San Antonio Energy Acquisition Public Facilities Corporation, Texas,
            
    Gas Supply Revenue Bonds, 5.50%, 8/01/24   1,620     1,165,331  
   
Texas M/F Housing Revenue Bonds (Copperwood Ranch Apartments),
            
    AIG SunAmerica, Inc., Pass-Through Certificates of Beneficial            
    Ownership, AMT, Series 9, 5.95%, 11/01/35   2,500     2,315,775  
    Texas State Turnpike Authority, Central Texas Turnpike System            
    Revenue Bonds, 6.09%, 8/15/35 (c)(m)   60,000     8,329,200  
    Texas State Turnpike Authority, Central Texas Turnpike System            
    Revenue Bonds, First Tier, Series A, 5%, 8/15/42 (m)   2,115     1,696,949  
    Tyler, Texas, Health Facilities Development Corporation, Hospital            
    Revenue Bonds (Mother Frances Hospital Regional Health Care            
    Center), 6%, 7/01/12 (a)   6,840     7,634,876  
              26,030,794  
Washington - 0.9%   Washington State Health Care Facilities Authority, Revenue            
    Refunding Bonds (Providence Health System), Series A, 4.625%,            
    10/01/34 (d)(i)   1,325     984,078  
Wisconsin - 1.0%   Wisconsin State Health and Educational Facilities Authority Revenue            
    Bonds (Aurora Health Care, Inc.), 6.40%, 4/15/33   1,350     1,140,683  
Multi State - 10.5%   Charter Mac Equity Issuer Trust, 7.20%, 10/31/52 (j)(o)   10,500     11,537,295  
Puerto Rico - 1.7%   Puerto Rico Commonwealth Aqueduct and Sewer Authority, Senior            
    Lien Revenue Bonds, Series A, 6%, 7/01/38   1,200     1,063,044  
   
Puerto Rico Commonwealth Highway and Transportation Authority,
            
    Transportation Revenue Refunding Bonds, Series N,            
    5.25%, 7/01/36 (k)   900     791,919  
              1,854,963  
    Total Municipal Bonds - 166.7%            183,859,310  
    Municipal Bonds Transferred to Tender Option Bond Trusts (p)            
Colorado - 3.0%   Colorado Health Facilities Authority Revenue Bonds (Catholic            
    Health), Series C-7, 5%, 9/01/36 (b)   3,750     3,300,787  
Massachusetts - 1.2%   Massachusetts State Water Resource Authority, General Revenue            
    Refunding Bonds, Series A, 5%, 8/01/41   1,450     1,288,485  
New York - 2.6%   New York State Dormitory Authority, Non-State Supported Debt            
    Revenue Bonds (New York University), Series A, 5%, 7/01/38   2,199     1,968,769  
    Port Authority of New York and New Jersey, Consolidated Revenue            
    Refunding Bonds, AMT, 152nd Series, 5.75%, 11/01/30   1,005     897,093  
              2,865,862  
Ohio - 2.5%   Ohio State Higher Educational Facilities Commission, Hospital            
    Revenue Bonds (University Hospitals Health System), Series A,            
    5.25%, 1/01/33   2,000     1,719,280  

6


BlackRock Municipal Bond Trust    
Schedule of Investments November 30, 2008 (Unaudited)   (Percentages shown are based on Net Assets)
                                                     Par        
    Municipal Bonds Transferred to Tender Option Bond Trusts (p)        (000)                         Value   
    Montgomery County, Ohio, Revenue Bonds (Catholic Health            
    Initiatives), Series C-1, 5%, 10/01/41 (b) $ 1,260   $ 1,088,048  
              2,807,328  
    Total Municipal Bonds Transferred to            
    Tender Option Bond Trusts - 9.3%         10,262,462  
    Total Long-Term Investments (Cost - $227,615,380) - 176.0%         194,121,772  
    Short-Term Securities   Shares        
    Merrill Lynch Institutional Tax-Exempt Fund, 1.08% (q)(r)   2,000,000     2,000,000  
    Total Short-Term Securities            
    (Cost - $2,000,000) - 1.8%         2,000,000  
    Total Investments (Cost - $229,615,380*) - 177.8%         196,121,772  
    Other Assets Less Liabilities - 0.7%         760,838  
    Liability for Trust Certificates, Including Interest            
    Expense and Fees Payable - (5.5)%         (6,020,748 )
    Preferred Shares, at Redemption Value - (73.0)%         (80,527,617 )
    Net Assets Applicable to Common Shares - 100.0%       $    110,334,245  

*       

The cost and unrealized appreciation (depreciation) of investments as of November 30, 2008, as computed for federal income tax purposes, were as follows:
 
         Aggregate cost   $   221,964,136  
  Gross unrealized appreciation   $   4,940,696  
  Gross unrealized depreciation       (36,782,433 )
  Net unrealized depreciation   $   (31,841,737 )

(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)

FSA Insured.
(c)

Represents a zero-coupon bond. Rate shown reflects the effective yield at the time of purchase.
(d)

MBIA Insured.
(e)

ACA Insured.
(f)

XL Capital Insured.
(g)

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

Non-income producing security.
(i)

FGIC Insured.
(j)

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

Assured Guaranty Insured.
(l)

Radian Insured.
(m)

AMBAC Insured.
(n)

BHAC Insured.
(o)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to mandatory redemption at maturity.
(p)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction.
(q)

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

Investments in companies considered to be an affiliate of the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
 
             Net    
Affiliate   Activity   Income
Merrill Lynch Institutional Tax-Exempt Fund   99,573   $     29,249

7


BlackRock Municipal Bond Trust
Schedule of Investments November 30, 2008 (Unaudited)

  • Effective September 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:

  • Level 1 - price quotations in active markets/exchanges for identical securities

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

  • Level 3 - unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Trust's own assumption used in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust's policy regarding valuation of investments and other significant accounting policies, please refer to the Trust's most recent financial statements as contained in its annual report.

The following table summarizes the inputs used as of November 30, 2008 in determining the fair valuation of the Trust's investments:

Valuation     Investments in  
Inputs     Securities   
Level 1   $ 2,000,000  
Level 2     194,121,772  
Level 3     -  
Total   $ 196,121,772  

8


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/ Donald C. Burke  
  Donald C. Burke
  Chief Executive Officer of
  BlackRock Municipal Bond Trust
   
Date: January 20, 2009

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 Municipal Bond Trust
 
Date: January 20, 2009
 
By: /s/ Neal J. Andrews  
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock Municipal Bond Trust
 
Date: January 20, 2009