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 811-5739
Name of Fund: BlackRock MuniEnhanced Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock MuniEnhanced 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: (609) 282-2800
Date of fiscal year end: 01/31/2007
Date of reporting period: 08/01/06 - 10/31/06
Item 1 - Schedule of Investments
BlackRock MuniEnhanced Fund, Inc.
Schedule of Investments as of October 31, 2006 (in Thousands)
Face
State Amount Municipal Bonds Value
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Alabama - 0.9% $ 2,750 Jefferson County, Alabama, Limited Obligation School Warrants, Series A, 5.50%
due 1/01/2022 $ 3,003
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California - 29.4% 10,000 Alameda Corridor Transportation Authority, California, Capital Appreciation Revenue
Refunding Bonds, Subordinate Lien, Series A, 5.464% due 10/01/2024 (a)(m) 8,123
6,000 Alameda Corridor Transportation Authority, California, Capital Appreciation Revenue
Refunding Bonds, Subordinate Lien, Series A, 5.495% due 10/01/2025 (a)(m) 4,869
950 Anaheim, California, Public Financing Authority, Electric System Distribution
Facilities Revenue Bonds, Series A, 5% due 10/01/2031 (d) 1,000
5,000 Anaheim, California, Public Financing Authority, Lease Revenue Bonds (Public
Improvements Project), Senior-Series A, 6% due 9/01/2024 (d) 6,115
2,350 California State, GO, Refunding, 5.25% due 9/01/2010 (g) 2,496
1,700 California State, GO, Refunding, 5.125% due 6/01/2027 1,771
5,000 California State, GO, Refunding, 5.125% due 6/01/2031 5,199
1,900 California State Public Works Board, Lease Revenue Bonds (Department of
Corrections), Series C, 5% due 6/01/2025 1,993
2,600 California State University, Systemwide Revenue Bonds, Series A, 5%
due 11/01/2035 (b) 2,722
8,490 California State, Various Purpose, GO, 5.50% due 11/01/2033 9,337
850 Chino Valley, California, Unified School District, GO (Election of 2002), Series C,
5.25% due 8/01/2030 (f) 925
1,600 East Side Union High School District, California, Santa Clara County, GO (Election
of 2002), Series D, 5% due 8/01/2026 (c) 1,699
2,835 Golden State Tobacco Securitization Corporation of California, Tobacco Settlement
Revenue Bonds, Series B, 5.50% due 6/01/2013 (c)(g) 3,150
3,000 Golden State Tobacco Securitization Corporation of California, Tobacco Settlement
Revenue Bonds, Series B, 5.625% due 6/01/2013 (g)(k) 3,356
5,300 Los Angeles, California, Department of Water and Power, Waterworks Revenue Bonds,
Series C, 5% due 7/01/2029 (f) 5,604
7,600 Los Angeles, California, Unified School District, GO, Series A, 5% due 1/01/2028 (f) 8,036
2,965 Metropolitan Water District of Southern California, Waterworks Revenue Bonds,
Series B-1, 5% due 10/01/2029 (b) 3,141
1,655 Metropolitan Water District of Southern California, Waterworks Revenue Bonds,
Series B-1, 5% due 10/01/2036 (b) 1,737
5,000 Norco, California, Redevelopment Agency, Tax Allocation Refunding Bonds (Norco
Redevelopment Project - Area Number 1), 5.125% due 3/01/2030 (f) 5,255
7,455 Orange County, California, Sanitation District, COP, 5% due 2/01/2033 (b) 7,802
1,750 Poway, California, Redevelopment Agency, Tax Allocation Refunding Bonds (Paguay
Redevelopment Project), 5.125% due 6/15/2033 (a) 1,838
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Portfolio Abbreviations
To simplify the listings of BlackRock MuniEnhanced Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the names of many
of the securities according to the list below.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
S/F Single-Family
BlackRock MuniEnhanced Fund, Inc.
Schedule of Investments as of October 31, 2006 (in Thousands)
Face
State Amount Municipal Bonds Value
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$ 3,850 Sacramento, California, Unified School District, GO (Election of 2002), 5% due
7/01/2030 (f) $ 4,095
6,145 Stockton, California, Public Financing Authority, Lease Revenue Bonds (Parking &
Capital Projects), 5.125% due 9/01/2030 (b) 6,521
1,600 Tamalpais, California, Union High School District, GO (Election of 2001), 5%
due 8/01/2028 (d) 1,681
2,325 Ventura County, California, Community College District, GO (Election of 2002),
Series B, 5% due 8/01/2030 (f) 2,472
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Colorado - 8.2% 2,135 Boulder County, Colorado, Hospital Development Revenue Bonds (Longmont United
Hospital Project), 5.75% due 12/01/2010 (g)(i) 2,304
80 Colorado HFA, Revenue Bonds (S/F Program), AMT, Senior Series A-1, 7.40%
due 11/01/2027 81
650 Colorado HFA, Revenue Refunding Bonds (S/F Program), AMT, Senior Series A-2, 7.50%
due 4/01/2031 666
1,200 Colorado Health Facilities Authority Revenue Bonds (Catholic Health Initiatives),
Series A, 5.50% due 3/01/2032 (h) 1,302
1,200 Colorado Health Facilities Authority Revenue Bonds (Covenant Retirement Communities
Inc.), Series A, 5.50% due 12/01/2027 (i) 1,286
675 Colorado Health Facilities Authority Revenue Bonds (Covenant Retirement Communities
Inc.), Series A, 5.50% due 12/01/2033 (i) 722
3,875 Colorado Water Resources and Power Development Authority, Clean Water Revenue Bonds,
Series A, 6.25% due 9/01/2010 (g) 4,247
2,000 Denver, Colorado, City and County Airport Revenue Refunding Bonds, AMT, Series A,
6% due 11/15/2018 (a) 2,156
5,450 El Paso County, Colorado, School District Number 49, Falcon, GO, Series A, 6% due
12/01/2009 (d)(g) 6,081
7,900 Northwest Parkway, Colorado, Public Highway Authority, Capital Appreciation Revenue
Bonds, Senior Convertible, Series C, 5.345% due 6/15/2025 (d)(m) 7,123
1,900 Northwest Parkway, Colorado, Public Highway Authority Revenue Bonds, Series A, 5.50%
due 6/15/2021 (a) 2,070
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District of 2,700 District of Columbia, COP, 5% due 1/01/2025 (b) 2,863
Columbia - 0.8%
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Florida - 1.7% 1,400 Highlands County, Florida, Health Facilities Authority, Hospital Revenue Bonds
(Adventist Health System), Series C, 5.25% due 11/15/2036 1,493
4,200 Orange County, Florida, Sales Tax Revenue Refunding Bonds, Series B, 5.125%
due 1/01/2032 (b) 4,446
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Georgia - 12.5% 17,355 Atlanta, Georgia, Airport General Revenue Refunding Bonds, Series B, 5.25%
due 1/01/2033 (d) 18,644
2,900 Atlanta, Georgia, Water and Wastewater Revenue Bonds, 5% due 11/01/2034 (d) 3,056
1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series A, 5% due 11/01/2033 (f) 1,039
4,250 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series A, 5% due 11/01/2039 (f) 4,407
2,300 Augusta, Georgia, Water and Sewer Revenue Bonds, 5.25% due 10/01/2039 (d) 2,479
2,500 Fulton County, Georgia, Water and Sewer Revenue Bonds, 5.25% due 1/01/2035 (b) 2,685
7,725 Georgia Municipal Electric Authority, Power Revenue Refunding Bonds, Series EE, 7%
due 1/01/2025 (a) 10,514
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Illinois - 15.2% 5,670 Chicago, Illinois, O'Hare International Airport Revenue Bonds, Third Lien, AMT,
Series B-2, 5.75% due 1/01/2023 (d) 6,253
2,500 Chicago, Illinois, O'Hare International Airport Revenue Bonds, Third Lien, AMT,
Series B-2, 6% due 1/01/2029 (c) 2,805
2,460 Cook County, Illinois, Capital Improvement, GO, Series C, 5.50% due 11/15/2012 (a)(g) 2,712
2,240 Cook County, Illinois, Community College District Number 508, Chicago, COP,
Refunding, 8.75% due 1/01/2007 (b) 2,259
20,120 Illinois Sports Facilities Authority, State Tax Supported Revenue Bonds, 5.341%
due 6/15/2030 (a)(m) 18,498
4,500 Illinois Sports Facilities Authority, State Tax Supported Revenue Bonds, 5%
due 6/15/2032 (a) 4,698
2,000 Metropolitan Pier and Exposition Authority, Illinois, Dedicated State Tax Revenue
Refunding Bonds (McCormick Place Expansion Project), Series B, 5.75%
due 6/15/2023 (f) 2,209
10,115 Regional Transportation Authority, Illinois, Revenue Bonds, Series A, 7.20%
due 11/01/2020 (a) 12,703
BlackRock MuniEnhanced Fund, Inc.
Schedule of Investments as of October 31, 2006 (in Thousands)
Face
State Amount Municipal Bonds Value
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Indiana - 4.4% $ 4,080 Hammond, Indiana, Multi-School Building Corporation, First Mortgage Revenue
Refunding Bonds, 6.125% due 7/15/2019 (f) $ 4,190
2,150 Indiana Transportation Finance Authority, Highway Revenue Bonds, Series A, 5%
due 6/01/2028 (d) 2,252
4,250 Indiana Transportation Finance Authority, Highway Revenue Bonds, Series A, 5.25%
due 6/01/2028 (b) 4,577
3,750 Indiana Transportation Finance Authority, Highway Revenue Bonds, Series A, 5.25%
due 6/01/2029 (b) 4,036
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Louisiana - 6.4% 4,500 Lafayette, Louisiana, Utilities Revenue Bonds, 5% due 11/01/2028 (f) 4,761
6,000 Louisiana Local Government, Environmental Facilities, Community Development
Authority Revenue Bonds (Capital Projects and Equipment Acquisition), Series A,
6.30% due 7/01/2030 (a) 7,170
2,035 Louisiana State Citizens Property Insurance Corporation, Assessment Revenue Bonds,
Series B, 5% due 6/01/2023 (a) 2,177
3,735 Louisiana State Transportation Authority, Senior Lien Toll Revenue Capital
Appreciation Bonds, Series B, 5.31% due 12/01/2027 (a)(m) 1,269
4,650 New Orleans, Louisiana, Ernest N. Morial Exhibit Hall Authority, Special Tax,
Sub-Series A, 5.25% due 7/15/2028 (a) 4,913
1,400 Terrebonne Parish, Louisiana, Hospital Service District Number 1, Hospital Revenue
Bonds (Terrebonne General Medical Center Project), 5.50% due 4/01/2033 (a) 1,529
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Massachusetts - 6.6% 8,800 Massachusetts State School Building Authority, Dedicated Sales Tax Revenue Bonds,
Series A, 5% due 8/15/2030 (d) 9,346
11,300 Massachusetts State Special Obligation Dedicated Tax Revenue Bonds, 5.25%
due 1/01/2014 (b)(g) 12,386
950 Massachusetts State Water Resource Authority, General Revenue Refunding Bonds,
Series B, 5.125% due 8/01/2027 (f) 1,006
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Michigan - 3.6% 1,900 Detroit, Michigan, Sewage Disposal System, Second Lien Revenue Bonds, Series B, 5%
due 7/01/2036 (b) 2,010
1,700 Michigan Higher Education Student Loan Authority, Student Loan Revenue Refunding
Bonds, AMT, Series XVII-G, 5.20% due 9/01/2020 (a) 1,786
1,300 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit
Edison Company Pollution Control Project), AMT, Series A, 5.50% due 6/01/2030 (c) 1,402
2,500 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit
Edison Company Pollution Control Project), AMT, Series C, 5.65% due 9/01/2029 (c) 2,663
4,300 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit
Edison Company Pollution Control Project), AMT, Series C, 5.45% due 12/15/2032 (c) 4,573
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Minnesota - 0.5% 1,550 Dakota County, Minnesota Community Development Agency, S/F Mortgage Revenue Bonds
(Mortgage-Backed Securities Program), Series B, 5.15% due 12/01/2038 (n)(o) 1,618
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Mississippi - 0.8% 2,400 Walnut Grove, Mississippi, Correctional Authority, COP, 6% due 11/01/2009 (a)(g) 2,609
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Nebraska - 0.5% 1,700 Washington County, Nebraska, Wastewater Facilities Revenue Bonds (Cargill Inc.
Project), AMT, 5.90% due 11/01/2027 1,855
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Nevada - 7.2% 3,100 Carson City, Nevada, Hospital Revenue Bonds (Carson-Tahoe Hospital Project),
Series A, 5.50% due 9/01/2033 (i) 3,339
1,500 Clark County, Nevada, Airport System Subordinate Lien Revenue Bonds, Series A-2,
5% due 7/01/2030 (b) 1,572
3,200 Clark County, Nevada, Airport System Subordinate Lien Revenue Bonds, Series A-2,
5% due 7/01/2036 (b) 3,343
5,060 Clark County, Nevada, IDR (Southwest Gas Corp. Project), AMT, Series A, 4.75%
due 9/01/2036 (b) 5,120
8,000 Washoe County, Nevada, Gas and Water Facilities, Revenue Refunding Bonds (Sierra
Pacific Power Company), 6.30% due 12/01/2014 (a) 8,119
3,000 Washoe County, Nevada, Water Facility Revenue Bonds (Sierra Pacific Power Company),
AMT, 6.65% due 6/01/2017 (f) 3,071
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New Hampshire - 2.3% 7,390 New Hampshire Health and Education Facilities Authority Revenue Bonds
(Dartmouth-Hitchcock Obligation Group, 5.50% due 8/01/2027 (d) 8,013
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BlackRock MuniEnhanced Fund, Inc.
Schedule of Investments as of October 31, 2006 (in Thousands)
Face
State Amount Municipal Bonds Value
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New Jersey - 7.5% $ 700 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50% due 6/15/2031 $ 746
1,165 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.75% due 6/15/2034 1,260
2,600 New Jersey EDA, Motor Vehicle Surcharge Revenue Bonds, Series A, 5% due 7/01/2029 (f) 2,745
9,325 New Jersey EDA, Motor Vehicle Surcharge Revenue Bonds, Series A, 5.25%
due 7/01/2031 (f) 10,049
5,200 New Jersey EDA, Motor Vehicle Surcharge Revenue Bonds, Series A, 5.25%
due 7/01/2033 (f) 5,600
4,960 New Jersey EDA, School Facilities Construction Revenue Bonds, Series O, 5.125%
due 3/01/2028 5,287
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New York - 1.4% 2,250 Metropolitan Transportation Authority, New York, Transportation Revenue Bonds,
Series A, 5% due 11/15/2032 (b) 2,364
2,400 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series A-1,
5.25% due 6/01/2022 (a) 2,578
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Ohio - 0.5% 1,500 Ohio State Air Quality, Development Authority Revenue Bonds (Dayton Power and Light
Company Project), 4.80% due 9/01/2036 (b) 1,526
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Pennsylvania - 5.9% 12,425 Pennsylvania State Public School Building Authority, School Lease Revenue Bonds (The
School District of Philadelphia Project), 5% due 6/01/2033 (d) 13,020
6,500 Philadelphia, Pennsylvania, Authority for Industrial Development, Lease Revenue
Bonds, Series B, 5.50% due 10/01/2020 (d) 7,070
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Rhode Island - 2.5% 4,345 Providence, Rhode Island, Public Building Authority, General Revenue Bonds,
Series A, 6.25% due 12/15/2020 (d) 4,818
3,355 Rhode Island State Economic Development Corporation, Airport Revenue Bonds,
Series B, 6.50% due 7/01/2010 (b)(g) 3,718
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South Carolina - 1.6% 2,800 Berkeley County, South Carolina, School District, Installment Lease Revenue Bonds
(Securing Assets for Education Project), 5.125% due 12/01/2030 2,968
2,365 Kershaw County, South Carolina, Public Schools Foundation, Installment Power Revenue
Refunding Bonds, 5% due 12/01/2029 (k) 2,499
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South Dakota - 2.1% 6,825 South Dakota State Health and Educational Facilities Authority Revenue Refunding
Bonds, Series A, 7.625% due 1/01/2008 (f)(g) 7,111
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Tennessee - 0.7% 2,280 Tennessee HDA, Revenue Refunding Bonds (Homeownership Program), AMT, Series 1, 5.95%
due 7/01/2012 (f) 2,305
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Texas - 5.7% 1,615 Bexar, Texas, Metropolitan Water District, Waterworks System Revenue Refunding
Bonds, 6.35% due 5/01/2025 (f) 1,634
9,345 Leander, Texas, Independent School District, Capital Appreciation, GO, Refunding
(School Building), 5.49% due 8/15/2029 (b)(m) 2,925
10,000 Leander, Texas, Independent School District, Capital Appreciation, GO, Refunding
(School Building), 5.58% due 8/15/2035 (m) 2,182
5,820 North Harris County, Texas, Regional Water Authority, Senior Lien Revenue Bonds,
5.125% due 12/15/2035 (f) 6,151
6,250 Texas State Turnpike Authority, Central Texas Turnpike System Revenue Bonds,
First Tier, Series A, 5.50% due 8/15/2039 (a) 6,780
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Virginia - 3.9% 10,000 Fairfax County, Virginia, EDA, Resource Recovery Revenue Refunding Bonds, AMT,
Series A, 6.10% due 2/01/2010 (a) 10,712
2,300 Halifax County, Virginia, IDA, Exempt Facility Revenue Refunding Bonds
(Old Dominion Electric Cooperative Project), AMT, 5.625% due 6/01/2028 (a) 2,518
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Washington - 0.6% 2,000 Snohomish County, Washington, Public Utility District Number 001, Electric Revenue
Refunding Bonds, 5.375% due 12/01/2009 (d)(g) 2,124
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Puerto Rico - 0.5% 1,700 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series NN, 5.125%
due 7/01/2029 1,795
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Total Municipal Bonds (Cost - $431,131) - 133.9% 458,931
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Municipal Bonds Held in Trust (p)
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California - 1.4% 4,400 California State, GO, Refunding, 5.25% due 2/01/2033 (i) 4,747
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Illinois - 6.0% 10,250 Chicago, Illinois, Board of Education, GO (Chicago School Reform Project), 5.75%
due 12/01/2027 (a) 10,687
9,100 Chicago, Illinois, O'Hare International Airport, General Airport Revenue Refunding
Bonds, Third Lien, AMT, Series A, 5.75% due 1/01/2021 (f) 9,836
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BlackRock MuniEnhanced Fund, Inc.
Schedule of Investments as of October 31, 2006 (in Thousands)
Face
State Amount Municipal Bonds Held in Trust (p) Value
-----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 4.8% $ 5,600 Massachusetts State HFA, Housing Revenue Bonds (Rental Mortgage), AMT, Series F,
5.25% due 1/01/2046 (d) $ 5,798
3,100 Massachusetts State Port Authority, Special Facilities Revenue Bonds (Delta Air
Lines Inc. Project), AMT, Series A, 5.50% due 1/01/2016 (a) 3,266
4,000 Massachusetts State Port Authority, Special Facilities Revenue Bonds (Delta Air
Lines Inc. Project), AMT, Series A, 5.50% due 1/1/2018 (a) 4,215
2,870 Massachusetts State Port Authority, Special Facilities Revenue Bonds (Delta Air
Lines Inc. Project), AMT, Series A, 5.50% due 1/01/2019 (a) 3,024
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New Jersey - 6.4% 15,250 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50% due 6/15/2024 (e) 16,510
5,000 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50% due 6/15/2031 (e) 5,454
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New York - 1.3% 4,200 New York City, New York, GO, Series J, 5.50% due 6/01/2021 (c) 4,635
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South Carolina - 2.2% 3,120 Charleston Educational Excellence Financing Corporation, South Carolina, Revenue
Bonds (Charleston County School District), 5.25% due 12/01/2028 (e) 3,380
2,765 Charleston Educational Excellence Financing Corporation, South Carolina, Revenue
Bonds (Charleston County School District), 5.25% due 12/01/2029 (e) 2,993
1,010 Charleston Educational Excellence Financing Corporation, South Carolina, Revenue
Bonds (Charleston County School District), 5.25% due 12/01/2030 (e) 1,093
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Texas - 9.0% 4,000 Dallas-Fort Worth, Texas, International Airport Revenue Bonds, AMT, Series A, 6%
due 11/01/2028 (f) 4,244
14,500 Dallas-Fort Worth, Texas, International Airport Revenue Bonds, AMT, Series A, 5.50%
due 11/01/2033 (f) 15,606
10,400 Travis County, Texas, Health Facilities Development Corporation, Revenue Refunding
Bonds (Ascension Health Credit), Series A, 5.875% due 11/15/2009 (a)(g) 11,161
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Total Municipal Bonds Held in Trust (Cost - $102,911) - 31.1% 106,649
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Shares
Held Short-Term Securities
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8,900 Merrill Lynch Institutional Tax-Exempt Fund, 3.38% (l)(j) 8,900
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Total Short-Term Securities (Cost - $8,900) - 2.6% 8,900
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Total Investments (Cost - $542,942*) - 167.6% 574,480
Other Assets Less Liabilities - 1.7% 5,864
Liabilities for Trust Certificates, Including Interest Expense Payable - (14.7%) (50,269)
Preferred Stock, at Redemption Value - (54.6%) (187,229)
---------
Net Assets Applicable to Common Stock - 100.0% $ 342,846
=========
* The cost and unrealized appreciation (depreciation) of investments as of
October 31, 2006, as computed for federal income tax purposes were as
follows:
Aggregate cost $ 493,510
=========
Gross unrealized appreciation $ 31,228
Gross unrealized depreciation (41)
---------
Net unrealized appreciation $ 31,187
=========
(a) AMBAC Insured.
(b) FGIC Insured.
(c) XL Capital Insured.
(d) FSA Insured.
BlackRock MuniEnhanced Fund, Inc.
Schedule of Investments as of October 31, 2006 (in Thousands)
(e) Assured Guaranty Insured.
(f) MBIA Insured.
(g) Prerefunded.
(h) Escrowed to maturity.
(i) Radian Insured.
(j) Represents current yield as of October 31, 2006.
(k) CIFG Insured.
(l) 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 $ 6,695 $ 88
--------------------------------------------------------------------------
(m) Represents a zero coupon bond or step bond; the interest rate shown
reflects the effective yield at the time of purchase.
(n) FNMA/GNMA Collateralized.
(o) FHLMC Collateralized.
(p) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction in
which the Fund may have acquired the residual interest certificates. These
securities serve as collateral in a financing transaction.
o Forward interest rate swaps outstanding as of October 31, 2006 were as
follows:
-------------------------------------------------------------------------------------------------
Notional Unrealized
Amount Depreciation
-------------------------------------------------------------------------------------------------
Pay a fixed rate of 3.981% and receive a floating rate based
on 1-week Bond Market Association rate
Broker, JPMorgan Chase
Expires November 2016 $ 25,000 $ (677)
Pay a fixed rate of 4.145% and receive a floating rate based
on 1-week Bond Market Association rate
Broker, JPMorgan Chase
Expires November 2021 $ 7,500 (285)
Pay a fixed rate of 4.004% and receive a floating rate based
on 1-week Bond Market Association rate
Broker, JPMorgan Chase
Expires December 2021 $ 12,500 (287)
Pay a fixed rate of 3.855% and receive a floating rate based
on 1-week Bond Market Association rate
Broker, Citibank N.A.
Expires January 2022 $ 8,000 (57)
-------------------------------------------------------------------------------------------------
Total $ (1,306)
==========
Item 2 - Controls and Procedures
2(a) - The Registrant's principal executive and principal financial officers
have evaluated the Registrant's disclosure controls and procedures,
including internal control over financial reporting, within 90 days of
this filing. Such principal officers have concluded that as of January
23, 2007 the Registrant's disclosure controls and procedures were
effective in design and operation to reasonably ensure that information
required to be disclosed by the Registrant in this Form N-Q was recorded,
processed, summarized, and reported within the required time periods, and
were sufficient to form the basis of the certifications required by Rule
30a-2 of the Investment Company Act of 1940, as amended. Prior to
reaching that conclusion, such principal officers had become aware of
matters relating to the Registrant's participation in certain inverse
floater structures that necessitated adjustments to financial information
included in the Registrant's annual report to shareholders on Form N-CSR.
As a result, management of the Registrant had reevaluated certain
disclosure controls and procedures determined not to be effective, as
discussed more fully below.
Management of the Registrant is responsible for establishing and
maintaining effective internal control over financial reporting. In
fulfilling this responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of controls.
The Registrant's internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with U.S. generally accepted accounting
principles. Such internal control includes policies and procedures that
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of a registrant's assets
that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may
deteriorate.
A control deficiency exists when the design or operation of a control
does not allow management or employees, in the normal course of
performing their assigned functions, to prevent or detect misstatements
on a timely basis. A significant deficiency is a control deficiency, or
combination of control deficiencies, that adversely affects the
Registrant's ability to initiate, authorize, record, process or report
financial data reliably in accordance with generally accepted accounting
principles such that there is more than a remote likelihood that a
misstatement of the Registrant's annual or interim financial statements
that is more than inconsequential will not be prevented or detected. A
material weakness is a significant deficiency, or combination of
significant deficiencies, that results in more than a remote likelihood
that a material misstatement of the annual or interim financial
statements will not be prevented or detected.
The Registrant identified the following control deficiency, that was
determined to be a material weakness, as defined above, in the
Registrant's internal control over financial reporting at October 31,
2006. The Registrant's controls related to the review and analysis of
relevant terms and conditions of transfers of certain assets pertaining
to inverse floater structures were not operating effectively to
appropriately determine whether the transfers of assets qualified for
sale accounting under the provisions of Statement of Financial Accounting
Standards No. 140, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities" ("SFAS 140"). As a result,
these controls did not detect that certain transfers were not
appropriately recorded as borrowings. Accordingly, the Registrant's
schedule of investments as of and for the period ended October 31, 2006,
were restated to appropriately reflect transfers of such securities as
secured borrowings. These adjustments had no impact on net assets, net
asset value per share or total return.
Subsequent to October 31, 2006, but prior to the evaluation of the design
and operation of the Registrant's disclosure controls and procedures at
January 23, 2007, the Registrant's disclosure controls and procedures
were modified to enhance the review and analysis of the relevant terms
and conditions of transfers of securities in connection with inverse
floater structures in light of SFAS 140.
2(b) - There have been no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the last fiscal quarter of the period
covered by this report that has materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting. However, as discussed above, subsequent to October
31, 2006, the Registrant has enhanced controls related to the application
of SFAS 140.
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 MuniEnhanced Fund, Inc.
By: /s/ Robert C. Doll, Jr.
---------------------------------
Robert C. Doll, Jr.
Chief Executive Officer
BlackRock MuniEnhanced Fund, Inc.
Date: February 20, 2007
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/ Robert C. Doll, Jr.
---------------------------------
Robert C. Doll, Jr.
Chief Executive Officer
BlackRock MuniEnhanced Fund, Inc.
Date: February 20, 2007
By: /s/ Donald C. Burke
---------------------------------
Donald C. Burke
Chief Financial Officer
BlackRock MuniEnhanced Fund, Inc.
Date: February 20, 2007