Exhibit 3


           Statements to Holders of Merrill Lynch Municipal ABS, Inc.
       Prerefunded Municipal Certificates, Series 1, Series 2 and Series 3
     relating to the Distribution Dates of April 1, 1997 and October 1, 1997

<PAGE>

                     [LETTERHEAD OF BANKERS TRUST COMPANY]

Colleen Shay-Persaud                         Mailing Address:
Bankers Trust Co.                            P.O. Box 318, Church Street Station
(212) 250-6125                               New York, New York 10008

October 3, 1997

Kerstin Stanley
Merrill Lynch

Re:   Merrill Lynch Municipal ABS, Inc.
      Prerefunded Municipal Certificates Series 1, 2, and 3

Kerstin:

For the above referenced issues, the principal and interest information
for October 1, 1997 is attached. All other relevant information is as
follows:

      Premium on Bonds                                                None
      Trustee Fees Payable                                            None
      Interest Shortfall on Bonds                                     None
      Aggregate Shortfall on Bonds                                    None
      Accrued Interest undistributed to holders                       None
      Accrued Principal undistributed to holders                      None
      Underlying Bonds on issues                                      Attached

Should you have any questions please call me at (212) 250-6125.

Thank You,

/s/ Colleen Shay-Persaud

enc.

<PAGE>

                     [LETTERHEAD OF BANKERS TRUST COMPANY]

James A. Odorczuk                            Mailing Address:
Bankers Trust Co.                            P.O. Box 318, Church Street Station
Telephone: (212) 250-6378                    New York, New York 10008-0318

March 26, 1997

Merrill Lynch
World Financial Center
North Towers - 9th Floor
250 Vesey Street
New York, NY 10281-1309
Attn: Robert Sheybani

The Depository Trust Company
7 Hanover Square - 2nd Floor
New York, NY 10004
Attn: Shandon Chakaraburty

Re: Merrill Lynch Municipal ABS, Inc.
    Prerefunded Municipal Certificates Series 1, 2 and 3

Gentlemen:

Pursuant to Section 4.03 of the Trust Agreement dated as of March 28,
1995, Bankers Trust Company as Trustee for the above-referenced bond
issues, hereby notifies you of the debt service payments for each Series
due on April 1, 1997. Attached is a payment schedule for each Series.

If you have any questions, please feel free to call me at the above referenced
number.

Very truly yours,

/s/ James A. Odorczuk

Attachment

<PAGE>

                                     0ct961


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                                         SERIES 1 CERTIFICATES
------------------------------------------------------------------------------------------------------
           Certificate                                                     Interest      Principal
 Class      Maturity         CUSIP      Certificate        Certificate      Amount        Amount
Number        Date           Number        Rate              Amount          Due            Due
------------------------------------------------------------------------------------------------------


<S>          <C>           <C>             <C>         <C>               <C>            <C> 
   4         4/1/97        021433 DYO      4.70            80,000.00        1,880.00     80,000.00
   5         10/1/97       021433 DZ7      4.70            85,000.00        1,997.50          0.00
   6         4/1/98        021433 EA1      4.80            85,000.00        2,040.00          0.00
   7         10/1/98       021433 EB9      4.80            85,000.00        2,040.00          0.00
   8         4/1/99        021433 EC7      4.90            90,000.00        2,205.00          0.00
   9         10/1/99       021433 ED5      4.90            90,000.00        2,205.00          0.00
  10         4/1/00        021433 EE3      5.00            95,000.00        2,375.00          0.00
  11         10/1/00       021433 EF0      5.00            95,000.00        2,375.00          0.00
  12         4/1/01        021433 EG8      5.00           100,000.00        2,500.00          0.00
  13         10/1/01       021433 EH6      5.00           100,000.00        2,500.00          0.00
  14         4/1/02        021433 EJ2      5.10           105,000.00        2,677.50          0.00
  15         10/1/02       021433 EK9      5.10           295,000.00        7,522.50          0.00
  16         4/1/03        021433 EL7      5.10           100,000.00        2,550.00          0.00
  17         10/1/03       021433 EM5      5.10           320,000.00        8,160.00          0.00
  18         4/1/04        021433 EN3      5.20            95,000.00        2,470.00          0.00
  19         10/1/04       021433 EP8      5.20           340,000.00        8,840.00          0.00
  20         4/1/05        021433 EQ6      5.25            95,000.00        2,493.75          0.00
  21         10/1/05       021433 ER4      5.25           360,000.00        9,450.00          0.00
  22         10/1/08       021433 EX1      5.50         1,495,000.00       41,112.50          0.00
  23         10/1/10       021433 FB8      5.60         1,130,000.00       3l,640.00          0.00
  24         10/1/12       021433 FF9      5.70         1,200,000.00       34,200.00          0.00
  RI         10/1/12       021433 FG7      Variable        74,275.00     Residual -->     3,360.00
---------------------------------------------------------------------------------------------------------
TOTAL                                                  $6,514,275.00     $173,233.75    $83,360.00
---------------------------------------------------------------------------------------------------------
</TABLE>

****Please note that premium on bonds, trustee fees payable, interest
shortfalls, aggregate shortfalls, accrued interest undistributed, and accrued
principal undistributed are at zero.
****Underlying Bond-Altamonte Springs FLA Authority
    13.125%, 10/01/12, $3,910,000

                                     Page 1

<PAGE>

                                     apr972


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                                         SERIES 2 CERTIFICATES
------------------------------------------------------------------------------------------------------
           Certificate                                                     Interest      Principal
 Class      Maturity         CUSIP      Certificate        Certificate      Amount        Amount
Number        Date           Number        Rate              Amount          Due            Due
------------------------------------------------------------------------------------------------------


<S>          <C>           <C>             <C>         <C>               <C>            <C> 
   4         4/1/97        70252B AS2      4.70           210,000.00        4,935.00     210,000.00
   5         10/1/97       70252B AT0      4.70           215,000.00        5,052.50           0.00
   6         4/1/98        70252B AU7      4.80           220,000.00        5,280.00           0.00
   7         10/1/98       70252B AV5      4.80           225,000.00        5,400.00           0.00
   8         4/1/99        70252B AW3      4.90           230,000.00        5,635.00           0.00
   9         10/1/99       70252B AX1      4.90           240,000.00        5,880.00           0.00
  10         4/1/00        70252B AY9      5.00           245,000.00        6,125.00           0.00
  11         10/1/00       70252B AZ6      5.00           250,000.00        6,250.00           0.00
  12         4/1/01        70252B BA0      5.00           255,000.00        6,375.00           0.00
  13         10/1/01       70252B BB8      5.00           265,000.00        6,625.00           0.00
  14         4/1/02        70252B BC6      5.10           270,000.00        6,885.00           0.00
  15         10/1/02       70252B BD4      5.10           795,000.00       20,272.50           0.00
  16         4/1/03        70252B BE2      5.10           265,000.00        6,757.50           0.00
  17         10/1/03       70252B BF9      5.10           860,000.00       21,930.00           0.00
  18         4/1/04        70252B BG7      5.20           250,000.00        6,500.00           0.00
  19         10/1/04       70252B BH5      5.20           925,000.00       24,050.00           0.00
  20         4/1/05        70252B BJ1      5.25           240,000.00        6,300.00           0.00
  21         10/1/05       70252B BK8      5.25         1,000,000.00       26,250.00           0.00
  22         10/1/08       70252B BP7      5.40         2,255,000.00 *     60,885.00           0.00
  23         10/1/10       70252B BV4      5.60         5,000,000.00 *    140,000.00           0.00
  24         10/1/12       70252B BZ5      5.70         1,915,000.00 *     54,577.50           0.00
  RI         10/1/12       70252B CA9      Variable        94,182.00     Residual -->      4,441.00
---------------------------------------------------------------------------------------------------------
TOTAL                                                 $16,224,182.00     $431,965.00    $214,441.00
---------------------------------------------------------------------------------------------------------
</TABLE>

****Please note that premium on bonds, trustee fees payable, interest
shortfalls, aggregate shortfalls, accrued interest undistributed, and accrued
principal undistributed are at zero.
****Pasco County FLA Health Facilities
    13.125%, 10/01/12, $9,850,000

                                     Page 1

<PAGE>

                                     oct963


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                         SERIES 3 CERTIFICATES
---------------------------------------------------------------------------------------------------------
           Certificate                                                     Interest         Principal
 Class      Maturity         CUSIP      Certificate        Certificate      Amount           Amount
Number        Date           Number        Rate              Amount          Due               Due
---------------------------------------------------------------------------------------------------------


<S>          <C>           <C>             <C>         <C>               <C>                <C> 
  4          4/1/97        684503 TE5      4.70            885,000.00        20,797.50      885,000.00
  5          10/1/97       684503 TF2      4.70            905,000.00        21,267.50            0.00
  6          4/1/98        684503 TG0      4.80            925,000.00        22,200.00            0.00
  7          10/1/98       684503 TH8      4.80            945,000.00        22,680.00            0.00
  8          4/1/99        684503 TJ4      4.90            970,000.00        23,765.00            0.00
  9          10/1/99       684503 TK1      4.90            995,000.00        24,377.50            0.00
 10          4/1/00        684503 TL9      5.00          1,020,000.00        25,500.00            0.00
 11          10/1/00       684503 TM7      5.00          1,045,000.00        26,125.00            0.00
 12          4/1/01        684503 TN5      5.00          1,070,000.00        26,750.00            0.00
 13          10/1/01       684503 TP0      5.00          1,095,000.00        27,375.00            0.00
 14          4/1/02        684503 TQ8      5.10          1,125,000.00        28,687.50            0.00
 15          10/1/02       684503 TR6      5.10          3,190,000.00        81,345.00            0.00
 16          4/1/03        684503 TS4      5.10          1,100,000.00        28,050.00            0.00
 17          10/1/03       684503 TT2      5.10          3,425,000.00        87,337.50            0.00
 18          4/1/04        684503 TU9      5.20          1,065,000.00        27,690.00            0.00
 19          10/1/04       684503 TV7      5.20          3,675,000.00        95,550.00            0.00
 20          4/1/05        684503 TX3      5.25          4,975,000.00 *     130,593.75            0.00
 21          10/1/06       684503 TZ8      5.30          5,225,000.00 *     138,462.50            0.00
 22          10/1/07       684503 UB9      5.40          5,480,000.00 *     147,960.00            0.00
 23          10/1/08       684503 UD5      5.50          5,785,000.00 *     159,087.50            0.00
 24          10/1/09       684503 UF0      5.60          6,085,000.00 *     170,380.00            0.00
 25          10/1/10       684503 UH6      5.60          6,410,000.00 *     179,480.00            0.00
 26          10/1/11       684503 UK9      5.70          6,750,000.00 *     192,375.00            0.00
 27          10/1/12       684503 UM5      5.70          4,910,000.00 *     139,935.00            0.00
 RI          10/1/12       684503 UN3      Variable         74,271.00      Residual -->         510.00
---------------------------------------------------------------------------------------------------------
TOTAL                                                  $69,129,271.00    $1,847,771.25     $885,510.00
---------------------------------------------------------------------------------------------------------
</TABLE>

****Please note that premium on bonds, trustee fees payable, interest
shortfalls, aggregate shortfalls, accrued interest undistributed, and accrued
principal undistributed are at zero.
****Underlying Bond-Orange County FLA Health Facilities
    13.125%, 10/01/12, $41,650,000

                                     Page 1

<PAGE>


                     [LETTERHEAD OF BANKERS TRUST COMPANY]

Colleen Shay-Persaud                         Mailing Address:
Bankers Trust Co.                            P.O. Box 318, Church Street Station
(212) 250-6125                               New York, New York 10008

October 3, 1997

Kerstin Stanley
Merrill Lynch

Re:   Merrill Lynch Municipal ABS, Inc.
      Prerefunded Municipal Certificates Series 1, 2, and 3

Kerstin:

For the above referenced issues, the principal and interest information for
October 1, 1997 is attached. All other relevant information is as follows:

      Premium on Bonds                                                  None
      Trustee Fees Payable                                              None
      Interest Shortfall on Bonds                                       None
      Aggregate Shortfall on Bonds                                      None
      Accrued Interest undistributed to holders                         None
      Accrued Principal undistributed to holders                        None
      Underlying Bonds on issues                                        Attached

Should you have any questions please call me at (212) 250-6125.

Thank You,

/s/ Colleen Shay-Persaud

enc.

<PAGE>

                     [LETTERHEAD OF BANKERS TRUST COMPANY]

Colleen Shay-Persaud                         Mailing Address:
Assistant Treasurer                          P.O. Box 318, Church Street Station
(212) 250-6125                               New York, New York 10008

September 16, 1997

Merrill Lynch
World Financial Center
North Towers - 9th Floor
250 Vesey Street
New York, NY 10281-1309
Attn: Robert Sheybani

The Depository Trust Company
7 Hanover Square - 2nd Floor
New York, NY 10004
Attn: Shandon Chakaraburty

Re: Merrill Lynch Municipal ABS, Inc.
    Prerefunded Municipal Certificates Series 1, 2 and 3

Gentlemen:

Pursuant to Section 4.03 of the Trust Agreement dated as of March 28, 1995,
Bankers Trust Company as Trustee for the above-referenced bond issues, hereby
notifies you of the debt service payments for each Series due on October 1,
1997. Attached is a payment schedule for each Series.

If you have any questions, please feel free to call me at the above referenced
number.

Very truly yours,

/s/ Colleen Shay-Persaud

Attachment

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                         SERIES 1 CERTIFICATES
---------------------------------------------------------------------------------------------------------
           Certificate                                                     Interest         Principal
 Class      Maturity         CUSIP      Certificate        Certificate      Amount           Amount
Number        Date           Number        Rate              Amount          Due               Due
---------------------------------------------------------------------------------------------------------


<S>          <C>           <C>             <C>         <C>               <C>               <C> 
  5          10/1/97       021433 DZ7      4.70            85,000.00         1,997.50       85,000.00
  6          4/1/98        021433 EA1      4.80            85,000.00         2,040.00            0.00
  7          10/1/98       021433 EB9      4.80            85,000.00         2,040.00            0.00
  8          4/1/99        021433 EC7      4.90            90,000.00         2,205.00            0.00
  9          10/1/99       021433 ED5      4.90            90,000.00         2,205.00            0.00
 10          4/1/00        021433 EE3      5.00            95,000,00         2,375.00            0.00
 11          10/1/00       021433 EF0      5.00            95,000,00         2,375,00            0.00
 12          4/1/01        021433 EG8      5.00           100,000.00         2,500.00            0.00
 13          10/1/01       021433 EH6      5.00           100,000.00         2,500.00            0.00
 14          4/1/02        021433 EJ2      5.10           105,000.00         2,677.50            0.00
 15          10/1/02       021433 EK9      5.10           295,000.00         7,522.50            0.00
 16          4/1/03        021433 EL7      5.10           100,000.00         2,550.00            0.00
 17          10/1/03       021433 EM5      5.10           320,000.00         8,160.00            0.00
 18          4/1/04        021433 EN3      5.20            95,000.00         2,470.00            0.00
 19          10/1/04       021433 EP8      5.20           340,000.00         8,840.00            0.00
 20          4/1/05        021433 EQ6      5.25            95,000.00         2,493.75            0.00
 21          10/1/05       021433 ER4      5.25           360,000.00         9,450.00            0.00
 22          10/1/08       021433 EX1      5.50         1,495,000.00        41,112.50            0.00
 23          10/1/10       021433 FB8      5.60         1,130,000.00        3l,640.00            0.00
 24          10/1/12       021433 FF9      5.70         1,200,000.00        34,200.00            0.00
 RI          10/1/12       021433 FG7      Variable        70,915.00      Residual -->         240.00
---------------------------------------------------------------------------------------------------------
TOTAL                                                  $6,430,915.00     $171,353.75       $85,240.00
---------------------------------------------------------------------------------------------------------
</TABLE>

****Please note that premium on bonds, trustee fees payable, interest
shortfalls, aggregate shortfalls, accrued interest undistributed, and accrued
principal undistributed are at zero.
****Underlying Bond-Altamonte Springs FLA Authority
    13.125%, 10/01/12, $3,910,000

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                         SERIES 2 CERTIFICATES
---------------------------------------------------------------------------------------------------------
           Certificate                                                     Interest         Principal
 Class      Maturity         CUSIP      Certificate        Certificate      Amount           Amount
Number        Date           Number        Rate              Amount          Due               Due
---------------------------------------------------------------------------------------------------------


<S>          <C>           <C>             <C>         <C>               <C>               <C> 
  5          10/1/97       70252B AT0      4.70            215,000.00       5,052.50        215,000.00
  6          4/1/98        70252B AU7      4.80            220,000.00       5,280.00              0.00
  7          10/1/98       70252B AV5      4.80            225,000.00       5,400.00              0.00
  8          4/1/99        70252B AW3      4.90            230,000.00       5,635.00              0.00
  9          10/1/99       70252B AX1      4.90            240,000.00       5,880.00              0.00
 10          4/1/00        70252B AY9      5.00            245,000.00       6,125.00              0.00
 11          10/1/00       70252B AZ6      5.00            250,000.00       6,250.00              0.00
 12          4/1/01        70252B BA0      5.00            255,000.00       6,375.00              0.00
 13          10/1/01       70252B BB8      5.00            265,000.00       6,625.00              0.00
 14          4/1/02        70252B BC6      5.10            270,000.00       6,885.00              0.00
 15          10/1/02       70252B BD4      5.10            795,000.00      20,272.50              0.00
 16          4/1/03        70252B BE2      5.10            265,000.00       6,757.50              0.00
 17          10/1/03       70252B BF9      5.10            860,000.00      21,930.00              0.00
 18          4/1/04        70252B BG7      5.20            250,000.00       6,500.00              0.00
 19          10/1/04       70252B BH5      5.20            925,000.00      24,050.00              0.00
 20          4/1/05        70252B BJ1      5.25            240,000.00       6,300.00              0.00
 21          10/1/05       70252B BK8      5.25          1,000,000.00      26,250.00              0.00
 22          10/1/08       70252B BP7      5.40          2,255,000.00 *    60,885.00              0.00
 23          10/1/10       70252B BV4      5.60          5,000,000.00 *   140,000.00              0.00
 24          10/1/12       70252B BZ5      5.70          1,915,000.00 *    54,577.50              0.00
 RI          10/1/12       70252B CA9      Variable         89,741.00    Residual -->         4,376.00
---------------------------------------------------------------------------------------------------------
TOTAL                                                  $16,009,741.00    $427,030.00       $219,376.00
---------------------------------------------------------------------------------------------------------
</TABLE>

****Please note that premium on bonds, trustee fees payable, interest
shortfalls, aggregate shortfalls, accrued interest undistributed, and accrued
principal undistributed are at zero.
****Pasco County FLA Health Facilities
    13.125%, 10/01/12, $9,850,000

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                         SERIES 3 CERTIFICATES
---------------------------------------------------------------------------------------------------------
           Certificate                                                     Interest         Principal
 Class      Maturity         CUSIP      Certificate        Certificate      Amount           Amount
Number        Date           Number        Rate              Amount          Due               Due
---------------------------------------------------------------------------------------------------------


<S>          <C>           <C>             <C>         <C>               <C>               <C> 
  5          10/1/97       684503 TF2      4.70            905,000.00        21,267.50      905,000.00
  6          4/1/98        684503 TG0      4.80            925,000.00        22,200.00            0.00
  7          10/1/98       684503 TH8      4.80            945,000.00        22,680.00            0.00
  8          4/1/99        684503 TJ4      4.90            970,000.00        23,765.00            0.00
  9          10/1/99       684503 TK1      4.90            995,000.00        24,377.50            0.00
 10          4/1/00        684503 TL9      5.00          1,020,000.00        25,500.00            0.00
 11          10/1/00       684503 TM7      5.00          1,045,000.00        26,125.00            0.00
 12          4/1/01        684503 TN5      5.00          1,070,000.00        26,750.00            0.00
 13          10/1/01       684503 TP0      5.00          1,095,000.00        27,375.00            0.00
 14          4/1/02        684503 TQ8      5.10          1,125,000.00        28,687.50            0.00
 15          10/1/02       684503 TR6      5.10          3,190,000.00        81,345.00            0.00
 16          4/1/03        684503 TS4      5.10          1,100,000.00        28,050.00            0.00
 17          10/1/03       684503 TT2      5.10          3,425,000.00        87,337.50            0.00
 18          4/1/04        684503 TU9      5.20          1,065,000.00        27,690.00            0.00
 19          10/1/04       684503 TV7      5.20          3,675,000.00        95,550.00            0.00
 20          4/1/05        684503 TX3      5.25          4,975,000.00 *     130,593.75            0.00
 21          10/1/06       684503 TZ8      5.30          5,225,000.00 *     138,462.50            0.00
 22          10/1/07       684503 UB9      5.40          5,480,000.00 *     147,960.00            0.00
 23          10/1/08       684503 UD5      5.50          5,785,000.00 *     159,087.50            0.00
 24          10/1/09       684503 UF0      5.60          6,085,000.00 *     170,380.00            0.00
 25          10/1/10       684503 UH6      5.60          6,410,000.00 *     179,480.00            0.00
 26          10/1/11       684503 UK9      5.70          6,750,000.00 *     192,375.00            0.00
 27          10/1/12       684503 UM5      5.70          4,910,000.00 *     139,935.00            0.00
 RI          10/1/12       684503 UN3      Variable         73,761.00      Residual -->       1,308.00
---------------------------------------------------------------------------------------------------------
TOTAL                                                  $68,243,761.00    $1,826,973.75     $906,308.00
---------------------------------------------------------------------------------------------------------
</TABLE>

****Please note that premium on bonds, trustee fees payable, interest
shortfalls, aggregate shortfalls, accrued interest undistributed, and accrued
principal undistributed are at zero.
****Underlying Bond-Orange County FLA Health Facilities
    13.125%, 10/01/12, $41,650,000