SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

_________

 

FORM            10-K

 

FOR            ANNUAL AND TRANSITION REPORTS

PURSUANT TO SECTIONS 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

(MARK            ONE)

 

xANNUAL REPORT PURSUANT TO SECTION 13 OR            15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the            fiscal year ended December 31, 2007.

__________________

 

OR

 

/ /            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF            1934

 

For the            transition period from ___________ to ___________

 

| Commission file number                            33-56254                    |
|-------------------------------------------------------------------------------|
|                                                                          |
| MERRILL LYNCH MUNICIPAL                            ABS, INC.                  |
| __________________________________________________________                    |
| (Exact Name of registrant                            as specified in charter) |
|                                                                          |
| NEW YORK                                                                      | 13-369-8229 |
| ________________________________                                              | ________________________________ |
| (State or other jurisdiction                            of                    | (IRS Employer Identification                            No.) |
| incorporation or organization)                                                |   |
|                                                                          |   |
| World Financial Center                                                        |   |
| North Tower                                                                   |   |
| 250 Vesey Street – 9th                            Flr.                  |   |
| North Tower                                                                   |   |
| New York, New York                                                            | 10080-1323 |
| ______________________________________________                                | ________________ |
| (Address of principal executive offices)                                      | (Zip Code) |
|                                                                          |
| Registrant's telephone number, including area                            code | (212) 449-9938 |
|                                                                          | _______________________ |
|                                                                               |  |  |

 

Securities registered pursuant to Section 12 (b) of the Act:

 

| TITLE OF EACH                            CLASS                                               | NAME OF EACH EXCHANGE ON WHICH                            REGISTERED |
|----------------------------------------------------------------------------------------------|----------------------------------------------------------------------|
| PREREFUNDED MUNICIPAL CERTIFICATES, SERIES 2, DUE                            OCTOBER 1, 2012 | NEW YORK STOCK EXCHANGE                                              |
| PREREFUNDED MUNICIPAL CERTIFICATES, SERIES 3, DUE                            OCTOBER 1, 2012 | NEW YORK STOCK EXCHANGE                                              |

Securities registered pursuant to Section 12 (g) of the Act:            None

 

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Indicate by check mark if the registrant is a well-known seasoned            issuer, as defined in Rule 405 of the Securities Act.

 

                                                                                  Yes __           No             X

 

Indicate by check mark if the registrant is not required to file reports            pursuant to Section 13 or Section 15(d) of the Act.

 

                                                                                  Yes __          No             X

 

Indicate by check mark whether the registrant: (1) has filed all reports            required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934            during the preceding 12 months (or for such shorter period that the registrant was            required to file such reports), and (2) has been subject to such filing requirements            for the past 90 days. Yes /X/ No / /

 

Indicate by check mark if disclosure of delinquent filers pursuant to            Item 405 of Regulation S-K is not contained herein and will not be contained, to the            best of registrant's knowledge, in definitive proxy or information statements            incorporated by reference in Part III of the Form 10-K or any amendment to this Form            10-K.

 

Indicate by check mark whether the registrant is a large accelerated            filer, an accelerated filer, or a non-accelerated filer. See definition of            “accelerated filer and large accelerated filer” in Rule 12b-2 of the            Exchange Act. (check one)

 

 

Indicate by check mark whether the registrant is shell company (as            defined in Rule 12b-2 of the Act).

 

                                                                                 Yes             No             X

 

State the aggregate market value of the voting and non-voting common            equity held by non-affiliates computed by reference to the pridce at which the common            equity was last sold, or the average bid and asked price of such common equity, as of            the last business day of the registrant’s most recently completed second fiscal            quarter.

 

ALL            THE VOTING STOCK IS HELD BY AFFILIATES OF THE REGISTRANT.

 

(APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS)

 

Indicate by check mark whether the registrant has filed all documents            and reports required to be filed by Section 12, 13 or 15 (d) of the Securities Exchange            Act of 1934 subsequent to the distribution of securities under a plan confirmed by a            court. Yes / / No / /

 

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

 

Indicate the number of shares outstanding of each of the registrant's            classes of common stock, as of the latest practicable date.

 

AS OF DECEMBER 31, 2007, THERE ARE 100 SHARES OF COMMON            STOCK.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

List hereunder the following documents if incorporated by reference and            the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is            incorporated: (1) any annual report to security-holders; (2) any proxy or information            statement; and (3) any prospectus filed pursuant to Rule 424 (b) or (c) under the            Securities Act of

 

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1933.            The listed documents should be clearly described for identification purposes (e.g.,            annual report to security-holders for fiscal year ended December 24, 1980).

 

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PART            I

 

| Item 1. | BUSINESS. |
|---------|-----------|

EXEMPT PER NO-ACTION LETTER PUBLICLY AVAILABLE MAY 30, 1996.

 

| Item 1A. | RISK FACTORS |
|----------|--------------|

NOT APPLICABLE

 

| Item 1B. | UNRESOLVED STAFF COMMENTS |
|----------|---------------------------|

NOT APPLICABLE

 

| Item 2. | PROPERTIES. |
|---------|-------------|

EXEMPT PER NO-ACTION LETTER PUBLICLY AVAILABLE MAY 30, 1996.

 

| Item 3. | LEGAL PROCEEDINGS. |
|---------|--------------------|

NONE.

 

| Item 4. | SUBMISSION OF MATTERS TO A VOTE OF                            SECURITY-HOLDERS. |
|---------|---------------------------------------------------------------------------------|

NONE.

 

PART            II

 

| Item 5. | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED                            STOCKHOLDERS |
|---------|----------------------------------------------------------------------------------------|

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

|   | (a) | Number of holders of record of each Series of                            Certificates as of December 31, 2007: |
|--------|-----|----------------------------------------------------------------------------------------------------------------|

SERIES 2: 17 HOLDERS*;

SERIES 3: 17 HOLDERS*.

 

(b) Principal market in which registrant's Certificates are being            traded:

 

|   | SERIES 2. | NEW YORK STOCK EXCHANGE |
|--------|-----------|-------------------------|

|   | SERIES 3. | NEW YORK STOCK EXCHANGE |
|--------|-----------|-------------------------|

 

(c) Report of Dividends:

 

EXEMPT PER NO-ACTION LETTER PUBLICLY AVAILABLE MAY 30, 1996.

 

| Item 6. | SELECTED FINANCIAL DATA. |
|---------|--------------------------|

EXEMPT PER NO-ACTION LETTER PUBLICLY AVAILABLE MAY 30, 1996.

 

| Item 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                            CONDITION |
|---------|----------------------------------------------------------------------------------------|

AND RESULTS OF OPERATIONS.

EXEMPT PER NO-ACTION LETTER PUBLICLY AVAILABLE MAY 30, 1996.

 

| Item 7A. | Quantitative and Qualitative Disclosures About Market                            Risk. |
|----------|----------------------------------------------------------------------------------------|

NONE

 

| Item 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
|---------|----------------------------------------------|

EXEMPT PER NO-ACTION LETTER PUBLICLY AVAILABLE MAY 30, 1996.

 

| Item 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                            ACCOUNTING |
|---------|----------------------------------------------------------------------------------------|

AND FINANCIAL DISCLOSURE.

NONE.

 

| Item 9A | CONTROLS AND PROCEDURE. |
|---------|-------------------------|

 

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NOT APPLICABLE

 

| Item 9B | OTHER INFORMATION. |
|---------|--------------------|

NOT APPLICABLE

 

*            Number of Holders per Series equals the number of Direct Participants holding            Certificates through The Depository Trust Company plus the number of accounts held at            Merrill Lynch for the benefit of Certificateholders.

 

PART            III

 

Item            10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

EXEMPT PER NO-ACTION LETTER PUBLICLY AVAILABLE MAY 30, 1996.

 

Item            11.  EXECUTIVE COMPENSATION.

EXEMPT PER NO-ACTION LETTER PUBLICLY AVAILABLE MAY 30, 1996.

 

Item            12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND            MANAGEMENT

AND RELATED STOCKHOLDER MATTERS.

EXEMPT PER NO-ACTION LETTER PUBLICLY AVAILABLE MAY 30, 1996.

 

Item            13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

EXEMPT PER NO-ACTION LETTER PUBLICLY AVAILABLE MAY 30, 1996.

 

Item            14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.

NOT APPLICABLE

 

PART            IV

 

Item            15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 

(a) (1) Financial Statements

NONE

 

(2) Financial Statement Schedule

NONE

 

(3) Exhibits

|   | 31.1 | RULE 13A-14 CERTIFICATION |
|--------|------|---------------------------|

|   | 99.1 | INDEPENDANT ACCOUNTANTS' REPORT ON APPLYING AGREED-UPON                            PROCEDURES |
|--------|------|-----------------------------------------------------------------------------------------------|

|   | 99.2 | NOTICE OF SUBSTITUTION OF DEFEASANCE                            OBLIGATIONS |
|--------|------|-----------------------------------------------------------------------------|

|   | 99.3 | STATEMENTS TO HOLDERS OF MERRILL LYNCH MUNICIPAL ABS,                            INC. PREREFUNDED MUNICIPAL CERTIFICATES, SERIES 2 AND SERIES 3 RELATING                            TO THE DISTRIBUTION DATES OF APRIL 2, 2007 AND OCTOBER 1,                            2007. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 99.4 | TRUSTEE'S CERTIFICATION |
|--------|------|-------------------------|

 

(b) Reports on Form 8-K

NONE.

 

|   | (c) | Not Applicable |
|--------|-----|----------------|

 

|   | (d) | Not Applicable |
|--------|-----|----------------|

 

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SIGNATURES

 

Pursuant to the requirements of the Section 13 or 15 (d) of the            Securities Exchange Act of 1934, the registrant has duly caused this report to be            signed on its behalf by the undersigned, thereunto duly authorized.

 

MERRILL LYNCH MUNICIPAL ABS, INC.

 

 

 

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EXHIBIT INDEX

 

| EXHIBIT                                                                                                                                                                                                                                                                              |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1 Rule 14a-14 Certification                                                                                                                                                                                                                                                       |
| 99.1 Independant Accountants' Report on Applying                            Agreed-Upon Procedures                                                                                                                                                                                   |
| 99.2 Notice of Substitution of Defeasance                            Obligations                                                                                                                                                                                                     |
| 99.3 Statements to holders of Merrill Lynch Municipal                            ABS, Inc. Prerefunded Municipal Certificates, Series 2 and Series 3,                            relating to the Distribution Dates of April 2, 2007 and October 1,                            2007. |
| 99.4 Trustee’s Certification                                                                                                                                                                                                                                                   |

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