It is proved that c0(E) is an LB-space, whenever E is either a Montel LB-space or a coechelon space k∞(v) of type ∞ (a partial solution of a problem of Schmets and Bierstedt). In the second case we show that c0(k∞(v)) is even the Mackey completion of c0 ⊗e k∞(v). Introduction. J. Schmets has successfully studied various linear-topological properties of spaces of vector-valued continuous functions [Sch2]. Unfortunately, the problem of bornologicity of such spaces has been left open (comp. [Sch1]). Up to now a solution has been obtained only in very special cases (see [Bo1], [Mu], [Sch2, I.7.3 and IV.4.7], [DG], [BoS1] and [BoS2]), in particular, it is still unclear when c0(E) is bornological. Bierstedt and Schmets asked if c0(E), E a DFM-space, is bornological (or, equivalently, an LB-space). We solve this problem completely. Then we show that the problem of bornologicity of c0(E) for general LB-spaces E (also asked by Schmets and Bierstedt [Sch1], see also [Sch2, Ch. IV]) reduces in some sense to the same problem for Montel E. By this reduction we solve the problem for arbitrary coechelon spaces E = k∞(v). We use our “factorization” approach developed in [DiDo1] and [DiDo2]. The problem of boronologicity of C(K,E), K compact, at least in case when E = indn∈N En is an LBor LF-space, is closely related to the question of interchanging of e-products and inductive limits (comp. [BoS2]). Indeed, by a result of Mujica ([Mu], [Sch2, I.7.2]), it is known that C(K,E) = C(K)e indn∈N En contains a bornological space indn∈N(C(K)eEn) as a topological subspace. Thus, if (∗) C(K)e ind n∈N En = ind n∈N (C(K)eEn) holds algebraically, then it holds topologically and C(K,E) is a fortiori bornological (see the result of Mujica [Sch2, I.7.3] or Marquina and Schmets [MS] and a more general result of Defant and Govaerts [Sch2, IV.4.7], [DG, Th. 13, Cor. 14]). If the space E is compactly regular (i.e., each compact subset of E is compact in some step En), then (∗) holds. Roughly speaking, for LB-spaces the case of 1991 Mathematics Subject Classification. Primary 46A11, 46A13, 46E40.