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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-06414
Name of Fund: BlackRock MuniYield Fund, Inc. (MYD)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniYield Fund,
Inc., 55 East 52nd Street, New York, NY 10055
Registrant’s telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 04/30/2014
Date of reporting period: 10/31/2013
Table of Contents
Item 1 – Report to Stockholders
Table of Contents
OCTOBER 31, 2013
SEMI-ANNUAL REPORT (UNAUDITED)
|  |
BlackRock MuniYield Fund, Inc. (MYD)
BlackRock MuniYield Quality Fund, Inc. (MQY)
BlackRock MuniYield Quality Fund II, Inc. (MQT)
| Not FDIC Insured • May Lose Value • No Bank Guarantee |
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Semi-Annual Report: | ||||
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| Financial Statements: | ||||
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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements | 51 | |||
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| 56 | ||||
| 2 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
| Dear Shareholder |
Financial markets were volatile as 2012 drew to a close, with investors growing increasingly concerned over the possible implementation of pre-mandated tax increases and spending cuts known as the “fiscal cliff.” However, a last-minute tax deal averted the potential crisis and allowed markets to get off to a strong start in 2013. Money that had been pulled to the sidelines amid year-end tax-rate uncertainty poured back into the markets in January. Key indicators signaling modest but broad-based improvements in the world’s major economies, coupled with the absence of negative headlines from Europe, fostered an aura of comfort for investors. Global equities surged, while rising US Treasury yields pressured high quality fixed income assets. (Bond prices fall when yields rise.)
Global economic momentum slowed in February, however, and the pace of the rally moderated. In the months that followed, US stocks outperformed international stocks, as America showed greater stability compared to most other regions. Slow, but positive, growth was sufficient to support corporate earnings, while uncomfortably high unemployment reinforced expectations that the Federal Reserve would keep its asset purchase program intact and interest rates low. International markets experienced higher levels of volatility given a resurgence of political instability in Italy, a severe banking crisis in Cyprus and a generally poor outlook for European economies, many of which were mired in recession. Emerging markets significantly lagged the rest of the world as growth in these economies, particularly in China and Brazil, fell short of expectations.
In May, the Fed Chairman commented on the possibility of beginning to gradually reduce — or “taper” — the central bank’s asset purchase program before the end of 2013. Investors around the world retreated from higher risk assets in response. Markets rebounded in late June when the tone of the US central bank turned more dovish, and improving economic indicators and better corporate earnings helped extend gains through July.
Markets slumped again in August as investors became wary of looming macro risks. Mixed economic data stirred worries about global growth and uncertainty about when and how much the Fed would scale back on stimulus. Also weighing on investors’ minds was the escalation of the revolution in Egypt and the civil war in Syria, both of which fueled higher oil prices, an additional headwind for global economic growth.
September was surprisingly positive for investors, thanks to the easing of several key risks. Most important, the Fed defied market expectations with its decision to delay tapering. Additionally, the more hawkish candidate to become the next Fed Chairman, Larry Summers, withdrew from the race. On the geopolitical front, turmoil in Egypt and Syria subsided. In Europe, the re-election of Angela Merkel as Chancellor of Germany was welcomed as a continuation of the status quo. High levels of volatility returned in late September when the Treasury Department warned that the US national debt would breach its statutory maximum soon after Oct. 17. Political brinksmanship led to a partial government shutdown, roiling global financial markets through the first half of October, but the rally quickly resumed with a last-minute compromise to reopen the government and extend the debt ceiling until early 2014.
Though periods of heightened uncertainty drove high levels of market volatility over the past year, riskier asset classes generally outperformed lower-risk investments. Developed market equities generated the highest returns for the 6- and 12-month periods ended Oct. 31, with particular strength coming from US small-cap stocks. Emerging markets posted smaller, albeit positive returns after struggling with slowing growth and weakening currencies in the first half of 2013. Rising interest rates resulted in poor performance for US Treasury bonds and other higher-quality sectors such as tax-exempt municipals and investment grade corporate bonds. High yield bonds, on the other hand, moved higher as income-oriented investors sought meaningful returns in the low-rate environment. Short-term interest rates remained near zero, keeping yields on money market securities near historical lows.
At BlackRock, we believe investors need to think globally and extend their scope across a broader array of asset classes and be prepared to move freely as market conditions change over time. We encourage you to talk with your financial advisor and visit www.blackrock.com for further insight about investing in today’s world.
Sincerely,
Rob Kapito
President, BlackRock Advisors, LLC
“Though periods of heightened uncertainty drove high levels of market volatility over the past year, riskier asset classes generally outperformed lower-risk investments.”
Rob Kapito
President, BlackRock Advisors, LLC
| Total Returns as of October 31, 2013 | ||||||||
| 6-month | 12-month | |||||||
US large cap equities | 11.14 | % | 27.18 | % | ||||
US small cap equities | 16.90 | 36.28 | ||||||
International equities | 8.53 | 26.88 | ||||||
Emerging market equities (MSCI Emerging Markets Index) | 1.18 | 6.53 | ||||||
3-month Treasury bill | 0.03 | 0.09 | ||||||
US Treasury securities | (6.07 | ) | (4.64 | ) | ||||
US investment grade | (1.97 | ) | (1.08 | ) | ||||
Tax-exempt municipal | (3.63 | ) | (1.69 | ) | ||||
US high yield bonds | 1.50 | 8.86 | ||||||
| Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. | ||||||||
| THIS PAGE NOT PART OF YOUR FUND REPORT | 3 |
Table of Contents
| Municipal Market Overview |
| For the Reporting Period Ended October 31, 2013 |
Municipal Market Conditions
Toward the end of 2012, municipal bond supply was met with robust demand as investors were starved for yield in the low-rate, low-return environment and uncertainty around the Presidential election and fiscal policy decisions highlighted the appeal of the relatively stable asset class. Investors poured into municipal bond mutual funds, favoring long-duration and high-yield funds as they tend to provide higher levels of income.
However, market conditions turned less favorable in May when the US Federal Reserve alluded to the possible scaling back of its bond-buying stimulus program. Municipal bond funds saw strong outflows in the last six months of the period, resulting in net outflows of approximately $38 billion for the 12-month period as a whole (based on data from the Investment Company Institute). Further signals from the Fed suggesting a retrenchment of asset purchases led to rising interest rates and waning demand in June. (Bond prices fall as rates rise.) High levels of interest rate volatility resulted in a sharp curtailment of tax-exempt issuance in May through period end. However, from a historical perspective, total new issuance for the 12 months ended October 31, 2013 remained relatively strong at $345 billion (down modestly from the $378 billion issued in the prior 12-month period). A significant portion of new supply during this period (roughly 50%) was attributable to refinancing activity as issuers took advantage of lower interest rates to reduce their borrowing costs. Total new supply was also supported by recent activity in the taxable market, where taxable-municipal issuance was up 19% year-over-year.
S&P Municipal Bond Index |
Total Returns as of October 31, 2013 |
6 months: (3.63)% |
12 months: (1.69)% |
A Closer Look at Yields
From October 31, 2012 to October 31, 2013, muni yields increased by 122 basis points (“bps”) from 2.82% to 4.04% on AAA-rated 30-year municipal bonds, while increasing 72 bps from 1.72% to 2.44% on 10-year bonds and rising another 39 bps from 0.67% to 1.06% on 5-year issues (as measured by Thomson Municipal Market Data). Overall, the municipal yield curve remained relatively steep over the 12-month period as the spread between 2- and 30-year maturities widened by 118 bps and the spread between 2- and 10-year maturities widened by 68 bps.
During the same time period, US Treasury rates rose by 78 bps on 30-year and 87 bps on 10-year bonds, while moving up 61 bps in 5-years. Accordingly, tax-exempt municipal bonds underperformed Treasuries on the long end of the yield curve as investors sought to reduce risk later in the period. On the short end of the curve, moderate outperformance versus Treasuries was driven largely by a supply/demand imbalance within the municipal market and a rotation from long-duration assets into short- and intermediate-duration investments. As higher US tax rates began to appear imminent late in 2012, municipal bonds benefited from the increased appeal of tax-exempt investing. The municipal asset class is known for its lower relative volatility and preservation of principal with an emphasis on income as tax rates rise. The municipal market continues to be an attractive avenue for investors seeking yield in today’s environment, particularly as the recent correction has restored value in the market and placed yields at levels not obtainable since early 2011. However, opportunities are not as broad-based as in 2011 and 2012, warranting a more tactical approach going forward.
Financial Conditions of Municipal Issuers Continue to Improve
Following an extended period of nation-wide austerity and de-leveraging as states sought to balance their budgets, 14 consecutive quarters of positive revenue growth coupled with the elimination of more than 750,000 jobs in recent years have put state and local governments in a better financial position. Many local municipalities, however, continue to face increased health care and pension costs passed down from the state level. BlackRock maintains the view that municipal bond defaults will be minimal and remain in the periphery, and that the overall market is fundamentally sound. We continue to recognize that careful credit research, appropriate structure and security selection remain imperative amid uncertainty in this fragile economic environment.
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
| 4 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
| The Benefits and Risks of Leveraging |
The Funds may utilize leverage to seek to enhance the yield and net asset value (“NAV”) of their common shares (“Common Shares”). However, these objectives cannot be achieved in all interest rate environments.
To obtain leverage, the Funds issue Variable Rate Demand Preferred Shares (“VRDP Shares”) or Variable Rate Muni Term Preferred Shares (“VMTP Shares”) (collectively, “Preferred Shares”). Preferred shares pay dividends at prevailing short-term interest rates, and the Funds invest the proceeds in long-term municipal bonds. In general, the concept of leveraging is based on the premise that the financing cost of assets to be obtained from leverage, which will be based on short-term interest rates, will normally be lower than the income earned by each Fund on its longer-term portfolio investments. To the extent that the total assets of each Fund (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Fund’s shareholders will benefit from the incremental net income.
The interest earned on securities purchased with the proceeds from leverage is paid to shareholders in the form of dividends, and the value of these portfolio holdings is reflected in the per share NAV. However, in order to benefit shareholders, the yield curve must be positively sloped; that is, short-term interest rates must be lower than long-term interest rates. If the yield curve becomes negatively sloped, meaning short-term interest rates exceed long-term interest rates, income to shareholders will be lower than if the Funds had not used leverage.
To illustrate these concepts, assume a Fund’s Common Shares capitalization is $100 million and it issues Preferred Shares for an additional $50 million, creating a total value of $150 million available for investment in long-term municipal bonds. If prevailing short-term interest rates are 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Fund pays dividends on the $50 million of Preferred Shares based on the lower short-term interest rates. At the same time, the securities purchased by the Fund with assets received from Preferred Shares issuance earn income based on long-term interest rates. In this case, the dividends paid to holders of Preferred Shares (“Preferred Shareholders”) are significantly lower than the income earned on the Fund’s long-term investments, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.
If short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental net income pickup will be reduced or eliminated completely. Furthermore, if prevailing short-term interest rates rise above long-term interest rates, the yield curve has a negative slope. In this case, the Fund pays higher short-term interest rates whereas the Fund’s total portfolio earns income based on lower long-term interest rates.
Furthermore, the value of the Funds’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the redemption value of the Funds’ Preferred Shares does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Funds’ NAVs positively or negatively in addition to the impact on Fund performance from leverage from Preferred Shares discussed above.
The Funds may also leverage their assets through the use of tender option bond trusts (“TOBs”), as described in Note 3 of the Notes to Financial Statements. TOB investments generally will provide the Funds with economic benefits in periods of declining short-term interest rates, but expose the Funds to risks during periods of rising short-term interest rates similar to those associated with Preferred Shares issued by the Funds, as described above. Additionally, fluctuations in the market value of municipal bonds deposited into the TOB trust may adversely affect each Fund’s NAV per share.
The use of leverage may enhance opportunities for increased income to the Funds and Common Shareholders, but as described above, it also creates risks as short- or long-term interest rates fluctuate. Leverage also will generally cause greater changes in the Funds’ NAVs, market prices and dividend rates than comparable portfolios without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, the Funds’ net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, each Fund’s net income will be less than if leverage had not been used, and therefore the amount available for distribution to Common Shareholders will be reduced. Each Fund may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause a Fund to incur losses. The use of leverage may limit each Fund’s ability to invest in certain types of securities or use certain types of hedging strategies, such as in the case of certain restrictions imposed by rating agencies that rate the Preferred Shares issued by the Funds. Each Fund will incur expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares.
Under the Investment Company Act of 1940, as amended (the “1940 Act”), the Funds are permitted to issue senior securities in the form of equity securities (e.g., Preferred Shares) up to 50% of their total managed assets (each Fund’s total assets less its total accrued liabilities). In addition, each Fund with VRDP Shares or VMTP Shares limits its economic leverage to 45% of its total managed assets. As of October 31, 2013, the Funds had economic leverage from Preferred Shares and/or TOBs as a percentage of their total managed assets as follows:
| Percent of Economic Leverage | ||||
MYD | 39 | % | ||
MQY | 40 | % | ||
MQT | 40 | % | ||
| Derivative Financial Instruments |
The Funds may invest in various derivative financial instruments, including financial futures contracts, as specified in Note 4 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such derivative financial instruments are used to obtain exposure to a market without owning or taking physical custody of securities or to hedge market, interest rate and/or other risks. Derivative financial instruments involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The Funds’ ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may require a Fund to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation a Fund can realize on an investment, may result in lower dividends paid to shareholders or may cause a Fund to hold an investment that it might otherwise sell. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 5 |
Table of Contents
| Fund Summary as of October 31, 2013 | BlackRock MuniYield Fund, Inc. |
| Fund Overview |
BlackRock MuniYield Fund, Inc.’s (MYD) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
| Performance |
| Ÿ | For the six-month period ended October 31, 2013, the Fund returned (11.24)% based on market price and (10.86)% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of (13.60)% based on market price and (9.18)% based on NAV. All returns reflect reinvestment of dividends. The Fund’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. |
| Ÿ | As tax-exempt municipal rates increased over the six-month period, the Fund’s duration exposure (sensitivity to interest rate movements) had a negative impact on performance. (Bond prices fall when rates rise.) Exposure to bonds with long maturities was detrimental as rates increased more in the long-end than in the short-end of the curve. Leverage on the Fund’s assets amplified the negative effect of rising rates on the Fund’s performance. Holdings of bonds rated low-quality investment grade and non-investment grade posted significant losses. The Fund’s modest exposure to Puerto Rico Sales Tax Revenue Bonds also detracted from results as credit spreads on most of Puerto Rico’s debt widened materially during the period due to investors’ lack of confidence and a weak local economy. Modest exposure to tobacco bonds was another notable source of negative performance. |
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| Fund Information |
Symbol on New York Stock Exchange (“NYSE”) | MYD | |
Initial Offering Date | November 29, 1991 | |
Yield on Closing Market Price as of October 31, 2013 ($13.90)1 | 7.21% | |
Tax Equivalent Yield2 | 12.74% | |
Current Monthly Distribution per Common Share3 | $0.0835 | |
Current Annualized Distribution per Common Share3 | $1.0020 | |
Economic Leverage as of October 31, 20134 | 39% |
| 1 | Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| 2 | Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
| 3 | The monthly distribution per common share, declared on December 2, 2013, was decreased to $0.0805 per share. The yield on closing market price, current monthly distribution per common share and current annualized distribution per common share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future. |
| 4 | Represents VRDP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5. |
| 6 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
| BlackRock MuniYield Fund, Inc. |
| Market Price and Net Asset Value Per Share Summary | ||||||||||||||||||||
10/31/13 | 4/30/13 | Change | High | Low | ||||||||||||||||
Market Price | $13.90 | $16.24 | (14.41)% | $16.30 | $12.52 | |||||||||||||||
Net Asset Value | $13.76 | $16.01 | (14.05)% | $16.06 | $12.99 | |||||||||||||||
| Market Price and Net Asset Value History For the Past Five Years |
| Overview of the Fund’s Long-Term Investments |
| Sector Allocation | 10/31/13 | 4/30/13 | ||||||
Health | 23 | % | 22 | % | ||||
Transportation | 22 | 21 | ||||||
County/City/Special District/School District | 12 | 11 | ||||||
Utilities | 12 | 12 | ||||||
Education | 11 | 11 | ||||||
State | 10 | 13 | ||||||
Corporate | 8 | 9 | ||||||
Tobacco | 2 | 1 | ||||||
| Credit Quality Allocation1 | 10/31/13 | 4/30/13 | ||||||
AAA/Aaa | 8 | % | 9 | % | ||||
AA/Aa | 43 | 43 | ||||||
A | 28 | 29 | ||||||
BBB/Baa | 9 | 9 | ||||||
BB/Ba | 3 | 1 | ||||||
B | 2 | 2 | ||||||
CCC/Caa | 1 | 1 | ||||||
Not Rated2 | 6 | 6 | ||||||
| 1 | Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investor Service (“Moody’s”) ratings. |
| 2 | The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of October 31, 2013 and April 30, 2013, the market value of these securities was $3,014,775, representing less than 1%, and $8,883,640, representing 1%, respectively, of the Fund’s long-term investments. |
| Call/Maturity Schedule3 | ||||
Calendar Year Ended December 31, | ||||
2013 | 4 | % | ||
2014 | 4 | |||
2015 | 4 | |||
2016 | 5 | |||
2017 | 4 | |||
| 3 | Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. |
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 7 |
Table of Contents
| Fund Summary as of October 31, 2013 | BlackRock MuniYield Quality Fund, Inc. |
| Fund Overview |
BlackRock MuniYield Quality Fund, Inc.’s (MQY) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests in municipal bonds which are in the three highest quality rating categories (A or better) or, if unrated, of comparable quality at the time of investment. The Fund invests primarily in long-term municipal bonds with maturities of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
| Performance |
| Ÿ | For the six-month period ended October 31, 2013, the Fund returned (13.99)% based on market price and (9.19)% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of (13.60)% based on market price and (9.18)% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. |
| Ÿ | As tax-exempt municipal rates increased over the six-month period, the Fund’s duration exposure (sensitivity to interest rate movements) had a negative impact on performance. (Bond prices fall when rates rise.) Exposure to the long-end of the yield curve was detrimental as rates increased more in the long-end than in the short-end of the curve. Leverage on the Fund’s assets amplified the negative effect of rising rates on the Fund’s performance. The Fund’s modest exposure to Puerto Rico Sales Tax Revenue Bonds also detracted from results as credit spreads on most of Puerto Rico’s debt widened materially during the period due to investors’ lack of confidence and a weak local economy. |
| Ÿ | Short positions in US Treasury futures contracts as a hedge against rising interest rates had a positive impact on the Fund’s performance for the period. |
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| Fund Information |
Symbol on NYSE | MQY | |
Initial Offering Date | June 26, 1992 | |
Yield on Closing Market Price as of October 31, 2013 ($14.09)1 | 6.81% | |
Tax Equivalent Yield2 | 12.03% | |
Current Monthly Distribution per Common Share3 | $0.08 | |
Current Annualized Distribution per Common Share3 | $0.96 | |
Economic Leverage as of October 31, 20134 | 40% |
| 1 | Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| 2 | Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
| 3 | The distribution rate is not constant and is subject to change. |
| 4 | Represents VRDP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5. |
| 8 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
| BlackRock MuniYield Quality Fund, Inc. |
| Market Price and Net Asset Value Per Share Summary | ||||||||||||||||||||
10/31/13 | 4/30/13 | Change | High | Low | ||||||||||||||||
Market Price | $14.09 | $16.94 | (16.82)% | $17.24 | $13.05 | |||||||||||||||
Net Asset Value | $14.78 | $16.83 | (12.18)% | $16.89 | $14.00 | |||||||||||||||
| Market Price and Net Asset Value History For the Past Five Years |
| Overview of the Fund’s Long-Term Investments |
| Sector Allocation | 10/31/13 | 4/30/13 | ||||||
County/City/Special District/School District | 26 | % | 24 | % | ||||
Transportation | 22 | 21 | ||||||
Utilities | 17 | 16 | ||||||
State | 15 | 19 | ||||||
Health | 10 | 10 | ||||||
Education | 7 | 6 | ||||||
Housing | 2 | 3 | ||||||
Corporate | 1 | 1 | ||||||
| Credit Quality Allocation1 | 10/31/13 | 4/30/13 | ||||||
AAA/Aaa | 10 | % | 10 | % | ||||
AA/Aa | 57 | 61 | ||||||
A | 31 | 27 | ||||||
BBB/Baa | 2 | 1 | ||||||
Not Rated | — | 1 | 2 | |||||
| 1 | Using the higher of S&P’s or Moody’s ratings. |
| 2 | The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of April 30, 2013, the market value of these securities was $2,950,141, representing less than 1% of the Fund’s long-term investments. |
| Call/Maturity Schedule3 | ||||
Calendar Year Ended December 31, | ||||
2013 | — | |||
2014 | 8 | % | ||
2015 | 11 | |||
2016 | 3 | |||
2017 | 12 | |||
| 3 | Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. |
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 9 |
Table of Contents
| Fund Summary as of October 31, 2013 | BlackRock MuniYield Quality Fund II, Inc. |
| Fund Overview |
BlackRock MuniYield Quality Fund II, Inc.’s (MQT) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests in municipal bonds which are in the three highest quality rating categories (A or better) or, if unrated, of comparable quality at the time of investment. The Fund invests primarily in long-term municipal bonds with maturities of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
| Performance |
| Ÿ | For the six-month period ended October 31, 2013, the Fund returned (14.24)% based on market price and (8.55)% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of (13.60)% based on market price and (9.18)% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. |
| Ÿ | As tax-exempt municipal rates increased over the six-month period, the Fund’s duration exposure (sensitivity to interest rate movements) had a negative impact on performance. (Bond prices fall when rates rise.) Exposure to the long-end of the yield curve was detrimental as rates increased more in the long-end than in the short-end of the curve. Leverage on the Fund’s assets amplified the negative effect of rising rates on the Fund’s performance. The Fund’s modest exposure to Puerto Rico Sales Tax Revenue Bonds also detracted from results as credit spreads on most of Puerto Rico’s debt widened materially during the period due to investors’ lack of confidence and a weak local economy. |
| Ÿ | Short positions in US Treasury futures contracts as a hedge against rising interest rates had a positive impact on the Fund’s performance for the period. |
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| Fund Information |
Symbol on NYSE | MQT | |||
Initial Offering Date | August 28, 1992 | |||
Yield on Closing Market Price as of October 31, 2013 ($11.94)1 | 7.09% | |||
Tax Equivalent Yield2 | 12.53% | |||
Current Monthly Distribution per Common Share3 | $0.0705 | |||
Current Annualized Distribution per Common Share3 | $0.8460 | |||
Economic Leverage as of October 31, 20134 | 40% |
| 1 | Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. |
| 2 | Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields. |
| 3 | The distribution rate is not constant and is subject to change. |
| 4 | Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5. |
| 10 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
| BlackRock MuniYield Quality Fund II, Inc. |
| Market Price and Net Asset Value Per Share Summary | ||||||||||||||||||||
10/31/13 | 4/30/13 | Change | High | Low | ||||||||||||||||
Market Price | $11.94 | $14.41 | (17.14)% | $14.81 | $11.29 | |||||||||||||||
Net Asset Value | $12.97 | $14.68 | (11.65)% | $14.73 | $12.30 | |||||||||||||||
| Market Price and Net Asset Value History For the Past Five Years |
| Overview of the Fund’s Long-Term Investments |
| Sector Allocation | 10/31/13 | 4/30/13 | ||||||
County/City/Special District/School District | 27 | % | 28 | % | ||||
Transportation | 24 | 22 | ||||||
State | 15 | 17 | ||||||
Utilities | 13 | 12 | ||||||
Health | 10 | 11 | ||||||
Education | 7 | 6 | ||||||
Housing | 3 | 3 | ||||||
Corporate | 1 | 1 | ||||||
| Credit Quality Allocation1 | 10/31/13 | 4/30/13 | ||||||
AAA/Aaa | 7 | % | 8 | % | ||||
AA/Aa | 66 | 68 | ||||||
A | 25 | 21 | ||||||
BBB/Baa | 2 | 2 | ||||||
Not Rated | — | 1 | 2 | |||||
| 1 | Using the higher of S&P’s or Moody’s ratings. |
| 2 | The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of April 30, 2013, the market value of these securities was $2,695,818, representing less than 1% of the Fund’s long-term investments. |
| Call/Maturity Schedule3 | ||||
Calendar Year Ended December 31, | ||||
2013 | 1 | % | ||
2014 | 10 | |||
2015 | 7 | |||
2016 | 5 | |||
2017 | 11 | |||
| 3 | Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. |
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 11 |
Table of Contents
BlackRock MuniYield Fund, Inc. (MYD) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Alabama — 0.8% | ||||||||
County of Jefferson Alabama, RB, Series A, 5.50%, 1/01/22 | $ | 5,250 | $ | 5,223,645 | ||||
Alaska — 1.0% | ||||||||
Northern Tobacco Securitization Corp., Refunding RB, Tobacco Settlement, Asset-Backed, Series A: | ||||||||
4.63%, 6/01/23 | 2,050 | 1,926,406 | ||||||
5.00%, 6/01/46 | 6,450 | 4,437,148 | ||||||
|
| |||||||
| 6,363,554 | ||||||||
Arizona — 4.6% | ||||||||
County of Maricopa Arizona IDA, RB, Arizona Charter Schools Project, Series A, 6.75%, 7/01/29 | 2,900 | 2,427,242 | ||||||
Phoenix IDA Arizona, Refunding RB, America West Airlines, Inc. Project, AMT: | ||||||||
6.25%, 6/01/19 | 3,000 | 2,997,000 | ||||||
6.30%, 4/01/23 | 5,090 | 5,011,767 | ||||||
Salt Verde Financial Corp., RB, Senior: | ||||||||
5.00%, 12/01/32 | 7,365 | 7,437,103 | ||||||
5.00%, 12/01/37 | 9,690 | 9,730,117 | ||||||
Vistancia Community Facilities District Arizona, GO, 5.75%, 7/15/24 | 2,125 | 2,184,500 | ||||||
|
| |||||||
| 29,787,729 | ||||||||
California — 11.6% | ||||||||
California Health Facilities Financing Authority, RB: | ||||||||
St. Joseph Health System, Series A, | 4,425 | 4,919,317 | ||||||
Sutter Health, Series B, 6.00%, 8/15/42 | 6,465 | 7,456,343 | ||||||
California Health Facilities Financing Authority, Refunding RB, Series A: | ||||||||
Catholic Healthcare West, 6.00%, 7/01/34 | 3,155 | 3,471,920 | ||||||
St. Joseph Health System, 5.00%, 7/01/33 | 2,560 | 2,637,005 | ||||||
California Pollution Control Financing Authority, RB: | ||||||||
Poseidon Resources (Channel Side) LP Desalination Project, AMT, | 3,465 | 3,057,585 | ||||||
Poseidon Resources (Channel Side) LP Desalination Project, AMT, | 3,855 | 3,232,726 | ||||||
San Diego County Water Authority Desalination Project Pipeline, | 2,510 | 2,229,031 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
California (concluded) | ||||||||
California State Public Works Board, RB, Various Capital Projects, Sub-Series I-1, | $ | 2,385 | $ | 2,745,994 | ||||
California Statewide Communities Development Authority, RB, John Muir Health, Series A, 5.13%, 7/01/39 | 2,300 | 2,373,370 | ||||||
California Statewide Communities Development Authority, Refunding RB, Episcopal Communities & Services: | ||||||||
5.00%, 5/15/42 | 845 | 759,883 | ||||||
5.00%, 5/15/47 | 735 | 648,167 | ||||||
City of Los Angeles California Department of Airports, Refunding RB, Los Angeles International Airport, Series A: | ||||||||
5.25%, 5/15/39 | 1,605 | 1,713,081 | ||||||
5.00%, 5/15/40 | 11,970 | 12,203,654 | ||||||
San Diego Community College District, GO, Election of 2006, 5.00%, 8/01/43 | 2,190 | 2,312,684 | ||||||
State of California, GO: | ||||||||
(AMBAC), 5.00%, 4/01/31 | 10 | 10,124 | ||||||
Various Purposes, 6.00%, 3/01/33 | 5,085 | 5,945,941 | ||||||
Various Purposes, 6.50%, 4/01/33 | 14,075 | 16,760,791 | ||||||
Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement Revenue, Asset-Backed, Senior Series A-1, 4.75%, 6/01/25 | 2,175 | 2,031,385 | ||||||
|
| |||||||
| 74,509,001 | ||||||||
Colorado — 3.0% | ||||||||
City & County of Denver Colorado Airport System, ARB, Series D, AMT (AMBAC), 7.75%, 11/15/13 | 1,435 | 1,439,090 | ||||||
Colorado Health Facilities Authority, Refunding RB, Evangelical Lutheran Good Samaritan Society Project, 5.00%, 12/01/42 | 3,580 | 3,331,333 | ||||||
Colorado State Board of Governors, Refunding RB, State University System Enterprise, Series A, 5.00%, 3/01/43 | 2,405 | 2,534,894 | ||||||
Plaza Metropolitan District No. 1 Colorado, Tax Allocation Bonds, Public Improvement Fee, Tax Increment, 8.00%, 6/01/14 (b) | 6,850 | 7,228,120 | ||||||
| Portfolio Abbreviations |
| To simplify the listings of portfolio holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list: | AGC | Assured Guarantee Corp. | GO | General Obligation Bonds | ||||
| AGM | Assured Guaranty Municipal Corp. | HDA | Housing Development Authority | |||||
| AMBAC | American Municipal Bond Assurance Corp. | HFA | Housing Finance Agency | |||||
| AMT | Alternative Minimum Tax (subject to) | HRB | Housing Revenue Bonds | |||||
| ARB | Airport Revenue Bonds | IDA | Industrial Development Authority | |||||
| BARB | Building Aid Revenue Bonds | ISD | Independent School District | |||||
| BHAC | Berkshire Hathaway Assurance Corp. | LRB | Lease Revenue Bonds | |||||
| CAB | Capital Appreciation Bonds | M/F | Multi-Family | |||||
| COP | Certificates of Participation | NPFGC | National Public Finance Guarantee Corp. | |||||
| COP | Colombian Peso | PSF-GTD | Permanent School Fund Guaranty | |||||
| EDA | Economic Development Authority | Radian | Radian Guaranty, Inc. | |||||
| EDC | Economic Development Corp. | RB | Revenue Bonds | |||||
| ERB | Education Revenue Bonds | SO | Special Obligation | |||||
| GAB | Grant Anticipation Notes | S/F | Single Family | |||||
| GARB | General Airport Revenue Bonds |
See Notes to Financial Statements.
| 12 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Fund, Inc. (MYD) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Colorado (concluded) | ||||||||
University of Colorado, RB, Series A: | ||||||||
5.25%, 6/01/30 | $ | 2,250 | $ | 2,499,772 | ||||
5.38%, 6/01/32 | 1,250 | 1,387,238 | ||||||
5.38%, 6/01/38 | 830 | 920,171 | ||||||
|
| |||||||
| 19,340,618 | ||||||||
Connecticut — 1.6% | ||||||||
Connecticut State Health & Educational Facility Authority, RB, Ascension Health Senior Credit, Series A, 5.00%, 11/15/40 | 2,770 | 2,842,463 | ||||||
Connecticut State Health & Educational Facility Authority, Refunding RB, Wesleyan University: | ||||||||
5.00%, 7/01/35 | 2,225 | 2,334,048 | ||||||
5.00%, 7/01/39 | 5,000 | 5,194,850 | ||||||
|
| |||||||
| 10,371,361 | ||||||||
Delaware — 1.6% | ||||||||
County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Project, 6.00%, 10/01/40 | 2,305 | 2,370,531 | ||||||
Delaware State EDA, RB, Exempt Facilities, Indian River Power, 5.38%, 10/01/45 | 8,275 | 7,846,355 | ||||||
|
| |||||||
| 10,216,886 | ||||||||
District of Columbia — 3.0% | ||||||||
District of Columbia, Tax Allocation Bonds, City Market at O Street Project, 5.13%, 6/01/41 | 4,440 | 4,446,704 | ||||||
Metropolitan Washington Airports Authority, Refunding RB: | ||||||||
CAB, Second Senior Lien, Series B (AGC), 5.59%, 10/01/31 (c) | 8,350 | 3,109,457 | ||||||
CAB, Second Senior Lien, Series B (AGC), 5.70%, 10/01/32 (c) | 15,000 | 5,180,400 | ||||||
CAB, Second Senior Lien, Series B (AGC), 5.81%, 10/01/33 (c) | 13,410 | 4,285,970 | ||||||
First Senior Lien, Series A, 5.25%, 10/01/44 | 2,425 | 2,455,604 | ||||||
|
| |||||||
| 19,478,135 | ||||||||
Florida — 8.7% | ||||||||
City of Atlantic Beach Florida, RB, Health Care Facilities, Fleet Landing Project, Series B, | 2,805 | 2,735,492 | ||||||
City of Clearwater Florida Water & Sewer Revenue, RB, Series A, 5.25%, 12/01/39 | 6,900 | 7,247,346 | ||||||
County of Broward Florida Water & Sewer Utility, Refunding RB, Series A, 5.25%, 10/01/34 | 2,155 | 2,329,684 | ||||||
County of Hillsborough Florida IDA, RB, National Gypsum Co. AMT: | ||||||||
Series A, 7.13%, 4/01/30 | 7,500 | 7,521,225 | ||||||
Series B, 7.13%, 4/01/30 | 5,000 | 5,002,250 | ||||||
County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport, Series A-1, | 7,530 | 7,781,954 | ||||||
County of Tampa-Hillsborough Florida Expressway Authority, Refunding RB: | ||||||||
Series A, 5.00%, 7/01/37 | 4,110 | 4,196,680 | ||||||
Series B, 5.00%, 7/01/42 | 5,120 | 5,177,088 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Florida (concluded) | ||||||||
Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/40 | $ | 6,150 | $ | 6,762,478 | ||||
Midtown Miami Community Development District, Special Assessment Bonds, Series B, | 4,980 | 4,997,928 | ||||||
Santa Rosa Bay Bridge Authority, RB, | 4,309 | 1,766,631 | ||||||
|
| |||||||
| 55,518,756 | ||||||||
Georgia — 1.4% | ||||||||
DeKalb Private Hospital Authority, Refunding RB, Children’s Healthcare, 5.25%, 11/15/39 | 1,700 | 1,737,876 | ||||||
Metropolitan Atlanta Rapid Transit Authority, RB, Sale Tax, Third Indenture Series, Series A, | 6,945 | 7,179,533 | ||||||
|
| |||||||
| 8,917,409 | ||||||||
Hawaii — 0.5% | ||||||||
State of Hawaii Harbor System, RB, Series A, | 2,760 | 2,968,352 | ||||||
Idaho — 1.6% | ||||||||
Power County Industrial Development Corp., RB, FMC Corp. Project, AMT, 6.45%, 8/01/32 | 10,000 | 10,008,100 | ||||||
Illinois — 12.4% | ||||||||
Bolingbrook Special Service Area No. 1, Special Tax Bonds, Forest City Project, 5.90%, 3/01/27 | 1,000 | 849,250 | ||||||
City of Chicago Illinois, GARB, O’Hare International Airport, Third Lien: | ||||||||
Series A, 5.63%, 1/01/35 | 4,200 | 4,358,718 | ||||||
Series A, 5.75%, 1/01/39 | 3,500 | 3,645,530 | ||||||
Series C, 6.50%, 1/01/41 | 11,920 | 13,404,517 | ||||||
City of Chicago Illinois, GO, Project, Series A: | ||||||||
5.00%, 1/01/33 | 1,625 | 1,534,878 | ||||||
5.00%, 1/01/34 | 7,585 | 7,125,728 | ||||||
City of Chicago Illinois, Refunding RB, Sales Tax Revenue, Series A, 5.25%, 1/01/38 | 1,660 | 1,732,658 | ||||||
City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts Revenue, 5.25%, 12/01/40 | 2,130 | 2,164,953 | ||||||
City of Chicago Illinois Waterworks, Refunding RB, Second Lien, Water Project, 5.00%, 11/01/42 | 6,030 | 5,966,263 | ||||||
County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38 | 1,635 | 1,716,227 | ||||||
Illinois Finance Authority, Refunding RB: | ||||||||
Ascension Health, Series A, 5.00%, 11/15/37 | 1,970 | 1,980,323 | ||||||
Ascension Health, Series A, 5.00%, 11/15/42 | 3,575 | 3,569,495 | ||||||
Central Dupage Health, Series B, 5.50%, 11/01/39 | 3,235 | 3,415,416 | ||||||
Illinois State Toll Highway Authority, RB, Series A, 5.00%, 1/01/38 | 4,720 | 4,730,006 | ||||||
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 13 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Fund, Inc. (MYD) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Illinois (concluded) | ||||||||
Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project: | ||||||||
CAB, Series B (AGM), 6.10%, 6/15/46 (c) | $ | 11,405 | $ | 1,606,166 | ||||
CAB, Series B (AGM), 6.11%, 6/15/47 (c) | 27,225 | 3,598,600 | ||||||
Series B (AGM), 5.00%, 6/15/50 | 6,405 | 6,293,169 | ||||||
Series B-2, 5.00%, 6/15/50 | 5,085 | 4,886,838 | ||||||
Railsplitter Tobacco Settlement Authority, RB: | ||||||||
5.50%, 6/01/23 | 2,730 | 3,001,935 | ||||||
6.00%, 6/01/28 | 2,335 | 2,503,587 | ||||||
State of Illinois, RB, Build Illinois, Series B, | 1,275 | 1,319,408 | ||||||
|
| |||||||
| 79,403,665 | ||||||||
Indiana — 5.3% | ||||||||
Carmel Redevelopment Authority, Refunding RB, Multipurpose, Series A: | ||||||||
4.00%, 8/01/35 | 2,305 | 2,155,175 | ||||||
4.00%, 2/01/38 | 3,700 | 3,362,264 | ||||||
Indiana Finance Authority, RB, Series A: | ||||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44 | 910 | 812,102 | ||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/48 | 3,015 | 2,656,185 | ||||||
Sisters of St. Francis Health, 5.25%, 11/01/39 | 1,690 | 1,724,831 | ||||||
Wastewater Utility (CWA Authority Project), First Lien, Series A, 5.25%, 10/01/38 | 6,665 | 6,900,275 | ||||||
Indiana Finance Authority, Refunding RB, Series A: | ||||||||
Community Health Network Project, | 3,670 | 3,577,479 | ||||||
Parkview Health System, 5.75%, 5/01/31 | 6,645 | 7,039,115 | ||||||
Indiana Municipal Power Agency, RB, Series B, 6.00%, 1/01/39 | 2,230 | 2,476,816 | ||||||
Indianapolis Local Public Improvement Bond Bank, RB, Series A: | ||||||||
5.00%, 1/15/36 | 805 | 840,565 | ||||||
5.00%, 1/15/40 | 2,580 | 2,666,353 | ||||||
|
| |||||||
| 34,211,160 | ||||||||
Iowa — 2.0% | ||||||||
Iowa Finance Authority, RB, Midwestern Disaster Area, Alcoa, Inc. Project, 4.75%, 8/01/42 | 1,830 | 1,544,611 | ||||||
Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project: | ||||||||
5.00%, 12/01/19 | 1,950 | 1,890,291 | ||||||
5.50%, 12/01/22 | 4,765 | 4,554,816 | ||||||
5.25%, 12/01/25 | 940 | 858,060 | ||||||
Iowa Student Loan Liquidity Corp., Refunding RB, Student Loan, Senior Series A-1, AMT, | 3,805 | 3,944,796 | ||||||
|
| |||||||
| 12,792,574 | ||||||||
| Municipal Bonds | Par (000) | Value | ||||||
Kansas — 0.7% | ||||||||
Kansas Development Finance Authority, Refunding RB, Adventist Health, 5.75%, 11/15/38 | $ | 4,380 | $ | 4,721,771 | ||||
Kentucky — 0.3% | ||||||||
Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45 (e) | 2,055 | 2,045,465 | ||||||
Louisiana — 4.0% | ||||||||
East Baton Rouge Sewerage Commission, RB, Series A, 5.25%, 2/01/39 | 1,610 | 1,705,908 | ||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Projects, 6.75%, 11/01/32 | 9,000 | 9,588,150 | ||||||
New Orleans Aviation Board, RB, Passenger Facility Charge, Series A, 5.25%, 1/01/41 | 1,260 | 1,277,111 | ||||||
State of Louisiana Gasoline & Fuels Tax Revenue, RB, Second Lien, Series B, 5.00%, 5/01/45 | 3,690 | 3,811,881 | ||||||
Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A: | ||||||||
5.50%, 5/15/30 | 2,055 | 2,094,456 | ||||||
5.25%, 5/15/31 | 1,750 | 1,740,042 | ||||||
5.25%, 5/15/32 | 2,240 | 2,216,413 | ||||||
5.25%, 5/15/33 | 2,430 | 2,394,911 | ||||||
5.25%, 5/15/35 | 1,025 | 1,005,535 | ||||||
|
| |||||||
| 25,834,407 | ||||||||
Maine — 0.8% | ||||||||
Maine Health & Higher Educational Facilities Authority, RB, Series A, 5.00%, 7/01/39 | 3,140 | 3,201,826 | ||||||
Maine Turnpike Authority, RB, Series A, | 1,790 | 1,867,901 | ||||||
|
| |||||||
| 5,069,727 | ||||||||
Maryland — 1.9% | ||||||||
County of Prince George’s Maryland, SO, Remarketing, National Harbor Project, 5.20%, 7/01/34 | 1,500 | 1,470,300 | ||||||
Maryland EDC, RB, Transportation Facilities Project, Series A, 5.75%, 6/01/35 | 880 | 891,141 | ||||||
Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25 | 2,400 | 2,497,296 | ||||||
Maryland Health & Higher Educational Facilities Authority, RB, Ascension Health Alliance, Series B, 5.00%, 11/15/51 | 6,520 | 6,524,107 | ||||||
Maryland Industrial Development Financing Authority, RB, Our Lady Of Good Counsel School, Series A, 6.00%, 5/01/35 | 500 | 513,980 | ||||||
|
| |||||||
| 11,896,824 | ||||||||
Massachusetts — 2.4% | ||||||||
Massachusetts Bay Transportation Authority, Refunding RB, Senior Series A-1, 5.25%, 7/01/29 | 3,250 | 3,798,145 | ||||||
Massachusetts Development Finance Agency, RB, Wellesley College, Series J, 5.00%, 7/01/42 | 3,680 | 3,872,685 | ||||||
See Notes to Financial Statements.
| 14 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Fund, Inc. (MYD) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Massachusetts (concluded) | ||||||||
Massachusetts Development Finance Agency, Refunding RB, Seven Hills Foundation & Affiliates (Radian), 5.00%, 9/01/35 | $ | 3,500 | $ | 3,030,965 | ||||
Massachusetts Health & Educational Facilities Authority, Refunding RB, Partners Healthcare System, Series J1, 5.00%, 7/01/39 | 1,640 | 1,666,568 | ||||||
Massachusetts School Building Authority, RB, Dedicated Sales Tax Revenue, Senior Series A, 5.00%, 5/15/43 | 2,880 | 3,029,414 | ||||||
|
| |||||||
| 15,397,777 | ||||||||
Michigan — 5.0% | ||||||||
City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien: | ||||||||
Series A, 5.00%, 7/01/32 | 3,175 | 2,877,344 | ||||||
Series A, 5.25%, 7/01/39 | 8,995 | 8,270,543 | ||||||
Series B (AGM), 7.50%, 7/01/33 | 1,835 | 1,969,909 | ||||||
Kalamazoo Hospital Finance Authority, Refunding RB, Bronson Methodist Hospital, 5.50%, 5/15/36 | 2,795 | 2,853,332 | ||||||
Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health, 5.75%, 11/15/39 | 6,085 | 6,221,608 | ||||||
Royal Oak Hospital Finance Authority, Refunding RB, William Beaumont Hospital: | ||||||||
8.00%, 9/01/29 | 2,000 | 2,393,580 | ||||||
8.25%, 9/01/39 | 6,365 | 7,656,331 | ||||||
|
| |||||||
| 32,242,647 | ||||||||
Minnesota — 0.1% | ||||||||
City of Minneapolis Minnesota, HRB, Gaar Scott Loft Project, AMT, 5.95%, 5/01/30 (f) | 815 | 817,616 | ||||||
Mississippi — 0.0% | ||||||||
University of Southern Mississippi, RB, Campus Facilities Improvements Project, 5.38%, 9/01/36 | 280 | 295,072 | ||||||
Missouri — 0.1% | ||||||||
Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44 | 510 | 527,406 | ||||||
Nebraska — 0.4% | ||||||||
Central Plains Energy Project, RB, Gas Project No. 3: | ||||||||
5.25%, 9/01/37 | 1,670 | 1,717,445 | ||||||
5.00%, 9/01/42 | 925 | 904,215 | ||||||
|
| |||||||
| 2,621,660 | ||||||||
New Jersey — 3.3% | ||||||||
New Jersey EDA, RB: | ||||||||
Continental Airlines, Inc. Project, AMT, | 975 | 896,064 | ||||||
First Mortgage, Lions Gate Project, Series A, 5.75%, 1/01/25 | 710 | 701,601 | ||||||
First Mortgage, Lions Gate Project, Series A, 5.88%, 1/01/37 | 230 | 211,984 | ||||||
Kapkowski Road Landfill Project, Series B, AMT, 6.50%, 4/01/31 | 2,500 | 2,647,700 | ||||||
New Jersey State Turnpike Authority, RB, Series A: | ||||||||
5.00%, 1/01/38 | 1,355 | 1,406,056 | ||||||
5.00%, 1/01/43 | 1,835 | 1,877,646 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
New Jersey (concluded) | ||||||||
New Jersey Transportation Trust Fund Authority, RB, Transportation System: | ||||||||
CAB, Series C (AMBAC), 5.81%, 12/15/35 (c) | $ | 8,110 | $ | 2,284,425 | ||||
Series A, 5.50%, 6/15/41 | 3,630 | 3,821,156 | ||||||
Series B, 5.25%, 6/15/36 | 4,990 | 5,245,388 | ||||||
Rutgers The State University of New Jersey, Refunding RB, Series L: | ||||||||
5.00%, 5/01/38 | 1,025 | 1,087,863 | ||||||
5.00%, 5/01/43 | 1,065 | 1,119,251 | ||||||
|
| |||||||
| 21,299,134 | ||||||||
New York — 5.8% | ||||||||
City of New York IDA, RB, British Airways PLC Project, AMT, 7.63%, 12/01/32 | 1,250 | 1,255,875 | ||||||
County of Dutchess New York IDA, Refunding RB, St. Francis Hospital, Series A, 7.50%, 3/01/29 | 2,000 | 2,023,600 | ||||||
County of Oneida New York Industrial Development Agency, RB, Hamilton College Civic Facility, 5.00%, 9/15/26 | 1,990 | 2,128,683 | ||||||
Metropolitan Transportation Authority, Refunding RB, Dedicated Tax Fund, Series B, 5.00%, 11/15/34 | 4,910 | 5,125,500 | ||||||
New York City Transitional Finance Authority Future Tax Secured, RB, Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42 | 4,985 | 5,224,878 | ||||||
New York Liberty Development Corp., Refunding RB, Second Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 7/15/49 | 2,480 | 2,627,238 | ||||||
New York State Dormitory Authority, RB, Series F: | ||||||||
5.00%, 3/15/15 (b) | 75 | 79,874 | ||||||
5.00%, 3/15/35 | 6,305 | 6,514,830 | ||||||
New York State Dormitory Authority, Refunding RB, Series A, 5.00%, 6/15/31 | 3,595 | 3,895,938 | ||||||
New York State Thruway Authority, Refunding RB, General, Series I, 5.00%, 1/01/42 | 3,590 | 3,674,329 | ||||||
Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8: | ||||||||
6.00%, 12/01/36 | 2,625 | 2,831,745 | ||||||
6.00%, 12/01/42 | 1,485 | 1,592,707 | ||||||
|
| |||||||
| 36,975,197 | ||||||||
North Carolina — 3.0% | ||||||||
North Carolina Capital Facilities Finance Agency, Refunding RB, Solid Waste Disposal Facility, Duke Energy Carolinas Project, Series B, 4.63%, 11/01/40 | 7,350 | 7,293,993 | ||||||
North Carolina Medical Care Commission, RB, Health Care Facilities, Duke University Health System, Series A, 5.00%, 6/01/42 | 2,805 | 2,845,785 | ||||||
North Carolina Medical Care Commission, Refunding RB: | ||||||||
First Mortgage, Aldersgate, 6.25%, 7/01/35 | 2,970 | 2,912,738 | ||||||
First Mortgage, Presbyterian Homes, 5.40%, 10/01/27 | 5,000 | 4,769,200 | ||||||
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 15 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Fund, Inc. (MYD) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
North Carolina (concluded) | ||||||||
North Carolina Medical Care Commission, Refunding RB (concluded): | ||||||||
Retirement Facilities, First Mortgage, Whitestone Project, Series A, 7.75%, 3/01/41 | $ | 1,210 | $ | 1,276,780 | ||||
|
| |||||||
| 19,098,496 | ||||||||
Ohio — 0.8% | ||||||||
County of Hamilton Ohio, RB, Christ Hospital Project, 5.00%, 6/01/42 | 2,205 | 2,104,959 | ||||||
County of Montgomery Ohio, Refunding RB, Catholic Health, Series A, 5.00%, 5/01/39 | 2,840 | 2,783,853 | ||||||
|
| |||||||
| 4,888,812 | ||||||||
Oregon — 0.1% | ||||||||
City of Tigard Oregon, Refunding RB, Water System, 5.00%, 8/01/37 | 510 | 535,016 | ||||||
Pennsylvania — 2.1% | ||||||||
Allentown Neighborhood Improvement Zone Development Authority, Refunding RB, Series A, 5.00%, 5/01/42 | 5,250 | 4,694,603 | ||||||
Pennsylvania Economic Development Financing Authority, RB: | ||||||||
Aqua Pennsylvania, Inc. Project, | 3,805 | 3,874,327 | ||||||
National Gypsum Co., Series A, AMT, 6.25%, 11/01/27 | 2,000 | 1,963,480 | ||||||
Pennsylvania Higher Educational Facilities Authority, RB, Shippensburg University Student Services, Student Housing, 5.00%, 10/01/44 | 1,890 | 1,711,319 | ||||||
Philadelphia IDA, RB, Commercial Development, AMT, 7.75%, 12/01/17 | 1,265 | 1,265,721 | ||||||
|
| |||||||
| 13,509,450 | ||||||||
Puerto Rico — 0.6% | ||||||||
Puerto Rico Sales Tax Financing Corp., Refunding RB, CAB, First Sub-Series C, 7.85%, 8/01/38 (c) | 23,695 | 3,523,920 | ||||||
Rhode Island — 0.5% | ||||||||
Central Falls Detention Facility Corp., Refunding RB, 7.25%, 7/15/35 | 4,190 | 3,152,766 | ||||||
South Carolina — 1.1% | ||||||||
South Carolina State Ports Authority, RB, 5.25%, 7/01/40 | 6,695 | 6,953,695 | ||||||
Tennessee — 1.7% | ||||||||
City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Series A, 5.25%, 1/01/45 (e) | 2,855 | 2,841,753 | ||||||
County of Hardeman Tennessee Correctional Facilities Corp., RB, 7.75%, 8/01/17 | 2,030 | 1,999,022 | ||||||
County of Rutherford Tennessee Health & Educational Facilities Board, RB, Ascension Health, Series C, 5.00%, 11/15/47 | 430 | 436,820 | ||||||
Metropolitan Government Nashville & Davidson County Health & Educational Facility Board, Refunding RB, Vanderbilt University, Series D, 3.25%, 10/01/37 | 6,520 | 5,402,276 | ||||||
|
| |||||||
| 10,679,871 | ||||||||
| Municipal Bonds | Par (000) | Value | ||||||
Texas — 12.8% | ||||||||
Central Texas Regional Mobility Authority, Refunding RB: | ||||||||
Senior Lien, 6.25%, 1/01/46 | $ | 4,365 | $ | 4,463,038 | ||||
Senior Lien, Series A, 5.00%, 1/01/33 | 205 | 198,840 | ||||||
Subordinate Lien, 5.00%, 1/01/33 | 725 | 657,590 | ||||||
Subordinate Lien, 5.00%, 1/01/42 | 645 | 557,003 | ||||||
City of Dallas Texas Waterworks & Sewer System, Refunding RB, 5.00%, 10/01/35 | 3,060 | 3,229,952 | ||||||
City of Houston Texas, RB, Special Facilities, Continental Airlines, Inc., Series E, AMT: | ||||||||
7.38%, 7/01/22 | 3,500 | 3,499,440 | ||||||
7.00%, 7/01/29 | 3,000 | 2,999,580 | ||||||
City of Houston Texas Airport System, Refunding ARB, Senior Lien, Series A, 5.50%, 7/01/39 | 3,100 | 3,403,149 | ||||||
City of San Antonio Texas Public Service Board, RB, Electric & Gas Systems, Junior Lien, 5.00%, 2/01/43 | 5,070 | 5,290,951 | ||||||
Clifton Higher Education Finance Corp., RB, 6.00%, 8/15/43 | 1,525 | 1,581,974 | ||||||
County of Matagorda Texas Navigation District No. 1, Refunding RB, Central Power & Light Co. Project, Series A, 6.30%, 11/01/29 | 4,320 | 4,801,853 | ||||||
County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Scott & White Healthcare, Series A, 5.00%, 8/15/43 | 730 | 731,066 | ||||||
Dallas-Fort Worth International Airport, Refunding ARB, Joint Improvement, Series E, AMT, 5.00%, 11/01/35 | 3,665 | 3,588,401 | ||||||
Fort Bend County Industrial Development Corp., RB, NRG Energy Project, Series B, 4.75%, 11/01/42 | 2,150 | 1,859,169 | ||||||
La Vernia Higher Education Finance Corp., RB, Kipp, Inc., Series A, 6.38%, 8/15/44 | 1,000 | 1,065,180 | ||||||
North Texas Tollway Authority, RB, CAB, Special Project System, Series B, 6.04%, 9/01/37 (c) | 4,110 | 995,195 | ||||||
North Texas Tollway Authority, Refunding RB, Second Tier System, Series F, 6.13%, 1/01/31 | 12,140 | 12,977,053 | ||||||
San Antonio Energy Acquisition Public Facility Corp., RB, Gas Supply, 5.50%, 8/01/25 | 6,365 | 7,063,431 | ||||||
Texas Municipal Gas Acquisition & Supply Corp. III, RB, 5.00%, 12/15/29 | 1,955 | 1,925,128 | ||||||
Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien: | ||||||||
LBJ Infrastructure Group LLC, LBJ Freeway Managed Lanes Project, 7.00%, 6/30/40 | 7,000 | 7,639,800 | ||||||
NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39 | 6,655 | 7,181,477 | ||||||
Texas State Turnpike Authority, RB, CAB (AMBAC), 6.09%, 8/15/35 (c) | 15,000 | 4,062,600 | ||||||
Texas Transportation Commission, Refunding RB, Central Texas Turnpike System, First Tier, Series A, 5.00%, 8/15/41 | 2,445 | 2,426,662 | ||||||
|
| |||||||
| 82,198,532 | ||||||||
See Notes to Financial Statements.
| 16 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Fund, Inc. (MYD) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Utah — 0.9% | ||||||||
County of Utah, RB, IHC Health Services, Inc., 5.00%, 5/15/43 | $ | 4,090 | $ | 4,190,532 | ||||
University of Utah, RB, General, Series A, 5.00%, 8/01/43 | 1,280 | 1,340,275 | ||||||
|
| |||||||
| 5,530,807 | ||||||||
Virginia — 2.1% | ||||||||
County of James City Virginia EDA, Refunding RB, First Mortgage, Williamsburg Lodge, Series A: | ||||||||
5.35%, 9/01/26 | 1,500 | 1,456,800 | ||||||
5.50%, 9/01/34 | 2,000 | 1,852,700 | ||||||
Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings LLC Project, AMT: | ||||||||
5.25%, 1/01/32 | 3,270 | 3,235,796 | ||||||
6.00%, 1/01/37 | 5,905 | 6,114,096 | ||||||
Winchester Industrial Development Authority, RB, Westminster-Canterbury, Series A, | 1,000 | 1,004,420 | ||||||
|
| |||||||
| 13,663,812 | ||||||||
Washington — 1.1% | ||||||||
Vancouver Housing Authority, HRB, Teal Pointe Apartments Project, AMT: | ||||||||
6.00%, 9/01/22 | 875 | 865,480 | ||||||
6.20%, 9/01/32 | 1,250 | 1,144,875 | ||||||
Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, | 4,745 | 4,964,694 | ||||||
|
| |||||||
| 6,975,049 | ||||||||
Wisconsin — 4.3% | ||||||||
State of Wisconsin, Refunding RB, Series A, 6.00%, 5/01/36 | 14,300 | 15,978,677 | ||||||
Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Care Group, 5.00%, 11/15/33 | 4,970 | 5,193,551 | ||||||
WPPI Energy Wisconsin, Refunding RB, Power Supply System, Series A: | ||||||||
5.00%, 7/01/29 | 765 | 821,977 | ||||||
5.00%, 7/01/30 | 970 | 1,032,662 | ||||||
5.00%, 7/01/31 | 2,105 | 2,228,963 | ||||||
5.00%, 7/01/37 | 2,560 | 2,626,970 | ||||||
|
| |||||||
| 27,882,800 | ||||||||
Wyoming — 1.1% | ||||||||
County of Sweetwater Wyoming, Refunding RB, Idaho Power Co. Project, Remarketing, | 6,195 | 6,675,174 | ||||||
Wyoming Municipal Power Agency, Inc., RB, Series A, 5.00%, 1/01/42 | 595 | 598,457 | ||||||
|
| |||||||
| 7,273,631 | ||||||||
| Total Municipal Bonds — 116.1% | 744,722,305 | |||||||
| Municipal Bonds Transferred to Tender Option Bond Trusts (g) | Par (000) | Value | ||||||
Alabama — 0.7% | ||||||||
City of Birmingham Alabama Special Care Facilities Financing Authority, Refunding RB, Ascension Health, Senior Credit Series C-2, 5.00%, 11/15/36 | $ | 4,538 | $ | 4,569,853 | ||||
California — 6.2% | ||||||||
Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, | 6,581 | 7,073,816 | ||||||
California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/39 (h) | 5,310 | 5,686,638 | ||||||
City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/39 | 19,080 | 19,934,021 | ||||||
Los Angeles Community College District California, GO, Election of 2001, Series A (AGM, NPFGC), 5.00%, 8/01/32 | 4,650 | 4,905,703 | ||||||
San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33 | 2,154 | 2,401,879 | ||||||
|
| |||||||
| 40,002,057 | ||||||||
Colorado — 2.7% | ||||||||
Colorado Health Facilities Authority, RB, Catholic Health (AGM): | ||||||||
Series C-3, 5.10%, 10/01/41 | 7,490 | 7,528,798 | ||||||
Series C-7, 5.00%, 9/01/36 | 4,800 | 4,830,720 | ||||||
Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A, 5.50%, 7/01/34 (h) | 4,299 | 4,708,219 | ||||||
|
| |||||||
| 17,067,737 | ||||||||
Connecticut — 3.0% | ||||||||
Connecticut State Health & Educational Facility Authority, RB, Yale University: | ||||||||
Series T-1, 4.70%, 7/01/29 | 9,117 | 9,512,598 | ||||||
Series X-3, 4.85%, 7/01/37 | 9,266 | 9,701,486 | ||||||
|
| |||||||
| 19,214,084 | ||||||||
Florida — 1.9% | ||||||||
County of Miami-Dade Florida, RB, Water & Sewer System, 5.00%, 10/01/34 | 11,448 | 11,874,463 | ||||||
Georgia — 1.0% | ||||||||
Private Colleges & Universities Authority, Refunding RB, Emory University, Series C, 5.00%, 9/01/38 | 6,398 | 6,657,891 | ||||||
Massachusetts — 0.7% | ||||||||
Massachusetts School Building Authority, RB, Senior Dedicated Sales Tax, Series B, 5.00%, 10/15/41 | 4,606 | 4,811,802 | ||||||
New Hampshire — 0.7% | ||||||||
New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/39 (h) | 4,048 | 4,402,661 | ||||||
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 17 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Fund, Inc. (MYD) (Percentages shown are based on Net Assets) |
| Municipal Bonds Transferred to Tender Option Bond Trusts (g) | Par (000) | Value | ||||||
New York — 6.8% | ||||||||
Hudson Yards Infrastructure Corp., RB, Senior, Series A, 5.75%, 2/15/47 (h) | $ | 3,260 | $ | 3,453,010 | ||||
New York City Municipal Water Finance Authority, Refunding RB, Water & Sewer System, Second General Resolution, Series FF-2, 5.50%, 6/15/40 | 3,194 | 3,420,225 | ||||||
New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Construction, Series 1, 5.25%, 12/15/43 | 21,630 | 22,572,852 | ||||||
New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, | 13,080 | 13,963,292 | ||||||
|
| |||||||
| 43,409,379 | ||||||||
North Carolina — 3.5% | ||||||||
North Carolina Capital Facilities Finance Agency, Refunding RB: | ||||||||
Duke University Project, Series A, 5.00%, 10/01/41 | 18,897 | 19,415,734 | ||||||
Residuals, Wake Forest University, 5.00%, 1/01/38 | 3,120 | 3,256,749 | ||||||
|
| |||||||
| 22,672,483 | ||||||||
Ohio — 4.7% | ||||||||
State of Ohio, Refunding RB, Cleveland Clinic Health System Obligated Group, Series A, 5.50%, 1/01/39 | 27,896 | 30,470,129 | ||||||
South Carolina — 3.0% | ||||||||
Charleston Educational Excellence Finance Corp., RB, Charleston County School (AGC) (b): | ||||||||
5.25%, 12/01/15 | 7,795 | 8,582,217 | ||||||
5.25%, 12/01/15 | 6,920 | 7,618,851 | ||||||
5.25%, 12/01/15 | 2,510 | 2,763,485 | ||||||
|
| |||||||
| 18,964,553 | ||||||||
Tennessee — 1.9% | ||||||||
County of Shelby Tennessee Health Educational & Housing Facilities Board, Refunding RB, St. Jude’s Children’s Research Hospital, 5.00%, 7/01/31 | 11,240 | 11,919,908 | ||||||
Texas — 2.1% | ||||||||
County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41 | 6,920 | 7,159,709 | ||||||
University of Texas System, Refunding RB, Series B, 5.00%, 8/15/43 | 6,241 | 6,609,375 | ||||||
|
| |||||||
| 13,769,084 | ||||||||
| Municipal Bonds Transferred to Tender Option Bond Trusts (g) | Par (000) | Value | ||||||
Utah — 1.2% | ||||||||
City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 8/15/41 | $ | 7,303 | $ | 7,401,523 | ||||
Virginia — 3.8% | ||||||||
County of Fairfax Virginia IDA, Refunding RB, Health Care, Inova Health System, Series A, 5.50%, 5/15/35 | 6,266 | 6,661,160 | ||||||
University of Virginia, Refunding RB, General, 5.00%, 6/01/40 | 10,618 | 11,383,840 | ||||||
Virginia Small Business Financing Authority, Refunding RB, Sentara Healthcare, 5.00%, 11/01/40 | 6,075 | 6,145,403 | ||||||
|
| |||||||
| 24,190,403 | ||||||||
Washington — 0.9% | ||||||||
Central Puget Sound Regional Transit Authority, RB, Series A (AGM), 5.00%, 11/01/32 | 5,384 | 5,668,836 | ||||||
Wisconsin — 1.8% | ||||||||
Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health, Inc., Series C, 5.25%, 4/01/39 (h) | 11,456 | 11,759,599 | ||||||
| Total Municipal Bonds Transferred to Tender Option Bond Trusts — 46.6% | 298,826,445 | |||||||
| Total Long-Term Investments (Cost — $1,024,471,352) — 162.7% | 1,043,548,750 | |||||||
| Short-Term Securities | Shares | |||||||
FFI Institutional Tax-Exempt Fund, | 13,238,307 | 13,238,307 | ||||||
| Total Short-Term Securities (Cost — $13,238,307) — 2.1% | 13,238,307 | |||||||
| Total Investments (Cost — $1,037,709,659) — 164.8% | 1,056,787,057 | |||||||
| Other Assets Less Liabilities — 0.3% | 2,102,438 | |||||||
| Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (25.9%) | (166,120,004 | ) | ||||||
| VRDP Shares, at Liquidation Value — (39.2%) | (251,400,000 | ) | ||||||
|
| |||||||
| Net Assets Applicable to Common Shares — 100.0% | $ | 641,369,491 | ||||||
|
| |||||||
| Notes to Schedule of Investments |
| (a) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
| (b) | US 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. |
| (c) | Represents a zero-coupon bond. Rate shown reflects the current yield as of report date. |
| (d) | Issuer filed for bankruptcy and/or is in default of principal and/or interest payments. |
See Notes to Financial Statements.
| 18 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Fund, Inc. (MYD) |
| (e) | When-issued security. Unsettled when-issued transactions were as follows: |
| Counter Party | Value | Unrealized Appreciation | ||||||
Morgan Stanley & Co. LLC | $ | 9,854,912 | $ | 197,516 | ||||
| (f) | Variable rate security. Rate shown is as of report date. |
| (g) | Represent bonds transferred to a TOB. In exchange the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs. |
| (h) | All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from October 1, 2016 to November 15, 2019 is $23,448,797. |
| (i) | Investments in issuers considered to be an affiliate of the Fund during the six months ended October 31, 2013, for purposes of Section 2(a)(3) of 1940 Act, were as follows: |
| Affiliate | Shares Held at April 30, 2013 | Net Activity | Shares Held at October 31, 2013 | Income | ||||||||||||
FFI Institutional Tax-Exempt Fund | 6,265,241 | 6,973,066 | 13,238,307 | $ | 1,438 | |||||||||||
| (j) | Represents the current yield as of report date. |
| Ÿ | Financial futures contracts as of October 31, 2013 were as follows: |
| Contracts Sold | Issue | Exchange | Expiration | Notional Value | Unrealized Depreciation | |||||||||
| (196) | 10-Year US Treasury Notes | Chicago Board of Trade | December 2013 | $ | 24,962,438 | $ | (15,526 | ) | ||||||
| Ÿ | Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows: |
| Ÿ | Level 1 — unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access |
| Ÿ | Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or 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) |
| Ÿ | Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments) |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2013:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
| Investments: | ||||||||||||||||
Long-Term Investments 1 | — | $ | 1,043,548,750 | — | $ | 1,043,548,750 | ||||||||||
Short-Term Securities | $ | 13,238,307 | — | — | 13,238,307 | |||||||||||
|
| |||||||||||||||
Total | $ | 13,238,307 | $ | 1,043,548,750 | — | $ | 1,056,787,057 | |||||||||
|
| |||||||||||||||
1 See above Schedule of Investments for values in each state or political subdivision.
|
| |||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Derivative Financial Instruments2 | ||||||||||||||||
Liabilities: | ||||||||||||||||
Interest rate contracts | $ | (15,526 | ) | — | — | $ | (15,526 | ) | ||||||||
| 2 | Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument. |
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 19 |
Table of Contents
Schedule of Investments (concluded) | BlackRock MuniYield Fund, Inc. (MYD) |
Certain of the Fund’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets: | ||||||||||||||
Cash | $ | 4 | — | — | $ | 4 | ||||||||
Cash pledged for financial futures contracts | 347,000 | — | — | 347,000 | ||||||||||
Liabilities: | ||||||||||||||
TOB trust certificates | — | $ | (166,078,226 | ) | — | (166,078,226 | ) | |||||||
VRDP Shares | — | (251,400,000 | ) | — | (251,400,000 | ) | ||||||||
|
| |||||||||||||
Total | $ | 347,004 | $ | (417,478,226 | ) | — | $ | (417,131,222 | ) | |||||
|
|
|
|
|
|
| ||||||||
There were no transfers between levels during the six months ended October 31, 2013.
See Notes to Financial Statements.
| 20 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments October 31, 2013 (Unaudited) | BlackRock MuniYield Quality Fund, Inc. (MQY) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Alabama — 2.8% | ||||||||
Birmingham Water Works Board, RB, Series B, | $ | 2,000 | $ | 2,030,740 | ||||
City of Birmingham Alabama, GO, CAB, Series A, | 560 | 470,949 | ||||||
County of Jefferson Alabama, RB, Series A, | 3,000 | 2,789,940 | ||||||
University of Alabama, RB, Series A (NPFGC), | 7,125 | 7,266,431 | ||||||
|
| |||||||
| 12,558,060 | ||||||||
Alaska — 1.8% | ||||||||
Alaska Housing Finance Corp., RB, General Housing, Series B (NPFGC), 5.25%, 12/01/30 | 600 | 639,354 | ||||||
Alaska Housing Finance Corp., Refunding RB, | 810 | 761,611 | ||||||
Alaska Industrial Development & Export Authority, RB, Providence Health Services, Series A, | 1,400 | 1,473,276 | ||||||
Borough of Matanuska-Susitna Alaska, RB, Goose Creek Correctional Center (AGC), | 4,425 | 5,035,561 | ||||||
|
| |||||||
| 7,909,802 | ||||||||
Arizona — 0.9% | ||||||||
Greater Arizona Development Authority, RB, Series B (NPFGC), 5.00%, 8/01/35 | 1,600 | 1,631,920 | ||||||
State of Arizona, COP, Department of Administration Series A (AGM): | ||||||||
5.00%, 10/01/27 | 1,850 | 1,970,121 | ||||||
5.25%, 10/01/28 | 250 | 267,670 | ||||||
|
| |||||||
| 3,869,711 | ||||||||
Arkansas — 0.3% | ||||||||
Arkansas Development Finance Authority, RB, (AMBAC), 5.61%, 7/01/46 (b) | 7,000 | 1,150,030 | ||||||
California — 19.1% | ||||||||
Alameda Corridor Transportation Authority, Refunding RB, CAB, Subordinate Lien, Series A (AMBAC), 5.45%, 10/01/25 (a) | 4,150 | 4,427,220 | ||||||
Cabrillo Community College District, GO, CAB, Election of 2004, Series B (NPFGC) (b): | ||||||||
5.90%, 8/01/37 | 3,250 | 817,798 | ||||||
5.94%, 8/01/38 | 7,405 | 1,738,546 | ||||||
California Health Facilities Financing Authority, RB: | ||||||||
St. Joseph Health System, Series A, 5.75%, 7/01/39 | 775 | 861,575 | ||||||
Sutter Health, Series A, 5.00%, 8/15/52 | 1,910 | 1,843,341 | ||||||
Sutter Health, Series B, 5.88%, 8/15/31 | 1,500 | 1,706,850 | ||||||
California State Public Works Board, LRB, Various Judicial Council Projects, Series A, 5.00%, 3/01/38 | 955 | 963,442 | ||||||
California Statewide Communities Development Authority, RB, Kaiser Permanente, Series A, 5.00%, 4/01/42 | 2,000 | 2,014,940 | ||||||
Carlsbad California Unified School District, GO, Election of 2006, Series B, 5.54%, 5/01/34 (a) | 5,000 | 3,871,350 | ||||||
City of San Jose California, Refunding ARB, AMT: | ||||||||
Series A (AMBAC), 5.50%, 3/01/32 | 5,100 | 5,467,047 | ||||||
Series A-1, 5.75%, 3/01/34 | 1,150 | 1,218,966 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
California (continued) | ||||||||
Coast Community College District, GO, CAB, Election of 2002, Series C (AGM), 5.00%, 8/01/31 (a) | 2,800 | 2,938,404 | ||||||
County of Orange California Sanitation District, COP, Series B (AGM): | ||||||||
5.00%, 2/01/30 | 3,500 | 3,723,230 | ||||||
5.00%, 2/01/31 | 1,200 | 1,274,340 | ||||||
El Monte Union High School District, GO, Series C (AGM), 5.25%, 6/01/28 | 6,110 | 6,513,688 | ||||||
Grossmont Union High School District, GO, CAB, Election of 2004, 5.27%, 8/01/31 (b) | 5,000 | 1,986,000 | ||||||
Grossmont-Cuyamaca Community College District, GO, Refunding CAB, Election of 2002, Series C (AGC), 5.13%, 8/01/30 (b) | 10,030 | 4,293,642 | ||||||
Hartnell Community College District California, GO, CAB, Election of 2002, Series D, 5.67%, 8/01/34 (a) | 4,125 | 2,817,004 | ||||||
Los Angeles Community College District California, GO, Election of 2001, Series A (NPFGC), 5.00%, 8/01/32 | 770 | 812,342 | ||||||
Mount San Antonio Community College District, GO, Refunding, CAB, Election of 2008, Series A, 5.56%, 8/01/43 (a) | 1,945 | 926,034 | ||||||
Poway Unified School District, GO, Refunding, CAB, School Facilities Improvement, Election of 2007, Series B, 5.76%, 8/01/36 (b) | 5,000 | 1,373,750 | ||||||
Rio Hondo Community College District California, GO, CAB, Election of 2004, Series C, 5.54%, 8/01/37 (b) | 4,005 | 1,093,846 | ||||||
San Bernardino Community College District, GO, CAB, Election of 2008, Series B, 5.47%, 8/01/34 (a) | 10,000 | 8,004,600 | ||||||
San Diego County Water Authority, COP, Refunding, Series A (AGM), 5.00%, 5/01/38 | 3,000 | 3,152,580 | ||||||
San Diego Unified School District California, GO, CAB, Election of 2008, Series C, 5.66%, 7/01/38 (b) | 2,200 | 555,280 | ||||||
San Diego Unified School District California, GO, Refunding, CAB, Series R-1, 5.08%, 7/01/31 (b) | 1,725 | 711,045 | ||||||
San Joaquin County Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A, 6.00%, 3/01/36 | 900 | 1,033,434 | ||||||
San Jose California Unified School District, GO, Election of 2002, Series B (NPFGC), 5.00%, 8/01/15 (c) | 2,825 | 3,057,582 | ||||||
San Marcos Unified School District, GO, Election of 2010, Series A: | ||||||||
5.00%, 8/01/34 | 900 | 948,366 | ||||||
5.00%, 8/01/38 | 760 | 789,617 | ||||||
State of California, GO | ||||||||
5.50%, 4/01/28 | 5 | 5,082 | ||||||
Various Purpose, 5.50%, 3/01/40 | 2,000 | 2,167,420 | ||||||
Various Purposes, 5.00%, 4/01/42 | 1,500 | 1,534,065 | ||||||
State of California, GO, Refunding, Various Purpose: | ||||||||
5.00%, 2/01/38 | 2,000 | 2,055,640 | ||||||
5.00%, 9/01/41 | 2,300 | 2,350,692 | ||||||
5.00%, 10/01/41 | 1,300 | 1,328,938 | ||||||
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 21 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Quality Fund, Inc. (MQY) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
California (concluded) | ||||||||
Ventura County Community College District, GO, Election of 2002, Series B (NPFGC), 5.00%, 8/01/30 | $ | 1,825 | $ | 1,914,918 | ||||
Yosemite Community College District, GO, CAB, Election of 2004, Series D, 5.57%, 8/01/36 (b) | 15,000 | 4,298,250 | ||||||
|
| |||||||
| 86,590,864 | ||||||||
Colorado — 0.4% | ||||||||
Regional Transportation District, COP, Refunding, Series A, 5.38%, 6/01/31 | 1,885 | 2,001,700 | ||||||
Florida — 9.7% | ||||||||
City of Jacksonville Florida Transportation, Refunding RB, Series A, 5.00%, 10/01/30 | 380 | 403,856 | ||||||
County of Duval Florida School Board, COP, Master Lease Program (AGM), 5.00%, 7/01/33 | 4,765 | 4,928,249 | ||||||
County of Lee Florida, Refunding ARB, Series A, AMT: | ||||||||
5.63%, 10/01/26 | 1,280 | 1,396,685 | ||||||
5.38%, 10/01/32 | 1,700 | 1,743,333 | ||||||
County of Miami-Dade Florida, GO, Building Better Communities Program, Series B, 6.38%, 7/01/28 | 3,300 | 3,812,589 | ||||||
County of Miami-Dade Florida, RB, Seaport: | ||||||||
AMT, Series B, 6.00%, 10/01/30 | 870 | 931,004 | ||||||
AMT, Series B, 6.25%, 10/01/38 | 560 | 598,366 | ||||||
AMT, Series B, 6.00%, 10/01/42 | 895 | 934,371 | ||||||
Series A, 6.00%, 10/01/38 | 2,755 | 3,015,595 | ||||||
County of Miami-Dade Florida, Refunding RB, Subordinate Special Obligation, Series B, 5.00%, 10/01/37 | 1,705 | 1,743,090 | ||||||
County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport Series A: | ||||||||
5.50%, 10/01/36 | 6,490 | 6,827,026 | ||||||
AMT (AGC), 5.00%, 10/01/40 | 1,000 | 995,560 | ||||||
County of Palm Beach Florida Solid Waste Authority, Refunding RB, 5.00%, 10/01/31 | 2,825 | 2,944,836 | ||||||
County of Sarasota Florida Public Hospital District, RB, Sarasota Memorial Hospital Project, Series A, AMT, 5.63%, 7/01/39 | 375 | 384,000 | ||||||
Florida Ports Financing Commission, Refunding RB, State Transportation Trust Fund, Series B, AMT: | ||||||||
5.13%, 6/01/27 | 1,395 | 1,517,425 | ||||||
5.38%, 10/01/29 | 1,900 | 2,087,834 | ||||||
Florida State Department of Environmental Protection, RB, Florida Forever Project, Series B (NPFGC), 5.00%, 7/01/27 | 1,350 | 1,458,432 | ||||||
Highlands County Health Facilities Authority, RB, Adventist Health System/Sunbelt, Series B, 6.00%, 11/15/37 | 1,250 | 1,409,788 | ||||||
Hillsborough County Aviation Authority Florida, RB, Series A, AMT (AGC), 5.38%, 10/01/33 | 2,700 | 2,868,912 | ||||||
Reedy Creek Improvement District, GO, Series A, 5.25%, 6/01/33 | 1,620 | 1,729,285 | ||||||
South Florida Water Management District, COP: | ||||||||
(AGC), 5.00%, 10/01/22 | 700 | 779,800 | ||||||
(AMBAC), 5.00%, 10/01/36 | 1,500 | 1,543,470 | ||||||
|
| |||||||
| 44,053,506 | ||||||||
| Municipal Bonds | Par (000) | Value | ||||||
Georgia — 1.9% | ||||||||
City of Atlanta Georgia Department of Aviation, Refunding GARB, Series C (AGM), 5.00%, 1/01/33 | 5,000 | 5,097,900 | ||||||
County of Burke Georgia Development Authority, Refunding RB, Oglethorpe Power-Vogtle Project, Series C, 5.70%, 1/01/43 | 3,150 | 3,297,546 | ||||||
|
| |||||||
| 8,395,446 | ||||||||
Illinois — 20.7% | ||||||||
Chicago Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/36 | 840 | 861,647 | ||||||
City of Chicago Illinois, GARB, O’Hare International Airport Third Lien: | ||||||||
Series A, 5.75%, 1/01/39 | 5,500 | 5,728,690 | ||||||
Series B-2, AMT, 6.00%, 1/01/29 | 3,300 | 3,321,153 | ||||||
Series B-2, AMT (AGM), 5.75%, 1/01/14 (c) | 7,400 | 7,467,340 | ||||||
City of Chicago Illinois, GO, CAB, City Colleges (NPFGC), 6.51%, 1/01/31 (b) | 13,000 | 4,328,480 | ||||||
City of Chicago Illinois, Refunding GARB, O’Hare International Airport AMT: | ||||||||
Series C, 5.38%, 1/01/39 | 4,090 | 4,084,069 | ||||||
Passenger Facility Charge, Series B, 5.00%, 1/01/31 | 7,500 | 7,514,475 | ||||||
Third Lien, Series A-2 (AGM), 5.75%, 1/01/14 (c) | 2,665 | 2,689,251 | ||||||
City of Chicago Illinois, Refunding RB, Waterworks, Second Lien, Series A (AMBAC), 5.00%, 11/01/36 | 1,500 | 1,500,825 | ||||||
City of Chicago Illinois Board of Education, GO, Refunding, Chicago School Reform Board, Series A (NPFGC), 5.50%, 12/01/26 | 2,000 | 2,070,280 | ||||||
City of Chicago Illinois Board of Education, GO, Series A, 5.50%, 12/01/39 | 3,180 | 3,136,498 | ||||||
City of Chicago Illinois Park District, GO, Harbor Facilities, Series C, 5.25%, 1/01/40 | 750 | 761,572 | ||||||
County of Cook Illinois Forest Preserve District, GO, Refunding, Limited Tax Project, Series B, 5.00%, 12/15/37 | 380 | 390,971 | ||||||
County of Cook Illinois Forest Preserve District, GO, Series C, 5.00%, 12/15/37 | 440 | 453,970 | ||||||
Illinois Finance Authority, RB, Carle Foundation, Series A, 5.75%, 8/15/34 | 850 | 906,440 | ||||||
Illinois HDA, RB, Liberty Arms Senior Apartments, Series D, AMT (AMBAC), 4.88%, 7/01/47 | 2,755 | 2,598,626 | ||||||
Illinois Sports Facilities Authority, RB, State Tax Supported (AMBAC), 5.50%, 6/15/30 | 26,525 | 27,995,546 | ||||||
Metropolitan Pier & Exposition Authority, RB, CAB, McCormick Place Expansion Project, Series A (NPFGC), 5.67%, 6/15/30 (b) | 15,000 | 5,922,000 | ||||||
Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project Series B: | ||||||||
CAB (AGM), 6.05%, 6/15/44 (b) | 4,625 | 745,504 | ||||||
4.25%, 6/15/42 | 6,000 | 5,324,340 | ||||||
Railsplitter Tobacco Settlement Authority, RB, 6.00%, 6/01/28 | 900 | 964,980 | ||||||
Regional Transportation Authority, RB, Series B (NPFGC), 5.75%, 6/01/33 | 3,200 | 3,578,656 | ||||||
State of Illinois, GO, Various Purposes: | ||||||||
5.50%, 7/01/33 | 1,100 | 1,123,067 | ||||||
5.50%, 7/01/38 | 590 | 592,148 | ||||||
|
| |||||||
| 94,060,528 | ||||||||
See Notes to Financial Statements.
| 22 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Quality Fund, Inc. (MQY) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Indiana — 1.9% | ||||||||
Indiana Finance Authority, RB, Series A: | ||||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/40 | $ | 1,190 | $ | 1,083,995 | ||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44 | 690 | 615,770 | ||||||
Wastewater Utility (CWA Authority Project), First Lien, 5.25%, 10/01/38 | 1,400 | 1,449,420 | ||||||
Indiana Municipal Power Agency, RB: | ||||||||
Series A (NPFGC), 5.00%, 1/01/37 | 1,150 | 1,164,145 | ||||||
Series B, 5.75%, 1/01/34 | 550 | 555,093 | ||||||
Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project Series A: | ||||||||
5.75%, 1/01/38 | 1,300 | 1,385,176 | ||||||
(AGC), 5.25%, 1/01/29 | 2,350 | 2,499,295 | ||||||
|
| |||||||
| 8,752,894 | ||||||||
Iowa — 3.5% | ||||||||
Iowa Finance Authority, RB, Series A (AGC), 5.63%, 8/15/37 | 7,700 | 8,208,662 | ||||||
Iowa Student Loan Liquidity Corp., RB, Senior Series A-2, AMT: | ||||||||
5.60%, 12/01/26 | 2,135 | 2,200,608 | ||||||
5.70%, 12/01/27 | 2,135 | 2,187,628 | ||||||
5.80%, 12/01/29 | 1,445 | 1,475,822 | ||||||
5.85%, 12/01/30 | 1,945 | 1,985,028 | ||||||
|
| |||||||
| 16,057,748 | ||||||||
Louisiana — 1.2% | ||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, RB, East Baton Rouge Sewerage Commission Projects, Sub-Lien, Series A: | ||||||||
5.00%, 2/01/43 | 1,910 | 1,931,010 | ||||||
4.00%, 2/01/48 | 1,910 | 1,615,860 | ||||||
Louisiana Public Facilities Authority, Refunding RB, Christus Health, Series B (AGC), 6.50%, 7/01/30 | 1,800 | 1,990,368 | ||||||
|
| |||||||
| 5,537,238 | ||||||||
Massachusetts — 5.0% | ||||||||
Massachusetts HFA, RB, S/F Housing, Series 124, AMT, 5.00%, 12/01/31 | 1,225 | 1,232,166 | ||||||
Massachusetts HFA, Refunding, HRB, Series C, AMT, 5.35%, 12/01/42 | 1,525 | 1,524,176 | ||||||
Massachusetts HFA, Refunding RB, Series C, AMT, 5.00%, 12/01/30 | 3,000 | 3,033,390 | ||||||
Massachusetts School Building Authority, RB, Series A: | ||||||||
Dedicated Sales Tax, Senior, 5.00%, 5/15/43 | 1,720 | 1,809,234 | ||||||
(AGM), 5.00%, 8/15/15 (c) | 12,065 | 13,075,323 | ||||||
Massachusetts Water Resources Authority, Refunding RB, General, Series A (NPFGC), 5.00%, 8/01/34 | 1,800 | 1,944,864 | ||||||
|
| |||||||
| 22,619,153 | ||||||||
| Municipal Bonds | Par (000) | Value | ||||||
Michigan — 6.7% | ||||||||
City of Detroit Michigan, Refunding RB, Second Lien: | ||||||||
Sewage Disposal System, Series E (BHAC), 5.75%, 7/01/31 | 8,300 | 8,496,710 | ||||||
Water Supply System, Series D (NPFGC), 5.00%, 7/01/33 | 1,000 | 907,880 | ||||||
City of Lansing Michigan, RB, Board of Water & Light, Series A, 5.50%, 7/01/41 | 2,500 | 2,680,525 | ||||||
Michigan State Building Authority, Refunding RB, Facilities Program: | ||||||||
Series I-A, 5.38%, 10/15/36 | 1,200 | 1,250,388 | ||||||
Series I-A, 5.38%, 10/15/41 | 1,000 | 1,020,070 | ||||||
Series II-A (AGM), 5.25%, 10/15/36 | 4,270 | 4,409,970 | ||||||
Michigan State HDA, RB, Series C, AMT, 5.50%, 12/01/28 | 1,275 | 1,313,926 | ||||||
Michigan Strategic Fund, Refunding RB, Detriot Edison Co. Project, Series A, AMT, 5.50%, 6/01/30 | 1,700 | 1,700,204 | ||||||
Royal Oak Hospital Finance Authority, Refunding RB, William Beaumont Hospital, 8.25%, 9/01/39 | 3,510 | 4,222,109 | ||||||
State of Michigan, RB, GAB (AGM), 5.25%, 9/15/26 | 3,350 | 3,663,962 | ||||||
Western Michigan University, Refunding RB, 5.00%, 11/15/39 | 520 | 525,304 | ||||||
|
| |||||||
| 30,191,048 | ||||||||
Minnesota — 0.7% | ||||||||
City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC), 6.50%, 11/15/38 | 2,700 | 3,094,821 | ||||||
Nebraska — 0.2% | ||||||||
Central Plains Energy Project Nebraska, RB, Gas Project No. 3, 5.25%, 9/01/37 | 1,000 | 1,028,410 | ||||||
Nevada — 2.6% | ||||||||
City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/34 | 1,150 | 1,257,456 | ||||||
County of Clark Nevada, ARB, Subordinate Lien Series A-2 (NPFGC): | ||||||||
5.00%, 7/01/30 | 1,000 | 1,017,570 | ||||||
5.00%, 7/01/36 | 9,350 | 9,364,586 | ||||||
|
| |||||||
| 11,639,612 | ||||||||
New Jersey — 5.4% | ||||||||
New Jersey EDA, RB: | ||||||||
Cigarette Tax (Radian), 5.50%, 6/15/14 (c) | 1,285 | 1,327,662 | ||||||
Motor Vehicle Surcharge, Series A (NPFGC), 5.25%, 7/01/31 | 12,375 | 12,634,751 | ||||||
New Jersey Higher Education Student Assistance Authority, Refunding RB, Series 1, AMT: | ||||||||
5.50%, 12/01/25 | 800 | 840,848 | ||||||
5.75%, 12/01/27 | 375 | 402,034 | ||||||
5.75%, 12/01/28 | 400 | 424,920 | ||||||
5.88%, 12/01/33 | 1,980 | 2,069,179 | ||||||
New Jersey Housing & Mortgage Finance Agency, Refunding RB, M/F Housing, Series 2, AMT, 4.35%, 11/01/33 | 1,655 | 1,506,315 | ||||||
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 23 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Quality Fund, Inc. (MQY) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
New Jersey (concluded) | ||||||||
New Jersey Transportation Trust Fund Authority, RB: | ||||||||
Transportation Program, Series AA, 5.25%, 6/15/33 | $ | 2,000 | $ | 2,128,860 | ||||
Transportation System, Series A (NPFGC), 5.75%, 6/15/25 | 2,000 | 2,412,700 | ||||||
Rutgers The State University of New Jersey, Refunding RB, Series L, 5.00%, 5/01/43 | 640 | 672,602 | ||||||
|
| |||||||
| 24,419,871 | ||||||||
New York — 2.0% | ||||||||
Hudson Yards Infrastructure Corp., RB, Series A, 5.75%, 2/15/47 | 1,000 | 1,059,300 | ||||||
New York State Dormitory Authority, ERB, Series B, 5.75%, 3/15/36 | 2,000 | 2,241,420 | ||||||
New York State HFA, RB, Affordable Housing, Series B, 5.30%, 11/01/37 | 3,350 | 3,394,488 | ||||||
Port Authority of New York & New Jersey, Refunding RB, Consolidated, 172nd Series, AMT, 4.50%, 4/01/37 | 2,270 | 2,196,475 | ||||||
|
| |||||||
| 8,891,683 | ||||||||
Ohio — 0.8% | ||||||||
County of Lucas Ohio, Refunding RB, Promedica Healthcare, Series A, 6.50%, 11/15/37 | 725 | 821,367 | ||||||
Ohio Higher Educational Facility Commission, Refunding RB, Kenyon College Project, 5.00%, 7/01/37 | 475 | 484,457 | ||||||
Ohio State Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1: | ||||||||
5.25%, 2/15/32 | 950 | 1,016,196 | ||||||
5.25%, 2/15/33 | 1,325 | 1,412,106 | ||||||
|
| |||||||
| 3,734,126 | ||||||||
Pennsylvania — 1.9% | ||||||||
Pennsylvania Turnpike Commission, RB: | ||||||||
Series C, 5.50%, 12/01/33 | 760 | 828,757 | ||||||
Subordinate, Special Motor License Fund, 6.00%, 12/01/36 | 775 | 871,790 | ||||||
Subordinate, Special Motor License Fund, 5.50%, 12/01/41 | 6,700 | 7,106,422 | ||||||
|
| |||||||
| 8,806,969 | ||||||||
South Carolina — 2.3% | ||||||||
Charleston County Airport District, RB, AMT, Series A: | ||||||||
5.50%, 7/01/38 | 1,500 | 1,551,015 | ||||||
5.50%, 7/01/41 | 2,725 | 2,809,257 | ||||||
South Carolina Jobs-EDA, Refunding RB, Palmetto Health, Series A (AGM), 6.50%, 8/01/39 | 320 | 354,614 | ||||||
South Carolina State Public Service Authority, Refunding RB, Santee Cooper, Series B, 5.00%, 12/01/38 | 2,850 | 2,920,224 | ||||||
South Carolina Transportation Infrastructure Bank, RB, Series A, 5.25%, 10/01/40 | 2,500 | 2,637,675 | ||||||
|
| |||||||
| 10,272,785 | ||||||||
Tennessee — 0.8% | ||||||||
Memphis Center City Revenue Finance Corp., RB, Pyramid & Pinch District, Series B (AGM), 5.25%, 11/01/30 | 3,520 | 3,778,826 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Texas — 13.2% | ||||||||
Bell County Health Facility Development Corp., RB, Lutheran General Health Care System, 6.50%, 7/01/19 (d) | 1,000 | 1,207,270 | ||||||
City of Houston Texas Utility System, Refunding RB, Combined First Lien, Series A (AGC), 6.00%, 11/15/35 | 2,850 | 3,239,908 | ||||||
City of San Antonio Texas Public Service Board, RB, Junior Lien, 5.00%, 2/01/38 | 760 | 796,062 | ||||||
Comal Texas ISD, GO, School Building (PSF-GTD), 5.00%, 2/01/36 | 2,500 | 2,647,600 | ||||||
Dallas-Fort Worth International Airport, ARB, Joint Improvement, Series D, AMT: | ||||||||
5.00%, 11/01/38 | 9,450 | 9,059,715 | ||||||
5.00%, 11/01/42 | 1,500 | 1,416,780 | ||||||
Dallas-Fort Worth International Airport, Refunding RB, Series F, 5.25%, 11/01/33 | 1,325 | 1,392,337 | ||||||
Lone Star College System, GO, 5.00%, 8/15/33 | 4,800 | 5,157,792 | ||||||
Mansfield Texas ISD, GO, School Building (PSF-GTD), 5.00%, 2/15/33 | 2,300 | 2,470,591 | ||||||
Midland County Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A, 5.01%, 9/15/36 (b) | 2,870 | 924,542 | ||||||
North Texas Tollway Authority, Refunding RB, First Tier Series A: | ||||||||
6.00%, 1/01/28 | 3,380 | 3,820,346 | ||||||
(NPFGC), 5.75%, 1/01/40 | 12,300 | 13,297,407 | ||||||
San Antonio Public Facilities Corp., Refunding RB, Convention Center Refinancing and Expansion Project: | ||||||||
4.00%, 9/15/42 | 2,155 | 1,850,973 | ||||||
CAB, 4.93%, 9/15/35 (b) | 3,530 | 1,215,520 | ||||||
CAB, 4.99%, 9/15/36 (b) | 6,015 | 1,949,401 | ||||||
CAB, 5.04%, 9/15/37 (b) | 4,305 | 1,311,777 | ||||||
Tarrant County Cultural Education Facilities Finance Corp., Refunding RB, Cook Childrens Medical Center, 5.25%, 12/01/39 | 1,100 | 1,136,487 | ||||||
Texas Municipal Gas Acquisition & Supply Corp. III, RB, 5.00%, 12/15/31 | 1,600 | 1,557,152 | ||||||
Texas Transportation Commission, Refunding RB, Central Texas Turnpike System, First Tier, Series A, 5.00%, 8/15/41 | 5,500 | 5,458,750 | ||||||
|
| |||||||
| 59,910,410 | ||||||||
Utah — 2.4% | ||||||||
Salt Lake City Corp., Refunding RB, IHC Hospitals, Inc. (NPFGC), 6.30%, 2/15/15 (d) | 10,490 | 10,960,476 | ||||||
Vermont — 0.0% | ||||||||
Vermont HFA, Refunding RB, Multiple Purpose, Series C, AMT (AGM), 5.50%, 11/01/38 (e) | 45 | 45,801 | ||||||
Washington — 2.1% | ||||||||
Central Puget Sound Regional Transit Authority, RB, Series A, 5.00%, 11/01/36 | 2,000 | 2,101,140 | ||||||
Washington Health Care Facilities Authority, RB: | ||||||||
MultiCare Health System, Remarketing, Series B, 5.00%, 8/15/44 | 4,000 | 3,999,680 | ||||||
Providence Health & Services, Series A, 5.00%, 10/01/39 | 1,525 | 1,542,446 | ||||||
Providence Health & Services, Series A, 5.25%, 10/01/39 | 850 | 873,707 | ||||||
See Notes to Financial Statements.
| 24 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Quality Fund, Inc. (MQY) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Washington (concluded) | ||||||||
Washington Health Care Facilities Authority, Refunding RB, Providence Health & Services, Series A, 5.00%, 10/01/42 | $ | 1,155 | $ | 1,147,954 | ||||
|
| |||||||
| 9,664,927 | ||||||||
Wisconsin — 0.4% | ||||||||
Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Care Group, 5.00%, 11/15/33 | 1,850 | 1,933,213 | ||||||
| Total Municipal Bonds — 110.7% | 501,929,658 | |||||||
| Municipal Bonds Transferred to Tender Option Bond Trusts (f) | ||||||||
Arizona — 2.4% | ||||||||
Phoenix Civic Improvement Corp., RB, Sub-Civic Plaza Expansion Project, Series A (NPFGC), 5.00%, 7/01/37 | 8,000 | 8,190,080 | ||||||
Salt River Project Agricultural Improvement & Power District, RB, Electric System, Series A, 5.00%, 1/01/38 | 2,750 | 2,880,460 | ||||||
|
| |||||||
| 11,070,540 | ||||||||
California — 5.0% | ||||||||
California State University, Refunding RB, Systemwide, Series A (AGM), 5.00%, 11/01/32 | 7,000 | 7,315,910 | ||||||
Los Angeles Community College District California, GO, Election of 2001, Series A (NPFGC), 5.00%, 8/01/32 | 6,120 | 6,456,539 | ||||||
Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A, 6.00%, 8/01/33 | 2,639 | 3,039,025 | ||||||
San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33 | 509 | 567,110 | ||||||
San Diego County Water Authority, COP, Refunding, Series A (AGM), 5.00%, 5/01/33 | 5,170 | 5,496,279 | ||||||
|
| |||||||
| 22,874,863 | ||||||||
Colorado — 0.3% | ||||||||
Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A, 5.50%, 7/01/34 (g) | 1,220 | 1,335,820 | ||||||
District of Columbia — 1.1% | ||||||||
District of Columbia, RB, Series A, 5.50%, 12/01/30 (g) | 1,320 | 1,479,861 | ||||||
Metropolitan Washington Airports Authority, Refunding ARB, Series A, AMT, 5.00%, 10/01/30 | 3,400 | 3,548,988 | ||||||
|
| |||||||
| 5,028,849 | ||||||||
Florida — 15.1% | ||||||||
City of Tallahassee Florida, RB, Energy System, (NPFGC): | ||||||||
5.00%, 7/01/14 | 6,000 | 6,117,780 | ||||||
5.00%, 10/01/32 (g) | 2,700 | 2,807,568 | ||||||
County of Highlands Florida Health Facilities Authority, RB, Adventist, Series C, 5.25%, 11/15/16 (e) | 5,990 | 6,073,680 | ||||||
| Municipal Bonds Transferred to Tender Option Bond Trusts (f) | Par (000) | Value | ||||||
Florida (concluded) | ||||||||
County of Miami-Dade Florida Transit System Sales Surtax, Refunding RB, Transit System Sales Surtax, 5.00%, 7/01/42 | 2,390 | 2,426,806 | ||||||
County of Miami-Dade Florida Water & Sewer System, RB, (AGM), 5.00%, 10/01/39 | 12,729 | 13,072,436 | ||||||
County of Orange Florida School Board, COP, Series A: | ||||||||
(AGC), 5.50%, 8/01/34 | 3,544 | 3,797,312 | ||||||
(NPFGC), 5.00%, 8/01/30 | 2,000 | 2,102,160 | ||||||
County of Orange School Board, COP, Series A (NPFCG), 5.00%, 8/01/31 | 5,000 | 5,203,400 | ||||||
County of Seminole Florida, Refunding RB, Series B (NPFGC), 5.25%, 10/01/31 | 6,300 | 6,991,992 | ||||||
Jacksonville Electric Authority Florida, RB, Sub-Series A, 5.63%, 10/01/32 | 4,310 | 4,720,183 | ||||||
Miami-Dade County School Board, COP, Refunding, | 11,350 | 12,519,163 | ||||||
State of Florida, GO, Board of Education, Refunding, Series D, 5.00%, 6/01/37 (g) | 2,399 | 2,529,012 | ||||||
|
| |||||||
| 68,361,492 | ||||||||
Hawaii — 1.4% | ||||||||
Honolulu City & County Board of Water Supply, RB, Series A (NPFGC), 5.00%, 7/01/14 (c) | 6,000 | 6,193,020 | ||||||
Illinois — 7.0% | ||||||||
City of Chicago Illinois, RB, Motor Fuel Tax Project, Series A (AGC), 5.00%, 1/01/38 | 4,000 | 3,842,520 | ||||||
City of Chicago Illinois, Refunding RB: | ||||||||
Sales Tax, Series A, 5.00%, 1/01/41 | 1,140 | 1,164,453 | ||||||
Waterworks, Second Lien (AGM), 5.25%, 11/01/33 | 14,427 | 14,893,632 | ||||||
Illinois State Toll Highway Authority, RB: | ||||||||
Senior Priority, Series B, 5.50%, 1/01/33 | 2,000 | 2,163,053 | ||||||
Series A, 5.00%, 1/01/38 | 2,878 | 2,883,992 | ||||||
Metropolitan Pier & Exposition Authority, RB, McCormick Place Expansion Project, Series A, 5.00%, 6/15/42 | 360 | 361,231 | ||||||
State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/34 (g) | 6,198 | 6,413,987 | ||||||
|
| |||||||
| 31,722,868 | ||||||||
Massachusetts — 0.5% | ||||||||
Massachusetts School Building Authority, RB, Dedicated Sales Tax, Series A, (AGM): | ||||||||
5.00%, 8/15/15 (c) | 271 | 283,994 | ||||||
5.00%, 8/15/30 | 1,829 | 1,919,792 | ||||||
|
| |||||||
| 2,203,786 | ||||||||
Michigan — 2.0% | ||||||||
Michigan Finance Authority, RB, Hospital, Trinity Health Credit Group, 5.00%, 12/01/39 | 9,100 | 9,060,142 | ||||||
Nevada — 1.8% | ||||||||
City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/39 (g) | 5,007 | 5,404,317 | ||||||
County of Clark Nevada Water Reclamation District, GO, Limited Tax, Series B, 5.75%, 7/01/34 | 2,429 | 2,760,671 | ||||||
|
| |||||||
| 8,164,988 | ||||||||
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 25 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Quality Fund, Inc. (MQY) (Percentages shown are based on Net Assets) |
| Municipal Bonds Transferred to Tender Option Bond Trusts (f) | Par (000) | Value | ||||||
New Jersey — 0.6% | ||||||||
New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B, 5.25%, 6/15/36 (g) | $ | 2,581 | $ | 2,712,640 | ||||
New York — 8.6% | ||||||||
The Erie County Industrial Development Agency, RB, City of Buffalo School District Project, Series A (AGM), 5.75%, 5/01/28 | 2,007 | 2,223,726 | ||||||
New York City Municipal Water Finance Authority, RB, Water & Sewer System, Fiscal 2009, Series A, 5.75%, 6/15/40 | 3,509 | 3,903,045 | ||||||
New York City Municipal Water Finance Authority, Refunding RB, Water & Sewer System, Second General Resolution, Series CC, 5.00%, 6/15/47 | 7,640 | 7,933,453 | ||||||
New York State Dormitory Authority, ERB, Series B, 17.94%, 3/15/36 | 1,540 | 1,725,893 | ||||||
New York State Thruway Authority, Refunding RB, General, Series G (AGM), 5.00%, 1/01/32 | 10,000 | 10,424,600 | ||||||
Port Authority of New York & New Jersey, RB, Series 169, AMT, 5.00%, 10/15/34 | 10,830 | 11,101,183 | ||||||
Triborough Bridge & Tunnel Authority, RB, General, Series A-2, 5.25%, 11/15/34 (g) | 1,500 | 1,626,270 | ||||||
|
| |||||||
| 38,938,170 | ||||||||
North Carolina — 0.5% | ||||||||
North Carolina HFA, RB, Series 31-A, AMT, 5.25%, 7/01/38 | 2,041 | 2,062,456 | ||||||
Ohio — 0.2% | ||||||||
State of Ohio, RB, Cleveland Clinic Health Obligated Group, Series B, 5.50%, 1/01/34 | 780 | 829,959 | ||||||
South Carolina — 1.1% | ||||||||
South Carolina State Public Service Authority, Refunding RB, Santee Cooper, Series A, 5.50%, 1/01/38 (g) | 4,695 | 5,084,122 | ||||||
Texas — 4.1% | ||||||||
Clear Creek ISD Texas, GO, Refunding, School Building (PSF-GTD), 5.00%, 2/15/33 | 5,900 | 6,293,058 | ||||||
Cypress-Fairbanks ISD, GO, Refunding, Schoolhouse (PSF-GTD), 5.00%, 2/15/32 | 4,750 | 5,092,998 | ||||||
Dallas Fort Worth International Airport, ARB, | 4,501 | 4,319,289 | ||||||
| Municipal Bonds Transferred to Tender Option Bond Trusts (f) | Par (000) | Value | ||||||
Texas (concluded) | ||||||||
North East Texas ISD, GO, School Building, | $ | 2,000 | $ | 2,144,860 | ||||
Tarrant County Cultural Education Facilities Finance Corp., RB, Baylor Health Care System Project, Series A, 5.00%, 11/15/38 | 879 | 883,896 | ||||||
|
| |||||||
| 18,734,101 | ||||||||
Virginia — 0.1% | ||||||||
County of Fairfax Virginia IDA, Refunding RB, Health Care, Inova Health System, Series A, 5.50%, 5/15/35 | 450 | 478,074 | ||||||
Washington — 0.6% | ||||||||
Central Puget Sound Regional Transit Authority, RB, Series A (AGM), 5.00%, 11/01/32 | 2,504 | 2,637,035 | ||||||
Wisconsin — 0.6% | ||||||||
Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health, Inc.: | ||||||||
Series A, 5.00%, 4/01/42 | 640 | 635,174 | ||||||
Series C, 5.25%, 4/01/39 | 2,000 | 2,052,940 | ||||||
|
| |||||||
| 2,688,114 | ||||||||
| Total Municipal Bonds Transferred to Tender Option Bond Trusts — 53.0% | 240,181,039 | |||||||
| Total Long-Term Investments (Cost — $720,543,466) — 163.7% | 742,110,697 | |||||||
| Short-Term Securities | Shares | |||||||
FFI Institutional Tax-Exempt Fund, 0.03% (i)(j) | 6,345,969 | 6,345,969 | ||||||
| Total Short-Term Securities (Cost — $6,345,969) — 1.4% | 6,345,969 | |||||||
| Total Investments (Cost — $726,889,435) — 165.1% | 748,456,666 | |||||||
| Other Assets Less Liabilities — 1.3% | 6,425,116 | |||||||
Liability for TOB Trust Certificates, Including |
| (124,839,701 | ) | |||||
| VRDP Shares, at Liquidation Value — (38.9%) | (176,600,000 | ) | ||||||
|
| |||||||
| Net Assets Applicable to Common Shares — 100.0% | $ | 453,442,081 | ||||||
|
| |||||||
| Notes to Schedule of Investments |
| (a) | Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date. |
| (b) | Represents a zero-coupon bond. Rate shown reflects the current yield as of report date. |
| (c) | US 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. |
| (d) | Security is collateralized by municipal or US Treasury obligations. |
| (e) | Variable rate security. Rate shown is as of report date. |
| (f) | Represent bonds transferred to a TOB. In exchange the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs. |
| (g) | All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from February 1, 2016 to December 1, 2029 is $21,224,963. |
See Notes to Financial Statements.
| 26 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments (concluded) | BlackRock MuniYield Quality Fund, Inc. (MQY) |
| (i) | Investments in issuers considered to be an affiliate of the Fund during the six months ended October 31, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows: |
| Affiliate | Shares Held at April 30, 2013 | Net Activity | Shares Held at October 31, 2013 | Income | ||||||||||||
FFI Institutional Tax-Exempt Fund | 802.157 | 5,543,812 | 6,345,969 | $ | 897 | |||||||||||
| (j) | Represents the current yield as of report date. |
| Ÿ | Financial futures contracts as of October 31, 2013 were as follows: |
Contracts Sold | Issue | Exchange | Expiration | Notional Value | Unrealized Depreciation | |||||||||
| (80) | 10-Year US Treasury Note | Chicago Board of Trade | December 2013 | $ | 10,188,750 | $ | (27,587 | ) | ||||||
| Ÿ | Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows: |
| Ÿ | Level 1 — unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access |
| Ÿ | Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or 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) |
| Ÿ | Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments) |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2013:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets: | ||||||||||||||
| Investments: | ||||||||||||||
Long-Term Investments 1 | — | $ | 742,110,697 | — | $ | 742,110,697 | ||||||||
Short-Term Securities | $ | 6,345,969 | — | — | 6,345,969 | |||||||||
|
| |||||||||||||
Total | $ | 6,345,969 | $ | 742,110,697 | — | $ | 748,456,666 | |||||||
|
| |||||||||||||
| 1 | See above Schedule of Investments for values in each state or political subdivision. |
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Derivative Financial Instruments 2 | ||||||||||||||||
Liabilities: | ||||||||||||||||
Interest rate contracts | $ (27,587) | — | — | $ (27,587) | ||||||||||||
| 2 | Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument. |
Certain of the Fund’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash | $ | 26,902 | — | — | $ | 26,902 | ||||||||||
Cash pledged for financial futures contracts | 142,000 | — | — | 142,000 | ||||||||||||
Liabilities: | ||||||||||||||||
TOB trust certificates | — | $ | (124,839,701 | ) | — | (124,839,701 | ) | |||||||||
VRDP Shares | — | (176,600,000 | ) | — | (176,600,000 | ) | ||||||||||
|
| |||||||||||||||
Total | $ | 168,902 | $ | (301,439,701 | ) | — | $ | (301,270,799 | ) | |||||||
|
| |||||||||||||||
There were no transfers between levels during the six months ended October 31, 2013.
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 27 |
Table of Contents
Schedule of Investments October 31, 2013 (Unaudited) | BlackRock MuniYield Quality Fund II, Inc. (MQT) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Alabama — 0.9% | ||||||||
City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/39 | $ | 650 | $ | 729,619 | ||||
County of Jefferson Alabama, RB, Series A, | 2,000 | 1,859,960 | ||||||
|
| |||||||
| 2,589,579 | ||||||||
Alaska — 0.5% | ||||||||
Alaska Housing Finance Corp., Refunding RB, Series A, 4.13%, 12/01/37 | 480 | 451,325 | ||||||
Alaska Industrial Development & Export Authority, RB, Providence Health Services, Series A, | 850 | 894,489 | ||||||
|
| |||||||
| 1,345,814 | ||||||||
Arizona — 1.5% | ||||||||
Greater Arizona Development Authority, RB, Series B (NPFGC), 5.00%, 8/01/35 | 1,100 | 1,121,945 | ||||||
Phoenix Civic Improvement Corp., Refunding RB, AMT, 5.00%, 7/01/32 | 1,000 | 1,030,870 | ||||||
State of Arizona, COP, Department of Administration, Series A (AGM): | ||||||||
5.00%, 10/01/27 | 1,300 | 1,384,409 | ||||||
5.00%, 10/01/29 | 925 | 971,287 | ||||||
|
| |||||||
| 4,508,511 | ||||||||
California — 17.2% | ||||||||
Alameda Corridor Transportation Authority, Refunding RB, CAB, Subordinate Lien, Series A (AMBAC), 5.45%, 10/01/25 (a) | 7,150 | 7,627,620 | ||||||
Cabrillo Community College District, GO, CAB, Election of 2004, Series B (NPFGC) (b): | ||||||||
5.90%, 8/01/37 | 2,100 | 528,423 | ||||||
5.94%, 8/01/38 | 4,800 | 1,126,944 | ||||||
California Health Facilities Financing Authority, RB: | ||||||||
St. Joseph Health System, Series A, | 500 | 555,855 | ||||||
Sutter Health, Series A, 5.00%, 8/15/52 | 1,235 | 1,191,899 | ||||||
Sutter Health, Series B, 5.88%, 8/15/31 | 1,000 | 1,137,900 | ||||||
California Health Facilities Financing Authority, Refunding RB, St. Joseph’s Health System, Series A, 5.00%, 7/01/37 | 945 | 955,773 | ||||||
California State Public Works Board, LRB, Various Judicial Council Projects, Series A, 5.00%, 3/01/38 | 615 | 620,437 | ||||||
California State University, RB, Systemwide Series A: | ||||||||
5.50%, 11/01/39 | 1,000 | 1,090,780 | ||||||
(AGC), 5.25%, 11/01/38 | 3,000 | 3,195,330 | ||||||
California Statewide Communities Development Authority, RB, Kaiser Permanente, Series A, | 1,290 | 1,299,636 | ||||||
City of San Jose California, Refunding ARB, Series A-1, AMT, 5.75%, 3/01/34 | 700 | 741,979 | ||||||
Coast Community College District, GO, CAB, Election of 2002, Series C (AGM), 5.00%, 8/01/31 (a) | 1,800 | 1,888,974 | ||||||
El Monte Union High School District, GO, Series C (AGM), 5.25%, 6/01/28 | 4,000 | 4,264,280 | ||||||
Fairfield-Suisun Unified School District California, GO, Election of 2002 (NPFGC), 5.50%, 8/01/14 (c) | 2,770 | 2,880,661 | ||||||
Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/32 | 2,200 | 2,320,978 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
California (concluded) | ||||||||
Monterey Peninsula Community College District, GO, CAB, Series C, 5.05%, 8/01/28 (b) | 11,975 | 5,735,067 | ||||||
Mount San Antonio Community College District, GO, Refunding, CAB, Election of 2008, Series A, 5.56%, 8/01/43 (a) | 5,000 | 2,380,550 | ||||||
San Diego Community College District California, GO, CAB, Election of 2006 (b): | ||||||||
5.69%, 8/01/31 | 1,855 | 685,033 | ||||||
5.79%, 8/01/32 | 2,320 | 795,505 | ||||||
San Diego County Water Authority, COP, Refunding, Series A (AGM), 5.00%, 5/01/38 | 2,015 | 2,117,483 | ||||||
San Diego Unified School District California, GO, CAB, Election of 2008, Series C, 5.66%, 7/01/38 (b) | 1,400 | 353,360 | ||||||
San Diego Unified School District California, GO, Refunding, CAB, Series R-1, 5.08%, 7/01/31 (b) | 1,110 | 457,542 | ||||||
San Joaquin County Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A, 6.00%, 3/01/36 | 575 | 660,250 | ||||||
San Marcos Unified School District, GO, Election of 2010, Series A: | ||||||||
5.00%, 8/01/34 | 600 | 632,244 | ||||||
5.00%, 8/01/38 | 490 | 509,095 | ||||||
State of California, GO, Refunding, Various Purpose, 5.00%, 10/01/41 | 900 | 920,034 | ||||||
State of California, GO, Various Purposes, | 1,500 | 1,534,065 | ||||||
Ventura County Community College District, GO, Election of 2002, Series B (NPFGC), | 675 | 708,257 | ||||||
Yosemite Community College District, GO, CAB, Election of 2004, Series D (b): | ||||||||
5.57%, 8/01/36 | 2,000 | 573,100 | ||||||
5.61%, 8/01/37 | 2,790 | 749,757 | ||||||
|
| |||||||
| 50,238,811 | ||||||||
Colorado — 1.0% | ||||||||
E-470 Public Highway Authority, Refunding RB, CAB, Series B (NPFGC), 5.79%, 9/01/32 (b) | 5,500 | 1,877,205 | ||||||
Regional Transportation District, COP, Refunding, Series A, 5.38%, 6/01/31 | 1,000 | 1,061,910 | ||||||
|
| |||||||
| 2,939,115 | ||||||||
Florida — 12.1% | ||||||||
City of Jacksonville Florida Transportation, Refunding RB, Series A, 5.00%, 10/01/30 | 250 | 265,695 | ||||||
County of Broward Florida School Board, COP, Series A (AGM), 5.25%, 7/01/33 | 1,000 | 1,062,060 | ||||||
County of Duval Florida School Board, COP, Master Lease Program (AGM), 5.00%, 7/01/33 | 7,875 | 8,144,797 | ||||||
County of Lee Florida, Refunding ARB, Series A, AMT: | ||||||||
5.63%, 10/01/26 | 825 | 900,207 | ||||||
5.38%, 10/01/32 | 1,100 | 1,128,039 | ||||||
County of Miami-Dade Florida, RB: | ||||||||
AMT, Seaport, Series B, 6.00%, 10/01/30 | 570 | 609,968 | ||||||
AMT, Seaport, Series B, 6.25%, 10/01/38 | 360 | 384,664 | ||||||
AMT, Seaport, Series B, 6.00%, 10/01/42 | 580 | 605,514 | ||||||
Jackson Health System (AGC), | 900 | 932,832 | ||||||
Seaport, Series A, 6.00%, 10/01/38 | 1,780 | 1,948,370 | ||||||
County of Miami-Dade Florida, Refunding RB, Subordinate Special Obligation, Series B, | 1,340 | 1,369,936 | ||||||
See Notes to Financial Statements.
| 28 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Quality Fund II, Inc. (MQT) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Florida (concluded) | ||||||||
County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport, Series A, AMT (AGC), 5.00%, 10/01/40 | $ | 5,900 | $ | 5,873,804 | ||||
County of Palm Beach Florida Solid Waste Authority, Refunding RB, 5.00%, 10/01/31 | 1,900 | 1,980,598 | ||||||
County of Sarasota Florida Public Hospital District, RB, Sarasota Memorial Hospital Project, Series A, AMT, 5.63%, 7/01/39 | 250 | 256,000 | ||||||
Florida Ports Financing Commission, Refunding RB, State Transportation Trust Fund, Series B, AMT, 5.38%, 10/01/29 | 2,400 | 2,637,264 | ||||||
Highlands County Health Facilities Authority, RB, Adventist Health System/Sunbelt, Series B, 6.00%, 11/15/37 | 550 | 620,307 | ||||||
Hillsborough County Aviation Authority Florida, RB, Series A, AMT (AGC), 5.38%, 10/01/33 | 3,250 | 3,453,320 | ||||||
Reedy Creek Improvement District, GO, Series A, 5.25%, 6/01/33 | 1,040 | 1,110,158 | ||||||
South Florida Water Management District, COP (AGC), 5.00%, 10/01/22 | 1,800 | 2,005,200 | ||||||
|
| |||||||
| 35,288,733 | ||||||||
Georgia — 7.3% | ||||||||
City of Atlanta Georgia Department of Aviation, Refunding GARB: | ||||||||
Series B (AGM), 5.25%, 1/01/33 | 5,000 | 5,111,350 | ||||||
Series C (AGM), 5.00%, 1/01/33 | 15,000 | 15,293,700 | ||||||
County of Burke Georgia Development Authority, Refunding RB, Oglethorpe Power-Vogtle Project, Series C, 5.70%, 1/01/43 | 1,000 | 1,046,840 | ||||||
|
| |||||||
| 21,451,890 | ||||||||
Illinois — 20.6% | ||||||||
Chicago Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/36 | 515 | 528,272 | ||||||
City of Chicago Illinois, GARB, O’Hare International Airport Third Lien: | ||||||||
Series A, 5.75%, 1/01/39 | 2,000 | 2,083,160 | ||||||
Series B-2, AMT, 6.00%, 1/01/29 | 2,200 | 2,214,102 | ||||||
Series B-2, AMT (AGM), 5.75%, 1/01/14 (c) | 5,200 | 5,247,320 | ||||||
City of Chicago Illinois, GO: | ||||||||
CAB, City Colleges (NPFGC), 6.51%, 1/01/31 (b) | 8,370 | 2,786,875 | ||||||
Park District, Harbor Facilities Revenues, | 4,000 | 4,044,920 | ||||||
City of Chicago Illinois, Refunding GARB, AMT: | ||||||||
O’Hare International Airport, General, Third Lien, Series C-2 (AGM), 5.25%, 1/01/30 | 2,000 | 2,001,380 | ||||||
O’Hare International Airport, Series C, | 3,235 | 3,230,309 | ||||||
City of Chicago Illinois Board of Education, GO, Refunding, Chicago School Reform Board, Series A (NPFGC), 5.50%, 12/01/26 | 2,500 | 2,587,850 | ||||||
City of Chicago Illinois Board of Education, GO, Series A, 5.50%, 12/01/39 | 2,050 | 2,021,956 | ||||||
City of Chicago Illinois Park District, GO, Harbor Facilities, Series C, 5.25%, 1/01/40 | 500 | 507,715 | ||||||
County of Cook Illinois Forest Preserve District, GO, Refunding, Limited Tax Project, Series B, | 250 | 257,217 | ||||||
County of Cook Illinois Forest Preserve District, GO, Series C, 5.00%, 12/15/37 | 285 | 294,049 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Illinois (concluded) | ||||||||
Illinois Finance Authority, RB, Carle Foundation, Series A, 5.75%, 8/15/34 | 400 | 426,560 | ||||||
Illinois Finance Authority, Refunding RB, Central Dupage Health, Series B, 5.50%, 11/01/39 | 2,070 | 2,185,444 | ||||||
Illinois Sports Facilities Authority, RB, State Tax Supported (AMBAC), 5.50%, 6/15/30 | 18,175 | 19,182,622 | ||||||
Metropolitan Pier & Exposition Authority, RB, CAB, McCormick Place Expansion Project (NPFGC), 5.96%, 12/15/36 (b) | 10,000 | 2,571,900 | ||||||
Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project Series B: | ||||||||
CAB (AGM), 6.05%, 6/15/44 (b) | 2,980 | 480,346 | ||||||
4.25%, 6/15/42 | 4,000 | 3,549,560 | ||||||
Railsplitter Tobacco Settlement Authority, RB, | 575 | 616,515 | ||||||
Regional Transportation Authority, RB, Series B (NPFGC), 5.75%, 6/01/33 | 2,000 | 2,236,660 | ||||||
State of Illinois, GO, Various Purposes: | ||||||||
5.50%, 7/01/33 | 710 | 724,889 | ||||||
5.50%, 7/01/38 | 380 | 381,383 | ||||||
|
| |||||||
| 60,161,004 | ||||||||
Indiana — 2.1% | ||||||||
Indiana Finance Authority, RB, Series A: | ||||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/40 | 770 | 701,408 | ||||||
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44 | 445 | 397,127 | ||||||
Wastewater Utility (CWA Authority Project), First Lien, 5.25%, 10/01/38 | 1,000 | 1,035,300 | ||||||
Indiana Municipal Power Agency, RB, Series B, 5.75%, 1/01/34 | 350 | 353,241 | ||||||
Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project Series A: | ||||||||
5.75%, 1/01/38 | 2,000 | 2,131,040 | ||||||
(AGC), 5.50%, 1/01/38 | 1,575 | 1,660,885 | ||||||
|
| |||||||
| 6,279,001 | ||||||||
Iowa — 3.3% | ||||||||
Iowa Finance Authority, RB, Series A (AGC), | 4,925 | 5,250,345 | ||||||
Iowa Student Loan Liquidity Corp., RB, Senior Series A-2, AMT: | ||||||||
5.60%, 12/01/26 | 1,300 | 1,339,949 | ||||||
5.70%, 12/01/27 | 1,305 | 1,337,168 | ||||||
5.80%, 12/01/29 | 875 | 893,664 | ||||||
5.85%, 12/01/30 | 915 | 933,831 | ||||||
|
| |||||||
| 9,754,957 | ||||||||
Kentucky — 0.7% | ||||||||
Kentucky State Property & Building Commission, Refunding RB, Project No. 93 (AGC), | 2,000 | 2,177,960 | ||||||
Louisiana — 1.2% | ||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, RB, East Baton Rouge Sewerage Commission Projects, Sub-Lien, Series A: | ||||||||
5.00%, 2/01/43 | 1,235 | 1,248,585 | ||||||
4.00%, 2/01/48 | 1,235 | 1,044,810 | ||||||
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 29 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Quality Fund II, Inc. (MQT) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Louisiana (concluded) | ||||||||
Louisiana Public Facilities Authority, Refunding RB, Christus Health, Series B (AGC), 6.50%, 7/01/30 | $ | 1,150 | $ | 1,271,624 | ||||
|
| |||||||
| 3,565,019 | ||||||||
Massachusetts — 5.3% | ||||||||
Massachusetts HFA, Refunding, HRB, Series C, AMT, 5.35%, 12/01/42 | 975 | 974,474 | ||||||
Massachusetts HFA, Refunding RB, Series C, AMT, 5.00%, 12/01/30 | 5,000 | 5,055,650 | ||||||
Massachusetts School Building Authority, RB, Series A: | ||||||||
Dedicated Sales Tax, Senior, 5.00%, 5/15/43 | 1,110 | 1,167,587 | ||||||
(AGM), 5.00%, 8/15/15 (c) | 4,860 | 5,266,976 | ||||||
Massachusetts Water Resources Authority, Refunding RB, General, Series A (NPFGC), 5.00%, 8/01/34 | 2,700 | 2,917,296 | ||||||
|
| |||||||
| 15,381,983 | ||||||||
Michigan — 5.1% | ||||||||
City of Detroit Michigan, RB, Water Supply System, Second Lien, Series B (AGM): | ||||||||
6.25%, 7/01/36 | 350 | 354,886 | ||||||
7.00%, 7/01/36 | 200 | 209,670 | ||||||
City of Detroit Michigan, Refunding RB, Sewage Disposal System (BHAC): | ||||||||
Second Lien, Series E, 5.75%, 7/01/31 | 2,200 | 2,252,140 | ||||||
Series A, 5.50%, 7/01/36 | 4,500 | 4,516,155 | ||||||
City of Lansing Michigan, RB, Board of Water & Light, Series A, 5.50%, 7/01/41 | 1,700 | 1,822,757 | ||||||
Michigan State Building Authority, Refunding RB, Facilities Program: | ||||||||
Series I-A, 5.38%, 10/15/41 | 600 | 612,042 | ||||||
Series II-A, 5.38%, 10/15/36 | 1,000 | 1,041,990 | ||||||
Series II-A (AGM), 5.25%, 10/15/36 | 1,900 | 1,962,282 | ||||||
Michigan State HDA, RB, Series C, AMT, | 825 | 850,187 | ||||||
Michigan Strategic Fund, Refunding RB, Detroit Edison Co. Project, Series A, AMT, 5.50%, 6/01/30 | 1,000 | 1,000,120 | ||||||
Western Michigan University, Refunding RB, | 340 | 343,468 | ||||||
|
| |||||||
| 14,965,697 | ||||||||
Minnesota — 0.7% | ||||||||
City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC), 6.50%, 11/15/38 | 1,800 | 2,063,214 | ||||||
Nebraska — 0.9% | ||||||||
Central Plains Energy Project Nebraska, RB, Gas Project No. 3, 5.25%, 9/01/37 | 2,650 | 2,725,287 | ||||||
Nevada — 2.0% | ||||||||
County of Clark Nevada, ARB: | ||||||||
Las Vegas-McCarran International Airport, | 1,700 | 1,757,715 | ||||||
Subordinate Lien, Series A-2 (NPFGC), | 1,250 | 1,271,962 | ||||||
Subordinate Lien, Series A-2 (NPFGC), | 2,700 | 2,704,212 | ||||||
|
| |||||||
| 5,733,889 | ||||||||
New Jersey — 4.3% | ||||||||
New Jersey EDA, RB: | ||||||||
Cigarette Tax (Radian), 5.50%, 6/15/14 (c) | 85 | 87,822 | ||||||
New Jersey (concluded) | ||||||||
New Jersey EDA, RB (concluded): | ||||||||
Motor Vehicle Surcharge, Series A (NPFGC), | 6,700 | 6,833,397 | ||||||
New Jersey Higher Education Student Assistance Authority, Refunding RB, Series 1, AMT: | ||||||||
5.50%, 12/01/25 | 500 | 525,530 | ||||||
5.50%, 12/01/26 | 350 | 365,722 | ||||||
5.75%, 12/01/28 | 200 | 212,460 | ||||||
New Jersey Housing & Mortgage Finance Agency, Refunding RB, M/F Housing, Series 2, AMT, | 1,070 | 973,871 | ||||||
New Jersey Transportation Trust Fund Authority, RB: | ||||||||
Transportation Program, Series AA, | 1,290 | 1,373,115 | ||||||
Transportation System, Series A (NPFGC), | 1,400 | 1,688,890 | ||||||
Rutgers The State University of New Jersey, Refunding RB, Series L, 5.00%, 5/01/43 | 400 | 420,376 | ||||||
|
| |||||||
| 12,481,183 | ||||||||
New York — 3.3% | ||||||||
Hudson Yards Infrastructure Corp., RB, Series A, 5.75%, 2/15/47 | 610 | 646,173 | ||||||
New York City Municipal Water Finance Authority, Refunding RB, Second General Resolution, Fiscal 2012, Series BB, 5.25%, 6/15/44 | 1,250 | 1,319,225 | ||||||
New York City Transitional Finance Authority Building Aid, BARB, Fiscal 2009, Series S-4, | 3,035 | 3,360,686 | ||||||
New York State HFA, RB, Affordable Housing, Series B, 5.30%, 11/01/37 | 2,835 | 2,872,649 | ||||||
Port Authority of New York & New Jersey, Refunding RB, Consolidated, 172nd Series, AMT, 4.50%, 4/01/37 | 1,460 | 1,412,710 | ||||||
|
| |||||||
| 9,611,443 | ||||||||
North Carolina — 0.1% | ||||||||
North Carolina Medical Care Commission, RB, Health Care Facilities, Novant Health Obligated Group, Series A, 4.75%, 11/01/43 | 395 | 379,737 | ||||||
Ohio — 0.8% | ||||||||
County of Lucas Ohio, Refunding RB, Promedica Healthcare, Series A, 6.50%, 11/15/37 | 460 | 521,143 | ||||||
Ohio Higher Educational Facility Commission, Refunding RB, Kenyon College Project, | 310 | 316,172 | ||||||
Ohio State Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1: | ||||||||
5.25%, 2/15/32 | 610 | 652,505 | ||||||
5.25%, 2/15/33 | 850 | 905,879 | ||||||
|
| |||||||
| 2,395,699 | ||||||||
Pennsylvania — 2.8% | ||||||||
Commonwealth Financing Authority, RB, Series B, 5.00%, 6/01/42 | 2,235 | 2,255,093 | ||||||
Pennsylvania Turnpike Commission, RB: | ||||||||
Series C, 5.50%, 12/01/33 | 490 | 534,330 | ||||||
Sub-Series A, 5.00%, 12/01/43 | 1,000 | 1,018,970 | ||||||
Subordinate, Special Motor License Fund, | 500 | 562,445 | ||||||
Subordinate, Special Motor License Fund, | 2,245 | 2,381,182 | ||||||
See Notes to Financial Statements.
| 30 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Quality Fund II, Inc. (MQT) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Pennsylvania (concluded) | ||||||||
Philadelphia School District, GO, Series E, | $ | 1,300 | $ | 1,395,433 | ||||
|
| |||||||
| 8,147,453 | ||||||||
South Carolina — 2.4% | ||||||||
Charleston County Airport District, RB, AMT, Series A, 5.50%, 7/01/41 | 1,360 | 1,402,051 | ||||||
South Carolina Jobs-EDA, Refunding RB, Palmetto Health, Series A (AGM), 6.50%, 8/01/39 | 100 | 110,817 | ||||||
South Carolina State Public Service Authority, Refunding RB, Santee Cooper, Series B, | 1,840 | 1,885,338 | ||||||
South Carolina Transportation Infrastructure Bank, RB, Series A, 5.25%, 10/01/40 | 3,420 | 3,608,339 | ||||||
|
| |||||||
| 7,006,545 | ||||||||
Tennessee — 0.4% | ||||||||
Memphis Center City Revenue Finance Corp., RB, Pyramid & Pinch District, Series B (AGM), | 1,000 | 1,073,530 | ||||||
Texas — 14.9% | ||||||||
City of San Antonio Texas Public Service Board, RB, Junior Lien, 5.00%, 2/01/38 | 500 | 523,725 | ||||||
Dallas-Fort Worth International Airport, ARB, Joint Improvement, Series D, AMT: | ||||||||
5.00%, 11/01/38 | 1,800 | 1,725,660 | ||||||
5.00%, 11/01/42 | 1,140 | 1,076,753 | ||||||
Dallas-Fort Worth International Airport, RB: | ||||||||
Series A (NPFGC), 5.50%, 11/01/33 | 5,000 | 5,000,000 | ||||||
Series H, 5.00%, 11/01/32 | 2,715 | 2,729,227 | ||||||
Dallas-Fort Worth International Airport, Refunding RB, Series F, 5.25%, 11/01/33 | 865 | 908,959 | ||||||
Lone Star College System, GO, 5.00%, 8/15/33 | 3,000 | 3,223,620 | ||||||
Mansfield Texas ISD, GO, School Building (PSF-GTD), 5.00%, 2/15/33 | 1,065 | 1,143,991 | ||||||
Midland County Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A, | 1,850 | 595,959 | ||||||
North Texas Tollway Authority, Refunding RB, First Tier: | ||||||||
Series A, 6.00%, 1/01/28 | 2,415 | 2,729,626 | ||||||
Series A (NPFGC), 5.75%, 1/01/40 | 3,600 | 3,891,924 | ||||||
Series K-1 (AGC), 5.75%, 1/01/38 | 3,400 | 3,719,770 | ||||||
San Antonio Public Facilities Corp., Refunding RB, Convention Center Refinancing & Expansion Project: | ||||||||
4.00%, 9/15/42 | 5,620 | 4,827,130 | ||||||
CAB, 4.93%, 9/15/35 (b) | 2,275 | 783,373 | ||||||
CAB, 4.99%, 9/15/36 (b) | 3,875 | 1,255,849 | ||||||
CAB, 5.04%, 9/15/37 (b) | 17,775 | 5,416,220 | ||||||
Tarrant County Cultural Education Facilities Finance Corp., Refunding RB, Cook Childrens Medical Center, 5.25%, 12/01/39 | 750 | 774,878 | ||||||
Texas Municipal Gas Acquisition & Supply Corp. III, RB: | ||||||||
5.00%, 12/15/31 | 1,030 | 1,002,417 | ||||||
5.00%, 12/15/32 | 2,500 | 2,419,125 | ||||||
|
| |||||||
| 43,748,206 | ||||||||
Vermont — 0.5% | ||||||||
Vermont HFA, Refunding RB, Multiple Purpose, Series C, AMT (AGM), 5.50%, 11/01/38 (d) | 1,305 | 1,328,216 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Washington — 2.1% | ||||||||
Central Puget Sound Regional Transit Authority, RB, Series A, 5.00%, 11/01/36 | 1,400 | 1,470,798 | ||||||
Washington Health Care Facilities Authority, RB: | ||||||||
MultiCare Health System, Remarketing, Series B, 5.00%, 8/15/44 | 3,000 | 2,999,760 | ||||||
Providence Health & Services, Series A, | 1,000 | 1,011,440 | ||||||
Providence Health & Services, Series A, | 550 | 565,339 | ||||||
Washington Health Care Facilities Authority, Refunding RB, Providence Health & Services, Series A, 5.00%, 10/01/42 | 205 | 203,750 | ||||||
|
| |||||||
| 6,251,087 | ||||||||
Wisconsin — 0.4% | ||||||||
Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Care Group, | 1,200 | 1,253,976 | ||||||
| Total Municipal Bonds — 114.4% | 334,847,539 | |||||||
| Municipal Bonds Transferred to Tender Option Bond Trusts (e) | ||||||||
Arizona — 1.0% | ||||||||
Phoenix Arizona Civic Improvement Corp., Refunding RB, Water System, Junior Lien, Series A, | 1,000 | 1,063,970 | ||||||
Salt River Project Agricultural Improvement & Power District, RB, Electric System, Series A, | 1,750 | 1,833,020 | ||||||
|
| |||||||
| 2,896,990 | ||||||||
California — 3.5% | ||||||||
Los Angeles Community College District California, GO, Election of 2001, Series A (NPFGC), | 4,330 | 4,568,107 | ||||||
Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A, | 1,699 | 1,956,948 | ||||||
San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33 | 359 | 400,313 | ||||||
San Diego County Water Authority, COP, Refunding, Series A (AGM), 5.00%, 5/01/33 | 3,030 | 3,221,223 | ||||||
|
| |||||||
| 10,146,591 | ||||||||
Colorado — 1.3% | ||||||||
Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A: | ||||||||
5.50%, 7/01/34 (f) | 780 | 854,049 | ||||||
5.00%, 2/01/41 | 2,999 | 2,924,190 | ||||||
|
| |||||||
| 3,778,239 | ||||||||
District of Columbia — 1.7% | ||||||||
District of Columbia, RB, Series A, | 855 | 958,546 | ||||||
District of Columbia Water & Sewer Authority, Refunding RB, Senior Lien, Series A, | 1,580 | 1,767,347 | ||||||
Metropolitan Washington Airports Authority, Refunding ARB, Series A, AMT, 5.00%, 10/01/30 | 2,190 | 2,285,966 | ||||||
|
| |||||||
| 5,011,859 | ||||||||
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 31 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Quality Fund II, Inc. (MQT) (Percentages shown are based on Net Assets) |
| Municipal Bonds Transferred to Tender Option Bond Trusts (e) | Par (000) | Value | ||||||
Florida — 12.9% | ||||||||
City of Tallahassee Florida, RB, Energy System (NPFGC), 5.00%, 10/01/37 | $ | 4,000 | $ | 4,078,520 | ||||
County of Highlands Health Facilities Authority, RB, Adventist, Series C, 5.25%, 11/15/36 (d) | 4,000 | 4,055,880 | ||||||
County of Miami-Dade Florida Expressway Authority, Refunding RB, Series A (AGC), 5.00%, 7/01/35 | 2,100 | 2,157,330 | ||||||
County of Miami-Dade Florida Transit System Sales Surtax, Refunding RB, Transit System Sales Surtax, 5.00%, 7/01/42 | 1,540 | 1,563,716 | ||||||
County of Miami-Dade Florida Water & Sewer System, RB, (AGM), 5.00%, 10/01/39 | 6,901 | 7,087,309 | ||||||
County of Orange Florida School Board, COP, Series A (AGC), 5.50%, 8/01/34 | 3,394 | 3,636,409 | ||||||
County of Orange Florida School Board, COP, Series A (NPFCG), 5.00%, 8/01/31 | 9,000 | 9,366,120 | ||||||
County of Seminole Florida, Refunding RB, Series B (NPFGC), 5.25%, 10/01/31 | 4,200 | 4,661,328 | ||||||
State of Florida, GO, Board of Education, Refunding, Series D, 5.00%, 6/01/37 (f) | 1,189 | 1,253,968 | ||||||
|
| |||||||
| 37,860,580 | ||||||||
Hawaii — 1.8% | ||||||||
Honolulu City & County Board of Water Supply, RB, Series A (NPFGC), 5.00%, 7/01/14 (c) | 5,000 | 5,160,850 | ||||||
Illinois — 9.5% | ||||||||
City of Chicago Illinois, RB, Motor Fuel Tax Project, Series A (AGC), 5.00%, 1/01/38 | 4,000 | 3,842,520 | ||||||
City of Chicago Illinois, Refunding RB: | ||||||||
Sales Tax, Series A, 5.00%, 1/01/41 | 700 | 715,015 | ||||||
Waterworks, Second Lien (AGM), | 2,548 | 2,630,498 | ||||||
Illinois State Toll Highway Authority, RB: | ||||||||
Senior Priority, Series B, 5.50%, 1/01/33 | 3,499 | 3,785,343 | ||||||
Series A, 5.00%, 1/01/38 | 1,859 | 1,862,578 | ||||||
Metropolitan Pier & Exposition Authority, RB, McCormick Place Expansion Project, Series A, 5.00%, 6/15/42 | 1,630 | 1,635,575 | ||||||
Regional Transportation Authority, RB, | 10,000 | 12,192,493 | ||||||
State of Illinois, RB, Build Illinois, Series B, | 1,130 | 1,169,001 | ||||||
|
| |||||||
| 27,833,023 | ||||||||
Louisiana — 1.6% | ||||||||
State of Louisiana Gas & Fuels, RB, Series A (AGM), 5.00%, 5/01/36 | 4,600 | 4,816,568 | ||||||
Massachusetts — 0.5% | ||||||||
Massachusetts School Building Authority, RB, Dedicated Sales Tax, Series A (AGM): | ||||||||
5.00%, 8/15/15 (c) | 180 | 188,653 | ||||||
5.00%, 8/15/30 | 1,215 | 1,275,290 | ||||||
|
| |||||||
| 1,463,943 | ||||||||
Michigan — 1.6% | ||||||||
Michigan Finance Authority, RB, Hospital, Trinity Health Credit Group, 5.00%, 12/01/39 | 4,700 | 4,679,414 | ||||||
Nevada — 1.8% | ||||||||
City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/39 (f) | 3,298 | 3,559,730 | ||||||
| Municipal Bonds Transferred to Tender Option Bond Trusts (e) | Par (000) | Value | ||||||
Nevada (concluded) | ||||||||
County of Clark Nevada Water Reclamation District, GO, Limited Tax, Series B, 5.75%, 7/01/34 | 1,574 | 1,789,324 | ||||||
|
| |||||||
| 5,349,054 | ||||||||
New Jersey — 0.6% | ||||||||
New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B, | 1,580 | 1,661,229 | ||||||
New York — 4.2% | ||||||||
New York City Municipal Water Finance Authority, RB, Water & Sewer System, Fiscal 2009, Series A, 5.75%, 6/15/40 | 1,050 | 1,167,578 | ||||||
New York City Municipal Water Finance Authority, Refunding RB, Water & Sewer System, Second General Resolution, Series CC, 5.00%, 6/15/47 | 4,920 | 5,108,977 | ||||||
New York State Dormitory Authority, ERB, Series B, 5.75%, 3/15/36 | 1,000 | 1,120,710 | ||||||
Port Authority of New York & New Jersey, Refunding RB, Construction, 143rd Series, AMT, | 3,500 | 3,592,750 | ||||||
Triborough Bridge & Tunnel Authority, RB, General, Series A-2, 5.25%, 11/15/34 (f) | 1,200 | 1,301,016 | ||||||
|
| |||||||
| 12,291,031 | ||||||||
Ohio — 0.2% | ||||||||
State of Ohio, RB, Cleveland Clinic Health Obligated Group, Series B, 5.50%, 1/01/34 | 500 | 532,025 | ||||||
South Carolina — 2.7% | ||||||||
Charleston Educational Excellence Finance Corp., RB, Charleston County School (AGC), | 6,030 | 6,638,970 | ||||||
South Carolina State Public Service Authority, Refunding RB, Santee Cooper, Series A, | 1,125 | 1,218,240 | ||||||
|
| |||||||
| 7,857,210 | ||||||||
Texas — 5.3% | ||||||||
Clear Creek ISD Texas, GO, Refunding, School Building (PSF-GTD), 5.00%, 2/15/33 | 1,900 | 2,026,578 | ||||||
Cypress-Fairbanks ISD, GO, Refunding, Schoolhouse (PSF-GTD), 5.00%, 2/15/32 | 5,250 | 5,629,102 | ||||||
Dallas Fort Worth International Airport, ARB, Series H, AMT, 5.00%, 11/01/37 (f) | 1,996 | 1,914,885 | ||||||
Harris County Cultural Education Facilities Finance Corp., RB, Texas Children’s Hospital Project, | 4,000 | 4,393,600 | ||||||
North East Texas ISD, GO, School Building, Series A (PSF-GTD), 5.00%, 8/01/37 (f) | 1,400 | 1,501,402 | ||||||
|
| |||||||
| 15,465,567 | ||||||||
Virginia — 0.1% | ||||||||
County of Fairfax Virginia IDA, Refunding RB, Health Care, Inova Health System, Series A, | 300 | 318,716 | ||||||
See Notes to Financial Statements.
| 32 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
Schedule of Investments (continued) | BlackRock MuniYield Quality Fund II, Inc. (MQT) (Percentages shown are based on Net Assets) |
| Municipal Bonds Transferred to Tender Option Bond Trusts (e) | Par (000) | Value | ||||||
Wisconsin — 1.8% | ||||||||
Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health Inc.: | ||||||||
Obligated Group, Series A, 5.00%, 4/01/42 | $ | 1,920 | $ | 1,905,523 | ||||
Series C, 5.25%, 4/01/39 (f) | 3,250 | 3,335,619 | ||||||
|
| |||||||
| 5,241,142 | ||||||||
| Total Municipal Bonds Transferred to Tender Option Bond Trusts — 52.1% | 152,364,031 | |||||||
Total Long-Term Investments (Cost — $473,744,263) — 166.5% | 487,211,570 | |||||||
| Short-Term Securities | Shares | Value | ||||||
FFI Institutional Tax-Exempt Fund, 0.03% (g)(h) | 3,474,496 | $ | 3,474,496 | |||||
Total Short-Term Securities (Cost — $3,474,496) — 1.2% | 3,474,496 | |||||||
| Total Investments (Cost — $477,218,759) — 167.7% | 490,686,066 | |||||||
| Liabilities in Excess of Other Assets — (0.2)% | (541,798 | ) | ||||||
| Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (27.7%) | (81,024,131 | ) | ||||||
| VMTP Shares, at Liquidation Value — (39.8%) | (116,500,000 | ) | ||||||
|
| |||||||
Net Assets Applicable to Common Shares — 100.0% |
| $ | 292,620,137 | |||||
|
| |||||||
| Notes to Schedule of Investments |
| (a) | Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date. |
| (b) | Represents a zero-coupon bond. Rate shown reflects the current yield as of report date. |
| (c) | US 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. |
| (d) | Variable rate security. Rate shown is as of report date. |
| (e) | Represent bonds transferred to a TOB. In exchange the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs. |
| (f) | All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from February 1, 2016 to December 1, 2029, is $11,177,580. |
| (g) | Investments in issuers considered to be an affiliate of the Fund during the six months ended October 31, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows: |
| Affiliate | Shares Held at April 30, 2013 | Net Activity | Shares Held at October 31, 2013 | Income | ||||||||||||
FFI Institutional Tax-Exempt Fund | 849,388 | 2,625,108 | 3,474,496 | $ | 669 | |||||||||||
| (h) | Represents the current yield as of report date. |
| Ÿ | Financial futures contracts as of October 31, 2013 were as follows: |
| Contracts Sold | Issue | Exchange | Expiration | Notional Value | Unrealized Depreciation | |||||||||
| (55) | 10-Year US Treasury Note | Chicago Board of Trade | December 2013 | $ | 7,004,766 | $ | (18,966 | ) | ||||||
| Ÿ | Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows: |
| Ÿ | Level 1 — unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access |
| Ÿ | Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or 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) |
| Ÿ | Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments) |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.
See Notes to Financial Statements.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 33 |
Table of Contents
Schedule of Investments (concluded) | BlackRock MuniYield Quality Fund II, Inc. (MQT) |
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2013:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
| Investments: | ||||||||||||||||
Long-Term Investments 1 | — | $ | 487,211,570 | — | $ | 487,211,570 | ||||||||||
Short-Term Securities | $ | 3,474,496 | — | — | 3,474,496 | |||||||||||
|
| |||||||||||||||
Total | $ | 3,474,496 | $ | 487,211,570 | — | $ | 490,686,066 | |||||||||
|
| |||||||||||||||
1 See above Schedule of Investments for values in each state or political subdivision.
| ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Derivative Financial Instruments 2 | ||||||||||||||||
Liabilities: | ||||||||||||||||
Interest rate contracts | $ (18,966) | — | — | $ | (18,966 | ) | ||||||||||
2 Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.
Certain of the Fund’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:
|
| |||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash pledged for financial futures contracts | $ | 98,000 | — | — | $ | 98,000 | ||||||||||
Liabilities: | ||||||||||||||||
TOB trust certificates | — | $ | (81,003,085 | ) | — | (81,003,085 | ) | |||||||||
VMTP Shares | — | (116,500,000 | ) | — | (116,500,000 | ) | ||||||||||
|
| |||||||||||||||
Total | $ | 98,000 | $ | (197,503,085 | ) | — | $ | (197,405,085 | ) | |||||||
|
| |||||||||||||||
There were no transfers between levels during the six months ended October 31, 2013.
See Notes to Financial Statements.
| 34 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
| Statements of Assets and Liabilities |
| October 31, 2013 (Unaudited) | BlackRock MuniYield Fund, Inc. (MYD) | BlackRock MuniYield Quality Fund, Inc. (MQY) | BlackRock MuniYield Quality Fund II, Inc. (MQT) | |||||||||
| Assets | ||||||||||||
Investments at value — unaffiliated1 | $ | 1,043,548,750 | $ | 742,110,696 | $ | 487,211,570 | ||||||
Investments at value — affiliated2 | 13,238,307 | 6,345,969 | 3,474,496 | |||||||||
Cash | 4 | 26,902 | — | |||||||||
Cash pledged for financial futures contracts | 347,000 | 142,000 | 98,000 | |||||||||
Interest receivable | 16,524,990 | 10,028,289 | 6,632,091 | |||||||||
Variation margin receivable on financial futures contracts | 30,625 | 12,500 | 8,594 | |||||||||
Deferred offering costs | 438,965 | 321,967 | 83,332 | |||||||||
Prepaid expenses | 15,561 | 130,448 | 2,811 | |||||||||
|
| |||||||||||
Total assets | 1,074,144,202 | 759,118,771 | 497,510,894 | |||||||||
|
| |||||||||||
| Accrued Liabilities | ||||||||||||
Investments purchased payable | 10,400,225 | 1,169,209 | 5,512,373 | |||||||||
Income dividends payable — Common Shares | 3,892,114 | 2,454,151 | 1,590,340 | |||||||||
Investment advisory fees payable | 443,606 | 318,339 | 206,882 | |||||||||
Officer’s and Directors’ fees payable | 230,054 | 168,100 | 2,338 | |||||||||
Interest expense and fees payable | 41,778 | 31,845 | 21,046 | |||||||||
Other accrued expenses payable | 288,708 | 95,345 | 54,693 | |||||||||
|
| |||||||||||
Total accrued liabilities | 15,296,485 | 4,236,989 | 7,387,672 | |||||||||
|
| |||||||||||
| Other Liabilities | ||||||||||||
TOB trust certificates | 166,078,226 | 124,839,701 | 81,003,085 | |||||||||
VRDP Shares, at liquidation value of $100,000 per share3,4 | 251,400,000 | 176,600,000 | — | |||||||||
VMTP Shares, at liquidation value of $100,000 per share3,4 | — | — | 116,500,000 | |||||||||
|
| |||||||||||
Total other liabilities | 417,478,226 | 301,439,701 | 197,503,085 | |||||||||
|
| |||||||||||
Total liabilities | 432,774,711 | 305,676,690 | 204,890,757 | |||||||||
|
| |||||||||||
Net Assets Applicable to Common Shareholders | $ | 641,369,491 | $ | 453,442,081 | $ | 292,620,137 | ||||||
|
| |||||||||||
| Net Assets Applicable to Common Shareholders Consist of | ||||||||||||
Paid-in capital5 | $ | 639,472,360 | $ | 430,121,896 | $ | 283,623,447 | ||||||
Undistributed net investment income | 9,411,008 | 8,160,839 | 6,121,452 | |||||||||
Accumulated net realized loss | (26,575,750 | ) | (6,380,297 | ) | (10,573,103 | ) | ||||||
Net unrealized appreciation/depreciation | 19,061,873 | 21,539,643 | 13,448,341 | |||||||||
|
| |||||||||||
Net Assets Applicable to Common Shareholders | $ | 641,369,491 | $ | 453,442,081 | $ | 292,620,137 | ||||||
|
| |||||||||||
Net asset value per Common Share | $ | 13.76 | $ | 14.78 | $ | 12.97 | ||||||
|
| |||||||||||
1 Investments at cost — unaffiliated | $ | 1,024,471,352 | $ | 720,543,466 | $ | 473,744,263 | ||||||
2 Investments at cost — affiliated | $ | 13,238,307 | $ | 6,345,969 | $ | 3,474,496 | ||||||
3 VRDP/VMTP Shares outstanding, par value $0.10 per share | 2,514 | 1,766 | 1,165 | |||||||||
4 Preferred Shares authorized, including Auction Market Preferred Shares (“AMPS”) | 16,234 | 11,766 | 7,565 | |||||||||
5 Common Shares outstanding, 200 million shares authorized, $0.10 par value | 46,612,142 | 30,676,888 | 22,558,009 | |||||||||
| See Notes to Financial Statements. | ||||||
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 35 | ||||
Table of Contents
| Statements of Operations |
| Six Months Ended October 31, 2013 (Unaudited) | BlackRock MuniYield Fund, Inc. (MYD) | BlackRock MuniYield Quality Fund, Inc. (MQY) | BlackRock MuniYield Quality Fund II, Inc. (MQT) | |||||||||
| Investment Income | ||||||||||||
Interest | $ | 27,119,398 | $ | 18,378,871 | $ | 11,881,594 | ||||||
Income — affiliated | 1,438 | 897 | 669 | |||||||||
|
| |||||||||||
Total income | 27,120,836 | 18,379,768 | 11,882,263 | |||||||||
|
| |||||||||||
| Expenses | ||||||||||||
Investment advisory | 2,779,413 | 1,942,705 | 1,257,162 | |||||||||
Liquidity fees | 858,647 | 827,389 | — | |||||||||
Commissions for Preferred Shares | 126,734 | 90,263 | — | |||||||||
Professional | 70,503 | 56,841 | 40,152 | |||||||||
Accounting services | 60,094 | 43,466 | 29,783 | |||||||||
Officer and Directors | 44,577 | 35,725 | 16,826 | |||||||||
Transfer agent | 26,819 | 21,849 | 14,840 | |||||||||
Custodian | 23,533 | 19,038 | 12,255 | |||||||||
Registration | 8,426 | 5,415 | 4,705 | |||||||||
Printing | 5,377 | 4,650 | 4,425 | |||||||||
Miscellaneous | 71,498 | 62,305 | 50,186 | |||||||||
|
| |||||||||||
Total expenses excluding interest expense and fees | 4,075,621 | 3,109,646 | 1,430,334 | |||||||||
Interest expense and fees1 | 993,656 | 628,426 | 950,012 | |||||||||
|
| |||||||||||
Total expenses | 5,069,277 | 3,738,072 | 2,380,346 | |||||||||
Less fees waived by Manager | (1,726 | ) | (831 | ) | (655 | ) | ||||||
|
| |||||||||||
Total expenses after fees waived | 5,067,551 | 3,737,241 | 2,379,691 | |||||||||
|
| |||||||||||
Net investment income | 22,053,285 | 14,642,527 | 9,502,572 | |||||||||
|
| |||||||||||
| Realized and Unrealized Gain (Loss) | ||||||||||||
| Net realized gain (loss) from: | ||||||||||||
Investments | (4,902,003 | ) | (5,468,409 | ) | (3,438,458 | ) | ||||||
Financial futures contracts | 801,503 | 530,126 | 341,559 | |||||||||
|
| |||||||||||
| (4,100,500 | ) | (4,938,283 | ) | (3,096,899 | ) | |||||||
|
| |||||||||||
| Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments | (100,729,554 | ) | (58,234,265 | ) | (35,618,607 | ) | ||||||
Financial futures contracts | 1,241,383 | 283,085 | 181,530 | |||||||||
|
| |||||||||||
| (99,488,171 | ) | (57,951,180 | ) | (35,437,077 | ) | |||||||
|
| |||||||||||
Total realized and unrealized loss | (103,588,671 | ) | (62,889,463 | ) | (38,533,976 | ) | ||||||
|
| |||||||||||
Net Decrease in Net Assets Applicable to Common Shareholders Resulting from Operations | $ | (81,535,386 | ) | $ | (48,246,936 | ) | $ | (29,031,404 | ) | |||
|
| |||||||||||
| 1 | Related to TOBs, VRDP Shares and/or VMTP Shares. |
| See Notes to Financial Statements. | ||||||
| 36 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | ||||
Table of Contents
| Statements of Changes in Net Assets |
| BlackRock MuniYield Fund, Inc. (MYD) | BlackRock MuniYield Quality Fund, Inc. (MQY) | |||||||||||||||||
| Increase (Decrease) in Net Assets Applicable to Common Shareholders: | Six Months 2013 (Unaudited) | Year Ended April 30, 2013 | Six Months 2013 (Unaudited) | Year Ended April 30, 2013 | ||||||||||||||
| Operations | ||||||||||||||||||
Net investment income | $ | 22,053,285 | $ | 44,247,872 | $ | 14,642,527 | $ | 28,525,982 | ||||||||||
Net realized gain (loss) | (4,100,500 | ) | 4,533,539 | (4,938,283 | ) | 65,452 | ||||||||||||
Net change in unrealized appreciation/depreciation | (99,488,171 | ) | 36,319,313 | (57,951,180 | ) | 19,607,267 | ||||||||||||
|
|
|
| |||||||||||||||
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations | (81,535,386 | ) | 85,100,724 | (48,246,936 | ) | 48,198,701 | ||||||||||||
|
|
|
| |||||||||||||||
| Dividends to Common Shareholders From | ||||||||||||||||||
Net investment income | (23,348,786 | ) | (47,224,460 | )1 | (14,722,740 | ) | (29,381,768 | )1 | ||||||||||
|
|
|
| |||||||||||||||
| Capital Share Transactions | ||||||||||||||||||
Reinvestment of common dividends | 678,310 | 4,409,201 | 417,081 | 1,917,950 | ||||||||||||||
|
|
|
| |||||||||||||||
| Net Assets Applicable to Common Shareholders | ||||||||||||||||||
Total increase (decrease) in net assets applicable to Common Shareholders | (104,205,862 | ) | 42,285,465 | (62,552,595 | ) | 20,734,883 | ||||||||||||
Beginning of period | 745,575,353 | 703,289,888 | 515,994,676 | 495,259,793 | ||||||||||||||
|
|
|
| |||||||||||||||
End of period | $ | 641,369,491 | $ | 745,575,353 | $ | 453,442,081 | $ | 515,994,676 | ||||||||||
|
|
|
| |||||||||||||||
Undistributed net investment income, end of period | $ | 9,411,008 | $ | 10,706,509 | $ | 8,160,839 | $ | 8,241,052 | ||||||||||
|
|
|
| |||||||||||||||
| BlackRock MuniYield Quality Fund II, Inc. (MQT) | ||||||||
| Increase (Decrease) in Net Assets Applicable to Common Shareholders: | Six Months 2013 | Year Ended 2013 | ||||||
| Operations | ||||||||
Net investment income | $ | 9,502,572 | $ | 18,402,461 | ||||
Net realized gain (loss) | (3,096,899 | ) | 246,588 | |||||
Net change in unrealized appreciation/depreciation | (35,437,077 | ) | 12,953,419 | |||||
|
| |||||||
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations | (29,031,404 | ) | 31,602,468 | |||||
|
| |||||||
| Dividends to Common Shareholders From | ||||||||
Net investment income | (9,519,480 | ) | (18,785,329 | )1 | ||||
|
| |||||||
| Capital Share Transactions | ||||||||
Reinvestment of common dividends | — | 1,075,952 | ||||||
|
| |||||||
| Net Assets Applicable to Common Shareholders | ||||||||
Total increase (decrease) in net assets applicable to Common Shareholders | (38,550,884 | ) | 13,893,091 | |||||
Beginning of period | 331,171,021 | 317,277,930 | ||||||
|
| |||||||
End of period | $ | 292,620,137 | $ | 331,171,021 | ||||
|
| |||||||
Undistributed net investment income, end of period | $ | 6,121,452 | $ | 6,138,360 | ||||
|
| |||||||
| 1 | Determined in accordance with federal income tax regulations. |
| See Notes to Financial Statements. | ||||||
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 37 | ||||
Table of Contents
| Statements of Cash Flows |
| Six Months Ended October 31, 2013 (Unaudited) | BlackRock MuniYield Fund, Inc. (MYD) | BlackRock MuniYield Quality Fund, Inc. (MQY) | BlackRock MuniYield Quality Fund II, Inc. (MQT) | |||||||||
| Cash Provided by Operating Activities | ||||||||||||
Net decrease in net assets resulting from operations | $ | (81,535,386 | ) | $ | (48,246,936 | ) | $ | (29,031,404 | ) | |||
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: | ||||||||||||
(Increase) decrease in interest receivable | 570,680 | (139,251 | ) | (301,824 | ) | |||||||
Decrease in cash pledged for financial futures contracts | 456,000 | 142,000 | 86,000 | |||||||||
(Increase) decrease in prepaid expenses | 4,800 | (116,540 | ) | 6,097 | ||||||||
Decrease in variation margin receivable | 27,688 | 7,656 | 4,531 | |||||||||
Decrease in investment advisory fees payable | (48,186 | ) | (17,849 | ) | (9,740 | ) | ||||||
Decrease in interest expense and fees payable | (73,781 | ) | (42,546 | ) | (18,663 | ) | ||||||
Increase (decrease) in other accrued expenses payable | (40,549 | ) | 92,992 | (33,846 | ) | |||||||
Increase in Officer’s and Directors’ fees payable | 25,892 | 22,592 | 1,993 | |||||||||
Net realized and unrealized loss on investments | 105,631,557 | 63,702,674 | 39,057,065 | |||||||||
Amortization of premium and accretion of discount on investments | 183,797 | (786,186 | ) | (505,043 | ) | |||||||
Amortization of deferred offering costs | 3,405 | 10,167 | 34,514 | |||||||||
Proceeds from sales of long-term investments | 128,696,307 | 71,219,917 | 52,680,906 | |||||||||
Purchases of long-term investments | (86,187,684 | ) | (61,383,431 | ) | (48,595,080 | ) | ||||||
Net proceeds from purchases of short-term securities | (6,973,066 | ) | (5,543,812 | ) | (2,625,108 | ) | ||||||
|
| |||||||||||
Cash provided by operating activities | 60,741,474 | 18,921,447 | 10,750,398 | |||||||||
|
| |||||||||||
| Cash Used for Financing Activities | ||||||||||||
Cash receipts from TOB trust certificates | 17,392,467 | 6,478,496 | 4,436,684 | |||||||||
Cash payments for TOB trust certificates | (59,257,618 | ) | (11,069,463 | ) | (5,690,160 | ) | ||||||
Cash dividends paid to Common Shareholders | (22,666,738 | ) | (14,303,578 | ) | (9,496,922 | ) | ||||||
|
| |||||||||||
Cash used for financing activities | (64,531,889 | ) | (18,894,545 | ) | (10,750,398 | ) | ||||||
|
| |||||||||||
| Cash | ||||||||||||
Net increase (decrease) in cash | (3,790,415 | ) | 26,902 | — | ||||||||
Cash at beginning of period | 3,790,419 | — | — | |||||||||
|
| |||||||||||
Cash at end of period | $ | 4 | $ | 26,902 | — | |||||||
|
| |||||||||||
| Cash Flow Information | ||||||||||||
Cash paid during the period for interest and fees | $ | 1,064,032 | $ | 660,805 | $ | 934,161 | ||||||
|
| |||||||||||
| Non-cash Financing Activities | ||||||||||||
Capital shares issued in reinvestment of dividends paid to Common Shareholders | $ | 678,310 | $ | 417,081 | — | |||||||
|
| |||||||||||
| See Notes to Financial Statements. | ||||||
| 38 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | ||||
Table of Contents
| Financial Highlights | BlackRock MuniYield Fund, Inc. (MYD) |
| Six Months Ended October 31, 2013 (Unaudited) | Year Ended April 30, | Period April 30, | Year Ended October 31, 2008 | |||||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||||||||
| Per Share Operating Performance | ||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 16.01 | $ | 15.19 | $ | 13.05 | $ | 13.87 | $ | 11.53 | $ | 10.70 | $ | 14.36 | ||||||||||||||
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Net investment income1 | 0.47 | 0.95 | 0.99 | 1.04 | 1.04 | 0.49 | 1.03 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | (2.22 | ) | 0.89 | 2.15 | (0.85 | ) | 2.17 | 0.77 | (3.62 | ) | ||||||||||||||||||
Dividends to AMPS shareholders from net investment income | — | — | (0.01 | ) | (0.03 | ) | (0.03 | ) | (0.04 | ) | (0.27 | ) | ||||||||||||||||
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Net increase (decrease) from investment operations | (1.75 | ) | 1.84 | 3.13 | 0.16 | 3.18 | 1.22 | (2.86 | ) | |||||||||||||||||||
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Dividends to Common Shareholders from net investment income | (0.50 | ) | (1.02 | )2 | (0.99 | )2 | (0.98 | )2 | (0.84 | )2 | (0.39 | )2 | (0.80 | )2 | ||||||||||||||
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Net asset value, end of period | $ | 13.76 | $ | 16.01 | $ | 15.19 | $ | 13.05 | $ | 13.87 | $ | 11.53 | $ | 10.70 | ||||||||||||||
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Market price, end of period | $ | 13.90 | $ | 16.24 | $ | 15.49 | $ | 13.17 | $ | 13.70 | $ | 11.45 | $ | 9.66 | ||||||||||||||
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| Total Investment Return Applicable to Common Shareholders3 | ||||||||||||||||||||||||||||
Based on net asset value | (10.86)% | 4 | 12.32% | 24.76% | 1.07% | 28.44% | 11.76% | 4 | (20.69)% | |||||||||||||||||||
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Based on market price | (11.24)% | 4 | 11.73% | 26.06% | 3.27% | 27.75% | 22.93% | 4 | (25.06)% | |||||||||||||||||||
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| Ratios to Average Net Assets Applicable to Common Shareholders | ||||||||||||||||||||||||||||
Total expenses | 1.52% | 5 | 1.52% | 1.53% | 1.15% | 7 | 1.14% | 7 | 1.25% | 5,7 | 1.38% | 7 | ||||||||||||||||
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Total expenses after fees waived | 1.52% | 5 | 1.52% | 1.53% | 1.15% | 7 | 1.14% | 7 | 1.24% | 5,7 | 1.38% | 7 | ||||||||||||||||
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Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs8 | 1.22% | 5,6 | 1.17% | 6 | 1.20% | 6 | 0.99% | 7 | 1.01% | 7 | 1.09% | 5,7 | 1.06% | 7 | ||||||||||||||
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Net investment income | 6.62% | 5 | 6.02% | 6.95% | 7.64% | 7 | 8.08% | 7 | 9.20% | 5,7 | 7.65% | 7 | ||||||||||||||||
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Dividends to AMPS Shareholders | — | — | 0.04% | 0.23% | 0.27% | 0.74% | 5 | 1.99% | ||||||||||||||||||||
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Net investment income to Common Shareholders | 6.62% | 5 | 6.02% | 6.91% | 7.41% | 7.81% | 8.46% | 5 | 5.66% | |||||||||||||||||||
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| Supplemental Data | ||||||||||||||||||||||||||||
Net assets applicable to Common Shareholders, end of period (000) | $ | 641,369 | $ | 745,575 | $ | 703,290 | $ | 598,976 | $ | 630,608 | $ | 523,590 | $ | 484,945 | ||||||||||||||
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AMPS outstanding at $25,000 liquidation preference, end of period (000) | — | — | — | $ | 251,450 | $ | 251,450 | $ | 271,500 | $ | 271,500 | |||||||||||||||||
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VRDP Shares outstanding at $100,000 liquidation value, end of period (000) | $ | 251,400 | $ | 251,400 | $ | 251,400 | — | — | — | — | ||||||||||||||||||
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Portfolio turnover | 8% | 16% | 19% | 16% | 35% | 7% | 20% | |||||||||||||||||||||
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Asset coverage per AMPS at $25,000 liquidation preference, end of period | — | — | — | $ | 84,556 | $ | 87,701 | $ | 73,217 | $ | 69,695 | |||||||||||||||||
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Asset coverage per VRDP Shares at $100,000 liquidation value, end of period | $ | 355,119 | $ | 396,569 | $ | 379,749 | — | — | — | — | ||||||||||||||||||
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| 1 | Based on average Common Shares outstanding. |
| 2 | Determined in accordance with federal income tax regulations. |
| 3 | Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions. |
| 4 | Aggregate total investment return. |
| 5 | Annualized. |
| 6 | For the six months ended October 31, 2013 and the years ended April 30, 2013 and April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.93%, 0.90% and 0.92%, respectively. |
| 7 | Does not reflect the effect of dividends to AMPS Shareholders. |
| 8 | Interest expense, fees and amortization of offering costs related to TOBs and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively. |
| See Notes to Financial Statements. | ||||||
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 39 | ||||
Table of Contents
| Financial Highlights | BlackRock MuniYield Quality Fund, Inc. (MQY) |
| Six Months Ended October 31, 2013 (Unaudited) | Year Ended April 30, | Period April 30, 2009 | Year Ended October 31, 2008 | |||||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||||||||
| Per Share Operating Performance | ||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 16.83 | $ | 16.22 | $ | 13.72 | $ | 14.63 | $ | 13.27 | $ | 11.68 | $ | 14.88 | ||||||||||||||
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Net investment income1 | 0.48 | 0.93 | 0.95 | 0.99 | 0.99 | 0.46 | 0.97 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | (2.05 | ) | 0.64 | 2.49 | (0.94 | ) | 1.23 | 1.51 | (3.12 | ) | ||||||||||||||||||
| Dividends to AMPS shareholders from: | ||||||||||||||||||||||||||||
Net investment income | — | — | (0.01 | ) | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.27 | ) | ||||||||||||||||
Net realized gain | — | — | — | — | — | — | (0.03 | ) | ||||||||||||||||||||
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Net increase (decrease) from investment operations | (1.57 | ) | 1.57 | 3.43 | 0.01 | 2.18 | 1.93 | (2.45 | ) | |||||||||||||||||||
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| Dividends and distributions to Common Shareholders from: | ||||||||||||||||||||||||||||
Net investment income | (0.48 | ) | (0.96 | )2 | (0.93 | )2 | (0.92 | )2 | (0.82 | )2 | (0.34 | )2 | (0.68 | )2 | ||||||||||||||
Net realized gain | — | — | — | — | — | — | (0.07 | )2 | ||||||||||||||||||||
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Total dividends and distributions to Common Shareholders | (0.48 | ) | (0.96 | ) | (0.93 | ) | (0.92 | ) | (0.82 | ) | (0.34 | ) | (0.75 | ) | ||||||||||||||
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Net asset value, end of period | $ | 14.78 | $ | 16.83 | $ | 16.22 | $ | 13.72 | $ | 14.63 | $ | 13.27 | $ | 11.68 | ||||||||||||||
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Market price, end of period | $ | 14.09 | $ | 16.94 | $ | 16.05 | $ | 13.15 | $ | 14.48 | $ | 12.32 | $ | 10.90 | ||||||||||||||
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| Total Investment Return Applicable to Common Shareholders3 | ||||||||||||||||||||||||||||
Based on net asset value | (9.19)% | 4 | 9.86% | 25.78% | 0.10% | 17.12% | 17.07% | 4 | (16.79)% | |||||||||||||||||||
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Based on market price | (13.99)% | 4 | 11.75% | 29.85% | (3.06)% | 24.86% | 16.47% | 4 | (12.47)% | |||||||||||||||||||
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| Ratios to Average Net Assets Applicable to Common Shareholders | ||||||||||||||||||||||||||||
Total expenses | 1.60% | 5 | 1.53% | 1.46% | 1.21% | 6 | 1.20% | 6 | 1.43% | 5,6 | 1.76% | 6 | ||||||||||||||||
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Total expenses after fees waived and paid indirectly | 1.60% | 5 | 1.53% | 1.46% | 1.21% | 6 | 1.20% | 6 | 1.42% | 5,6 | 1.75% | 6 | ||||||||||||||||
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Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7 | 1.33% | 5 | 1.23% | 8 | 1.19% | 8 | 1.02% | 6 | 1.02% | 6 | 1.13% | 5,6 | 1.10% | 6 | ||||||||||||||
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Net investment income | 6.26% | 5 | 5.57% | 6.29% | 6.97% | 6 | 6.98% | 6 | 7.58% | 5,6 | 6.89% | 6 | ||||||||||||||||
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Dividends to AMPS shareholders | — | — | 0.08% | 0.25% | 0.28% | 0.69% | 5 | 1.92% | ||||||||||||||||||||
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Net investment income to Common Shareholders | 6.26% | 5.57% | 6.21% | 6.72% | 6.70% | 6.89% | 5 | 4.97% | ||||||||||||||||||||
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| Supplemental Data | ||||||||||||||||||||||||||||
Net assets applicable to Common Shareholders, end of period (000) | $ | 453,442 | $ | 515,995 | $ | 495,260 | $ | 418,346 | $ | 445,160 | $ | 403,796 | $ | 355,459 | ||||||||||||||
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AMPS outstanding at $25,000 liquidation preference, end of period (000) | — | — | — | $ | 176,625 | $ | 176,625 | $ | 192,000 | $ | 192,000 | |||||||||||||||||
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VRDP Shares outstanding at $100,000 liquidation value, end of period (000) | $ | 176,600 | $ | 176,600 | $ | 176,600 | — | — | — | — | ||||||||||||||||||
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Portfolio turnover | 8% | 15% | 25% | 12% | 19% | 13% | 20% | |||||||||||||||||||||
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Asset coverage per AMPS at $25,000 liquidation preference, | — | — | — | $ | 84,217 | $ | 88,013 | $ | 77,582 | $ | 71,318 | |||||||||||||||||
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Asset coverage per VRDP Shares at $100,000 liquidation value, | $ | 356,762 | $ | 392,183 | $ | 380,442 | — | — | — | — | ||||||||||||||||||
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| 1 | Based on average Common Shares outstanding. |
| 2 | Determined in accordance with federal income tax regulations. |
| 3 | Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions. |
| 4 | Aggregate total investment return. |
| 5 | Annualized. |
| 6 | Does not reflect the effect of dividends to AMPS shareholders. |
| 7 | Interest expense, fees and amortization of offering costs related to TOBs and VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively. |
| 8 | For the six months ended October 31, 2013 and the years ended April 30, 2013 and April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.96%, 0.90% and 0.95%, respectively. |
| See Notes to Financial Statements. | ||||||
| 40 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | ||||
Table of Contents
| Financial Highlights | BlackRock MuniYield Quality Fund II, Inc. (MQT) |
| Six Months Ended October 31, 2013 (Unaudited) | Year Ended April 30, | Period November 1, | Year Ended 2008 | |||||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||||||||
| Per Share Operating Performance | ||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.68 | $ | 14.11 | $ | 11.85 | $ | 12.71 | $ | 11.55 | $ | 10.17 | $ | 13.17 | ||||||||||||||
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Net investment income1 | 0.42 | 0.82 | 0.85 | 0.86 | 0.88 | 0.41 | 0.86 | |||||||||||||||||||||
Net realized and unrealized gain (loss) | (1.71 | ) | 0.58 | 2.24 | (0.89 | ) | 1.04 | 1.31 | (3.00 | ) | ||||||||||||||||||
| Dividends to AMPS Shareholders from | ||||||||||||||||||||||||||||
Net investment income | — | — | (0.01 | ) | (0.02 | ) | (0.03 | ) | (0.04 | ) | (0.26 | ) | ||||||||||||||||
Net realized gain | — | — | (0.00 | )2 | — | — | — | — | ||||||||||||||||||||
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Net increase (decrease) from investment operations | (1.29 | ) | 1.40 | 3.08 | (0.05 | ) | 1.89 | 1.68 | (2.40 | ) | ||||||||||||||||||
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Dividends to Common Shareholders from net investment income | (0.42 | ) | (0.83 | )3 | (0.82 | )3 | (0.81 | )3 | (0.73 | )3 | (0.30 | )3 | (0.60 | )3 | ||||||||||||||
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Net asset value, end of period | $ | 12.97 | $ | 14.68 | $ | 14.11 | $ | 11.85 | $ | 12.71 | $ | 11.55 | $ | 10.17 | ||||||||||||||
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Market price, end of period | $ | 11.94 | $ | 14.41 | $ | 13.93 | $ | 11.59 | $ | 12.52 | $ | 10.16 | $ | 8.75 | ||||||||||||||
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| Total Investment Return Applicable to Common Shareholders4 | ||||||||||||||||||||||||||||
Based on net asset value | (8.55)%5 | 10.17% | 26.85% | (0.36)% | 17.15% | 17.27% | 5 | (18.42)% | ||||||||||||||||||||
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Based on market price | (14.24)%5 | 9.55% | 28.04% | (1.07)% | 31.18% | 19.90% | 5 | (20.31)% | ||||||||||||||||||||
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| Ratios to Average Net Assets Applicable to Common Shareholders | ||||||||||||||||||||||||||||
Total expenses | 1.58% | 6 | 1.49% | 1.31% | 1.21% | 7 | 1.21% | 7 | 1.52% | 6,7 | 1.80% | 7 | ||||||||||||||||
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Total expenses after fees waived and paid indirectly | 1.58% | 6 | 1.49% | 1.31% | 1.20% | 7 | 1.21% | 7 | 1.52% | 6,7 | 1.79% | 7 | ||||||||||||||||
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Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs8 | 0.95% | 6 | 0.90% | 0.99% | 9 | 1.03% | 7 | 1.04% | 7 | 1.18% | 6,7 | 1.12% | 7 | |||||||||||||||
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Net investment income | 6.30% | 6 | 5.62% | 6.46% | 7.00% | 7 | 7.13% | 7 | 7.86% | 6,7 | 6.96% | 7 | ||||||||||||||||
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Dividends to AMPS Shareholders | — | — | 0.08% | 0.20% | 0.23% | 0.68% | 6 | 2.08% | ||||||||||||||||||||
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Net investment income to Common Shareholders | 6.30% | 5.62% | 6.38% | 6.80% | 6.90% | 7.18% | 6 | 4.88% | ||||||||||||||||||||
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| Supplemental Data | ||||||||||||||||||||||||||||
Net assets applicable, end of period (000) | $ | 292,620 | $ | 331,171 | $ | 317,278 | $ | 265,918 | $ | 284,395 | $ | 258,263 | $ | 227,551 | ||||||||||||||
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AMPS outstanding at $25,000 liquidation preference, end of period (000) | — | — | — | $ | 116,575 | $ | 116,575 | $ | 128,250 | $ | 128,250 | |||||||||||||||||
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VMTP Shares outstanding at $100,000 liquidation value, end of period (000) | $ | 116,500 | $ | 116,500 | $ | 116,500 | — | — | — | — | ||||||||||||||||||
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Portfolio turnover | 10% | 15% | 20% | 10% | 25% | 9% | 17% | |||||||||||||||||||||
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Asset coverage per AMPS at $25,000 liquidation preference, | — | — | — | $ | 82,031 | $ | 85,994 | $ | 75,349 | $ | 69,420 | |||||||||||||||||
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Asset coverage per VMTP Shares at $100,000 liquidation value, end of period | $ | 351,176 | $ | 384,267 | $ | 372,342 | — | — | — | — | ||||||||||||||||||
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| 1 | Based on average Common Shares outstanding. |
| 2 | Amount is greater than $(0.005) per share. |
| 3 | Determined in accordance with federal income tax regulations. |
| 4 | Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions. |
| 5 | Aggregate total investment return. |
| 6 | Annualized. |
| 7 | Does not reflect the effect of dividends to AMPS Shareholders. |
| 8 | Interest expense, fees and amortization of offering costs related to TOBs and VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively. |
| 9 | For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.95%. |
| See Notes to Financial Statements. | ||||||
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 41 | ||||
Table of Contents
| Notes to Financial Statements (Unaudited) |
1. Organization:
BlackRock MuniYield Fund, Inc. (“MYD”), BlackRock MuniYield Quality Fund, Inc. (“MQY”) and BlackRock MuniYield Quality Fund II, Inc. (“MQT”) (each, a “Fund”, and collectively the “Funds”) are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as non-diversified, closed-end management investment companies. The Funds are organized as Maryland corporations. The Boards of Directors of the Funds are collectively referred to throughout this report as the “Board of Directors” or the “Board” and the directors, thereof are collectively referred to throughout this report as “Directors”. The Funds determine and make available for publication the NAVs of their Common Shares on a daily basis.
2. Significant Accounting Policies:
The Funds’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Funds:
Valuation: US GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds determine the fair values of their instruments at market value using independent dealers or pricing services under policies approved by the Board. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to provide oversight of the pricing function for the Funds for all financial instruments.
Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. Financial futures contracts traded on exchanges are valued at their last sale price. Investments in open-end registered investment companies are valued at net asset value each business day. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value.
In the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee or its delegate deem relevant consistent with the principals of fair value measurement, which include the market approach, income approach and/or in the case of recent investments, the cost approach, as appropriate. The market approach generally consists of using comparable market transactions. The income approach generally is used to discount future cash flows to present value and is adjusted for liquidity as appropriate. These factors include but are not limited to: (i) attributes specific to the investment or asset; (ii) the principal market for the investment or asset; (iii) the customary participants in the principal market for the investment or asset; (iv) data assumptions by market participants for the investment or asset, if reasonably available; (v) quoted prices for similar investments or assets in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. Due to the inherent uncertainty of valuations of such investments, the fair values may differ from the values that would have been used had an active market existed. The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Funds’ pricing vendors, regular reviews of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof on a quarterly basis.
Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that each Fund either deliver collateral or segregate assets in connection with certain investments (e.g., TOBs, and financial futures contracts), each Fund will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on their books and records cash or liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, a fund engaging in such transactions may have requirements to deliver/deposit securities to/with an exchange or broker-dealer as collateral for certain investments.
| 42 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
| Notes to Financial Statements (continued) |
Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.
Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. The character and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 9.
Income Taxes: It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of their taxable income to their shareholders. Therefore, no federal income tax provision is required.
Each Fund files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Funds’ US federal tax returns remains open for each of the four years ended April 30, 2013. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction. Management does not believe there are any uncertain tax positions that require recognition of a tax liability.
Deferred Compensation Plan: Under the Deferred Compensation Plan approved by each Fund’s Board, the independent Directors (“Independent Directors”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Directors. This has the same economic effect for the Independent Directors as if the Independent Directors had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.
The Plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Fund. Deferred compensation liabilities are included in officer’s and directors’ fees payable in the Statement of Assets and Liabilities and will remain as a liability of the Funds until such amounts are distributed in accordance with the Plan.
Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods.
The Funds have an arrangement with the custodians whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodians impose fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.
3. Securities and Other Investments:
Zero-Coupon Bonds: The Funds may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.
Forward Commitments and When-Issued Delayed Delivery Securities: The Funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Funds may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Funds may be required to pay more at settlement than the security is worth. In addition, the Funds are not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, the Funds’ maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Schedules of Investments.
Municipal Bonds Transferred to TOBs: The Funds leverage their assets through the use of TOBs. A TOB is a special purpose entity established by a third party sponsor, into which a fund, or an agent on behalf of the funds, transfers municipal bonds into a trust (“TOB Trust”). Other funds managed by the investment advisor may also contribute municipal bonds to a TOB into which a Fund has contributed bonds. A TOB typically issues two classes of beneficial interests: short-term floating rate certificates (“TOB Trust Certificates”), which are sold to third party investors, and residual certificates (“TOB Residuals”), which are generally issued to the participating funds that contributed the municipal bonds to the TOB Trust. If multiple funds participate in the same TOB, the rights and obligations under the TOB Residual will be shared among the funds ratably in proportion to their participation.
The TOB Residuals held by a Fund include the right of a Fund (1) to cause the holders of a proportional share of the TOB Trust Certificates to tender their certificates at par plus accrued interest upon the occurrence of certain mandatory tender events defined in the TOB agreements, and
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(2) to transfer, subject to a specified number of days’ prior notice, a corresponding share of the municipal bonds from the TOB to a Fund. The TOB may also be collapsed without the consent of a Fund, as the TOB Residual holder, upon the occurrence of certain termination events as defined in the TOB agreements. Such termination events may include the bankruptcy or default of the municipal bond, a substantial downgrade in credit quality of the municipal bond, the inability of the TOB to obtain renewal of the liquidity support agreement, a substantial decline in market value of the municipal bond and a judgment or ruling that interest on the municipal bond is subject to federal income taxation. Upon the occurrence of a termination event, the TOB would generally be liquidated in full with the proceeds typically applied first to any accrued fees owed to the trustee, remarketing agent and liquidity provider, and then to the holders of the TOB Trust Certificates up to par plus accrued interest owed on the TOB Trust Certificates, with the balance paid out to the TOB Residual holder. During the six months ended October 31, 2013, no TOBs in which the Funds participated were terminated without the consent of the Funds.
The cash received by the TOB from the sale of the TOB Trust Certificates, less transaction expenses, is paid to a Fund. The Funds typically invests the cash received in additional municipal bonds. Each Fund’s transfer of the municipal bonds to a TOB Trust is accounted for as a secured borrowing: therefore the municipal bonds deposited into a TOB are presented in the Funds’ Schedules of Investments and the TOB Trust Certificates issued are shown in other liabilities in the Statements of Assets and Liabilities. The carrying amount of each Fund’s payable to the holder of the TOB Trust Certificates, as reported in Statements of Assets and Liabilities as TOB Trust Certificates approximates its fair value.
The Funds may invest in TOBs on either a non-recourse or recourse basis. TOB Trusts are typically supported by a liquidity facility provided by a bank or other financial institution (the “Liquidity Provider”) that allows the holders of the TOB Trust Certificates to tender their certificates in exchange for payment from the Liquidity Provider of par plus accrued interest on any business day prior to the occurrence of the termination events described above. When a Fund invests in TOBS on a non-recourse basis, and the Liquidity Provider is required to make a payment under the liquidity facility due to a termination event, the Liquidity Provider will typically liquidate all or a portion of the municipal securities held in the TOB Trust and then fund, on a net basis, the balance, if any, of the amount owed under the liquidity facility over the liquidation proceeds (the “Liquidation Shortfall”). If a Fund invests in a TOB on a recourse basis, the Fund will typically enter into a reimbursement agreement with the Liquidity Provider where the Fund is required to repay the Liquidity Provider the amount of any Liquidation Shortfall. As a result, a Fund investing in a recourse TOB will bear the risk of loss with respect to any Liquidation Shortfall. If multiple funds participate in any such TOB, these losses will be shared ratably, including the maximum potential amounts owed by the Funds at October 31, 2013, in proportion to their participation. The recourse TOB Trusts are identified in the Schedules of Investments including the maximum potential amounts owed by the Funds at October 31, 2013.
Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by the Funds on an accrual basis. Interest expense incurred on the secured borrowing and other expenses related to remarketing, administration and trustee services to a TOB are shown as interest expense, fees and amortization of offering costs in the Statements of Operations. The TOB Trust Certificates have interest rates that generally reset weekly and their holders have the option to tender such certificates to the TOB for redemption at par at each reset date. At October 31, 2013, the aggregate value of the underlying municipal bonds transferred to TOBs, the related liability for TOB Trust Certificates and the range of interest rates on the liability for TOB Trust Certificates were as follows:
| Underlying Municipal Bonds Transferred to TOBs | Liability for TOB Trust Certificates | Range of Interest Rates | ||||||||||
MYD | $ | 298,826,445 | $ | 166,078,226 | 0.08% - 0.33% | |||||||
MQY | $ | 240,181,039 | $ | 124,839,701 | 0.08% - 0.36% | |||||||
MQT | $ | 152,364,031 | $ | 81,003,085 | 0.08% - 0.36% | |||||||
For the six months ended October 31, 2013, the Funds’ average TOB Trust Certificates outstanding and the daily weighted average interest rate, including fees, were as follows:
| Average TOB Trust Certificates Outstanding | Daily Weighted Average Interest Rate | |||||||
MYD | $ | 190,166,859 | 0.64 | % | ||||
MQY | $ | 129,984,844 | 0.67 | % | ||||
MQT | $ | 83,062,037 | 0.66 | % | ||||
Should short-term interest rates rise, the Funds’ investments in TOBs may adversely affect the Funds’ net investment income and dividends to Common Shareholders. Also, fluctuations in the market value of municipal bonds deposited into the TOB Trust may adversely affect the Funds’ NAVs per share.
4. Derivative Financial Instruments:
The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to economically hedge their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risk (inflation risk). These contracts may be transacted on an exchange or over-the counter.
Financial Futures Contracts: The Funds purchase and/or sell financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk), changes in the value of
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equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk). Financial futures contracts are agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. Upon entering into a financial futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Securities deposited as initial margin are designated on the Schedules of Investments and cash deposited is recorded on the Statements of Assets and Liabilities as cash pledged for financial futures contracts. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin Variation margin is recorded by the Funds as unrealized appreciation or depreciation and, if applicable, as a receivable or payable for variation margin in the Statements of Assets and Liabilities. When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.
The following is a summary of the Funds’ derivative financial instruments categorized by risk exposure:
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| Fair Values of Derivative Financial Instruments as of October 31, 2013 | ||||||||||||||
Derivative Liabilities | ||||||||||||||
| MYD | MQY | MQT | |||||||||||
| Statements of Assets and Liabilities Location | Value | |||||||||||||
| Interest rate contracts: | ||||||||||||||
Financial futures contracts | Net unrealized depreciation1 | $ | (15,526 | ) | $ | (27,587 | ) | $ | (18,966 | ) | ||||
| 1 | Includes cumulative appreciation/depreciation on financial futures contracts as reported in the Schedules of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities. |
| The Effect of Derivative Financial Instruments in the Statements of Operations Six Months Ended October 31, 2013 | ||||||||||||
| Net Realized Gain From | MYD | MQY | MQT | |||||||||
| Interest rate contracts: | ||||||||||||
Financial futures contracts | $ | 801,503 | $ | 530,126 | $ | 341,559 | ||||||
| Net Change in Unrealized Appreciation/Depreciation on | ||||||||||||
| MYD | MQY | MQT | ||||||||||
| Interest rate contracts: | ||||||||||||
Financial futures contracts | $ | 1,241,383 | $ | 283,085 | $ | 181,530 | ||||||
| For the period ended October 31, 2013, the average quarterly balances of outstanding derivative financial instruments were as follows: | ||||||||||||
| MYD | MQY | MQT | ||||||||||
| Financial futures contracts: | ||||||||||||
Average number of contracts sold | 98 | 40 | 28 | |||||||||
Average notional value of contracts sold | $ | 12,481,219 | $ | 5,094,375 | $ | 3,502,383 | ||||||
Counterparty Credit Risk: A derivative contract may suffer a mark to market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, the Funds do not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally Credit risk still exists in exchange traded
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| Notes to Financial Statements (continued) |
futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocate on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.
For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Assets and Liabilities.
5. Investment Advisory Agreement and Other Transactions with Affiliates:
The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate, for 1940 Act purposes of BlackRock, Inc. (“BlackRock”).
Each Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Funds’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of each Fund’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Fund. For such services, each Fund pays the Manager a monthly fee at an annual rate of each Fund’s average daily net assets at the following annual rates:
MYD | 0.50 | % | ||
MQY | 0.50 | % | ||
MQT | 0.50 | % |
Average daily net assets are the average daily value of each Fund’s total assets minus its total accrued liabilities.
The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with each Fund’s investment in other affiliated investment companies, if any. These amounts waived or reimbursed are shown as fees waived by Manager in the Statements of Operations.
The Manager entered into a sub-advisory agreement with BlackRock Investment Management, LLC (“BIM”), an affiliate of the Manager. The Manager pays BIM for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Fund to the Manager.
Certain officers and/or Directors of the Funds are officers and/or directors of BlackRock or its affiliates. The Funds reimburse the Manager for compensation paid to the Funds’ Chief Compliance Officer, which is included in officer and directors in the Statements of Operations.
6. Purchases and Sales:
Purchases and sales of investments excluding short-term securities for the six months ended October 31, 2013 were as follows:
| Purchases | Sales | |||||||
MYD | $ | 85,473,061 | $ | 128,586,307 | ||||
MQY | $ | 57,939,974 | $ | 68,096,350 | ||||
MQT | $ | 52,031,652 | $ | 51,479,190 | ||||
7. Income Tax Information:
As of April 30, 2013, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
| Expires April 30, | MYD | MQT | ||||||
2016 | $ | 11,743,926 | — | |||||
2017 | 4,065,755 | $ | 2,624,082 | |||||
2018 | 1,196,450 | 66,689 | ||||||
2019 | 479,687 | 1,774,764 | ||||||
No expiration date1 | 3,081,587 | — | ||||||
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| |||||
Total | $ | 20,567,405 | $ | 4,465,535 | ||||
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| 1 | Must be utilized prior to losses subject to expiration. |
As of October 31, 2013 gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
| MYD | MQY | MQT | ||||||||||
Tax cost | $ | 873,722,424 | $ | 603,907,774 | $ | 398,638,840 | ||||||
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| |||||||
Gross unrealized appreciation | $ | 44,442,460 | $ | 31,249,479 | $ | 19,305,786 | ||||||
Gross unrealized depreciation | (27,456,053 | ) | (11,540,288 | ) | (8,261,645 | ) | ||||||
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Net unrealized appreciation (depreciation) | $ | 16,986,407 | $ | 19,709,191 | $ | 11,044,141 | ||||||
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8. Concentration, Market and Credit Risk:
Each Fund invests a substantial amount of their assets in issuers located in a single state or limited number of states. Please see the Schedules of Investments for concentrations in specific states or US territories.
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Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.
In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.
As of October 31, 2013, MYD invested a significant portion of its assets in securities in the health sector. MQY and MQT each invested a significant portion of their assets in the county/city/special district/school district sector. Each Fund also invested a significant portion of its assets in the transportation sector. Changes in economic conditions affecting the health, county/city/special district/school district and transportation sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.
The Funds may hold a significant amount of bonds subject to calls by the issuers at defined dates and prices. When bonds are called by issuers and the Funds reinvest the proceeds received, such investments may be in securities with lower yields than the bonds originally held, and correspondingly, could adversely impact the yield and total return performance of a fund.
9. Capital Share Transactions:
Each Fund is authorized to issue 200 million shares, all of which were initially classified as Common Shares. The par value for each Fund’s Common Shares is $0.10. The par value for each Fund’s Preferred Shares is $0.10. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without approval of Common Shareholders.
Common Shares
For the periods shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:
Six Months Ended October 31, 2013 | Year Ended April 30, 2013 | |||||||
MYD | 44,770 | 278,043 | ||||||
MQY | 26,017 | 114,037 | ||||||
MQT | — | 73,441 | ||||||
Preferred Shares
Each Fund’s Preferred Shares rank prior to the Fund’s Common Shares as to the payment of dividends by the Fund and distribution of assets upon dissolution or liquidation of the Fund. The 1940 Act prohibits the declaration of any dividend on the Fund’s Common Shares or the repurchase of the Fund’s Common Shares if the Fund fails to maintain the asset coverage of at least 200% of the liquidation preference of the outstanding Preferred Shares. In addition, pursuant to the Preferred Shares’ governing instrument, the Fund is restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with the Preferred Shares or repurchasing such shares if the Fund fails to declare and pay dividends on the Preferred Shares, redeem any Preferred Shares required to be redeemed under the Preferred Shares governing instrument or comply with the basic maintenance amount requirement of the rating agencies then rating the Preferred Shares.
The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Directors for each Fund. In addition, the 1940 Act requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Fund’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.
VRDP Shares
MYD and MQY (collectively, the “VRDP Funds”), have issued Series W-7 VRDP Shares, $100,000 liquidation value per share, in a privately negotiated offering. The VRDP Shares were offered to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act of 1933 and include a liquidity feature that allows the holders of VRDP Shares to have their shares purchased by the liquidity provider in the event of a failed remarketing. The VRDP Funds are required to redeem
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the VRDP Shares owned by the liquidity provider after six months of continuous, unsuccessful remarketing. Upon the occurrence of the first unsuccessful remarketing, the VRDP Funds are required to segregate liquid assets to fund the redemption. The VRDP Shares are subject to certain restrictions on transfer.
The VRDP Shares outstanding as of October 31, 2013 were as follows:
| Issue Date | Shares Issued | Aggregate Principal | Maturity Date | |||||||||||||
MYD | 6/30/11 | 2,514 | $ | 251,400,000 | 7/01/41 | |||||||||||
MQY | 9/15/11 | 1,766 | $ | 176,600,000 | 10/01/41 | |||||||||||
The VRDP Funds entered into a fee agreement with the liquidity provider that require a per annum liquidity fee to be paid to the liquidity provider. MYD’s fee agreement also required an initial commitment fee to be paid to the liquidity provider. These fees are shown as liquidity fees in the Statements of Operations.
The fee agreement between MYD and the liquidity provider is for a 364- day term and is scheduled to expire on June 25, 2014, unless renewed or terminated in advance. The fee agreement between MQY and the liquidity provider that was scheduled to expire on March 15, 2013 was terminated in advance on November 29, 2012. On November 29, 2012, MQY entered into a new fee agreement with an alternate liquidity provider. The new fee agreement is scheduled to expire on December 4, 2014, unless renewed or terminated in advance. In addition, the remarketing agreement between MQY and the remarketing agent terminated on November 21, 2012. On November 21, 2012, MQY entered into a remarketing agreement with a new remarketing agent. The change in liquidity provider resulted in a mandatory tender of MQY’s VRDP Shares on November 28, 2012, which were successfully remarketed by the remarketing agent.
In the event the fee agreement is not renewed or is terminated in advance, and the VRDP Funds do not enter into a fee agreement with an alternate liquidity provider, the VRDP Shares will be subject to mandatory purchase by the liquidity provider prior to the termination of the fee agreement. The VRDP Funds are required to redeem any VRDP Shares purchased by the liquidity provider six months after the purchase date. Immediately after the purchase of any VRDP Shares by the liquidity provider, the VRDP Funds are required to begin to segregate liquid assets with the VRDP Fund’s custodian to fund the redemption. There is no assurance the VRDP Funds will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.
Each VRDP Fund is required to redeem its VRDP Shares on the maturity date, unless earlier redeemed or repurchased. Six months prior to the maturity date, each VRDP Fund is required to begin to segregate liquid assets with the Fund’s custodian to fund the redemption. In addition, VRDP Funds are required to redeem certain of its outstanding VRDP Shares if it fails to maintain certain asset coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, the VRDP Shares may be redeemed, in whole or in part, at any time at the option of VRDP Funds. The redemption price per VRDP Share is equal to the liquidation value per share plus any outstanding unpaid dividends.
Dividends on the VRDP Shares are payable monthly at a variable rate set weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum rate. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the length of time that the VRDP Shares fail to be remarketed. At the date of issuance, the VRDP Shares were assigned a long-term rating of Aaa from Moody’s and AAA from Fitch. Subsequent to the issuance of the VRDP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of October 31, 2013, the VRDP Shares were assigned a long term rating of Aa1 from Moody’s under its new rating methodology. The VRDP Shares continue to be assigned a long-term rating of AAA from Fitch.
The short-term ratings on the VRDP Shares are directly related to the short-term ratings of the liquidity provider for such VRDP Shares. Changes in the credit quality of the liquidity provider could cause a change in the short-term credit ratings of the VRDP Shares as rated by Moody’s, Fitch and/or S&P. A change in the short-term credit rating of the liquidity provider or the VRDP Shares may adversely affect the dividend rate paid on such shares, although the dividend rate paid on the VRDP Shares is not directly related based upon either short-term rating. As of October 31, 2013, the short-term ratings of MQY’s liquidity provider and the VRDP Shares were P1, F1 and A1 as rated by Moody’s, Fitch and/or S&P, respectively, which is within the two highest rating categories and the short-term ratings of MYD’s liquidity provider and the VRDP Shares were P2, F1 and A1 as rated by Moody’s, Fitch and/or S&P, respectively, which is within the two highest rating categories. The liquidity provider may be terminated prior to the scheduled termination date if the liquidity provider fails to maintain short-term debt ratings in one of the two highest rating categories.
For financial reporting purposes, the VRDP Shares are considered debt of the issuer; therefore, the liquidation value which approximates fair value of the VRDP Shares is recorded as a liability in the Statements of Assets and Liabilities. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VRDP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VRDP Shares are treated as equity
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for tax purposes. Dividends paid to holders of the VRDP Shares are generally classified as tax-exempt income for tax-reporting purposes.
The VRDP Funds may incur remarketing fees of 0.10% on the aggregate principal amount of all the VRDP Shares, which, if any, are included in remarketing fees on Preferred Shares in the Statements of Operations. All of MYD and MQY’s VRDP Shares that were tendered for remarketing during the six months ended October 31, 2013 were successfully remarketed. The annualized dividend rates for the VRDP Shares for the six months ended October 31, 2013 were as follows:
| Rate | ||||
MYD | 0.29 | % | ||
MQY | 0.18 | % | ||
VMTP Shares
MQT has issued Series W-7 VMTP Shares, $100,000 liquidation value per share, in a privately negotiated offering and sale of VMTP Shares exempt from registration under the Securities Act.
The VMTP Shares outstanding as of the six months ended October 31, 2013 were as follows:
| Issue Date | Shares Issued | Aggregate Principal | Term Date | |||||||||||||
MQT | 12/16/11 | 1,165 | $ | 116,500,000 | 1/02/15 | |||||||||||
MQT is required to redeem its VMTP Shares on the term date, unless earlier redeemed or repurchased or unless extended. There is no assurance that the term of MQT’s VMTP Shares will be extended or that MQT’s VMTP Shares will be replaced with any other preferred shares or other form of leverage upon the redemption or repurchase of the VMTP Shares. Six months prior to term date, MQT is required to begin to segregate liquid assets with its custodian to fund the redemption. In addition, MQT is required to redeem certain of its outstanding VMTP Shares if it fails to maintain certain asset coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, MQT’s VMTP Shares may be redeemed, in whole or in part, at any time at the option of MQT. The redemption price per VMTP Share is equal to the liquidation value per share plus any outstanding unpaid dividends and applicable redemption premium. If MQT redeems the VMTP Shares on a date that is one year or more prior to the term date and the VMTP Shares are rated above A1/A+ by Moody’s and Fitch, respectively, then such redemption is subject to a prescribed redemption premium (up to 3% of the liquidation preference) payable to the holder of the VMTP Shares based on the time remaining to the term date, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. The VMTP Shares are subject to certain restrictions on transfer, and MQT may also be required to register the VMTP Shares for sale under the Securities Act under certain circumstances. In addition, amendments to the VMTP governing document generally require the consent of the holders of VMTP Shares.
Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread to the Securities Industry and Financial Markets Association Municipal Swap Index (SIFMA). The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by Moody’s and Fitch. At the date of issuance, the VMTP Shares were assigned long-term ratings of Aaa from Moody’s and AAA from Fitch. Subsequent to the issuance of the VMTP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of October 31, 2013, the VMTP Shares were assigned a long-term rating of Aa1 from Moody’s under its new rating methodology. The VMTP Shares continue to be assigned a long-term rating of AAA from Fitch. The dividend rate on the VMTP Shares is subject to a step-up spread if the Fund fails to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions or gross-up payments, and maintaining certain asset coverage and leverage requirements.
The average annualized dividend rates for the VMTP Shares for the six months ended October 31, 2013, were as follows:
| Rate | ||||
MQT | 1.08 | % | ||
For financial reporting purposes, the VMTP Shares are considered debt of the issuer; therefore the liquidation value, which approximates fair value, of the VMTP Shares is recorded as a liability in the Statements of Assets and Liabilities. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VMTP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VMTP Shares are treated as equity for tax purposes. Dividends paid to holders of the VMTP Shares are generally classified as tax-exempt income for tax-reporting purposes.
VMTP Shares issued and outstanding remained constant for the six months ended October 31, 2013.
Offering Costs: The Funds incurred costs in connection with the issuance of VRDP Shares and/or VMTP Shares. For VRDP Shares, these costs were recorded as a deferred charge and will be amortized over the 30-year life of the VRDP Shares with the exception of upfront fees paid to the liquidity provider, which were amortized over the life of the liquidity agreement. For VMTP Shares, these costs were recorded as a deferred charge and will be amortized over the 3-year life of the VMTP Shares. Amortization of these costs is included in interest expense, fees and amortization of offering costs in the Statements of Operations.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 49 |
Table of Contents
| Notes to Financial Statements (concluded) |
10. Subsequent Events:
Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:
The Funds paid a net investment income dividend on December 2, 2013 to Common Shareholders of record on November 15, 2013 as follows:
| Common Dividend Per Share | ||||
MYD | $ | 0.08350 | ||
MQY | $ | 0.08000 | ||
MQT | $ | 0.07050 | ||
Additionally, the Funds declared dividends and distributions on December 2, 2013 payable to Common Shareholders of record on December 13, 2013 as follows:
| Per Common Share | ||||||||||||
| Tax-Exempt Dividends Declared | Ordinary | Long-Term Capital Gains Distributed | ||||||||||
MYD | $ | 0.08050 | $ | 0.001825 | — | |||||||
MQY | $ | 0.08000 | — | $ | 0.016209 | |||||||
MQT | $ | 0.07050 | — | — | ||||||||
The dividends declared on Preferred Shares for the period November 1, 2013 to November 30, 2013 were as follows:
| Series | Dividends Declared | |||||||
MYD VRDP Shares | W-7 | $ | 56,617 | |||||
MQY VRDP Shares | W-7 | $ | 23,660 | |||||
MQT VMTP Shares | W-7 | $ | 101,786 | |||||
On December 10, 2013, regulators published final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”), which prohibit banking entities from engaging in proprietary trading of certain instruments and limit such entities’ investments in, and relationships with, “covered funds, as defined in the rules.” Banking entities subject to the rules are required to fully comply by July 21, 2015. These rules may preclude banking entities and their affiliates from (i) sponsoring TOB trust programs (as such programs are presently structured) and (ii) continuing relationships with or services for existing TOB trust programs. As a result, TOB trusts may need to be restructured or unwound. There can be no assurances that TOB trusts can be restructured, that new sponsors of TOB trusts will develop, or that alternative forms of leverage will be available to the Funds. Any alternative forms of leverage may be more or less advantageous to the Funds than existing TOB leverage.
TOB transactions constitute an important component of the municipal bond market. Accordingly, implementation of the Volcker Rule may adversely impact the municipal market, including through reduced demand for and liquidity of municipal bonds and increased financing costs for municipal issuers. Any such developments could adversely affect the Funds. The ultimate impact of these rules on the TOB market and the overall municipal market is not yet certain.
| 50 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
| Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements | ||
The Board of Directors (each, a “Board,” collectively, the “Boards,” and the members of which are referred to as “Board Members”) of BlackRock MuniYield Fund, Inc. (“MYD”), BlackRock MuniYield Quality Fund, Inc. (“MQY”) and BlackRock MuniYield Quality Fund II, Inc. (“MQT,” and together with MYD and MQY, each a “Fund,” and, collectively, the “Funds”) met in person on April 18, 2013 (the “April Meeting”) and June 4-5, 2013 (the “June Meeting”) to consider the approval of each Fund’s investment advisory agreement (each, an “Advisory Agreement”) with BlackRock Advisors, LLC (the “Manager”), each Fund’s investment advisor. The Board of each Fund also considered the approval of the sub-advisory agreement (each, a “Sub-Advisory Agreement”) among the Manager, BlackRock Investment Management, LLC (the “Sub-Advisor”), and its Fund. The Manager and the Sub-Advisor are referred to herein as “BlackRock.” The Advisory Agreements and the Sub-Advisory Agreements are referred to herein as the “Agreements.”
Activities and Composition of the Board
Each Board consists of eleven individuals, nine of whom are not “interested persons” of such Fund as defined in the Investment Company Act of 1940 (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of the Funds and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chairman of each Board is an Independent Board Member. Each Board has established six standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee, an Executive Committee, and a Leverage Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Executive Committee and the Leverage Committee, each of which also has one interested Board Member).
The Agreements
Pursuant to the 1940 Act, the Boards are required to consider the continuation of the Agreements on an annual basis. The Boards have four quarterly meetings per year, each extending over two days, and a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreements. In connection with this process, the Boards assessed, among other things, the nature, scope and quality of the services provided to the Funds by BlackRock, its personnel and its affiliates, including investment management, administrative and shareholder services, oversight of fund accounting and custody, marketing services, risk oversight, compliance and assistance in meeting applicable legal and regulatory requirements.
The Boards, acting directly and through their respective committees, considered at each of their meetings, and from time to time as appropriate, factors that are relevant to their annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Funds and their shareholders. Among the matters the Boards considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, and applicable benchmarks, if any, as well as senior management’s and portfolio managers’ analysis of the reasons for any over-performance or underperformance against their peers and/or benchmark, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Funds for services such as call center; (c) Fund operating expenses and how BlackRock allocates expenses to the Funds; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Funds’ investment objectives, policies and restrictions; (e) the Funds’ compliance with their Code of Ethics and other compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Boards; (i) execution quality of portfolio transactions; (j) BlackRock’s implementation of the Funds’ valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment objectives across the open-end fund, closed-end fund and institutional account product channels, as applicable; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates; and (m) periodic updates on BlackRock’s business.
The Boards have engaged in an ongoing strategic review with BlackRock of opportunities to consolidate funds and of BlackRock’s commitment to investment performance. In addition, the Boards requested and BlackRock provided an analysis of fair valuation and stale pricing policies. BlackRock also furnished information to the Boards in response to specific questions. These questions covered issues such as BlackRock’s profitability, investment performance and management fee levels. The Boards further considered the importance of: (i) organizational and structural variables to investment performance; (ii) rates of portfolio turnover; (iii) BlackRock’s performance accountability for portfolio managers; (iv) marketing support for the funds; (v) services provided to the Funds by BlackRock affiliates; and (vi) BlackRock’s oversight of relationships with third party service
providers.
The Board of each Fund considered BlackRock’s efforts during the past year with regard to refinancing outstanding AMPS, as well as ongoing time and resources devoted to other forms of preferred shares and alternative leverage. As of the date of this report, the Funds have redeemed 100% of their outstanding AMPS.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 51 |
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| Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued) | ||
Board Considerations in Approving the Agreements
The Approval Process: Prior to the April Meeting, the Boards requested and received materials specifically relating to the Agreements. The Boards are engaged in a process with its independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist their deliberations. The materials provided in connection with the April Meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on Fund fees and expenses as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of the Funds as compared with a peer group of funds as determined by Lipper1 and a customized peer group selected by BlackRock; (b) information on the profits realized by BlackRock and its affiliates pursuant to the Agreements and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients and open-end funds, under similar investment mandates, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by each Fund to BlackRock and (g) if applicable, a comparison of management fees to similar BlackRock closed-end funds, as classified by Lipper.
At the April Meeting, the Boards reviewed materials relating to their consideration of the Agreements. As a result of the discussions that occurred during the April Meeting, and as a culmination of the Boards’ year-long deliberative process, the Boards presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the June Meeting.
At the June Meeting, each Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its Fund, and the Sub-Advisory Agreement among the Manager, the Sub-Advisor, and its Fund, each for a one-year term ending June 30, 2014. In approving the continuation of the Agreements, the Boards considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Funds and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Funds; (d) the Funds’ costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) economies of scale; (f) fall-out benefits to BlackRock as a result of its relationship with the Funds; and (g) other factors deemed relevant by the Board Members.
The Boards also considered other matters they deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to securities lending, services related to the valuation and pricing of Fund portfolio holdings, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Funds and advice from independent legal counsel with respect to the review process and materials submitted for the Boards’ review. The Boards noted the willingness of BlackRock personnel to engage in open, candid discussions with the Boards. The Boards did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.
A. Nature, Extent and Quality of the Services Provided by BlackRock: The Boards, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of the Funds. Throughout the year, the Boards compared Fund performance to the performance of a comparable group of closed-end funds and/or the performance of a relevant benchmark, if any. The Boards met with BlackRock’s senior management personnel responsible for investment operations, including the senior investment officers. Each Board also reviewed the materials provided by its Fund’s portfolio management team discussing the Fund’s performance and the Fund’s investment objective, strategies and outlook.
The Boards considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and their Funds’ portfolio management teams; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Boards engaged in a review of BlackRock’s compensation structure with respect to their Funds’ portfolio management teams and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.
In addition to advisory services, the Boards considered the quality of the administrative and other non-investment advisory services provided to the Funds. BlackRock and its affiliates provide the Funds with certain services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In particular, BlackRock and its affiliates provide the Funds with the following administrative services including, among others: (i) preparing disclosure documents, such as the prospectus, the summary prospectus (as applicable) and the statement of additional information in connection with the initial public offering and
| 1 | Lipper ranks funds in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable. |
| 52 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
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| Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued) | ||
periodic shareholder reports; (ii) preparing communications with analysts to support secondary market trading of the Funds; (iii) assisting with daily accounting and pricing; (iv) preparing periodic filings with regulators and stock exchanges; (v) overseeing and coordinating the activities of other service providers; (vi) organizing Board meetings and preparing the materials for such Board meetings; (vii) providing legal and compliance support; (viii) furnishing analytical and other support to assist the Boards in their consideration of strategic issues such as the merger or consolidation of certain closed-end funds; and (ix) performing other administrative functions necessary for the operation of the Funds, such as tax reporting, fulfilling regulatory filing requirements and call center services. The Boards reviewed the structure and duties of BlackRock’s fund administration, shareholder services, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.
B. The Investment Performance of the Funds and BlackRock: Each Board, including the Independent Board Members, also reviewed and considered the performance history of its Funds. In preparation for the April Meeting, the Boards worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and were provided with reports independently prepared by Lipper, which included a comprehensive analysis of each Fund’s performance. The Boards also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock, which analyzed various factors that affect Lipper’s rankings. In connection with their review, each Board received and reviewed information regarding the investment performance, based on net asset value (NAV), of its Fund as compared to other funds in its applicable Lipper category and the customized peer group selected by BlackRock. The Boards were provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review their methodology. Each Board and its Performance Oversight Committee regularly review, and meet with Fund management to discuss, the performance of its Fund throughout the year.
The Board of MYD noted that MYD ranked in the first quartile against its Customized Lipper Peer Group Composite for each of the one-, three- and five-year periods reported.
The Board of MQY noted that MQY ranked in the second, second and first quartiles against its Customized Lipper Peer Group Composite for the one-, three- and five-year periods reported, respectively.
The Board of MQT noted that MQT ranked in the second, first and second quartiles against its Customized Lipper Peer Group Composite for the one-, three- and five-year periods reported, respectively.
BlackRock believes that the Customized Lipper Peer Group Composite is an appropriate performance metric for each Fund in that it measures a blend of total return and yield.
The Boards noted that BlackRock has recently made, and continues to make, changes to the organization of BlackRock’s overall portfolio management structure designed to result in strengthened leadership teams.
C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Funds: Each Board, including the Independent Board Members, reviewed its Fund’s contractual management fee rate compared with the other funds in its Lipper category. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. Each Board also compared its Fund’s total net operating expense ratio, as well as actual management fee rate, to those of other funds in its Lipper category. The total net operating expense ratio and actual management fee rate both give effect to any expense reimbursements or fee waivers that benefit the funds. The Boards considered the services provided and the fees charged by BlackRock to other types of clients with similar investment mandates, including institutional accounts.
The Boards received and reviewed statements relating to BlackRock’s financial condition. The Boards were also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Funds. The Boards reviewed BlackRock’s profitability with respect to the Funds and other funds the Boards currently oversee for the year ended December 31, 2012 compared to available aggregate profitability data provided for the prior two years. The Boards reviewed BlackRock’s profitability with respect to certain other fund complexes managed by the Manager and/or its affiliates. The Boards reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Boards recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, comparing profitability is difficult.
The Boards noted that, in general, individual fund or product line profitability of other advisors is not publicly available. The Boards reviewed BlackRock’s overall operating margin, in general, compared to that of certain other publicly-traded asset management firms. The Boards considered the differences between BlackRock and these other firms, including the contribution of technology at BlackRock, BlackRock’s expense management, and the relative product mix.
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| Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded) | ||
In addition, the Boards considered the cost of the services provided to the Funds by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management of the Funds and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Boards reviewed BlackRock’s methodology in allocating its costs to the management of the Funds. The Boards also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Boards.
The Board of each Fund noted that its respective Fund’s contractual management fee rate ranked in the first quartile relative to the Fund’s Expense Peers.
D. Economies of Scale: Each Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of its Fund increase. Each Board also considered the extent to which its Fund benefits from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Fund to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of the Fund.
Based on the Boards’ review and consideration of the issue, the Boards concluded that most closed-end funds do not have fund level breakpoints because closed-end funds generally do not experience substantial growth after the initial public offering. They are typically priced at scale at a fund’s inception. The Boards noted that only one closed-end fund in the Fund Complex has breakpoints in its advisory fee
structure.
E. Other Factors Deemed Relevant by the Board Members: The Boards, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Funds, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Funds, including securities lending and cash management services. The Boards also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Boards also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts. The Boards further noted that they had considered the investment by BlackRock’s funds in exchange traded funds (i.e., ETFs) without any offset against the management fees payable by the funds to BlackRock.
In connection with its consideration of the Agreements, the Boards also received information regarding BlackRock’s brokerage and soft dollar practices. The Boards received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.
The Boards noted the competitive nature of the closed-end fund marketplace, and that shareholders are able to sell their Fund shares in the secondary market if they believe that the Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.
The Boards also considered the various notable initiatives and projects BlackRock performed in connection with its closed-end fund product line. These initiatives included completion of the refinancing of auction rate preferred securities; efforts to eliminate product overlap with fund mergers; ongoing services to manage leverage that has become increasingly complex; share repurchases and other support initiatives for certain BlackRock funds; and continued communications efforts with shareholders, fund analysts and financial advisers. With respect to the latter, the Independent Board Members noted BlackRock’s continued commitment to supporting the secondary market for the common shares of its closed-end funds through a comprehensive secondary market communication program designed to raise investor and analyst awareness and understanding of closed-end funds. BlackRock’s support services included, among other things: continuing communications concerning the refinancing efforts related to auction rate preferred securities; sponsoring and participating in conferences; communicating with closed-end fund analysts covering the BlackRock funds throughout the year; providing marketing and product updates for the closed-end funds; and maintaining and enhancing its closed-end fund website.
Conclusion
Each Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its Fund for a one-year term ending June 30, 2014, and the Sub-Advisory Agreement among the Manager, the Sub-Advisor, and its Fund for a one-year term ending June 30, 2014. Based upon its evaluation of all of the aforementioned factors in their totality, the Boards, including the Independent Board Members, were satisfied that the terms of the Agreements were fair and reasonable and in the best interest of the Funds and their shareholders. In arriving at their decision to approve the Agreements, the Boards did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making these determinations. The contractual fee arrangements for the Funds reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.
| 54 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
Table of Contents
| Officers and Directors |
Richard E. Cavanagh, Chairman of the Board and Director
Karen P. Robards, Vice Chairperson of the Board, Chairperson of the Audit Committee and Director
Paul L. Audet, Director
Michael J. Castellano, Director and Member of the Audit Committee
Frank J. Fabozzi, Director and Member of the Audit Committee
Kathleen F. Feldstein, Director
James T. Flynn, Director and Member of the Audit Committee
Henry Gabbay, Director
Jerrold B. Harris, Director
R. Glenn Hubbard, Director
W. Carl Kester, Director and Member of the Audit Committee
John M. Perlowski, President and Chief Executive Officer
Brendan Kyne, Vice President
Robert W. Crothers Vice President
Neal Andrews, Chief Financial Officer
Jay Fife, Treasurer
Brian Kindelan, Chief Compliance Officer and Anti-Money Laundering Officer
Janey Ahn, Secretary
Investment Advisor
BlackRock Advisors, LLC
Wilmington, DE 19809
Sub-Advisor
BlackRock Investment Management, LLC
Princeton, NJ 08540
Custodians
The Bank of New York Mellon1
New York, NY 10286
State Street Bank and Trust Company2
Boston, MA 02110
Transfer Agent
Computershare Trust Company, N.A.
Canton, MA 02021
VRDP Tender and Paying Agent and
VMTP Redemption and Paying Agent
The Bank of New York Mellon
New York, NY 10289
VRDP Remarketing Agents
Merrill Lynch, Pierce, Fenner & Smith Incorporated3
New York, NY 10036
Barclays Capital Inc.2
New York, NY 10019
VRDP Liquidity Providers
Bank of America, N.A.3
New York, NY 10036
Barclays Bank PLC2
New York, NY 10019
Accounting Agent
State Street Bank and Trust Company
Boston, MA 02110
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Boston, MA 02116
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
New York, NY 10036
Address of the Funds
100 Bellevue Parkway
Wilmington, DE 19809
| 1 | For MYD and MQT. |
| 2 | For MQY. |
| 3 | For MYD. |
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 55 |
Table of Contents
| Additional Information |
| Proxy Results |
The Annual Meeting of Shareholders was held on July 30, 2013 for shareholders of record on June 3, 2013 to elect director nominees for each Fund. There were no broker non-votes with regard to any of the Funds.
Approved the Directors as follows:
Paul L. Audet | Michael J. Castellano | Richard E. Cavanagh | ||||||||||||||||
| Votes For | Votes Withheld | Abstain | Votes For | Votes Withheld | Abstain | Votes For | Votes Withheld | Abstain | ||||||||||
MYD | 40,913,911 | 1,363,728 | 0 | 40,878,569 | 1,399,070 | 0 | 40,916,911 | 1,360,728 | 0 | |||||||||
MQY | 27,277,148 | 1,069,144 | 0 | 27,175,630 | 1,170,662 | 0 | 27,274,897 | 1,071,395 | 0 | |||||||||
MQT | 18,123,434 | 418,672 | 0 | 18,148,571 | 393,535 | 0 | 18,134,261 | 407,845 | 0 | |||||||||
Frank J. Fabozzi¹ | Kathleen F. Feldstein | James T. Flynn | ||||||||||||||||
| Votes For | Votes Withheld | Abstain | Votes For | Votes Withheld | Abstain | Votes For | Votes Withheld | Abstain | ||||||||||
MYD | 2,514 | 0 | 0 | 40,769,726 | 1,507,913 | 0 | 40,815,756 | 1,461,883 | 0 | |||||||||
MQY | 1,766 | 0 | 0 | 27,145,456 | 1,200,836 | 0 | 27,181,328 | 1,164,964 | 0 | |||||||||
MQT | 1,165 | 0 | 0 | 17,973,191 | 568,915 | 0 | 18,082,338 | 459,768 | 0 | |||||||||
Henry Gabbay | Jerrold B. Harris | R. Glenn Hubbard | ||||||||||||||||
| Votes For | Votes Withheld | Abstain | Votes For | Votes Withheld | Abstain | Votes For | Votes Withheld | Abstain | ||||||||||
MYD | 40,912,796 | 1,364,843 | 0 | 40,804,719 | 1,472,920 | 0 | 40,831,767 | 1,445,872 | 0 | |||||||||
MQY | 27,239,407 | 1,106,885 | 0 | 27,236,842 | 1,109,450 | 0 | 27,154,248 | 1,192,044 | 0 | |||||||||
MQT | 18,138,348 | 403,758 | 0 | 18,103,668 | 438,438 | 0 | 18,045,925 | 496,182 | 0 | |||||||||
W. Carl Kester¹ | Karen P. Robards | |||||||||||||||||
| Votes For | Votes Withheld | Abstain | Votes For | Votes Withheld | Abstain | |||||||||||||
MYD | 2,514 | 0 | 0 | 40,930,483 | 1,347,156 | 0 | ||||||||||||
MQY | 1,766 | 0 | 0 | 27,219,639 | 1,126,653 | 0 | ||||||||||||
MQT | 1,165 | 0 | 0 | 18,143,080 | 399,026 | 0 | ||||||||||||
| ¹ | Voted on by holders of Preferred Shares only. |
| 56 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
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| Additional Information (continued) |
| Regulation Regarding Derivatives |
Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to registered investment companies to regulation by the CFTC if a fund invests more than a prescribed level of its net assets in CFTC-regulated futures, options and swaps (“CFTC Derivatives”), or if a fund markets itself as providing investment exposure to such instruments. To the extent a Fund uses CFTC Derivatives, it intends to do so below such prescribed levels and will not market itself as a “commodity pool” or a vehicle for trading such instruments. Accordingly, BlackRock Advisors, LLC has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act (“CEA”) pursuant to Rule 4.5 under the CEA. BlackRock Advisors, LLC is not, therefore, subject to registration or regulation as a “commodity pool operator” under the CEA in respect to each Fund.
| Dividend Policy |
Each Fund’s dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Funds may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Funds for any particular month may be more or less than the amount of net investment income earned by the Funds during such month. The Funds’ current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.
| General Information |
The Funds do not make available copies of their Statements of Additional Information because the Funds’ shares are not continuously offered, which means that the Statement of Additional Information of each Fund has not been updated after completion of the respective Fund’s offerings and the information contained in each Fund’s Statement of Additional Information may have become outdated.
During the period, there were no material changes in the Funds’ investment objectives or policies or to the Funds’ charters or by-laws that would delay or prevent a change of control of the Funds that were not approved by the shareholders or in the principal risk factors associated with investment in the Funds. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Funds’ portfolio.
Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Funds may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.
Electronic Delivery
Electronic copies of most financial reports are available on the Funds’ website or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Funds’ electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.
Householding
The Funds will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your
shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (800) 882-0052.
| SEMI-ANNUAL REPORT | OCTOBER 31, 2013 | 57 |
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| Additional Information (concluded) |
| General Information (concluded) |
Availability of Quarterly Schedule of Investments
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 882-0052.
Availability of Proxy Voting Policies and Procedures
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 882-0052; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.
Availability of Proxy Voting Record
Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 882-0052 and (2) on the SEC’s website at http://www.sec.gov.
Availability of Fund Updates
BlackRock will update performance and certain other data for the Funds on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to periodically check the website for updated performance information and the release of other material information about the Funds. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.
| BlackRock Privacy Principles |
BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.
BlackRock does not sell or disclose to non-affiliated third parties any non public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.
| 58 | SEMI-ANNUAL REPORT | OCTOBER 31, 2013 |
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This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered are presentation of future performance. The Funds have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in the short-term dividend rates of the Preferred Shares may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.
| MYQII-10/13-SAR |  |
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| Item 2 – | Code of Ethics – Not Applicable to this semi-annual report |
| Item 3 – | Audit Committee Financial Expert – Not Applicable to this semi-annual report |
| Item 4 – | Principal Accountant Fees and Services – Not Applicable to this semi-annual report |
| Item 5 – | Audit Committee of Listed Registrants – Not Applicable to this semi-annual report |
| Item 6 – | Investments |
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
| Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable to this semi-annual report |
| Item 8 – | Portfolio Managers of Closed-End Management Investment Companies |
| (a) | Not Applicable to this semi-annual report |
| (b) | As of the date of this filing, there have been no changes in any of the portfolio managers identified in the most recent annual report on Form N-CSR. |
| Item 9 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable |
| Item 10 – | Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures. |
| Item 11 – | Controls and Procedures |
(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.
(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 second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
| Item 12 – | Exhibits attached hereto |
(a)(1) – Code of Ethics – Not Applicable to this semi-annual report
(a)(2) – Certifications – Attached hereto
(a)(3) – Not Applicable
(b) – Certifications – Attached hereto
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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 MuniYield Fund, Inc. | ||
| By: | /s/ John M. Perlowski | |
| John M. Perlowski | ||
Chief Executive Officer (principal executive officer) of BlackRock MuniYield Fund, Inc. | ||
Date: January 2, 2014
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/ John M. Perlowski | |
John M. Perlowski Chief Executive Officer (principal executive officer) of BlackRock MuniYield Fund, Inc. |
Date: January 2, 2014
| By: | /s/ Neal J. Andrews | |
| Neal J. Andrews | ||
Chief Financial Officer (principal financial officer) of BlackRock MuniYield Fund, Inc. |
Date: January 2, 2014
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