UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMN-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number:811-06500
Name of Fund: BlackRock MuniYield New York Quality Fund, Inc. (MYN)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniYield New York Quality 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: 07/31/2019
Date of reporting period: 01/31/2019
Item 1 – Report to Stockholders
JANUARY 31, 2019
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SEMI-ANNUAL REPORT (UNAUDITED) | |  |
BlackRock MuniHoldings Quality Fund II, Inc. (MUE)
BlackRock MuniYield California Quality Fund, Inc. (MCA)
BlackRock MuniYield New York Quality Fund, Inc. (MYN)
BlackRock MuniYield Quality Fund III, Inc. (MYI)
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of each Fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from BlackRock or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
You may elect to receive all future reports in paper free of charge. If you hold accounts directly with BlackRock, you can call Computershare at (800)699-1236 to request that you continue receiving paper copies of your shareholder reports. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds advised by BlackRock Advisors, LLC or its affiliates, or all funds held with your financial intermediary, as applicable.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive electronic delivery of shareholder reports and other communications by contacting your financial intermediary, if you hold accounts through a financial intermediary. Please note that not all financial intermediaries may offer this service.
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| Not FDIC Insured • May Lose Value • No Bank Guarantee |
The Markets in Review
Dear Shareholder,
In the 12 months ended January 31, 2019, concerns about a variety of political risks and a modest slowdown in global growth worked against the equity market, while the bond market delivered modest positive returns. Though the market’s appetite for risk remained healthy for most of the reporting period, risk-taking declined sharply later in the reporting period. As a result, bonds held their value better than stocks, which posted negative returns across the globe. Shorter-term, higher-quality securities led the bond market, and U.S. equities outperformed most international stock markets.
Volatility rose in emerging market stocks, as the rising U.S. dollar and higher interest rates in the U.S. disrupted economic growth abroad. U.S.-China trade relations and debt concerns adversely affected the Chinese stock market, while Turkey and Argentina became embroiled in currency crises, largely due to hyperinflation in both countries. An economic slowdown in Europe also led to negative performance for European equities.
Volatility in the U.S. equity market spiked in October, as a wide range of risks were brought to bear on markets, ranging from rising interest rates and slowing global growth to heightened trade tensions and political turmoil in several countries, including the United States. These risks manifested in a broad basedsell-off in December, leading to the worst December performance on record since 1931.
By comparison, fixed income securities delivered modest positive returns with relatively low volatility. In fixed income markets, short-term U.S. Treasury interest rates rose the fastest, while longer-term rates were relatively unchanged. This led to positive returns for U.S. Treasuries and a substantial flattening of the yield curve. Although the credit fundamentals in corporate markets remained relatively solid, investment-grade and high-yield bonds trailed U.S. Treasuries.
The U.S. Federal Reserve (the “Fed”) increased short-term interest rates four times during the reporting period. The Fed also continued to reduce its balance sheet, gradually reversing the unprecedented stimulus measures it enacted after the financial crisis. By our estimation, the Fed’s neutral interest rate (the theoretical rate that is neither stimulative nor restrictive to the economy) is approximately 3.5%. The Fed funds rate is currently at 2.5%, which is stimulative to the economy. At its latest meeting in late January, the Fed left interest rates unchanged and signaled a slower pace of rate hikes in response to the global economic slowdown. Relatively low inflation gives the Fed room to maintain support for the economy until the economic data builds the case for changing interest rates.
Although fears of recession drove equity volatility higher at the end of 2018, we continue to believe the probability of recession in 2019 remains relatively low. Economic growth and global earnings are likely to slow somewhat in 2019 — the tax cut stimulus will be less pronounced, and the Fed’s rate hikes in 2018 will gain traction in 2019. Trade frictions look more baked into asset prices than a year ago, but markets may be overlooking European political risks. Consequently, we are cautious on European equities, as European unity remains tenuous with a history offlare-ups. We continue to prefer to take risk in U.S. and emerging market equities. Within U.S. equities, we believe that companies with high-quality earnings and strong balance sheets offer the most attractive risk/rewardtrade-off. We also favor short-term bonds over long-term bonds because they offer nearly equivalent yields with far lower volatility.
In this environment, investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visitblackrock.com for further insight about investing in today’s markets.
Sincerely,
Rob Kapito
President, BlackRock Advisors, LLC
Rob Kapito
President, BlackRock Advisors, LLC
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| Total Returns as of January 31, 2019 |
| | | 6-month | | 12-month |
U.S. large cap equities
(S&P 500® Index) | | (3.00)% | | (2.31)% |
U.S. small cap equities
(Russell 2000® Index) | | (9.62) | | (3.52) |
International equities
(MSCI Europe, Australasia, Far East Index) | | (7.80) | | (12.51) |
Emerging market equities
(MSCI Emerging Markets Index) | | (2.60) | | (14.24) |
3-month Treasury bills
(ICE BofAML3-Month U.S. Treasury Bill Index) | | 1.10 | | 1.95 |
U.S. Treasury securities
(ICE BofAML10-Year U.S. Treasury Index) | | 4.20 | | 3.21 |
U.S. investment grade bonds
(Bloomberg Barclays U.S. Aggregate Bond Index) | | 2.71 | | 2.25 |
Tax-exempt municipal bonds
(S&P Municipal Bond Index) | | 1.86 | | 3.08 |
U.S. high yield bonds
(Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index) | | 1.07 | | 1.73 |
| Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. |
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| 2 | | THIS PAGEISNOT PARTOF YOUR FUND REPORT |
Table of Contents
Municipal Market Overview For the Reporting Period Ended January 31, 2019
Municipal Market Conditions
Municipal bonds experienced positive performance during the period, despite challenged total returns during most of 2018 as interest rates moved higher on the back of continued Fed policy normalization, fiscal stimulus, strong economic growth, and increased U.S. Treasury issuance. Performance turned particularly strong late in the year, with interest rates rallying as the Fed began to indicate a pivot from forecast based to data driven policy and the potential for a slower pace of future rate hikes. During the period, demand for the asset class remained firm, although displayed some bouts of volatility. Broadly, investors favored thetax-exempt income, diversification, quality, and value of municipal bonds given that tax reform ultimately lowered the top individual tax rate just 2.6% while eliminating deductions. During the 12 months ended January 31, 2019, municipal bond funds experienced net inflows of approximately $2.7 billion (based on data from the Investment Company Institute).
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| For the same12-month period, total new issuance underwhelmed from a historical perspective at $315 billion (below the $394 billion issued in the prior12-month period), a direct result of the elimination of advanced refundings through the 2017 Tax Cuts and Jobs Act. This shift transitioned the market from an existing net positive supply environment to a much more favorable net negative supply environment in which reinvestment income (coupons, calls, and maturities) largely outstripped gross issuance and provided a powerful technical tailwind. | | S&P Municipal Bond Index |
| | Total Returns as of January 31, 2019 |
| | 6 months: 1.86% |
| | 12 months: 3.08% |
A Closer Look at Yields
| From January 31, 2018 to January 31, 2019, yields onAAA-rated30-year municipal bonds increased by 11 basis points (“bps”) from 2.91% to 3.02%, while10-year rates decreased by 18 bps from 2.35% to 2.17% and5-year rates decreased by 7 bps from 1.83% to 1.76% (as measured by Thomson Municipal Market Data). The municipal yield curve was nearly unchanged over the12-month period with the spread between2- and30-year maturities bear steepening just 1 bp, which is significant given that the corresponding U.S. Treasury curve bear flattened 26 bps. (Bear steepening is the widening of the yield curve caused by long-term rates increasing at a faster rate than short-term rates. Bear flattened is a yield-rate environment in which short-term interest rates are increasing at a faster rate than long-term interest rates.) The municipal yield curve is now more than 2.5 times steeper than the U.S. Treasury curve. |
During the same time period, on a relative basis,tax-exempt municipal bonds strongly outperformed U.S. Treasuries, driven by the front and intermediate portions of the yield curve. The relative positive performance of municipal bonds was driven largely by a supply/demand imbalance within the municipal market as investors sought income, incremental yield, and tax shelter in an environment where opportunities became increasingly scarce. The asset class is known for its lower relative volatility and preservation of principal with an emphasis on income as tax rates rise.
Financial Conditions of Municipal Issuers
The majority of municipal credits remain strong, despite well-publicized problems among a few issuers. Four of the five states with the largest amount of debt outstanding — California, New York, Texas and Florida — continue to exhibit improved credit fundamentals. However, several states with the largest unfunded pension liabilities are faced with elevated borrowing costs and difficult budgetary decisions. Across the country on the local level, property values support credit stability. Standard & Poor’s recent decision to remove its “negative” outlook on New Mexico underscores the improvement in state finances as it was the only remaining state with the designation. Revenue bonds continue to drive performance as investors continue to seek higher yield bonds in the tobacco sector. BlackRock maintains the view that municipal bond defaults will remain minimal and in the periphery while the overall market is fundamentally sound. We continue to advocate careful credit research and believe that a thoughtful approach to structure and security selection remains imperative amid uncertainty in a modestly improving economic environment.
The opinions expressed are those of BlackRock as of January 31, 2019, and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of any individual holdings or market sectors. Investing involves risk including loss of principal. Bond values fluctuate in price so the value of your investment can go down depending on market conditions. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to Alternative Minimum Tax (“AMT”). Capital gains distributions, if any, are taxable.
The Standard & Poor’s Municipal Bond Index, a broad, market value-weighted index, seeks to measure the performance of the U.S. municipal bond market. All bonds in the index are exempt from U.S. federal income taxes or subject to the AMT. Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index.
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| 4 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
The Benefitsand Risks of Leveraging
The Funds may utilize leverage to seek to enhance the distribution rate on, and net asset value (“NAV”) of, their common shares (“Common Shares”). However, there is no guarantee that these objectives can be achieved in all interest rate environments.
In general, the concept of leveraging is based on the premise that the financing cost of leverage, which is based on short-term interest rates, is normally lower than the income earned by a Fund on its longer-term portfolio investments purchased with the proceeds from leverage. To the extent that the total assets of the Funds (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, the Funds’ shareholders 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.
To illustrate these concepts, assume a Fund’s Common Shares capitalization is $100 million and it utilizes leverage for an additional $30 million, creating a total value of $130 million available for investment in longer-term income securities. If prevailing short-term interest rates are 3% and longer-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, a Fund’s financing costs on the $30 million of proceeds obtained from leverage are based on the lower short-term interest rates. At the same time, the securities purchased by a Fund with the proceeds from leverage earn income based on longer-term interest rates. In this case, a Fund’s financing cost of leverage is significantly lower than the income earned on a Fund’s longer-term investments acquired from such leverage proceeds, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.
However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed the Funds’ return on assets purchased with leverage proceeds, income to shareholders is lower than if the Funds had not used leverage. 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 value of the Funds’ obligations under their respective leverage arrangements generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Funds’ NAVs positively or negatively. Changes in the future direction of interest rates are very difficult to predict accurately, and there is no assurance that the Funds’ intended leveraging strategy will be successful.
The use of leverage also generally causes greater changes in each Fund’s NAV, market price and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the NAV and market price of a Fund’s Common Shares than if the Fund were not leveraged. In addition, 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 the Fund to incur losses. The use of leverage may limit a Fund’s ability to invest in certain types of securities or use certain types of hedging strategies. Each Fund incurs expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares. Moreover, to the extent the calculation of the Funds’ investment advisory fees includes assets purchased with the proceeds of leverage, the investment advisory fees payable to the Funds’ investment adviser will be higher than if the Funds did not use leverage.
To obtain leverage, each Fund has issued Variable Rate Demand Preferred Shares (“VRDP Shares”) or Variable Rate Muni Term Preferred Shares (“VMTP Shares”) (collectively, “Preferred Shares”) and/or leveraged its assets through the use of tender option bond trusts (“TOB Trusts”) as described in the Notes to Financial Statements.
Under the Investment Company Act of 1940, as amended (the “1940 Act”), each Fund is permitted to issue debt up to 33 1/3% of its total managed assets or equity securities (e.g., Preferred Shares) up to 50% of its total managed assets. A Fund may voluntarily elect to limit its leverage to less than the maximum amount permitted under the 1940 Act. In addition, a Fund may also be subject to certain asset coverage, leverage or portfolio composition requirements imposed by the Preferred Shares’ governing instruments or by agencies rating the Preferred Shares, which may be more stringent than those imposed by the 1940 Act.
If a Fund segregates or designates on its books and records cash or liquid assets having a value not less than the value of a Fund’s obligations under the TOB Trust (including accrued interest), then the TOB Trust is not considered a senior security and is not subject to the foregoing limitations and requirements imposed by the 1940 Act.
Derivative Financial Instruments
The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and 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 instrument. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.
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| THE BENEFITSAND RISKSOF LEVERAGING / DERIVATIVE FINANCIAL INSTRUMENTS | | | 5 | |
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| Fund Summary as of January 31, 2019 | | BlackRock MuniHoldings Quality Fund II, Inc. |
Fund Overview
BlackRock MuniHoldings Quality Fund II, Inc.’s (MUE) (the “Fund”) investment objective is to provide shareholders with current income exempt from U.S. federal income taxes. The Fund seeks to achieve its investment objective by investing primarily in long-term, investment grade municipal obligations exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). The municipal obligations in which the Fund primarily invests are either rated investment grade quality, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of investment. Under normal market conditions, the Fund invests at least 80% of its assets in municipal obligations with remaining maturities of one year or more 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.
Fund Information
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Symbol on New York Stock Exchange (“NYSE”) | | MUE |
Initial Offering Date | | February 26, 1999 |
Yield on Closing Market Price as of January 31, 2019 ($12.01)(a) | | 4.90% |
Tax Equivalent Yield(b) | | 8.28% |
Current Monthly Distribution per Common Share(c) | | $0.0490 |
Current Annualized Distribution per Common Share(c) | | $0.5880 |
Economic Leverage as of January 31, 2019(d) | | 38% |
| | (a) | 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. | |
| | (b) | Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.80%, 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. | |
| | (c) | The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain. | |
| | (d) | Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOB Trusts, 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. | |
Performance
Returns for the six months ended January 31, 2019 were as follows:
| | | | | | | | |
| | | Returns Based On | |
| | | Market Price | | | NAV | |
MUE(a)(b) | | | (0.24 | )% | | | 1.00 | % |
Lipper General & Insured Municipal Debt Funds (Leveraged)(c) | | | 2.46 | | | | 0.94 | |
| | (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. | |
| | (b) | The Fund’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV. | |
| | (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on theex-dividend date as calculated by Lipper. | |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the first half of the period, municipal bonds recovered to post a positive total return for the full six months. The initial downturn was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of more accommodative Fed policy, sparking a rally across the bond market from early November onward.
The Fund’s positions in the transportation,pre-refunded,state-tax backed and utilities sectors contributed to performance. Its allocation to the tobacco sector, while limited, detracted.
The Fund’s allocation to higher-rated issues, which outpaced lower-quality bonds, aided results.
Income made a meaningful contribution to performance relative to price appreciation. The Fund’s use of leverage augmented the contribution from income.
The Fund sought to manage interest rate risk using U.S. Treasury futures. Given that U.S. Treasury yields fell, as prices rose, this strategy detracted from the Fund’s return.
Reinvestment had an adverse effect on the Fund’s income, as the proceeds of higher-yielding bonds that matured or were called needed to be reinvested at lower prevailing rates.
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.
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| 6 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
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| Fund Summary as of January 31, 2019 (continued) | | BlackRock MuniHoldings Quality Fund II, Inc. |
Market Price and Net Asset Value Per Share Summary
| | | | | | | | | | | | | | | | | | | | |
| | | 01/31/19 | | | 07/31/18 | | | Change | | | High | | | Low | |
Market Price | | $ | 12.01 | | | $ | 12.36 | | | | (2.83 | )% | | $ | 12.38 | | | $ | 11.28 | |
Net Asset Value | | | 13.33 | | | | 13.55 | | | | (1.62 | ) | | | 13.55 | | | | 13.07 | |
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
SECTOR ALLOCATION
| | | | | | | | |
| Sector | | 01/31/19 | | | 07/31/18 | |
Transportation | | | 37 | % | | | 35 | % |
County/City/Special District/School District | | | 14 | | | | 18 | |
Utilities | | | 12 | | | | 14 | |
Education. | | | 11 | | | | 10 | |
Health | | | 10 | | | | 9 | |
State | | | 9 | | | | 8 | |
Housing | | | 3 | | | | 3 | |
Corporate | | | 2 | | | | 1 | |
Tobacco | | | 2 | | | | 2 | |
| | | For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease. | |
CALL/MATURITY SCHEDULE (c)
| | | | |
Calendar Year Ended December 31, | | | | |
2019 | | | 11 | % |
2020 | | | 3 | |
2021 | | | 17 | |
2022 | | | 5 | |
2023 | | | 23 | |
| | (c) | Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. | |
| | * | Excludes short-term securities. | |
CREDIT QUALITY ALLOCATION (a)
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| Credit Rating | | 01/31/19 | | | 07/31/18 | |
AAA/Aaa | | | 2 | % | | | 5 | % |
AA/Aa | | | 50 | | | | 53 | |
A | | | 32 | | | | 30 | |
BBB/Baa | | | 12 | | | | 9 | |
N/R(b) | | | 4 | | | | 3 | |
| | (a) | For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either Standard & Poor’s (“S&P”) or Moody’s Investors Service (“Moody’s”) if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. | |
| | (b) | The investment adviser evaluates the credit quality of not-rated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. | |
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| Fund Summary as of January 31, 2019 | | BlackRock MuniYield California Quality Fund, Inc. |
Fund Overview
BlackRock MuniYield California Quality Fund, Inc.’s (MCA) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from U.S. federal and California 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 obligations exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax) and California income taxes. Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality, or are considered by the Fund’s investment adviser to be of comparable quality, 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.
Fund Information
| | |
Symbol on NYSE | | MCA |
Initial Offering Date | | October 30, 1992 |
Yield on Closing Market Price as of January 31, 2019 ($13.00)(a) | | 4.80% |
Tax Equivalent Yield(b) | | 10.46% |
Current Monthly Distribution per Common Share(c) | | $0.0520 |
Current Annualized Distribution per Common Share(c) | | $0.6240 |
Economic Leverage as of January 31, 2019(d) | | 42% |
| | (a) | 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. | |
| | (b) | Tax equivalent yield assumes the maximum marginal U.S. federal and state tax rate of 54.10%, 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. | |
| | (c) | The distribution rate is not constant and is subject to change. | |
| | (d) | Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, 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. | |
Performance
Returns for the six months ended January 31, 2019 were as follows:
| | | | | | | | |
| | | Returns Based On | |
| | | Market Price | | | NAV | |
MCA(a)(b) | | | 0.45 | % | | | 0.69 | % |
Lipper California Municipal Debt Funds(c) | | | 2.77 | | | | 0.80 | |
| | (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. | |
| | (b) | The Fund’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV. | |
| | (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on theex-dividend date as calculated by Lipper. | |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the first half of the period, municipal bonds recovered to post a positive total return for the full six months. The initial downturn was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of more accommodative Fed policy, sparking a rally across the bond market from early November onward.
California municipal bonds lagged the national market. However, the state’s debt gained a measure of support from strong demand among retail investors looking fortax-exempt income in a state with the country’s most punitive income tax regime. The credit quality of state and local authorities remained consistent, but investors were alert for any changes in fiscal responsibility demonstrated by the new governor and his administration.
Income, which was enhanced by leverage, was the largest contributor to Fund performance. However, the cost of leverage became more expensive during the period due to the Fed’s two interest rate increases.
Positions in short-dated maturities were top performers on a price basis, as yields fell the most for bonds with maturities of ten years and below. (Prices and yields move in opposite directions.) Longer-dated maturities, while experiencing less price appreciation than short-term issues, provided the Fund with an attractive level of income.
At the sector level, positions in transportation and school district issues aided results. In both cases, holdings in higher-quality bonds were key contributors. Conversely, an allocation to the tobacco sector was a slight detractor. The sector experienced yield spread widening, which led to poor performance relative to other market segments.
The Fund’s higher-quality mandate proved beneficial given that higher-rated bonds outperformed in the period.
The Fund sought to manage interest rate risk using U.S. Treasury futures. Given that U.S. Treasury yields fell, as prices rose, this strategy detracted from the Fund’s return.
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.
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| 8 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
| Fund Summary as of January 31, 2019 (continued) | | BlackRock MuniYield California Quality Fund, Inc. |
Market Price and Net Asset Value Per Share Summary
| | | | | | | | | | | | | | | | | | | | |
| | | 01/31/19 | | | 07/31/18 | | | Change | | | High | | | Low | |
Market Price | | $ | 13.00 | | | $ | 13.30 | | | | (2.26 | )% | | $ | 13.48 | | | $ | 12.34 | |
Net Asset Value | | | 14.96 | | | | 15.27 | | | | (2.03 | ) | | | 15.27 | | | | 14.65 | |
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
SECTOR ALLOCATION
| | | | | | | | |
| Sector | | 01/31/19 | | | 07/31/18 | |
County/City/Special District/School District | | | 33 | % | | | 32 | % |
Health | | | 18 | | | | 17 | |
Transportation | | | 18 | | | | 16 | |
Utilities | | | 13 | | | | 15 | |
Education | | | 12 | | | | 14 | |
State | | | 4 | | | | 4 | |
Corporate | | | 1 | | | | 1 | |
Tobacco | | | 1 | | | | 1 | |
| | | For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease. | |
CALL/MATURITY SCHEDULE (b)
| | | | |
Calendar Year Ended December 31, | | | | |
2019 | | | 14 | % |
2020 | | | 6 | |
2021 | | | 11 | |
2022 | | | 3 | |
2023 | | | 6 | |
| | (b) | Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. | |
| | * | Excludes short-term securities. | |
CREDIT QUALITY ALLOCATION (a)
| | | | | | | | |
| Credit Rating | | 01/31/19 | | | 07/31/18 | |
AAA/Aaa | | | 8 | % | | | 9 | % |
AA/Aa | | | 71 | | | | 72 | |
A | | | 15 | | | | 13 | |
BBB/Baa | | | 3 | | | | 3 | |
N/R | | | 3 | | | | 3 | |
| | (a) | For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. | |
| | |
| Fund Summary as of January 31, 2019 | | BlackRock MuniYield New York Quality Fund, Inc. |
Fund Overview
BlackRock MuniYield New York Quality Fund, Inc.’s (MYN) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from U.S. federal income taxes and New York State and New York City personal 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 obligations exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax) and New York State and New York City personal income taxes. Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality, or are considered by the Fund’s investment adviser to be of comparable quality, 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.
Fund Information
| | |
Symbol on NYSE | | MYN |
Initial Offering Date | | February 28, 1992 |
Yield on Closing Market Price as of January 31, 2019 ($11.93)(a) | | 4.27% |
Tax Equivalent Yield(b) | | 8.48% |
Current Monthly Distribution per Common Share(c) | | $0.0425 |
Current Annualized Distribution per Common Share(c) | | $0.5100 |
Economic Leverage as of January 31, 2019(d) | | 40% |
| | (a) | 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. | |
| | (b) | Tax equivalent yield assumes the maximum marginal U.S. federal and state tax rate of 49.62%, 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. | |
| | (c) | The distribution rate is not constant and is subject to change. | |
| | (d) | Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, 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. | |
Performance
Returns for the six months ended January 31, 2019 were as follows:
| | | | | | | | |
| | | Returns Based On | |
| | | Market Price | | | NAV | |
MYN(a)(b) | | | 2.55 | % | | | 1.47 | % |
Lipper New York Municipal Debt Funds(c) | | | 3.35 | | | | 1.12 | |
| | (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. | |
| | (b) | The Fund’s discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV. | |
| | (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on theex-dividend date as calculated by Lipper. | |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the first half of the period, municipal bonds recovered to post a positive total return for the full six months. The initial downturn was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of more accommodative Fed policy, sparking a rally across the bond market from early November onward.
The New York municipal market finished somewhat behind the national indexes due primarily to elevatednew-issue supply. While New York continues to benefit from a broad and diverse economic base, a tax revenue shortfall — possibly driven by changes stemming from the federal Tax Cuts and Jobs Act — had an adverse effect on investor sentiment. In addition to making revenue forecasting more of a challenge, thetax-law changes made New York’s tax structure less competitive relative tolower-tax states.
Income, which was enhanced by leverage, was the largest contributor to Fund performance. However, the cost of leverage became more expensive during the period due to the Fed’s two interest rate increases.
The Fund’s position in the housing sector, which has an above-average sensitivity to the direction of bond yields, also contributed to Fund performance.
The Fund’s yield curve positioning detracted from Fund performance, largely as a result of an underweight in the outperforming five- toten-year maturity area.
The Fund sought to manage interest rate risk using U.S. Treasury futures. Given that U.S. Treasury yields fell, as prices rose, this strategy detracted from the Fund’s return.
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.
| | |
| 10 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
| Fund Summary as of January 31, 2019 (continued) | | BlackRock MuniYield New York Quality Fund, Inc. |
Market Price and Net Asset Value Per Share Summary
| | | | | | | | | | | | | | | | | | | | |
| | | 01/31/19 | | | 07/31/18 | | | Change | | | High | | | Low | |
Market Price | | $ | 11.93 | | | $ | 11.89 | | | | 0.34 | % | | $ | 11.97 | | | $ | 11.09 | |
Net Asset Value | | | 13.64 | | | | 13.74 | | | | (0.73 | ) | | | 13.74 | | | | 13.23 | |
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
SECTOR ALLOCATION
| | | | | | | | |
| Sector | | 01/31/19 | | | 07/31/18 | |
Transportation | | | 23 | % | | | 25 | % |
County/City/Special District/School District | | | 18 | | | | 15 | |
Education | | | 17 | | | | 18 | |
State | | | 15 | | | | 17 | |
Utilities | | | 14 | | | | 14 | |
Health | | | 6 | | | | 6 | |
Housing | | | 4 | | | | 2 | |
Corporate | | | 2 | | | | 2 | |
Tobacco | | | 1 | | | | 1 | |
| | | For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease. | |
CALL/MATURITY SCHEDULE (c)
| | | | |
Calendar Year Ended December 31, | | | | |
2019 | | | 11 | % |
2020 | | | 4 | |
2021 | | | 16 | |
2022 | | | 9 | |
2023 | | | 9 | |
| | (c) | Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. | |
| | * | Excludes short-term securities. | |
CREDIT QUALITY ALLOCATION (a)
| | | | | | | | |
| Credit Rating | | 01/31/19 | | | 07/31/18 | |
AAA/Aaa | | | 11 | % | | | 20 | % |
AA/Aa | | | 57 | | | | 48 | |
A | | | 22 | | | | 23 | |
BBB/Baa | | | 6 | | | | 5 | |
BB/Ba | | | 1 | | | | — | |
N/R | | | 3 | | | | 4 | |
| | (a) | For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. | |
| | (b) | The investment adviser evaluates the credit quality of not-rated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of January 31, 2019 and July 31, 2018, the market value of unrated securities deemed by the investment adviser to be investment grade represents 1% and 1%, respectively, of the Fund’s total investments. | |
| | |
| Fund Summary as of January 31, 2019 | | BlackRock MuniYield Quality Fund III, Inc. |
Fund Overview
BlackRock MuniYield Quality Fund III, Inc.’s (MYI) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from U.S. 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 obligations exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality, or are considered by the Fund’s investment adviser to be of comparable quality, 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.
Fund Information
| | |
Symbol on NYSE | | MYI |
Initial Offering Date | | March 27, 1992 |
Yield on Closing Market Price as of January 31, 2019 ($12.44)(a) | | 4.87% |
Tax Equivalent Yield(b) | | 8.23% |
Current Monthly Distribution per Common Share(c) | | $0.0505 |
Current Annualized Distribution per Common Share(c) | | $0.6060 |
Economic Leverage as of January 31, 2019(d) | | 40% |
| | (a) | 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. | |
| | (b) | Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.80%, 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. | |
| | (c) | The distribution rate is not constant and is subject to change. | |
| | (d) | Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, 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. | |
Performance
Returns for the six months ended January 31, 2019 were as follows:
| | | | | | | | |
| | | Returns Based On | |
| | | Market Price | | | NAV | |
MYI(a)(b) | | | 2.36 | % | | | 1.50 | % |
Lipper General & Insured Municipal Debt Funds (Leveraged)(c) | | | 2.46 | | | | 0.94 | |
| | (a) | All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. | |
| | (b) | The Fund’s discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV. | |
| | (c) | Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on theex-dividend date as calculated by Lipper. | |
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Past performance is not indicative of future results.
The following discussion relates to the Fund’s absolute performance based on NAV:
After performing poorly through the first half of the period, municipal bonds recovered to post a positive total return for the full six months. The initial downturn was largely brought about by concerns that the Fed would raise interest rates aggressively in 2019. However, subsequent signs of slowing growth prompted investors to adjust their expectations in favor of more accommodative Fed policy, sparking a rally across the bond market from early November onward.
Portfolio income, enhanced by leverage, made the largest contribution to the Fund’s return. The Fund’s position in bonds with five- to10-year maturities also contributed, as yields in this area declined most sharply while finishing largely unchanged among both short- and long-term issues. (Prices and yields move in opposite directions.)
At the sector level, positions in statetax-backed and school district issues were key contributors to performance.
The Fund sought to manage interest rate risk using U.S. Treasury futures. Given that U.S. Treasury yields fell, as prices rose, this strategy detracted from the Fund’s return.
The Fund’s allocation to lower-rated issues also detracted from the Fund’s return, as yield spreads generally widened during 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.
| | |
| 12 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
| Fund Summary as of January 31, 2019 (continued) | | BlackRock MuniYield Quality Fund III, Inc. |
Market Price and Net Asset Value Per Share Summary
| | | | | | | | | | | | | | | | | | | | |
| | | 01/31/19 | | | 07/31/18 | | | Change | | | High | | | Low | |
Market Price | | $ | 12.44 | | | $ | 12.46 | | | | (0.16 | )% | | $ | 12.57 | | | $ | 11.54 | |
Net Asset Value | | | 13.84 | | | | 13.98 | | | | (1.00 | ) | | | 13.98 | | | | 13.38 | |
Market Price and Net Asset Value History For the Past Five Years
Overview of the Fund’s Total Investments*
SECTOR ALLOCATION
| | | | | | | | |
| Sector | | 01/31/19 | | | 07/31/18 | |
Transportation | | | 30 | % | | | 28 | % |
State | | | 21 | | | | 19 | |
Health | | | 16 | | | | 16 | |
Utilities | | | 13 | | | | 14 | |
Education | | | 9 | | | | 10 | |
County/City/Special District/School District | | | 8 | | | | 8 | |
Corporate | | | 2 | | | | 3 | |
Tobacco | | | 1 | | | | 1 | |
Housing | | | — | | | | 1 | |
| | | For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease. | |
CALL/MATURITY SCHEDULE (c)
| | | | |
Calendar Year Ended December 31, | | | | |
2019 | | | 10 | % |
2020 | | | 2 | |
2021 | | | 9 | |
2022 | | | 5 | |
2023 | | | 9 | |
| | (c) | Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years. | |
| | * | Excludes short-term securities. | |
CREDIT QUALITY ALLOCATION (a)
| | | | | | | | |
| Credit Rating | | 01/31/19 | | | 07/31/18 | |
AAA/Aaa | | | 4 | % | | | 6 | % |
AA/Aa | | | 48 | | | | 49 | |
A | | | 27 | | | | 25 | |
BBB/Baa | | | 16 | | | | 16 | |
N/R | | | 5 | | | | 4 | |
| | (a) | For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. | |
| | (b) | The investment adviser evaluates the credit quality of not-rated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of January 31, 2019 and July 31, 2018, the market value of unrated securities deemed by the investment adviser to be investment grade represents 1% and 1%, respectively, of the Fund’s total investments. | |
| | |
Schedule of Investments (unaudited) January 31, 2019 | | BlackRock MuniHoldings Quality Fund II, Inc. (MUE) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
Municipal Bonds — 130.8% | |
|
| Alabama — 2.1% | |
City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 06/01/19(a) | | $ | 5,225 | | | $ | 5,296,948 | |
City of Selma Alabama IDB, RB, Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.38%, 12/01/35 | | | 940 | | | | 1,010,303 | |
| | | | | | | | |
| | | | | | | 6,307,251 | |
|
| Arizona — 0.9% | |
Salt Verde Financial Corp., RB, Senior, 5.00%, 12/01/37 | | | 2,450 | | | | 2,846,263 | |
| | | | | | | | |
| | |
| California — 18.9% | | | | | | |
California Health Facilities Financing Authority, RB, Sutter Health, Series B, 6.00%, 08/15/20(a) | | | 2,865 | | | | 3,058,445 | |
California Municipal Finance Authority, ARB, Senior Lien, Linxs APM Project, AMT, 5.00%, 12/31/43 | | | 1,400 | | | | 1,527,148 | |
City & County of San Francisco California Airports Commission, ARB, Special Facility Lease, SFO Fuel, Series A, AMT (AGM), 6.10%, 01/01/20 | | | 240 | | | | 240,864 | |
City & County of San Francisco California Airports Commission, Refunding ARB, AMT, Series A: | | | | | | | | |
2nd, 5.50%, 05/01/28 | | | 1,800 | | | | 2,044,710 | |
2nd, 5.25%, 05/01/33 | | | 1,410 | | | | 1,574,716 | |
5.00%, 05/01/44 | | | 1,860 | | | | 2,035,324 | |
City of San Jose California, Refunding ARB, Norman Y Mineta San Jose International Airport SJC, Series A-1, AMT, 5.50%, 03/01/30 | | | 4,045 | | | | 4,311,687 | |
City of Sunnyvale California, Refunding RB, 5.25%, 04/01/20(a) | | | 2,800 | | | | 2,921,072 | |
County of Riverside Public Financing Authority, RB, Capital Facilities Project, 5.25%, 11/01/40 | | | 4,500 | | | | 5,226,840 | |
Emery Unified School District, GO, Election of 2010, Series A (AGM), 5.50%, 08/01/21(a) | | | 1,875 | | | | 2,057,756 | |
Kern Community College District, GO, Safety, Repair & Improvement, Series C, 5.50%, 11/01/33 | | | 2,445 | | | | 2,835,002 | |
Los Angeles Community College District California, GO, Election of 2008, Series C, 5.25%, 08/01/20(a) | | | 2,000 | | | | 2,109,620 | |
Redondo Beach Unified School District, GO, Election of 2008, Series E, 5.50%, 08/01/21(a) | | | 2,670 | | | | 2,933,689 | |
Regents of the University of California Medical Center Pooled Revenue, Refunding RB, Series J: | | | | | | | | |
5.25%, 05/15/23(a) | | | 5,905 | | | | 6,793,112 | |
5.25%, 05/15/38 | | | 1,675 | | | | 1,870,925 | |
State of California Public Works Board, LRB, Various Capital Projects, Series I: | | | | | | | | |
5.50%, 11/01/30 | | | 5,000 | | | | 5,714,700 | |
5.50%, 11/01/31 | | | 3,130 | | | | 3,568,325 | |
5.50%, 11/01/33 | | | 3,000 | | | | 3,410,010 | |
State of California Public Works Board, RB, Department of Corrections & Rehabilitation, Series F, 5.25%, 09/01/33 | | | 1,260 | | | | 1,412,951 | |
Township of Washington California Health Care District, GO, Election of 2004, Series B, 5.50%, 08/01/40 | | | 940 | | | | 1,090,663 | |
| | | | | | | | |
| | | | | | | 56,737,559 | |
|
| Colorado — 2.1% | |
City & County of Denver Colorado Airport System, ARB, Series A, AMT: | | | | | | | | |
5.50%, 11/15/28 | | | 1,500 | | | | 1,700,070 | |
5.50%, 11/15/30 | | | 565 | | | | 636,834 | |
5.50%, 11/15/31 | | | 675 | | | | 759,200 | |
Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM), 6.00%, 05/15/19(a) | | | 3,300 | | | | 3,340,260 | |
| | | | | | | | |
| | | | | | | 6,436,364 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| Connecticut — 1.0% | |
State of Connecticut, GO, Series A, 5.00%, 04/15/38 | | $ | 1,690 | | | $ | 1,848,826 | |
State of Connecticut Health & Educational Facility Authority, Refunding RB, Sacred Heart University Issue, Series I-1, 5.00%, 07/01/42 | | | 1,015 | | | | 1,114,186 | |
| | | | | | | | |
| | | | | | | 2,963,012 | |
|
| Delaware — 0.5% | |
State of Delaware Health Facilities Authority, RB, Beebe Medical Center Project, 5.00%, 06/01/43 | | | 1,400 | | | | 1,510,376 | |
| | | | | | | | |
|
| Florida — 19.9% | |
Central Florida Expressway Authority, Refunding RB, Senior Lien, 5.00%, 07/01/48 | | | 4,730 | | | | 5,302,472 | |
City of Jacksonville Florida, RB, 5.00%, 10/01/38 | | | 1,000 | | | | 1,125,480 | |
County of Broward Florida Airport System, ARB, Series A, AMT, 5.00%, 10/01/45 | | | 1,440 | | | | 1,571,702 | |
County of Broward Florida Airport System Revenue, ARB, Series A, AMT, 5.13%, 10/01/38 | | | 5,665 | | | | 6,181,931 | |
County of Hillsborough Florida Aviation Authority, Refunding ARB, Tampa International Airport, Series A, AMT, 5.50%, 10/01/29 | | | 2,995 | | | | 3,389,082 | |
County of Lee Florida, Refunding ARB, Series A, AMT, 5.38%, 10/01/32 | | | 2,500 | | | | 2,670,725 | |
County of Lee Florida HFA, RB, S/F Housing, Multi-County Program, Series A-2, AMT (Ginnie Mae, Fannie Mae & Freddie Mac), 6.00%, 09/01/40 | | | 180 | | | | 181,276 | |
County of Miami-Dade Florida, RB, Seaport Department: | | | | | | | | |
Series A, 5.38%, 10/01/33 | | | 1,765 | | | | 1,974,400 | |
Series A, 5.50%, 10/01/42 | | | 3,000 | | | | 3,341,610 | |
Series B, AMT, 6.25%, 10/01/38 | | | 800 | | | | 918,960 | |
Series B, AMT, 6.00%, 10/01/42 | | | 1,060 | | | | 1,207,626 | |
County of Miami-Dade Florida, Refunding RB, Water & Sewer System, Series B, 5.25%, 10/01/29 | | | 3,130 | | | | 3,545,946 | |
County of Miami-Dade Florida Aviation, Refunding ARB, Series A, AMT, 5.00%, 10/01/31 | | | 5,155 | | | | 5,568,947 | |
County of Miami-Dade Florida Aviation Revenue, Refunding ARB, Series A, AMT, 5.00%, 10/01/32 | | | 5,000 | | | | 5,392,450 | |
County of Orange Florida School Board, COP, Series A (AGC), 5.50%, 08/01/19(a) | | | 7,600 | | | | 7,744,552 | |
Reedy Creek Florida Improvement District, GO, Series A, 5.25%, 06/01/32 | | | 1,805 | | | | 2,034,867 | |
Tohopekaliga Water Authority, Refunding RB, Series A, 5.25%, 10/01/21(a) | | | 6,965 | | | | 7,599,163 | |
| | | | | | | | |
| | | | | | | 59,751,189 | |
| | |
| Hawaii — 1.7% | | | | | | |
State of Hawaii Airports System, ARB, Series A, AMT, 5.00%, 07/01/45 | | | 2,805 | | | | 3,083,424 | |
State of Hawaii Airports System, COP, AMT: | | | | | | | | |
5.25%, 08/01/25 | | | 740 | | | | 826,950 | |
5.25%, 08/01/26 | | | 1,205 | | | | 1,340,081 | |
| | | | | | | | |
| | | | | | | 5,250,455 | |
| | |
| Illinois — 14.2% | | | | | | |
City of Chicago Illinois Midway International Airport, Refunding GARB, 2nd Lien, Series A, AMT: | | | | | | | | |
5.00%, 01/01/41 | | | 1,140 | | | | 1,227,655 | |
5.50%, 01/01/28 | | | 1,000 | | | | 1,106,690 | |
5.50%, 01/01/29 | | | 1,500 | | | | 1,655,925 | |
5.38%, 01/01/33 | | | 2,000 | | | | 2,180,060 | |
City of Chicago Illinois O’Hare International Airport, GARB: | | | | | | | | |
3rd Lien, Series A, 5.75%, 01/01/21(a) | | | 1,680 | | | | 1,808,184 | |
3rd Lien, Series A, 5.75%, 01/01/39 | | | 320 | | | | 339,315 | |
3rd Lien, Series C, 6.50%, 01/01/21(a) | | | 9,085 | | | | 9,903,831 | |
Senior Lien, Series D, AMT, 5.00%, 01/01/42 | | | 735 | | | | 795,777 | |
| | |
| 14 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniHoldings Quality Fund II, Inc. (MUE) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Illinois (continued) | | | | | | |
City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts: | | | | | | | | |
5.25%, 12/01/36 | | $ | 2,940 | | | $ | 3,106,316 | |
5.25%, 12/01/40 | | | 1,500 | | | | 1,576,560 | |
City of Chicago Illinois Wastewater Transmission, RB, 2nd Lien, 5.00%, 01/01/42 | | | 2,985 | | | | 3,122,847 | |
County of Cook Illinois Community College District No. 508, GO, City College of Chicago: | | | | | | | | |
5.25%, 12/01/30 | | | 1,270 | | | | 1,323,111 | |
5.50%, 12/01/38 | | | 1,205 | | | | 1,256,128 | |
5.25%, 12/01/43 | | | 2,960 | | | | 3,048,652 | |
Illinois Finance Authority, Refunding RB, Presence Health Network, Series C, 5.00%, 02/15/41 | | | 975 | | | | 1,079,481 | |
Railsplitter Tobacco Settlement Authority, RB(a): | | | | | | | | |
5.50%, 06/01/21 | | | 2,350 | | | | 2,548,176 | |
6.00%, 06/01/21 | | | 670 | | | | 734,099 | |
State of Illinois, GO: | | | | | | | | |
5.25%, 02/01/31 | | | 1,495 | | | | 1,566,401 | |
5.25%, 02/01/32 | | | 2,320 | | | | 2,423,356 | |
5.50%, 07/01/33 | | | 1,000 | | | | 1,055,070 | |
5.50%, 07/01/38 | | | 700 | | | | 730,520 | |
| | | | | | | | |
| | | | | | | 42,588,154 | |
| | |
| Indiana — 0.2% | | | | | | |
State of Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges, Series A, AMT, 5.00%, 07/01/40 | | | 460 | | | | 486,031 | |
| | | | | | | | |
| | |
| Iowa — 0.7% | | | | | | |
State of Iowa Finance Authority, RB, Lifespace Communities, Series A, 5.00%, 05/15/48 | | | 1,950 | | | | 2,008,091 | |
| | | | | | | | |
| | |
| Louisiana — 1.5% | | | | | | |
Lake Charles Louisiana Harbor & Terminal District, RB, Series B, AMT (AGM), 5.50%, 01/01/29 | | | 2,225 | | | | 2,503,014 | |
Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.50%, 05/15/29 | | | 2,020 | | | | 2,037,049 | |
| | | | | | | | |
| | | | | | | 4,540,063 | |
| | |
| Maryland — 6.4% | | | | | | |
County of Howard Maryland Housing Commission, RB, M/F Housing, Woodfield Oxford Square Apartments, 5.00%, 12/01/42 | | | 2,450 | | | | 2,687,821 | |
Maryland Stadium Authority, RB, Construction and Revitalization Program: | | | | | | | | |
5.00%, 05/01/47 | | | 9,815 | | | | 11,009,584 | |
5.00%, 05/01/34 | | | 4,780 | | | | 5,542,219 | |
| | | | | | | | |
| | | | | | | 19,239,624 | |
| | |
| Massachusetts — 1.8% | | | | | | |
Massachusetts Development Finance Agency, RB: | | | | | | | | |
Emerson College Issue, Series A, 5.00%, 01/01/47 | | | 420 | | | | 449,984 | |
Emerson College Issue, Series A, 5.25%, 01/01/42 | | | 940 | | | | 1,026,282 | |
UMass Darthmouth Student Housing Project, 5.00%, 10/01/43 | | | 2,265 | | | | 2,409,371 | |
Massachusetts Development Finance Agency, Refunding RB, Emerson College, Series A, 5.00%, 01/01/40 | | | 1,025 | | | | 1,113,150 | |
Massachusetts HFA, Refunding RB, Series C, AMT, 5.35%, 12/01/42 | | | 485 | | | | 488,143 | |
| | | | | | | | |
| | | | | | | 5,486,930 | |
| | |
| Michigan — 1.6% | | | | | | |
Hudsonville Michigan Public Schools, GO, School Building & Site (Q-SBLF), 5.25%, 05/01/21(a) | | | 3,420 | | | | 3,687,410 | |
Michigan Strategic Fund, RB, I-75 Improvement Projects, AMT, 5.00%, 06/30/48 | | | 895 | | | | 971,406 | |
| | | | | | | | |
| | | | | | | 4,658,816 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Minnesota — 0.3% | | | | | | |
County of St. Paul Minnesota Housing & Redevelopment Authority, Refunding RB, Fairview Health Services, Series A, 4.00%, 11/15/43 | | $ | 985 | | | $ | 989,304 | |
| | | | | | | | |
| | |
| Mississippi — 2.4% | | | | | | |
Mississippi Development Bank, RB, Jackson Water & Sewer System Project (AGM), 6.88%, 12/01/40 | | | 2,225 | | | | 2,634,756 | |
Mississippi State University Educational Building Corp., Refunding RB, Mississippi State University Improvement Project, 5.25%, 08/01/23(a) | | | 1,000 | | | | 1,150,090 | |
State of Mississippi, RB, Series A: | | | | | | | | |
5.00%, 10/15/37 | | | 565 | | | | 643,123 | |
4.00%, 10/15/38 | | | 2,815 | | | | 2,851,060 | |
| | | | | | | | |
| | | | | | | 7,279,029 | |
| | |
| Montana — 0.3% | | | | | | |
Montana State Board of Housing, RB, S/F, Series B-2: | | | | | | | | |
3.38%, 12/01/37 | | | 395 | | | | 379,247 | |
3.50%, 12/01/42 | | | 175 | | | | 165,237 | |
3.60%, 12/01/47 | | | 265 | | | | 251,300 | |
| | | | | | | | |
| | | | | | | 795,784 | |
| | |
| Nevada — 2.5% | | | | | | |
City of Carson City Nevada, Refunding RB, Carson Tahoe Regional Healthcare Project, 5.00%, 09/01/42 | | | 1,130 | | | | 1,195,325 | |
County of Clark Nevada, ARB, Las Vegas-McCarran International Airport, Series A (AGM), 5.25%, 07/01/39 | | | 3,210 | | | | 3,293,107 | |
County of Clark Nevada, GO, Stadium Improvement, Series A: | | | | | | | | |
5.00%, 06/01/36 | | | 2,065 | | | | 2,404,176 | |
5.00%, 06/01/37 | | | 500 | | | | 579,475 | |
| | | | | | | | |
| | | | 7,472,083 | |
|
| New Jersey — 8.1% | |
New Jersey EDA, RB: | | | | | | | | |
Goethals Bridge Replacement Project, AMT, Private Activity Bond, 5.38%, 01/01/43 | | | 1,940 | | | | 2,083,657 | |
Private Activity Bond, Goethals Bridge Replacement Project, AMT (AGM), 5.00%, 01/01/31 | | | 1,355 | | | | 1,470,703 | |
State Government Buildings Project, Series A, 5.00%, 06/15/47 | | | 2,500 | | | | 2,607,125 | |
New Jersey Health Care Facilities Financing Authority, RB, Virtua Health, Series A (AGC), 5.50%, 07/01/38 | | | 3,400 | | | | 3,449,878 | |
New Jersey Housing & Mortgage Finance Agency, Refunding RB, S/F Housing, Series BB, AMT, 3.80%, 10/01/32 | | | 2,455 | | | | 2,480,213 | |
New Jersey Transportation Trust Fund Authority, RB: | | | | | | | | |
Transportation Program Bonds, Series S, 5.25%, 06/15/43 | | | 2,980 | | | | 3,215,420 | |
Transportation System, Series AA, 5.50%, 06/15/39 | | | 3,040 | | | | 3,223,281 | |
New Jersey Transportation Trust Fund Authority, Refunding RB, Transportation System, Series A, 5.00%, 12/15/32 | | | 2,735 | | | | 2,981,615 | |
Tobacco Settlement Financing Corp., Refunding RB: | | | | | | | | |
Series A, 5.25%, 06/01/46 | | | 2,355 | | | | 2,489,989 | |
Sub-Series B, 5.00%, 06/01/46 | | | 445 | | | | 443,131 | |
| | | | | | | | |
| | | | 24,445,012 | |
| | |
| New York — 8.2% | | | | | | |
City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series EE, 5.38%, 06/15/43 | | | 2,220 | | | | 2,358,040 | |
City of New York New York Water & Sewer System, Refunding RB, 2nd General Resolution, Fiscal 2009, Series EE, 5.25%, 06/15/40 | | | 6,930 | | | | 7,015,100 | |
Hudson Yards Infrastructure Corp., RB, Senior, Fiscal 2012: | | | | | | | | |
5.75%, 02/15/21(a) | | | 580 | | | | 627,531 | |
5.75%, 02/15/47 | | | 360 | | | | 386,654 | |
Metropolitan Transportation Authority, RB: | | | | | | | | |
Series A, 5.25%, 11/15/21(a) | | | 8,500 | | | | 9,342,690 | |
Series A-1, 5.25%, 11/15/39 | | | 1,550 | | | | 1,727,553 | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 15 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniHoldings Quality Fund II, Inc. (MUE) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| New York (continued) | | | | | | |
Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 166th Series, 5.25%, 07/15/36 | | $ | 2,000 | | | $ | 2,120,740 | |
TSASC, Inc., Refunding RB, Series A, 5.00%, 06/01/41 | | | 895 | | | | 925,099 | |
| | | | | | | | |
| | | | 24,503,407 | |
|
| Ohio — 0.9% | |
State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1, 5.25%, 02/15/31 | | | 2,500 | | | | 2,783,350 | |
| | | | | | | | |
|
| Oklahoma — 0.5% | |
Oklahoma Development Finance Authority, RB, Provident Oklahoma Education Resources, Inc., Cross Village Student Housing Project, Series A, 5.25%, 08/01/57 | | | 1,640 | | | | 1,528,513 | |
| | | | | | | | |
|
| Oregon — 0.4% | |
Oregon Health & Science University, RB, Series A, 5.00%, 07/01/42 | | | 1,100 | | | | 1,237,159 | |
| | | | | | | | |
|
| Pennsylvania — 7.2% | |
Altoona Area School District, GO, 5.00%, 12/01/36 | | | 185 | | | | 207,918 | |
County of Delaware Springfield School District, GO: | | | | | | | | |
5.00%, 03/01/40 | | | 1,485 | | | | 1,679,060 | |
5.00%, 03/01/43 | | | 1,100 | | | | 1,237,324 | |
County of Montgomery Higher Education & Health Authority, Refunding RB, Thomas Jeferson University, Series A, 5.00%, 09/01/48 | | | 1,690 | | | | 1,860,014 | |
County of Westmoreland Pennsylvania Municipal Authority, Refunding RB, (BAM), 5.00%, 08/15/36 | | | 2,215 | | | | 2,499,982 | |
Pennsylvania Housing Finance Agency, RB, S/F, Series 125B, 3.65%, 10/01/42 | | | 3,000 | | | | 2,943,870 | |
Pennsylvania Turnpike Commission, Refunding RB, 2nd Series, Subordinate, Special Motor License Fund, 5.00%, 12/01/41 | | | 2,490 | | | | 2,757,401 | |
Pennsylvania Turnpike Commission, RB, Sub-Series B-1, 5.25%, 06/01/47 | | | 2,300 | | | | 2,537,705 | |
Swarthmore Borough Authority, RB, Swarthmore College, 5.00%, 09/15/47 | | | 1,600 | | | | 1,856,784 | |
Township of Bristol Pennsylvania School District, GO: | | | | | | | | |
5.25%, 06/01/37 | | | 2,500 | | | | 2,763,875 | |
5.25%, 06/01/43 | | | 1,100 | | | | 1,210,429 | |
| | | | | | | | |
| | | | 21,554,362 | |
|
| South Carolina — 5.3% | |
County of Charleston South Carolina, RB, Special Source, 5.25%, 12/01/38 | | | 3,760 | | | | 4,249,025 | |
County of Charleston South Carolina Airport District, ARB, Series A, AMT: | | | | | | | | |
6.00%, 07/01/38 | | | 2,940 | | | | 3,345,838 | |
5.50%, 07/01/41 | | | 2,500 | | | | 2,775,850 | |
South Carolina Jobs EDA, Refunding RB, Prisma Health Obligated Group, Series A, 5.00%, 05/01/43 | | | 1,360 | | | | 1,482,781 | |
State of South Carolina Ports Authority, RB, AMT, 5.25%, 07/01/50 | | | 1,870 | | | | 2,031,736 | |
State of South Carolina Public Service Authority, RB, Series E, 5.50%, 12/01/53 | | | 1,000 | | | | 1,066,520 | |
State of South Carolina Public Service Authority, Refunding RB, Series C, 5.00%, 12/01/46 | | | 1,000 | | | | 1,053,040 | |
| | | | | | | | |
| | | | 16,004,790 | |
|
| Tennessee — 1.1% | |
Metropolitan Nashville Airport Authority, ARB, Series B, AMT, 5.00%, 07/01/40 | | | 3,000 | | | | 3,276,030 | |
| | | | | | | | |
|
| Texas — 9.9% | |
City of Beaumont Texas, GO, Certificates of Obligation, 5.25%, 03/01/37 | | | 2,345 | | | | 2,605,811 | |
City of Houston Texas Airport System Revenue, Refunding RB, Sub-Series D, 5.00%, 07/01/37 | | | 2,010 | | | | 2,312,445 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| Texas (continued) | |
City of Houston Texas Combined Utility System, Refunding RB, Combined 1st Lien, Series A (AGC)(a): | | | | | | | | |
6.00%, 05/15/19 | | $ | 6,345 | | | $ | 6,422,028 | |
6.00%, 05/15/19 | | | 355 | | | | 359,363 | |
County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Christus Health, Series B, 5.00%, 07/01/35 | | | 2,500 | | | | 2,831,775 | |
Dallas-Fort Worth Texas International Airport, ARB, Joint Improvement, AMT: | | | | | | | | |
Series A, 5.00%, 11/01/38 | | | 1,615 | | | | 1,679,390 | |
Series H, 5.00%, 11/01/37 | | | 1,810 | | | | 1,911,360 | |
Lower Colorado River Authority, Refunding RB, 5.50%, 05/15/33 | | | 2,155 | | | | 2,435,452 | |
North Texas Tollway Authority, RB, Special Projects, Series A, 5.50%, 09/01/21(a) | | | 5,480 | | | | 5,990,791 | |
North Texas Tollway Authority, Refunding RB, 1st Tier, Series A, 5.00%, 01/01/48 | | | 1,775 | | | | 1,984,414 | |
Red River Texas Education Financing Corp., RB, Texas Christian University Project, 5.25%, 03/15/38 | | | 1,070 | | | | 1,190,118 | |
| | | | | | | | |
| | | | 29,722,947 | |
|
| Vermont — 1.0% | |
University of Vermont & State Agricultural College, Refunding RB, 5.00%, 10/01/43 | | | 2,535 | | | | 2,851,064 | |
| | | | | | | | |
|
| Virginia — 1.8% | |
City of Lexington Virginia IDA, RB, Washington & Lee University, 5.00%, 01/01/43 | | | 945 | | | | 1,019,683 | |
Virginia Small Business Financing Authority, RB, Transform 66 P3 Project, AMT, 5.00%, 12/31/49 | | | 4,000 | | | | 4,283,000 | |
| | | | | | | | |
| | | | 5,302,683 | |
|
| Washington — 6.4% | |
City of Seattle Washington Municipal Light & Power, Refunding RB, Series A, 5.25%, 02/01/21(a) | | | 2,400 | | | | 2,567,616 | |
Port of Seattle Washington, ARB, AMT: | | | | | | | | |
Intermediate Lien, Series C, 5.00%, 05/01/37 | | | 2,485 | | | | 2,776,142 | |
Series A, 5.00%, 05/01/43 | | | 660 | | | | 726,838 | |
State of Washington, COP, Series B: | | | | | | | | |
5.00%, 07/01/36 | | | 1,000 | | | | 1,161,970 | |
5.00%, 07/01/38 | | | 1,155 | | | | 1,328,793 | |
State of Washington, GO: | | | | | | | | |
Series C, 5.00%, 02/01/36 | | | 7,565 | | | | 8,801,499 | |
Various Purposes, Series B, 5.25%, 02/01/21(a) | | | 1,865 | | | | 1,995,252 | |
| | | | | | | | |
| | | | 19,358,110 | |
|
| Wisconsin — 0.8% | |
Wisconsin Health & Educational Facilities Authority, Refunding RB, Milwaukee Regional Medical Center Thermal Service, 5.00%, 04/01/44 | | | 2,065 | | | | 2,322,299 | |
| | | | | | | | |
|
| Wyoming — 0.2% | |
State of Wyoming Municipal Power Agency, Inc., Refunding RB, Series A (BAM), 5.00%, 01/01/42 | | | 570 | | | | 633,179 | |
| | | | | | | | |
| |
Total Municipal Bonds — 130.8%
(Cost — $375,518,157) | | | | 392,869,283 | |
| | | | | | | | |
|
Municipal Bonds Transferred to Tender Option Bond Trusts(b) | |
| | |
California — 2.8% | | | | | | | | |
Sacramento Area Flood Control Agency, Refunding, Consolidated Capital Assessment District No. 2 Bonds, 5.00%, 10/01/47 | | | 7,499 | | | | 8,415,437 | |
| | | | | | | | |
| | |
| Colorado — 1.2% | | | | | | |
City & County of Denver Colorado Airport System Revenue, Refunding ARB, Sub-System, Series A, AMT, 5.25%, 12/01/43(c) | | | 3,262 | | | | 3,726,413 | |
| | | | | | | | |
| | |
| 16 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniHoldings Quality Fund II, Inc. (MUE) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Connecticut — 1.1% | | | | | | |
State of Connecticut Health & Educational Facility Authority, Refunding RB, Trinity Health Credit Group, 5.00%, 12/01/45 | | $ | 3,061 | | | $ | 3,361,805 | |
| | | | | | | | |
| | |
| Illinois — 3.3% | | | | | | |
City of Chicago Illionis Waterworks, Refunding RB, 2017 2nd Lien, Water Revenue Project (AGM), 5.25%, 11/01/33 | | | 760 | | | | 760,365 | |
State of Illinois Toll Highway Authority, RB: | | | | | | | | |
Series A, 5.00%, 01/01/40 | | | 1,980 | | | | 2,218,167 | |
Series B, 5.00%, 01/01/40 | | | 6,148 | | | | 6,777,868 | |
| | | | | | | | |
| | | | 9,756,400 | |
| | |
| Maryland — 0.9% | | | | | | |
City of Baltimore Maryland, RB, Wastewater Project, Series A, 5.00%, 07/01/46 | | | 2,499 | | | | 2,793,895 | |
| | | | | | | | |
| | |
| Nevada — 2.8% | | | | | | |
County of Clark Nevada Water Reclamation District, GO, Series B, 5.50%, 07/01/29(a) | | | 8,247 | | | | 8,377,966 | |
| | | | | | | | |
| | |
| New Jersey — 1.5% | | | | | | |
New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC, 5.25%, 10/01/29 | | | 3,041 | | | | 3,051,525 | |
New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B, 5.25%, 06/15/36(c) | | | 1,500 | | | | 1,563,717 | |
| | | | | | | | |
| | | | 4,615,242 | |
| | |
| New York — 6.5% | | | | | | |
City of New York Municipal Water Finance Authority, Refunding RB, Series FF, 5.00%, 06/15/45 | | | 5,958 | | | | 6,448,732 | |
New York Liberty Development Corp., ARB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43 | | | 7,515 | | | | 8,158,023 | |
New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51(c) | | | 4,400 | | | | 4,814,456 | |
| | | | | | | | |
| | | | 19,421,211 | |
| | |
| Pennsylvania — 4.0% | | | | | | |
Commonwealth of Pennsylvania, GO, 1st Series, 4.00%, 03/01/38(c) | | | 3,600 | | | | 3,723,552 | |
County of Northampton General Purpose Authority, Refunding RB, Lafayette College, 4.00%, 11/01/38(c) | | | 5,927 | | | | 6,113,697 | |
County of Westmoreland Pennsylvania Municipal Authority, Refunding RB, (BAM), 5.00%, 08/15/38 | | | 1,963 | | | | 2,189,278 | |
| | | | | | | | |
| | | | | | | 12,026,527 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Texas — 1.6% | | | | | | |
County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Baylor Health Care System Project, Series A, 5.00%, 11/15/38 | | $ | 4,296 | | | $ | 4,644,570 | |
| | | | | | | | |
| | |
| Utah — 0.9% | | | | | | |
City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 08/15/41(a) | | | 2,504 | | | | 2,548,760 | |
| | | | | | | | |
| | |
| Virginia — 1.4% | | | | | | |
County of Fairfax Virginia EDA, RB, Metrorail Parking System Project, 5.00%, 04/01/47(c) | | | 3,720 | | | | 4,196,569 | |
| | | | | | | | |
| |
Total Municipal Bonds Transferred to Tender Option Bond Trusts — 28.0%
(Cost — $82,018,433) | | | | 83,884,795 | |
| | | | | | | | |
| |
Total Long-Term Investments — 158.8%
(Cost — $457,536,590) | | | | 476,754,078 | |
| | | | | | | | |
| |
Total Investments — 158.8%
(Cost — $457,536,590) | | | | 476,754,078 | |
| |
Other Assets Less Liabilities — 1.3% | | | | 4,059,078 | |
| |
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (16.5)% | | | | (49,500,094 | ) |
| |
VMTP Shares, at Liquidation Value, Net of Deferred Offering Costs — (43.6)% | | | | (131,000,000 | ) |
| | | | | | | | |
| |
Net Assets Applicable to Common Shares — 100.0% | | | $ | 300,313,062 | |
| | | | | | | | |
| (a) | U.S. 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. |
| (b) | Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details. |
| (c) | All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between June 15, 2019 and November 1, 2026, is $13,124,918. See Note 4 of the Notes to Financial Statements for details. |
During the six months ended January 31, 2019, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Affiliate | | Shares
Held at
07/31/18 | | | Net
Activity | | | Shares
Held at
01/31/19 | | | Value at
01/31/19 | | | Income | | | Net
Realized
Gain (Loss) (a) | | | Change in
Unrealized
Appreciation
(Depreciation) | |
BlackRock Liquidity Funds, MuniCash, Institutional Class(b) | | | 2,901,453 | | | | (2,901,453 | ) | | | — | | | $ | — | | | $ | 47,459 | | | $ | 2,687 | | | $ | (289 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes net capital gain distributions, if applicable. | |
| | (b) | No longer held by the Fund as of period end. | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 17 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniHoldings Quality Fund II, Inc. (MUE) |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
| | | | | | | | | | | | | | | | |
| Description | | Number of
Contracts | | | Expiration
Date | | | Notional
Amount (000) | | | Value/
Unrealized
Appreciation
(Depreciation) | |
Short Contracts: | | | | | | | | | | | | | | | | |
10-Year U.S. Treasury Note | | | 58 | | | | 03/20/19 | | | $ | 7,103 | | | $ | (163,618 | ) |
Long U.S. Treasury Bond | | | 111 | | | | 03/20/19 | | | | 16,282 | | | | (714,355 | ) |
5-Year U.S. Treasury Note | | | 49 | | | | 03/29/19 | | | | 5,628 | | | | (99,356 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | $ | (977,329 | ) |
| | | | | | | | | | | | | | | | |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contracts | | | Credit
Contracts | | | Equity
Contracts | | | Foreign Currency Exchange Contracts | | | Interest
Rate Contracts | | | Other Contracts | | | Total | |
Liabilities — Derivative Financial Instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures Contracts | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized depreciation(a) . . . . . . . . . . . . . .. . . . | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 977,329 | | | $ | — | | | $ | 977,329 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes cumulative depreciation on futures contracts if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities. | |
For the six months ended January 31, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contract | | | Credit Contracts | | | Equity Contracts | | | Foreign Currency Exchange Contracts | | | Interest Rate Contracts | | | Other Contracts | | | Total | |
Net Realized Gain (Loss) from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 234,126 | | | $ | — | | | $ | 234,126 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Change in Unrealized Appreciation (Depreciation) on: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (1,051,783 | ) | | $ | — | | | $ | (1,051,783 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| | | | |
Futures contracts: | | | | |
Average notional value of contracts— short . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | | $ | 21,002,410 | |
| | | | |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Long-Term Investments(a) | | $ | — | | | $ | 476,754,078 | | | $ | — | | | $ | 476,754,078 | |
| | | | | | | | | | | | | | | | |
Derivative Financial Instruments(b) | | | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Interest rate contracts | | $ | (977,329 | ) | | $ | — | | | $ | — | | | $ | (977,329 | ) |
| | | | | | | | | | | | | | | | |
| | (a) | See above Schedule of Investments for values in each state or political subdivision. | |
| | (b) | Derivative financial instruments are futures contracts which are valued at the unrealized depreciation on the instrument. | |
| | |
| 18 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniHoldings Quality Fund II, Inc. (MUE) |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Liabilities: | | | | | | | | | | | | | | | | |
TOB Trust Certificates | | $ | — | | | $ | (49,352,286 | ) | | $ | — | | | $ | (49,352,286 | ) |
VMTP Shares at Liquidation Value | | | — | | | | (131,000,000 | ) | | | — | | | | (131,000,000 | ) |
| | | | | | | | | | | | | | | | |
| | $ | — | | | $ | (180,352,286 | ) | | $ | — | | | $ | (180,352,286 | ) |
| | | | | | | | | | | | | | | | |
During the six months ended January 31, 2019, there were no transfers between levels.
See notes to financial statements.
| | | | |
| SCHEDULES OF INVESTMENTS | | | 19 | |
| | |
Schedule of Investments (unaudited) January 31, 2019 | | BlackRock MuniYield California Quality Fund, Inc. (MCA) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
Municipal Bonds — 91.2% | | | | | | | | |
| | |
California — 91.2% | | | | | | | | |
| | |
| Corporate — 1.3% | | | | | | |
California Pollution Control Financing Authority, RB, San Jose Water Company Project, AMT, 4.75%, 11/01/46 | | $ | 4,000 | | | $ | 4,283,040 | |
City of Chula Vista California, Refunding RB, San Diego Gas & Electric, Series A, 5.88%, 02/15/34 | | | 2,435 | | | | 2,459,935 | |
| | | | | | | | |
| | | | | | | 6,742,975 | |
|
| County/City/Special District/School District — 30.3% | |
Chaffey Joint Union High School District, GO, CAB, Election of 2012, Series C(a): | | | | | | | | |
0.00%, 08/01/32 | | | 250 | | | | 157,338 | |
0.00%, 08/01/33 | | | 500 | | | | 297,535 | |
0.00%, 08/01/34 | | | 505 | | | | 287,431 | |
0.00%, 08/01/35 | | | 545 | | | | 296,126 | |
0.00%, 08/01/36 | | | 500 | | | | 258,725 | |
0.00%, 08/01/37 | | | 650 | | | | 321,074 | |
0.00%, 08/01/38 | | | 630 | | | | 296,932 | |
0.00%, 08/01/39 | | | 750 | | | | 336,187 | |
0.00%, 08/01/40 | | | 1,850 | | | | 789,395 | |
0.00%, 08/01/41 | | | 305 | | | | 123,961 | |
0.00%, 02/01/42 | | | 350 | | | | 138,936 | |
City & County of San Francisco California, COP, Port Facilities Project, Series C, AMT, 5.25%, 03/01/32 | | | 1,050 | | | | 1,165,920 | |
City of Sacramento California Transient Occupancy Tax Revenue, RB, Convention Center Complex, Series A, 5.00%, 06/01/48 | | | 3,750 | | | | 4,251,525 | |
County of Kern California, COP, Capital Improvements Projects, Series A (AGC), 6.00%, 02/01/19 | | | 2,000 | | | | 2,000,000 | |
County of Orange California Sanitation District, COP, Series A, 5.00%, 02/01/19 | | | 1,000 | | | | 1,000,000 | |
County of Orange California Water District, COP, Refunding, 5.25%, 08/15/19(b) | | | 9,045 | | | | 9,223,548 | |
County of San Joaquin California Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A, 6.00%, 03/01/21(b) | | | 2,755 | | | | 3,001,986 | |
El Monte City School District, GO, Los Angeles Country, California Series B, 5.50%, 08/01/46 | | | 4,265 | | | | 5,044,685 | |
Fowler Unified School District, GO, Election of 2016, Series A (BAM), 5.25%, 08/01/46 | | | 3,700 | | | | 4,286,931 | |
Garden Grove Unified School District, GO, Election of 2010, Series C, 5.25%, 08/01/37 | | | 2,725 | | | | 3,078,596 | |
Gavilan Joint Community College District, GO, Election of 2004, Series D(b): | | | | | | | | |
5.50%, 08/01/21 | | | 2,165 | | | | 2,378,815 | |
5.75%, 08/01/21 | | | 8,400 | | | | 9,280,740 | |
Grossmont California Healthcare District, GO, Election of 2006, Series B, 6.13%, 07/15/21(b) | | | 2,500 | | | | 2,776,775 | |
Grossmont California Union High School District, GO, Election of 2008, Series C, 5.50%, 08/01/21(b) | | | 1,880 | | | | 2,065,669 | |
Kern Community College District, GO, Safety Repair & Improvements, Series C, 5.25%, 11/01/32 | | | 5,715 | | | | 6,576,193 | |
Los Angeles Municipal Improvement Corp., Refunding LRB, Real Property, Series B (AGC), 5.50%, 04/01/19(b) | | | 2,075 | | | | 2,088,384 | |
Menifee Union School District, GO, Series B (BAM), 4.00%, 08/01/43 | | | 5,370 | | | | 5,451,194 | |
Mount San Antonio Community College District, GO, Refunding, Election of 2008, Series A, 5.00%, 08/01/34 | | | 4,500 | | | | 5,091,660 | |
Ohlone Community College District, GO, Election of 2010, Series A, 5.25%, 08/01/21(b) | | | 8,140 | | | | 8,894,252 | |
Orchard School District, GO, Election of 2001, Series A (AGC), 5.00%, 08/01/19(b) | | | 7,490 | | | | 7,617,929 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| County/City/Special District/School District (continued) | |
Perris Union High School District, GO, Election of 2012, Series B (BAM), 5.25%, 09/01/39 | | $ | 2,715 | | | $ | 3,152,549 | |
Riverside County Public Financing Authority, Tax Allocation Bonds, Series A (BAM), 4.00%, 10/01/40 | | | 2,455 | | | | 2,487,210 | |
RNR School Financing Authority, Special Tax Bonds, Community Facilities Distric No. 92-1, Series A (BAM): | | | | | | | | |
5.00%, 09/01/37 | | | 1,500 | | | | 1,694,310 | |
5.00%, 09/01/41 | | | 3,000 | | | | 3,341,400 | |
San Jose California Financing Authority, LRB, Convention Center Expansion & Renovation Project, Series A: | | | | | | | | |
5.75%, 05/01/36 | | | 2,570 | | | | 2,577,556 | |
5.75%, 05/01/42 | | | 4,500 | | | | 4,859,730 | |
San Jose California Financing Authority, Refunding LRB, Civic Center Project, Series A: | | | | | | | | |
5.00%, 06/01/32 | | | 3,375 | | | | 3,761,269 | |
5.00%, 06/01/39 | | | 5,800 | | | | 6,446,062 | |
San Juan Unified School District, GO, Election of 2002 (AGM), 5.00%, 08/01/20(b) | | | 6,475 | | | | 6,810,988 | |
San Leandro California Unified School District, GO, Election of 2010, Series A, 5.75%, 08/01/41 | | | 3,000 | | | | 3,270,570 | |
Snowline Joint Unified School District, COP, Refunding, Refining Project (AGC), 5.75%, 09/01/19(b) | | | 5,600 | | | | 5,735,352 | |
Walnut Valley Unified School District, GO, Election of 2007, Series B, 5.75%, 08/01/21(b) | | | 7,680 | | | | 8,485,248 | |
Washington Township Health Care District, GO, Election of 2004, Series B, 5.50%, 08/01/38 | | | 1,625 | | | | 1,895,481 | |
West Contra Costa California Unified School District, GO: | | | | | | | | |
Election of 2010, Series A (AGM), 5.25%, 08/01/21(b) | | | 6,140 | | | | 6,708,932 | |
Election of 2010, Series B, 5.50%, 08/01/39 | | | 3,000 | | | | 3,440,580 | |
Election of 2012, Series A, 5.50%, 08/01/39 | | | 2,500 | | | | 2,867,150 | |
| | | | | | | | |
| | | | | | | 156,112,829 | |
| | |
| Education — 7.0% | | | | | | |
California Educational Facilities Authority, RB, Series A, 5.00%, 10/01/53 | | | 10,000 | | | | 11,211,200 | |
California Municipal Finance Authority, RB, Emerson College, 6.00%, 01/01/22(b) | | | 2,750 | | | | 3,096,637 | |
California School Finance Authority, RB, Alliance for College-Ready Public Schools Projects, Series A, 5.00%, 07/01/36(c) | | | 755 | | | | 801,667 | |
California School Finance Authority, Refunding RB, Aspire Public Schools— Obligated Group, 5.00%, 08/01/46(c) | | | 1,250 | | | | 1,309,925 | |
California Statewide Communities Development Authority, RB,University of California, Irvine East Campus, Series A, 5.00%, 05/15/37 | | | 4,000 | | | | 4,452,200 | |
California Statewide Communities Development Authority, Refunding RB, CHF-Irvine LLC: | | | | | | | | |
5.00%, 05/15/33 | | | 2,625 | | | | 2,929,579 | |
5.00%, 05/15/40 | | | 2,250 | | | | 2,453,062 | |
University of California, RB, 5.25%, 05/15/36 | | | 3,680 | | | | 4,199,064 | |
University of California, Refunding RB, General, Series AZ, 5.25%, 05/15/58 | | | 5,000 | | | | 5,709,300 | |
| | | | | | | | |
| | | | 36,162,634 | |
| | |
| Health — 12.0% | | | | | | |
California Health Facilities Financing Authority, RB: | | | | | | | | |
Children’s Hospital, Series A, 5.25%, 11/01/41 | | | 10,000 | | | | 10,901,700 | |
Providence Health Services, Series B, 5.50%, 10/01/39 | | | 4,205 | | | | 4,306,803 | |
Sutter Health, Series B, 6.00%, 08/15/20(b) | | | 7,715 | | | | 8,235,917 | |
California Health Facilities Financing Authority, Refunding RB, Series A: | | | | | | | | |
Adventist Health System West, 4.00%, 03/01/43 | | | 1,400 | | | | 1,410,444 | |
Adventist Health System/West, 4.00%, 03/01/39 | | | 985 | | | | 1,003,843 | |
Catholic Healthcare West, 6.00%, 07/01/19(b) | | | 5,500 | | | | 5,599,330 | |
Dignity Health, 6.00%, 07/01/19(b) | | | 2,370 | | | | 2,412,802 | |
| | |
| 20 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield California Quality Fund, Inc. (MCA) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Health (continued) | | | | | | |
California Municipal Finance Authority, Refunding RB, Community Medical Centers, Series A, 5.00%, 02/01/42 | | $ | 4,000 | | | $ | 4,368,480 | |
California Statewide Communities Development Authority, RB: | | | | | | | | |
Green Bond, Marin General Hospital, 4.00%, 08/01/45 | | | 2,500 | | | | 2,511,225 | |
Huntington Memorial Hospital Project, 4.00%, 07/01/48 | | | 1,780 | | | | 1,767,754 | |
Methodist Hospital of Southern California, 4.25%, 01/01/43 | | | 4,550 | | | | 4,556,552 | |
Sutter Health, Series A, 6.00%, 08/15/20(b) | | | 4,130 | | | | 4,405,595 | |
California Statewide Communities Development Authority, Refunding RB: | | | | | | | | |
Front Porch Communities and Services, 4.00%, 04/01/42 | | | 2,595 | | | | 2,620,119 | |
Front Porch Communities and Services, 4.00%, 04/01/47 | | | 1,320 | | | | 1,321,769 | |
John Muir Health, Series A, 4.00%, 12/01/57 | | | 3,250 | | | | 3,205,637 | |
Trinity Health Credit Group Composite Issue, 5.00%, 12/01/41 | | | 2,860 | | | | 3,071,583 | |
| | | | | | | | |
| | | | | | | 61,699,553 | |
| | |
| State — 6.3% | | | | | | |
State of California, GO, Various Purposes: | | | | | | | | |
6.00%, 04/01/19(b) | | | 4,910 | | | | 4,945,548 | |
6.00%, 03/01/33 | | | 5,500 | | | | 5,756,245 | |
6.00%, 04/01/38 | | | 8,970 | | | | 9,028,395 | |
6.00%, 11/01/39 | | | 3,510 | | | | 3,614,563 | |
State of California Public Works Board, LRB: | | | | | | | | |
Department of Education, Riverside Campus Project, Series B, 6.50%, 04/01/19(b) | | | 3,670 | | | | 3,699,397 | |
Various Capital Projects, Series I, 5.50%, 11/01/33 | | | 2,575 | | | | 2,926,925 | |
Various Capital Projects, Sub-Series I-1, 6.13%, 11/01/19(b) | | | 2,615 | | | | 2,704,198 | |
| | | | | | | | |
| | | | | | | 32,675,271 | |
| | |
| Tobacco — 1.2% | | | | | | |
Golden State Tobacco Securitization Corp., Refunding RB,Series A-1: | | | | | | | | |
5.00%, 06/01/33 | | | 2,175 | | | | 2,425,234 | |
5.00%, 06/01/35 | | | 3,215 | | | | 3,555,275 | |
| | | | | | | | |
| | | | | | | 5,980,509 | |
| | |
| Transportation — 21.4% | | | | | | |
Alameda Corridor Transportation Authority, Refunding RB, 2nd Subordinate Lien, Series B, 5.00%, 10/01/35 | | | 1,500 | | | | 1,668,180 | |
California Municipal Finance Authority, ARB, AMT: | | | | | | | | |
Senior Lien, Linxs APM Project, 5.00%, 12/31/43 | | | 6,500 | | | | 7,090,330 | |
Senior Lien-Linxs APM Project, 4.00%, 12/31/47 | | | 7,500 | | | | 7,373,400 | |
City & County of San Francisco Airport Commission, Refunding RB, AMT, San Francisco International Airport, Series D, 5.00%, 05/01/43 | | | 7,715 | | | | 8,634,551 | |
City & County of San Francisco California Airports Commission, ARB: | | | | | | | | |
Second Series E, 6.00%, 05/01/19(b) | | | 745 | | | | 753,106 | |
Second Series E, 6.00%, 05/01/39 | | | 8,905 | | | | 9,001,886 | |
Special Facility Lease, SFO Fuel, Series A, AMT (AGM), 6.10%, 01/01/20 | | | 190 | | | | 190,684 | |
Special Facility Lease, SFO Fuel, Series A, AMT (AGM), 6.13%, 01/01/27 | | | 985 | | | | 992,003 | |
City & County of San Francisco California Airports Commission, Refunding ARB, AMT, Series A: | | | | | | | | |
2nd, 5.25%, 05/01/33 | | | 1,900 | | | | 2,121,958 | |
5.00%, 05/01/40 | | | 3,785 | | | | 4,184,280 | |
5.00%, 05/01/44(d) | | | 6,000 | | | | 6,768,240 | |
5.00%, 05/01/44 | | | 2,660 | | | | 2,910,732 | |
5.00%, 05/01/49(d) | | | 3,500 | | | | 3,928,890 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Transportation (continued) | | | | | | |
City of Los Angeles California Department of Airports, ARB: | | | | | | | | |
Los Angeles International Airoport, Sub-Series B, 5.00%, 05/15/40 | | $ | 2,500 | | | $ | 2,595,575 | |
Series D, AMT, 5.00%, 05/15/35 | | | 2,000 | | | | 2,255,400 | |
Series D, AMT, 5.00%, 05/15/36 | | | 1,500 | | | | 1,686,945 | |
City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Senior Series A, 5.25%, 05/15/29 | | | 3,760 | | | | 3,800,946 | |
City of Los Angeles Department of Airports, ARB, AMT, Subordinate, Series C, 5.00%, 05/15/38 | | | 3,215 | | | | 3,644,267 | |
City of San Jose California, Refunding ARB, Norman Y Mineta San Jose International Airport SJC, AMT: | | | | | | | | |
Series A, 5.00%, 03/01/41 | | | 3,075 | | | | 3,410,636 | |
Series A, 5.00%, 03/01/47 | | | 6,770 | | | | 7,463,790 | |
Series A-1, 6.25%, 03/01/34 | | | 1,400 | | | | 1,511,986 | |
County of Sacramento California Airport System Revenue, Refunding ARB: | | | | | | | | |
Airport System Subordinate Revenue, Sub-Series B, 5.00%, 07/01/41 | | | 1,750 | | | | 1,947,715 | |
Senior Series A, 5.00%, 07/01/41 | | | 2,500 | | | | 2,791,150 | |
County of San Bernardino California Transportation Authority, RB, Series A, 5.25%, 03/01/40 | | | 4,500 | | | | 5,148,585 | |
County of San Diego California Regional Airport Authority, Refunding ARB, Series B, 5.00%, 07/01/40 | | | 6,350 | | | | 6,608,635 | |
County of San Diego Regional Airport Authority, ARB, Subordinate, Series B, AMT, 5.00%, 07/01/47 | | | 6,000 | | | | 6,622,920 | |
Port of Los Angeles California Harbor Department, RB, Series B, 5.25%, 08/01/19(b) | | | 4,530 | | | | 4,614,032 | |
Port of Los Angeles California Harbor Department, Refunding RB, Series A, AMT, 5.00%, 08/01/44 | | | 200 | | | | 222,038 | |
| | | | | | | | |
| | | | | | | 109,942,860 | |
| | |
| Utilities — 11.7% | | | | | | |
Anaheim Public Financing Authority, RB, Electric System Distribution Facilities, Series A, 5.38%, 04/01/21(b) | | | 5,000 | | | | 5,416,550 | |
City of Los Angeles California Department of Water & Power, Refunding RB, Water System, Series A, 5.25%, 07/01/39 | | | 8,000 | | | | 8,501,360 | |
City of Los Angeles California Wastewater System Revenue, Refunding RB, Sub-Series A: | | | | | | | | |
5.00%, 06/01/20(b) | | | 1,325 | | | | 1,385,234 | |
5.00%, 06/01/28 | | | 675 | | | | 703,681 | |
City of San Francisco California Public Utilities Commission Water Revenue, RB, Sub-Series A, 5.00%, 11/01/37 | | | 10,000 | | | | 10,899,800 | |
City of San Francisco California Public Utilities Commission Water Revenue, Refunding RB, Series A: | | | | | | | | |
5.25%, 11/01/19(b) | | | 6,280 | | | | 6,453,830 | |
5.00%, 11/01/36 | | | 3,335 | | | | 3,811,872 | |
Dublin-San Ramon Services District Water Revenue, Refunding RB, 6.00%, 02/01/21(b) | | | 4,000 | | | | 4,352,720 | |
East Bay California Municipal Utility District Water System Revenue, Refunding RB, Sub-Series A, 5.00%, 06/01/20(b) | | | 5,000 | | | | 5,230,650 | |
El Dorado Irrigation District/El Dorado County Water Agency, Refunding RB, Series A (AGM), 5.25%, 03/01/39 | | | 5,000 | | | | 5,689,800 | |
San Diego Public Facilities Financing Authority, RB, Subordinate, Series A, 5.25%, 08/01/47 | | | 5,000 | | | | 5,860,150 | |
San Diego Public Facilities Financing Authority Sewer, Refunding RB, Senior Series A, 5.25%, 05/15/19(b) | | | 2,000 | | | | 2,021,380 | |
| | | | | | | | |
| | | | | | | 60,327,027 | |
| | | | | | | | |
| |
Total Municipal Bonds — 91.2%
(Cost — $450,810,679) | | | | 469,643,658 | |
| | | | | | | | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 21 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield California Quality Fund, Inc. (MCA) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| Municipal Bonds Transferred to Tender Option Bond Trusts(e) | |
| | |
California — 82.6% | | | | | | | | |
| | |
| County/City/Special District/School District — 28.7% | | | | | | |
California Municipal Finance Authority, RB, Orange County Civic Center Infrastructure, 5.00%, 06/01/48 | | $ | 9,500 | | | $ | 10,704,457 | |
County of Riverside California Public Financing Authority, RB, Capital Facilities Project, 5.25%, 11/01/45 | | | 10,000 | | | | 11,538,600 | |
County of San Luis California Obispo Community College District, GO, Refunding Election of 2014, Series A, 4.00%, 08/01/40 | | | 6,585 | | | | 6,747,475 | |
County of San Mateo California Community College District, GO, Election of 2014, Series A, 5.00%, 09/01/45 | | | 17,615 | | | | 20,018,141 | |
Fremont Union High School District, GO, Refunding Series A, 4.00%, 08/01/46 | | | 5,000 | | | | 5,200,925 | |
Los Angeles California Unified School District, GO: | | | | | | | | |
Election of 2008, Series B-1, 5.25%, 07/01/42(f) | | | 7,075 | | | | 8,338,779 | |
Series I, 5.00%, 01/01/34 | | | 5,000 | | | | 5,060,375 | |
Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A, 6.00%, 08/01/19(b) | | | 9,596 | | | | 9,807,106 | |
Los Angeles County Facilities Inc., RB, Vermont Corridor County Administration Building, Series A, 5.00%, 12/01/51(f) | | | 11,420 | | | | 12,883,897 | |
Los Rios Community College District, GO, Election of 2008, Series A, 5.00%, 08/01/20(b) | | | 11,000 | | | | 11,552,420 | |
Palomar Community College District, GO, Election of 2006, Series C, 5.00%, 08/01/44 | | | 15,140 | | | | 17,196,088 | |
Sacramento Area Flood Control Agency, Refunding, Consolidated Capital Assessment District No. 2, Series A, 5.00%, 10/01/43 | | | 10,005 | | | | 11,276,202 | |
West Valley-Mission Community College District, GO, Election of 2012, Series B, 4.00%, 08/01/40 | | | 17,000 | | | | 17,689,265 | |
| | | | | | | | |
| | | | 148,013,730 | |
|
| Education — 11.7% | |
University of California, RB: | | | | | | | | |
Series AM, 5.25%, 05/15/44 | | | 9,210 | | | | 10,372,256 | |
Series O, 5.75%, 05/15/19(b) | | | 11,193 | | | | 11,323,672 | |
University of California, Refunding RB: | | | | | | | | |
Series A, 5.00%, 11/01/43 | | | 13,002 | | | | 14,640,789 | |
Series I, 5.00%, 05/15/40 | | | 21,105 | | | | 23,663,951 | |
| | | | | | | | |
| | | | 60,000,668 | |
|
| Health — 19.1% | |
California Health Facilities Financing Authority, Refunding RB, Kaiser Permanent, Sub-Series A-2, 4.00%, 11/01/44 | | | 13,280 | | | | 13,542,081 | |
California Health Facilities Financing Authority, RB: | | | | | | | | |
Lucile Salter Packard Children’s Hospital at Stanford, 5.00%, 11/15/56 | | | 6,000 | | | | 6,565,760 | |
Sutter Health, Series A, 4.00%, 11/15/42 | | | 7,500 | | | | 7,605,150 | |
Sutter Health, Series A, 5.00%, 08/15/52 | | | 10,000 | | | | 10,730,850 | |
California Health Facilities Financing Authority, Refunding RB: | | | | | | | | |
Lucile Salter Packard Children’s Hospital, Series B, 5.00%, 08/15/55 | | | 4,500 | | | | 4,921,594 | |
Providence St. Joseph Health, Series A, 4.00%, 10/01/47 | | | 6,018 | | | | 6,084,838 | |
Sutter Health, Series A, 5.00%, 08/15/43 | | | 24,940 | | | | 27,437,990 | |
California Statewide Communities Development Authority, RB, Kaiser Permanente, Series A, 5.00%, 04/01/42 | | | 19,860 | | | | 21,263,705 | |
| | | | | | | | |
| | | | 98,151,968 | |
|
| State — 0.7% | |
State of California, GO, Refunding, Various Purpose, 5.25%, 10/01/39 | | | 3,000 | | | | 3,443,760 | |
| | | | | | | | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| Transportation — 9.5% | |
Bay Area Toll Authority, Refunding RB, San Francisco Bay Area Toll Bridge(f): | | | | | | | | |
4.00%, 04/01/42 | | $ | 11,250 | | | $ | 11,525,221 | |
4.00%, 04/01/49 | | | 6,555 | | | | 6,682,866 | |
City of Los Angeles California Department of Airports, ARB, AMT: | | | | | | | | |
Los Angeles International Airport, Series B, 5.00%, 05/15/46 | | | 5,000 | | | | 5,507,075 | |
Series D, 5.00%, 05/15/41 | | | 13,311 | | | | 14,859,018 | |
City of Los Angeles California Department of Airports, RB, AMT: | | | | | | | | |
Los Angeles International Airport, Series B, 5.00%, 05/15/41 | | | 3,641 | | | | 4,030,934 | |
Senior Revenue, Series A, 5.00%, 05/15/40 | | | 5,500 | | | | 6,144,050 | |
| | | | | | | | |
| | | | 48,749,164 | |
|
| Utilities — 12.9% | |
Anaheim Public Financing Authority, Refunding RB, Anaheim Convention Center Expansion Project, Series A: | | | | | | | | |
5.00%, 05/01/39 | | | 6,000 | | | | 6,637,980 | |
5.00%, 05/01/46 | | | 13,500 | | | | 14,818,815 | |
Beaumont Public Improvement Authority, RB, Series A (AGM), 5.00%, 09/01/49 | | | 6,000 | | | | 6,881,900 | |
City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/19(b) | | | 4,380 | | | | 4,491,909 | |
City of Los Angeles California Wastewater System Revenue, RB, Green Bonds, Series A, 5.00%, 06/01/44 | | | 6,290 | | | | 7,118,204 | |
City of Sacramento California Water Revenue, RB, 5.25%, 09/01/47 | | | 14,825 | | | | 17,281,436 | |
Los Angeles Department of Water, Refunding RB, Series A, 5.00%, 07/01/46 | | | 8,413 | | | | 9,408,494 | |
| | | | | | | | |
| | | | | | | 66,638,738 | |
| | | | | | | | |
| |
Total Municipal Bonds Transferred to Tender Option Bond Trusts — 82.6%
(Cost — $418,890,289) | | | | 424,998,028 | |
| | | | | | | | |
| |
Total Long-Term Investments — 173.8%
(Cost — $869,700,968) | | | | 894,641,686 | |
| | | | | | | | |
| | |
| | | Shares | | | | |
| | |
| Short-Term Securities — 0.1% | | | | | | |
BlackRock Liquidity Funds California Money Fund, Institutional Class, 0.87%(g)(h) | | | 249,795 | | | | 249,845 | |
| | | | | | | | |
| |
Total Short-Term Securities — 0.1%
(Cost — $249,845) | | | | 249,845 | |
| | | | | | | | |
| |
Total Investments — 173.9%
(Cost — $869,950,813) | | | | 894,891,531 | |
| |
Liabilities in Excess of Other Assets — (0.1)% | | | | (206,556 | ) |
| |
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (41.5)% | | | | (213,724,464 | ) |
| |
VRDP Shares, at Liquidation Value, Net of Deferred Offering Costs — (32.3)% | | | | (166,245,364 | ) |
| | | | | | | | |
| |
Net Assets Applicable to Common Shares — 100.0% | | | $ | 514,715,147 | |
| | | | | | | | |
| (b) | U.S. 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) | 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. |
| | |
| 22 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield California Quality Fund, Inc. (MCA) |
| (d) | When-issued security. |
| (e) | Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details. |
| (f) | All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between April 1, 2025 to June 1, 2026 is $25,985,300. See Note 4 of the Notes to Financial Statements for details. |
| (g) | Annualized 7-day yield as of period end. |
| (h) | During the six months ended January 31, 2019, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Affiliate | | Shares
Held at
07/31/18 | | | Net
Activity | | | Shares
Held at
01/31/19 | | | Value at
01/31/19 | | | Income | | | Net Realized Gain (Loss) (a) | | | Change in
Unrealized
Appreciation
(Depreciation) | |
BlackRock Liquidity Funds California Money Fund, Institutional Class | | | — | | | | 249,795 | | | | 249,795 | | | $ | 249,845 | | | $ | 5,885 | | | $ | — | | | $ | — | |
BlackRock Liquidity Funds, MuniCash, Institutional Class | | | 349,727 | | | | (349,727 | ) | | | — | | | | — | | | | 8,242 | | | | (11 | ) | | | (25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | $ | 249,845 | | | $ | 14,127 | | | $ | (11 | ) | | $ | (25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes net capital gain distributions, if applicable. | |
For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
| | | | | | | | | | | | | | | | |
| Description | | Number of
Contracts | | | Expiration
Date | | | Notional
Amount (000) | | | Value/
Unrealized
Appreciation
(Depreciation) | |
Short Contracts: | | | | | | | | | | | | | | | | |
10-Year U.S. Treasury Note | | | 150 | | | | 03/20/19 | | | $ | 18,370 | | | $ | (391,539 | ) |
Long U.S. Treasury Bond | | | 216 | | | | 03/20/19 | | | | 31,685 | | | | (1,595,518 | ) |
5-Year U.S. Treasury Note | | | 44 | | | | 03/29/19 | | | | 5,054 | | | | (86,574 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | $ | (2,073,631 | ) |
| | | | | | | | | | | | | | | | |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contracts | | | Credit
Contracts | | | Equity
Contracts | | | Foreign
Currency
Exchange
Contracts | | | Interest
Rate
Contracts | | | Other
Contracts | | | Total | |
Liabilities — Derivative Financial Instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized depreciation(a) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 2,073,631 | | | $ | — | | | $ | 2,073,631 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes cumulative appreciation (depreciation) on futures contracts if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities. | |
For the six months ended January 31, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contracts | | | Credit
Contracts | | | Equity
Contracts | | | Foreign
Currency
Exchange
Contracts | | | Interest
Rate
Contracts | | | Other
Contracts | | | Total | |
Net Realized Gain (Loss) from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 574,423 | | | $ | — | | | $ | 574,423 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Change in Unrealized Appreciation (Depreciation) on: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (2,141,292 | ) | | $ | — | | | $ | (2,141,292 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 23 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield California Quality Fund, Inc. (MCA) |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| | | | |
Futures contracts: | | | | |
Average notional value of contracts — short | | $ | 40,865,016 | |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Long-Term Investments(a) | | $ | — | | | $ | 894,641,686 | | | $ | — | | | $ | 894,641,686 | |
Short-Term Securities | | | 249,845 | | | | — | | | | — | | | | 249,845 | |
| | | | | | | | | | | | | | | | |
| | $ | 249,845 | | | $ | 894,641,686 | | | $ | — | | | $ | 894,891,531 | |
| | | | | | | | | | | | | | | | |
Derivative Financial Instruments(b) | | | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Interest rate contracts | | $ | (2,073,631 | ) | | $ | — | | | $ | — | | | $ | (2,073,631 | ) |
| | | | | | | | | | | | | | | | |
| | (a) | See above Schedule of Investments for values in each sector. | |
| | (b) | Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument. | |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Liabilities: | | | | | | | | | | | | | | | | |
TOB trust certificates | | $ | — | | | $ | (212,664,205 | ) | | $ | — | | | $ | (212,664,205 | ) |
VRDP Shares at Liquidation Value | | | — | | | | (166,500,000 | ) | | | — | | | | (166,500,000 | ) |
| | | | | | | | | | | | | | | | |
| | $ | — | | | $ | (379,164,205 | ) | | $ | — | | | $ | (379,164,205 | ) |
| | | | | | | | | | | | | | | | |
During the six months ended January 31, 2019, there were no transfers between levels.
See notes to financial statements.
| | |
| 24 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) January 31, 2019 | | BlackRock MuniYield New York Quality Fund, Inc. (MYN) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
Municipal Bonds — 127.2% | | | | | | | | |
| | |
New York — 125.6% | | | | | | | | |
| | |
| Corporate — 2.9% | | | | | | |
City of New York Industrial Development Agency, Refunding RB, Transportation Infrastructure Properties LLC, Series A, AMT, 5.00%, 07/01/28 | | $ | 930 | | | $ | 993,231 | |
New York Liberty Development Corp., Refunding RB, Goldman Sachs Headquarters, 5.25%, 10/01/35 | | | 12,070 | | | | 14,735,780 | |
| | | | | | | | |
| | | | | | | 15,729,011 | |
|
| County/City/Special District/School District — 22.6% | |
City of New York, GO, Refunding: | | | | | | | | |
Fiscal 2012, Series I, 5.00%, 08/01/32 | | | 490 | | | | 534,144 | |
Fiscal 2014, Series E, 5.00%, 08/01/32 | | | 2,040 | | | | 2,281,169 | |
Series E, 5.50%, 08/01/25 | | | 5,435 | | | | 6,268,512 | |
City of New York, GO: | | | | | | | | |
Series A-1, 5.00%, 08/01/35 | | | 1,950 | | | | 2,086,091 | |
Sub-Series A-1, 5.00%, 08/01/33 | | | 2,100 | | | | 2,345,406 | |
Sub-Series D-1, 5.00%, 10/01/33 | | | 8,350 | | | | 8,981,677 | |
Sub-Series D-1, Fiscal 2014, 5.00%, 08/01/31 | | | 1,300 | | | | 1,455,454 | |
City of New York Convention Center Development Corp., RB, CAB, Sub Lien, Hotel Unit Fee, Series B (AGM), 0.00%, 11/15/56(a) | | | 7,825 | | | | 1,609,446 | |
City of New York Convention Center Development Corp., Refunding RB, Hotel Unit Fee Secured: | | | | | | | | |
5.00%, 11/15/40 | | | 7,370 | | | | 8,253,589 | |
5.00%, 11/15/45 | | | 13,995 | | | | 15,609,183 | |
City of New York New York Industrial Development Agency, RB, PILOT: | | | | | | | | |
(AMBAC), 5.00%, 01/01/39 | | | 1,750 | | | | 1,773,695 | |
CAB, Yankee Stadium Project, Series A (AGC), 0.00%, 03/01/39(a) | | | 5,000 | | | | 2,266,650 | |
CAB, Yankee Stadium Project, Series A (AGC), 0.00%, 03/01/43(a) | | | 4,330 | | | | 1,595,605 | |
Queens Baseball Stadium (AGC), 6.38%, 01/01/39 | | | 1,000 | | | | 1,003,550 | |
Queens Baseball Stadium (AMBAC), 5.00%, 01/01/36 | | | 6,400 | | | | 6,417,792 | |
Yankee Stadium Project (NPFGC), 5.00%, 03/01/36 | | | 2,250 | | | | 2,254,410 | |
Yankee Stadium Project (NPFGC), 5.00%, 03/01/46 | | | 9,650 | | | | 9,704,426 | |
City of New York Transitional Finance Authority Future Tax Secured, RB: | | | | | | | | |
Future Tax Secured, Sub-Series A-3, 4.00%, 08/01/43 | | | 3,320 | | | | 3,413,956 | |
Future Tax Secured, Sub-Series E-1, 5.00%, 02/01/43 | | | 975 | | | | 1,094,964 | |
Series A-2, 5.00%, 08/01/38 | | | 4,105 | | | | 4,689,962 | |
Sub-Series B-1, 5.00%, 11/01/35 | | | 2,510 | | | | 2,820,336 | |
County of Nassau New York, GO, Series A, 5.00%, 01/15/31 | | | 1,770 | | | | 2,032,119 | |
County of Nassau New York, GOL, Series B, General Improvement Bonds (AGM), 5.00%, 07/01/45 | | | 2,185 | | | | 2,453,187 | |
Hudson Yards Infrastructure Corp., Refunding RB, Series A: | | | | | | | | |
5.00%, 02/15/39 | | | 800 | | | | 904,888 | |
5.00%, 02/15/42 | | | 6,225 | | | | 6,994,161 | |
Metropolitan Transportation Authority Hudson Rail Yards Trust Obligations, Refunding RB, Series A, 5.00%, 11/15/56 | | | 5,655 | | | | 6,050,850 | |
New York Convention Center Development Corp., RB, Hotel Unit Fee Secured, Series B(a): | | | | | | | | |
0.00%, 11/15/42 | | | 2,640 | | | | 964,366 | |
0.00%, 11/15/47 | | | 6,740 | | | | 1,953,319 | |
0.00%, 11/15/48 | | | 3,550 | | | | 982,605 | |
New York Liberty Development Corp., Refunding RB: | | | | | | | | |
4 World Trade Center Project, 5.00%, 11/15/31 | | | 2,570 | | | | 2,758,664 | |
4 World Trade Center Project, 5.00%, 11/15/44 | | | 2,000 | | | | 2,131,760 | |
4 World Trade Center Project, 5.75%, 11/15/51 | | | 3,000 | | | | 3,288,180 | |
7 World Trade Center Project, Class 1, 4.00%, 09/15/35 | | | 1,090 | | | | 1,136,663 | |
7 World Trade Center Project, Class 2, 5.00%, 09/15/43 | | | 3,725 | | | | 4,001,060 | |
| | | | | | | | |
| | | | | | | 122,111,839 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| Education — 25.5% | |
Albany Capital Resource Corp., Refunding RB, Albany College of Pharmacy and Health Sciences, Series A: | | | | | | | | |
5.00%, 12/01/31 | | $ | 250 | | | $ | 274,568 | |
5.00%, 12/01/32 | | | 100 | | | | 109,270 | |
Amherst Development Corp., Refunding RB, University at Buffalo Foundation Faculty-Student Housing Corp., Series A (AGM), 4.63%, 10/01/20(b) | | | 2,000 | | | | 2,097,240 | |
Build NYC Resource Corp., Refunding RB: | | | | | | | | |
City University Queens College, Series A, 5.00%, 06/01/43 | | | 525 | | | | 583,123 | |
Manhattan College Project, 4.00%, 08/01/42 | | | 975 | | | | 988,328 | |
City of Albany New York Capital Resource Corp., Refunding RB, Albany College of Pharmacy and Health Sciences, Series A, 4.00%, 12/01/34 | | | 110 | | | | 111,711 | |
City of New York Trust for Cultural Resources, Refunding RB, Series A: | | | | | | | | |
American Museum of Natural History, 5.00%, 07/01/37 | | | 2,265 | | | | 2,565,656 | |
American Museum of Natural History, 5.00%, 07/01/41 | | | 825 | | | | 927,820 | |
Carnegie Hall, 4.75%, 12/01/39 | | | 3,550 | | | | 3,620,574 | |
Carnegie Hall, 5.00%, 12/01/39 | | | 2,150 | | | | 2,200,847 | |
Wildlife Conservation Society, 5.00%, 08/01/42 | | | 750 | | | | 828,855 | |
City of Troy New York Capital Resource Corp., Refunding RB, Rensselaer Polytechnic Institute Project, Series A, 5.13%, 09/01/40 | | | 5,740 | | | | 5,974,766 | |
Counties of Buffalo & Erie New York Industrial Development Agency, RB, City School District of Buffalo Project, Series A: | | | | | | | | |
5.25%, 05/01/31 | | | 2,305 | | | | 2,476,769 | |
5.25%, 05/01/32 | | | 1,000 | | | | 1,071,090 | |
Counties of Buffalo & Erie New York Industrial Development Agency, Refunding RB, City School District of Buffalo Project: | | | | | | | | |
5.00%, 05/01/28 | | | 750 | | | | 888,623 | |
Series A, 5.00%, 05/01/29 | | | 4,060 | | | | 4,793,601 | |
Counties of Buffalo & Erie New York Industrial Land Development Corp., Refunding RB, Buffalo State College Foundation Housing Corp. Project, Series A, 5.38%, 10/01/41 | | | 1,040 | | | | 1,111,250 | |
County of Dutchess New York Local Development Corp., RB, Marist College Project: | | | | | | | | |
5.00%, 07/01/43 | | | 685 | | | | 778,509 | |
5.00%, 07/01/48 | | | 1,030 | | | | 1,167,042 | |
County of Dutchess New York Local Development Corp., Refunding RB, Vassar College Project: | | | | | | | | |
5.00%, 07/01/42 | | | 1,180 | | | | 1,336,975 | |
4.00%, 07/01/46 | | | 2,235 | | | | 2,297,669 | |
County of Madison New York Capital Resource Corp., RB, Colgate University Project, Series B: | | | | | | | | |
5.00%, 07/01/40 | | | 815 | | | | 917,397 | |
5.00%, 07/01/43 | | | 2,940 | | | | 3,302,061 | |
County of Monroe New York Industrial Development Corp., RB, University of Rochester Project, Series B, 4.50%, 07/01/21(b) | | | 3,885 | | | | 4,151,045 | |
County of Monroe New York Industrial Development Corp., Refunding RB, University of Rochester Project: | | | | | | | | |
Series A, 5.00%, 07/01/23(b) | | | 1,440 | | | | 1,643,616 | |
Series A, 4.00%, 07/01/39 | | | 500 | | | | 516,840 | |
Series C, 4.00%, 07/01/43 | | | 1,000 | | | | 1,033,180 | |
County of Onondaga New York, RB, Syracuse University Project: | | | | | | | | |
5.00%, 12/01/30 | | | 1,190 | | | | 1,288,913 | |
5.00%, 12/01/36 | | | 1,150 | | | | 1,239,332 | |
County of St. Lawrence New York Industrial Development Agency, RB, Clarkson University Project, 5.38%, 09/01/41 | | | 500 | | | | 533,810 | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 25 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield New York Quality Fund, Inc. (MYN) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| Education (continued) | |
County of Tompkins New York Development Corp., RB, Ithaca College Project (AGM)(b): | | | | | | | | |
5.25%, 01/01/21 | | $ | 860 | | | $ | 917,414 | |
5.50%, 01/01/21 | | | 500 | | | | 535,715 | |
County of Tompkins New York Industrial Development Agency, RB, Civic Facility Cornell University Project, Series A, 5.00%, 07/01/37 | | | 675 | | | | 702,878 | |
State of New York Dormitory Authority, RB: | | | | | | | | |
Convent of the Sacred Heart (AGM), 5.75%, 11/01/40 | | | 2,075 | | | | 2,238,489 | |
Fordham University, Series A,
5.00%, 07/01/21(b) | | | 325 | | | | 351,078 | |
Fordham University, Series A,
5.50%, 07/01/21(b) | | | 1,550 | | | | 1,692,615 | |
General Purpose, Series A, 5.00%, 02/15/36 | | | 5,500 | | | | 6,064,025 | |
New School (AGM), 5.50%, 07/01/20(b) | | | 4,050 | | | | 4,266,715 | |
New York University Mount Sinai School of Medicine, 5.13%, 07/01/19(b) | | | 665 | | | | 674,410 | |
New York University, Series 1 (AMBAC), 5.50%, 07/01/40 | | | 4,580 | | | | 5,918,734 | |
New York University, Series B,
5.00%, 07/01/19(b) | | | 1,000 | | | | 1,013,850 | |
New York University, Series B, 5.00%, 07/01/37 | | | 600 | | | | 655,692 | |
New York University, Series B, 5.00%, 07/01/42 | | | 3,240 | | | | 3,531,794 | |
State University Dormitory Facilities, Series A, 5.00%, 07/01/35 | | | 800 | | | | 833,488 | |
State University Dormitory Facilities, Series A, 5.00%, 07/01/40 | | | 2,035 | | | | 2,114,406 | |
State University Dormitory Facilities, Series A, 5.00%, 07/01/41 | | | 1,500 | | | | 1,599,060 | |
State of New York Dormitory Authority, Refunding RB: | | | | | | | | |
3rd General Resolution, State University Educational Facilities Issue, Series A, 5.00%, 05/15/29 | | | 1,000 | | | | 1,095,100 | |
Barnard College, Series A, 5.00%, 07/01/34 | | | 1,150 | | | | 1,316,313 | |
Barnard College, Series A, 4.00%, 07/01/37 | | | 240 | | | | 248,364 | |
Barnard College, Series A, 5.00%, 07/01/43 | | | 2,520 | | | | 2,839,939 | |
Cornell University, Series A, 5.00%, 07/01/40 | | | 700 | | | | 728,609 | |
Fordham University, 5.00%, 07/01/44 | | | 2,130 | | | | 2,338,932 | |
Icahn School of Medicine at Mount Sinai, Series A, 5.00%, 07/01/35 | | | 1,380 | | | | 1,547,477 | |
New York University, Series A, 5.00%, 07/01/31 | | | 3,955 | | | | 4,342,590 | |
New York University, Series A, 5.00%, 07/01/37 | | | 4,775 | | | | 5,218,215 | |
Pratt Institute, 5.00%, 07/01/46 | | | 910 | | | | 1,001,491 | |
Rochester Institute of Technology, 5.00%, 07/01/42 | | | 750 | | | | 807,825 | |
Series B, 5.00%, 02/15/37 | | | 2,130 | | | | 2,445,048 | |
Series E, 5.25%, 03/15/33 | | | 2,250 | | | | 2,623,477 | |
St. John’s University, Series A, 5.00%, 07/01/37 | | | 2,240 | | | | 2,525,802 | |
State University Dormitory Facilities, Series A, 5.25%, 07/01/30 | | | 4,195 | | | | 4,744,755 | |
State University Dormitory Facilities, Series A, 5.25%, 07/01/31 | | | 8,735 | | | | 9,871,860 | |
State University Dormitory Facilities, Series A, 5.00%, 07/01/42 | | | 1,490 | | | | 1,613,998 | |
State University Dormitory Facilities, Series A, 5.00%, 07/01/46 | | | 2,490 | | | | 2,802,420 | |
State University Dormitory Facilities, Series B, 5.00%, 07/01/32 | | | 500 | | | | 572,625 | |
State University Dormitory Facilities, Series B, 5.00%, 07/01/33 | | | 1,140 | | | | 1,300,523 | |
State University of New York Dormitory Facilities, Series A, 5.00%, 07/01/38 | | | 1,475 | | | | 1,683,344 | |
Town of Hempstead New York Local Development Corp., Refunding RB, Hofstra University Project, 5.00%, 07/01/47 | | | 1,645 | | | | 1,838,584 | |
| | | | | | | | |
| | | | | | | 137,448,134 | |
| | |
| Health — 9.2% | | | | | | |
City of New York Health & Hospital Corp., Refunding RB, Health System, Series A, 5.00%, 02/15/30 | | | 2,200 | | | | 2,262,194 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Health (continued) | | | | | | |
County of Dutchess New York Industrial Development Agency, RB, Vassar Brothers Medical Center (AGC): | | | | | | | | |
5.50%, 04/01/30 | | $ | 250 | | | $ | 264,110 | |
5.50%, 04/01/34 | | | 490 | | | | 517,494 | |
County of Dutchess New York Local Development Corp., RB, Health Quest Systems, Inc., Series B, 4.00%, 07/01/41 | | | 3,305 | | | | 3,315,444 | |
County of Monroe New York Industrial Development Corp., RB, Rochester General Hospital Project: | | | | | | | | |
4.00%, 12/01/41 | | | 800 | | | | 802,632 | |
5.00%, 12/01/46 | | | 1,280 | | | | 1,398,464 | |
Series A, 5.00%, 12/01/32 | | | 830 | | | | 901,422 | |
Series A, 5.00%, 12/01/37 | | | 350 | | | | 377,601 | |
County of Monroe New York Industrial Development Corp., Refunding RB, Unity Hospital of Rochester Project (FHA), 5.50%, 08/15/40 | | | 5,650 | | | | 6,042,731 | |
County of Suffolk New York EDC, RB, Catholic Health Services, Series C, 5.00%, 07/01/32 | | | 625 | | | | 678,506 | |
County of Westchester New York Healthcare Corp., Refunding RB, Senior Lien, Remarketing, Series A, 5.00%, 11/01/30 | | | 1,790 | | | | 1,883,957 | |
State of New York Dormitory Authority, RB: | | | | | | | | |
Healthcare, Series A, 5.00%, 03/15/19(b) | | | 2,000 | | | | 2,008,000 | |
New York University Hospitals Center, Series A, 5.75%, 07/01/20(b) | | | 3,450 | | | | 3,646,546 | |
New York University Hospitals Center, Series A, 6.00%, 07/01/20(b) | | | 1,100 | | | | 1,166,484 | |
North Shore-Long Island Jewish Obligated Group, Series A, 5.50%, 05/01/19(b) | | | 2,075 | | | | 2,094,630 | |
North Shore-Long Island Jewish Obligated Group, Series C, 4.25%, 05/01/39 | | | 1,000 | | | | 1,040,190 | |
North Shore-Long Island Jewish Obligated Group, Series D, 4.25%, 05/01/39 | | | 300 | | | | 312,057 | |
State of New York Dormitory Authority, Refunding RB: | | | | | | | | |
Memorial Sloan-Kettering Cancer Center, Series 1, 5.00%, 07/01/42 | | | 2,625 | | | | 2,958,480 | |
North Shore-Long Island Jewish Obligated Group, Series A, 5.00%, 05/01/21(b) | | | 4,000 | | | | 4,294,520 | |
North Shore-Long Island Jewish Obligated Group, Series A, 5.25%, 05/01/21(b) | | | 9,220 | | | | 9,949,394 | |
North Shore-Long Island Jewish Obligated Group, Series A, 5.00%, 05/01/32 | | | 3,525 | | | | 3,957,553 | |
| | | | | | | | |
| | | | 49,872,409 | |
| | |
| Housing — 4.5% | | | | | | |
City of New York Housing Development Corp., RB, M/F Housing, Fund Grant Program, New York City Housing Authority Program, Series B1: | | | | | | | | |
5.25%, 07/01/32 | | | 6,865 | | | | 7,551,775 | |
5.00%, 07/01/33 | | | 1,675 | | | | 1,819,536 | |
City of New York Housing Development Corp., Refunding RB, M/F Housing, 8 Spruce Street, Class F, 4.50%, 02/15/48 | | | 1,230 | | | | 1,274,132 | |
City of Yonkers New York Industrial Development Agency, RB, Monastery Manor Associates LP Project, Series A, AMT (SONYMA), 5.25%, 04/01/37 | | | 2,445 | | | | 2,451,822 | |
State of New York HFA, RB, M/F: | | | | | | | | |
Affordable Housing, Series B (Ginnie Mae, Fannie Mae & Freddie Mac), 4.00%, 11/01/42 | | | 1,045 | | | | 1,054,112 | |
Green Bonds, Series H, 4.15%, 11/01/43 | | | 1,650 | | | | 1,681,086 | |
Green Bonds, Series H, 4.20%, 11/01/48 | | | 1,095 | | | | 1,116,363 | |
St. Philip’s Housing, Series A, AMT, 4.65%, 11/15/38 | | | 1,500 | | | | 1,523,775 | |
State of New York Mortgage Agency, Refunding RB: | | | | | | | | |
S/F, Series 213, 4.20%, 10/01/43 | | | 2,305 | | | | 2,367,235 | |
Series 190, 3.80%, 10/01/40 | | | 3,470 | | | | 3,471,492 | |
| | | | | | | | |
| | | | 24,311,328 | |
| | |
| 26 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield New York Quality Fund, Inc. (MYN) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| State — 17.0% | | | | | | |
City of New York Transitional Finance Authority, BARB, Series S-3, 5.25%, 07/15/36 | | $ | 1,910 | | | $ | 2,259,492 | |
City of New York Transitional Finance Authority Building Aid Revenue, BARB, Fiscal 2015, Series S-1, 5.00%, 07/15/37 | | | 2,000 | | | | 2,229,040 | |
City of New York Transitional Finance Authority Building Aid Revenue, Refunding RB, Series S-3, 4.00%, 07/15/38 | | | 6,070 | | | | 6,387,157 | |
City of New York Transitional Finance Authority Future Tax Secured, RB: | | | | | | | | |
Fiscal 2014, Sub-Series A-1, 5.00%, 11/01/38 | | | 1,000 | | | | 1,105,440 | |
Fiscal 2014, Sub-Series B-1, 5.00%, 11/01/36 | | | 1,690 | | | | 1,896,298 | |
Fiscal 2016, Sub-Series B-1, 5.00%, 11/01/38 | | | 4,000 | | | | 4,497,840 | |
Future Tax Secured Subordinate Bonds, SubSeries A-1, 5.00%, 08/01/40 | | | 1,025 | | | | 1,175,901 | |
Future Tax Secured, Sub-Series F-1, 5.00%, 05/01/42 | | | 7,175 | | | | 8,092,682 | |
Metropolitan Transportation Authority, Refunding RB, Dedicated Tax Fund: | | | | | | | | |
Series B, 5.00%, 11/15/19(b) | | | 1,500 | | | | 1,539,720 | |
Sub-Series B-1, 5.00%, 11/15/31 | | | 3,465 | | | | 3,902,872 | |
Sales Tax Asset Receivable Corp., Refunding RB, Fiscal 2015, Series A, 4.00%, 10/15/32 | | | 3,835 | | | | 4,157,677 | |
State of New York Dormitory Authority, RB: | | | | | | | | |
Bid Group 3, Series A, 5.00%, 03/15/39 | | | 1,610 | | | | 1,848,441 | |
Bid Group 3, Series A, 5.00%, 03/15/43 | | | 1,560 | | | | 1,776,434 | |
Bidding Group Bond, 4.00%, 02/15/46 | | | 2,835 | | | | 2,909,249 | |
General Purpose, Series B, 5.00%, 03/15/37 | | | 1,000 | | | | 1,081,920 | |
General Purpose, Series B, 5.00%, 03/15/42 | | | 7,500 | | | | 8,060,475 | |
Group B, State Sales Tax, Series A, 5.00%, 03/15/39 | | | 2,280 | | | | 2,586,842 | |
Group C, Sales Tax, Series A, 5.00%, 03/15/41 | | | 8,550 | | | | 9,648,333 | |
Group C, State Sales Tax, Series A, 4.00%, 03/15/45 | | | 3,900 | | | | 3,992,235 | |
Master BOCES Program Lease (AGC), 5.00%, 08/15/19(b) | | | 1,750 | | | | 1,781,868 | |
Sales tax, Group B, Series A, 5.00%, 03/15/38 | | | 3,245 | | | | 3,691,707 | |
Series A, 5.00%, 02/15/42 | | | 3,000 | | | | 3,358,800 | |
Series B, 5.00%, 03/15/37 | | | 2,000 | | | | 2,258,760 | |
State Personal Income Tax, Series A, 5.00%, 02/15/43 | | | 1,000 | | | | 1,096,080 | |
State of New York Dormitory Authority, Refunding RB: | | | | | | | | |
Group 3, Series E, 5.00%, 03/15/41 | | | 3,335 | | | | 3,834,283 | |
Series C, 5.00%, 03/15/38 | | | 3,850 | | | | 4,436,702 | |
State of New York Urban Development Corp., RB, State Personal Income Tax, Series C, 5.00%, 03/15/32 | | | 2,000 | | | | 2,219,900 | |
| | | | | | | | |
| | | | | | | 91,826,148 | |
| | |
| Tobacco — 2.4% | | | | | | |
Counties of New York Tobacco Trust VI, Refunding RB, Tobacco Settlement Pass-Through: | | | | | | | | |
Series A, 5.00%, 06/01/41 | | | 425 | | | | 446,497 | |
Series A-2B, 5.00%, 06/01/51 | | | 800 | | | | 807,760 | |
Series B, 5.00%, 06/01/45 | | | 2,460 | | | | 2,497,515 | |
County of Chautauqua New York Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed, 4.75%, 06/01/39 | | | 2,190 | | | | 2,139,608 | |
County of Niagara New York Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed: | | | | | | | | |
5.25%, 05/15/34 | | | 1,650 | | | | 1,738,374 | |
5.25%, 05/15/40 | | | 2,250 | | | | 2,353,117 | |
Westchester New York Tobacco Asset Securitization, Refunding RB, Tobacco Settlement Bonds, Sub-Series C, 4.00%, 06/01/42 | | | 3,325 | | | | 3,090,787 | |
| | | | | | | | |
| | | | | | | 13,073,658 | |
| | |
| Transportation — 25.9% | | | | | | |
Buffalo & Fort Erie Public Bridge Authority, RB, Toll Bridge System: | | | | | | | | |
5.00%, 01/01/42 | | | 1,250 | | | | 1,394,050 | |
5.00%, 01/01/47 | | | 1,545 | | | | 1,716,248 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Transportation (continued) | | | | | | |
Metropolitan Transportation Authority, RB: | | | | | | | | |
Green Bonds, Series A, 5.00%, 11/15/42 | | $ | 3,500 | | | $ | 3,968,545 | |
Series A, 5.00%, 11/15/21(b) | | | 1,000 | | | | 1,092,370 | |
Series A, 5.00%, 05/15/23(b) | | | 1,000 | | | | 1,137,880 | |
Series A-1, 5.25%, 11/15/23(b) | | | 2,565 | | | | 2,985,173 | |
Series A-1, 5.25%, 11/15/23(b) | | | 2,840 | | | | 3,305,220 | |
Series D, 5.25%, 11/15/21(b) | | | 765 | | | | 840,842 | |
Series E, 5.00%, 11/15/38 | | | 7,785 | | | | 8,458,792 | |
Series E, 5.00%, 11/15/43 | | | 4,000 | | | | 4,336,920 | |
Series H, 5.00%, 11/15/22(b) | | | 930 | | | | 1,044,799 | |
Series H, 5.00%, 11/15/31 | | | 760 | | | | 823,528 | |
Sub-Series B, 5.00%, 11/15/23(b) | | | 3,250 | | | | 3,745,202 | |
Metropolitan Transportation Authority, Refunding RB: | | | | | | | | |
Green Bond, SubSeries B-1, 5.00%, 11/15/51 | | | 2,815 | | | | 3,147,029 | |
Green Bonds, Climate Bond Certified, Sub-Series B-2, 4.00%, 11/15/34 | | | 3,000 | | | | 3,222,780 | |
Green Bonds, Series A-1, 5.25%, 11/15/56 | | | 2,610 | | | | 2,876,481 | |
Green Bonds, Series A-1, 5.25%, 11/15/57 | | | 1,795 | | | | 1,997,189 | |
Series D, 5.25%, 11/15/20(b) | | | 1,000 | | | | 1,063,980 | |
Series D, 5.25%, 11/15/21(b) | | | 2,685 | | | | 2,951,191 | |
New York Liberty Development Corp., RB, World Trade Center Port Authority Consolidated, 5.25%, 12/15/43 | | | 3,500 | | | | 3,804,780 | |
New York Transportation Development Corp., ARB, LaGuardia Airport Terminal B Redevelopment Project, Series A, AMT: | | | | | | | | |
5.00%, 07/01/41 | | | 2,155 | | | | 2,275,960 | |
5.00%, 07/01/46 | | | 11,545 | | | | 12,158,501 | |
5.25%, 01/01/50 | | | 920 | | | | 978,153 | |
(AGM), 4.00%, 07/01/41 | | | 1,575 | | | | 1,582,576 | |
Niagara Falls Bridge Commission, Refunding RB, Toll Bridge System, Series A (AGC), 4.00%, 10/01/19 | | | 420 | | | | 426,149 | |
Port Authority of New York & New Jersey, ARB,: | | | | | | | | |
Consolidated, 163rd Series, 5.00%, 07/15/35 | | | 2,500 | | | | 2,605,700 | |
Consolidated,169th Series, 5.00%, 10/15/41 | | | 1,000 | | | | 1,065,050 | |
Consolidated,183rd Series, 4.00%, 06/15/44 | | | 1,500 | | | | 1,528,245 | |
JFK International Air Terminal LLC, Special Project, Series 6, AMT (NPFGC), 5.75%, 12/01/22 | | | 6,705 | | | | 6,975,882 | |
Port Authority of New York & New Jersey, Refunding ARB: | | | | | | | | |
178th Series, AMT, 5.00%, 12/01/33 | | | 1,140 | | | | 1,263,815 | |
179th Series, 5.00%, 12/01/38 | | | 1,390 | | | | 1,559,080 | |
Consolidated, 177th Series, AMT, 4.00%, 01/15/43 | | | 735 | | | | 741,938 | |
Consolidated, 178th Series, AMT, 5.00%, 12/01/43 | | | 750 | | | | 817,238 | |
Consolidated, 186th Series, AMT, 5.00%, 10/15/44 | | | 1,000 | | | | 1,094,110 | |
Consolidated, 195th Series, AMT, 5.00%, 04/01/36 | | | 1,500 | | | | 1,682,040 | |
Series G, JFK International Air Terminal (AGM), 5.75%, 12/01/25 | | | 3,500 | | | | 3,641,645 | |
State of New York Thruway Authority, RB, Junior Lien, Series A: | | | | | | | | |
5.00%, 01/01/41 | | | 2,110 | | | | 2,347,818 | |
5.25%, 01/01/56 | | | 2,940 | | | | 3,245,613 | |
State of New York Thruway Authority, Refunding RB: | | | | | | | | |
General, Series I, 5.00%, 01/01/37 | | | 4,225 | | | | 4,502,287 | |
General, Series I, 5.00%, 01/01/42 | | | 3,250 | | | | 3,448,282 | |
General, Series J, 5.00%, 01/01/41 | | | 6,275 | | | | 6,879,722 | |
General, Series K, 5.00%, 01/01/29 | | | 2,225 | | | | 2,549,761 | |
General, Series K, 5.00%, 01/01/31 | | | 1,500 | | | | 1,708,290 | |
Series L, 5.00%, 01/01/33 | | | 490 | | | | 573,619 | |
Series L, 5.00%, 01/01/34 | | | 840 | | | | 977,592 | |
Series L, 5.00%, 01/01/35 | | | 970 | | | | 1,124,754 | |
Triborough Bridge & Tunnel Authority, RB, Series B: | | | | | | | | |
5.00%, 11/15/40 | | | 1,010 | | | | 1,147,653 | |
5.00%, 11/15/45 | | | 1,500 | | | | 1,697,505 | |
Triborough Bridge & Tunnel Authority, Refunding RB: | | | | | | | | |
General, CAB, Series B, 0.00%, 11/15/32(a) | | | 9,700 | | | | 6,070,648 | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 27 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield New York Quality Fund, Inc. (MYN) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Transportation (continued) | | | | | | |
General, Series A, 5.00%, 11/15/38 | | $ | 1,000 | | | $ | 1,096,430 | |
General, Series A, 5.25%, 11/15/45 | | | 1,460 | | | | 1,689,205 | |
General, Series A, 5.00%, 11/15/50 | | | 4,500 | | | | 5,063,580 | |
MTA Bridge and Tunnels, Series C, 5.00%, 11/15/37 | | | 1,050 | | | | 1,234,601 | |
| | | | | | | | |
| | | | | | | 139,666,441 | |
| | |
| Utilities — 16.9% | | | | | | |
City of New York Municipal Water Finance Authority, RB, Water & Sewer System, 2nd General Resolution, Fiscal 2017, Series DD, 5.25%, 06/15/47 | | | 4,140 | | | | 4,744,357 | |
City of New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Fiscal 2015, Series HH, 5.00%, 06/15/39 | | | 3,000 | | | | 3,365,460 | |
City of New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution: | | | | | | | | |
Fiscal 2010, Series FF, 5.00%, 06/15/31 | | | 1,500 | | | | 1,563,105 | |
Fiscal 2011, Series BB, 5.00%, 06/15/31 | | | 1,000 | | | | 1,042,070 | |
Fiscal 2011, Series GG, 5.00%, 06/15/21(b) | | | 1,000 | | | | 1,078,790 | |
City of New York Water & Sewer System, RB, Series DD-1, 4.00%, 06/15/49 | | | 1,365 | | | | 1,403,643 | |
City of New York Water & Sewer System, Refunding RB, Series EE, 5.00%, 06/15/40 | | | 5,170 | | | | 5,917,427 | |
County of Western Nassau New York Water Authority, RB, Series A, 5.00%, 04/01/40 | | | 1,185 | | | | 1,326,501 | |
Long Island Power Authority, RB: | | | | | | | | |
5.00%, 09/01/37 | | | 3,825 | | | | 4,423,039 | |
5.00%, 09/01/35 | | | 2,000 | | | | 2,334,340 | |
General, 5.00%, 09/01/47 | | | 1,075 | | | | 1,202,828 | |
General, 5.00%, 09/01/36 | | | 975 | | | | 1,119,066 | |
General, Electric Systems, 5.00%, 09/01/42 | | | 335 | | | | 377,223 | |
General, Electric Systems, Series A (AGM), 5.00%, 05/01/21(b) | | | 3,775 | | | | 4,052,953 | |
Long Island Power Authority, Refunding RB: | | | | | | | | |
Electric System, Series B, 5.00%, 09/01/41 | | | 590 | | | | 657,980 | |
Electric System, Series B, 5.00%, 09/01/46 | | | 825 | | | | 914,801 | |
Electric Systems, Series A (AGC), 5.75%, 04/01/19(b) | | | 1,015 | | | | 1,021,719 | |
General, Electric Systems, Series A (AGC), 6.00%, 05/01/19(b) | | | 1,500 | | | | 1,515,990 | |
State of New York Environmental Facilities Corp., RB, Series B: | | | | | | | | |
Green Bonds, 5.00%, 03/15/45 | | | 5,145 | | | | 5,767,597 | |
Revolving Funds, Green Bonds, 5.00%, 09/15/40 | | | 1,195 | | | | 1,346,765 | |
Subordinated SRF Bonds, 5.00%, 06/15/48 | | | 1,345 | | | | 1,544,195 | |
State of New York Environmental Facilities Corp., Refunding RB: | | | | | | | | |
Revolving Funds, New York City Municipal Water, Series B, 5.00%, 06/15/36 | | | 2,100 | | | | 2,240,679 | |
Series A, 5.00%, 06/15/40 | | | 4,275 | | | | 4,840,925 | |
Series A, 5.00%, 06/15/45 | | | 18,920 | | | | 21,306,758 | |
State of New York Power Authority, Refunding RB, Series A, 5.00%, 11/15/38 | | | 4,920 | | | | 5,315,716 | |
Utility Debt Securitization Authority, Refunding RB, Restructuring, Series TE, 5.00%, 12/15/41 | | | 9,960 | | | | 11,078,906 | |
| | | | | | | | |
| | | | | | | 91,502,833 | |
| | | | | | | | |
| |
Total Municipal Bonds in New York | | | | 685,541,801 | |
| | | | | | | | |
|
Guam — 0.3% | |
|
| Utilities — 0.3% | |
Guam Power Authority, RB, Series A (AGM), 5.00%, 10/01/20(b) | | | 1,380 | | | | 1,454,354 | |
| | | | | | | | |
| |
Total Municipal Bonds — 127.2%
(Cost — $657,073,083) | | | | 686,996,155 | |
| | | | | | | | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
Municipal Bonds Transferred to Tender Option Bond Trusts(c) | |
| |
New York — 38.5% | | | | | |
| |
| County/City/Special District/School District — 7.1% | | | | |
City of New York, GO: | | | | | | | | |
Sub-Series C-3 (AGC), 5.75%, 02/15/19(b)(e) | | $ | 916 | | | $ | 917,026 | |
Sub-Series C-3 (AGC), 5.75%, 08/15/28(e) | | | 13,484 | | | | 13,501,622 | |
Sub-Series I-1, 5.00%, 03/01/36 | | | 3,500 | | | | 3,913,403 | |
Refunding Series E, 5.00%, 08/01/19(b) | | | 309 | | | | 313,758 | |
Refunding Series E, 5.00%, 08/01/27 | | | 755 | | | | 767,644 | |
City of New York Transitional Finance Authority, RB, Future Tax Secured, Sub-Series D-1, 5.00%, 11/01/38 | | | 4,125 | | | | 4,413,420 | |
Hudson Yards Infrastructure Corp., RB, Senior-Fiscal 2012(e): | | | | | | | | |
5.75%, 02/15/21(b) | | | 6,030 | | | | 6,496,211 | |
5.75%, 02/15/47 | | | 3,709 | | | | 3,996,272 | |
New York Liberty Development Corp., Refunding RB, 7 World Trade Center Project, Class 1, 5.00%, 09/15/40 | | | 3,645 | | | | 3,946,028 | |
| | | | | | | | |
| | | | | | | 38,265,384 | |
| | |
| Education — 2.6% | | | | | | |
City of New York Trust for Cultural Resources, Refunding RB, Wildlife Conservation Society, Series A, 5.00%, 08/01/33 | | | 1,981 | | | | 2,206,443 | |
State of New York Dormitory Authority, RB, State University Dormitory Facilities, New York University, Series A: | | | | | | | | |
5.25%, 07/01/19(b) | | | 6,000 | | | | 6,090,390 | |
5.00%, 07/01/35 | | | 5,198 | | | | 5,549,183 | |
| | | | | | | | |
| | | | | | | 13,846,016 | |
| | |
| Housing — 1.8% | | | | | | |
City of New York Housing Development Corp., Refunding RB, Sustainable Neighborhood Bonds, Series A, 4.25%, 11/01/43(d) | | | 4,370 | | | | 4,508,769 | |
New York State Housing Finance Agency, RB, M/F, Affordable Housing, Climate Bond Certified, Series I, 4.05%, 11/01/48 | | | 5,457 | | | | 5,496,127 | |
| | | | | | | | |
| | | | | | | 10,004,896 | |
|
| State — 7.4% | |
City of New York Transitional Finance Authority, RB, Future Tax Secured, Sub-Series F-1, 5.00%, 05/01/38 | | | 4,123 | | | | 4,694,804 | |
Sales Tax Asset Receivable Corp., Refunding RB, Fiscal 2015, Series A: | | | | | | | | |
5.00%, 10/15/31 | | | 7,995 | | | | 9,150,518 | |
4.00%, 10/15/32 | | | 8,000 | | | | 8,672,480 | |
State of New York Dormitory Authority, ERB, Series B, 5.75%, 03/15/19(b) | | | 7,850 | | | | 7,887,641 | |
State of New York Dormitory Authority, RB: | | | | | | | | |
Bid Group 2, Series A, 5.00%, 03/15/32 | | | 2,000 | | | | 2,369,370 | |
General Purpose, Series C, 5.00%, 03/15/41 | | | 1,650 | | | | 1,745,576 | |
State of New York Dormitory Authority, Refunding RB, Series A, 5.00%, 03/15/40(e) | | | 3,549 | | | | 4,076,235 | |
State of New York Urban Development Corp., Refunding RB, State Personal Income Tax, Series A, 5.00%, 03/15/45 | | | 1,001 | | | | 1,113,455 | |
| | | | | | | | |
| | | | 39,710,079 | |
|
| Transportation — 13.5% | |
New York Liberty Development Corp., ARB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43 | | | 17,999 | | | | 19,540,176 | |
Port Authority of New York & New Jersey, Refunding ARB: | | | | | | | | |
194th Series, 5.25%, 10/15/55 | | | 3,900 | | | | 4,447,716 | |
Consolidated, 210th Series, 5.00%, 09/01/48 | | | 4,760 | | | | 5,436,396 | |
Consolidated, Series 169th, 5.00%, 10/15/25 | | | 7,990 | | | | 8,564,231 | |
Consolidated, Series 169th, 5.00%, 10/15/26 | | | 6,000 | | | | 6,432,150 | |
State of New York Thruway Authority, Refunding RB, Transportation, Personal Income Tax,
Series A, 5.00%, 03/15/31 | | | 3,940 | | | | 4,233,707 | |
| | |
| 28 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield New York Quality Fund, Inc. (MYN) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| Transportation (continued) | |
Triborough Bridge & Tunnel Authority, Refunding RB: | | | | | | | | |
General, Series A, 5.00%, 11/15/46 | | $ | 15,000 | | | $ | 16,792,200 | |
MTA Bridges & Tunnels, Series C-2, 5.00%, 11/15/42 | | | 6,675 | | | | 7,632,039 | |
| | | | | | | | |
| | | | | | | 73,078,615 | |
|
| Utilities — 6.1% | |
City of New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution: | | | | | | | | |
Fiscal 2011, Series HH, 5.00%, 06/15/32 | | | 9,900 | | | | 10,577,292 | |
Fiscal 2012, Series BB, 5.00%, 06/15/44 | | | 3,991 | | | | 4,283,918 | |
City of New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series FF-2, 5.50%, 06/15/40 | | | 2,760 | | | | 2,796,984 | |
City of New York Water & Sewer System, Refunding RB, 2nd General Resolution, Fiscal 2018, 5.00%, 06/15/38(e) | | | 1,391 | | | | 1,590,435 | |
Utility Debt Securitization Authority, Refunding RB: | | | | | | | | |
5.00%, 12/15/41 | | | 5,998 | | | | 6,665,050 | |
Restructuring, Series A, 5.00%, 12/15/35 | | | 3,500 | | | | 4,031,387 | |
Restructuring, Series B, 4.00%, 12/15/35 | | | 2,980 | | | | 3,160,052 | |
| | | | | | | | |
| | | | 33,105,118 | |
| | | | | | | | |
| |
Total Municipal Bonds Transferred to Tender Option Bond Trusts — 38.5%
(Cost — $202,943,874) | | | | 208,010,108 | |
| | | | | | | | |
| |
Total Long-Term Investments — 165.7%
(Cost — $860,016,957) | | | | 895,006,263 | |
| | | | | | | | |
| | | | | | | | |
| Security | | Shares | | | Value | |
| | |
| Short-Term Securities — 0.1% | | | | | | |
BlackRock Liquidity Funds New York Money Fund Portfolio, 1.13%(f)(g) | | | 270,137 | | | $ | 270,137 | |
| | | | | | | | |
| |
Total Short-Term Securities — 0.1%
(Cost — $270,137) | | | | 270,137 | |
| | | | | | | | |
| |
Total Investments — 165.8%
(Cost — $860,287,094) | | | | 895,276,400 | |
| |
Other Assets Less Liabilities — 0.9% | | | | 4,972,100 | |
| |
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (20.9)% | | | | (112,833,415 | ) |
| |
VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (45.8)% | | | | (247,361,144 | ) |
| | | | | | | | |
| |
Net Assets Applicable to Common Shares — 100.0% | | | $ | 540,053,941 | |
| | | | | | | | |
| (b) | U.S. 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) | Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details. |
| (d) | When-issued security. |
| (e) | All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between February 15, 2019 to September 15, 2026, is $15,965,215. See Note 4 of the Notes to Financial Statements for details. |
| (f) | Annualized 7-day yield as of period end. |
| (g) | During the six months ended January 31, 2019, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Affiliate | | Shares
Held at
07/31/18 | | | Net
Activity | | | Shares
Held at
01/31/19 | | | Value at
01/31/19 | | | Income | | | Net
Realized
Gain (Loss) (a) | | | Change in
Unrealized
Appreciation
(Depreciation) | |
BlackRock Liquidity Funds New York Money Fund Portfolio | | | — | | | | 270,137 | | | | 270,137 | | | $ | 270,137 | | | $ | 10,948 | | | $ | — | | | $ | — | |
BlackRock Liquidity Funds, MuniCash, Institutional Class | | | 2,731,322 | | | | (2,731,322 | ) | | | — | | | | — | | | | 8,816 | | | | 87 | | | | (361 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | $ | 270,137 | | | $ | 19,764 | | | $ | 87 | | | $ | (361 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes net capital gain distributions, if applicable. | |
For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
| | | | | | | | | | | | | | | | |
| Description | | Number of
Contracts | | | Expiration
Date | | | Notional
Amount
(000) | | | Value/
Unrealized
Appreciation
(Depreciation) | |
Short Contracts: | | | | | | | | | | | | | | | | |
10-Year U.S. Treasury Note | | | 117 | | | | 03/20/19 | | | $ | 14,329 | | | $ | (308,427 | ) |
Long U.S. Treasury Bond | | | 238 | | | | 03/20/19 | | | | 34,912 | | | | (1,535,822 | ) |
5-Year U.S. Treasury Note | | | 66 | | | | 03/29/19 | | | | 7,581 | | | | (120,573 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | $ | (1,964,822 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 29 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield New York Quality Fund, Inc. (MYN) |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contracts | | | Credit
Contracts | | | Equity
Contracts | | | Foreign
Currency
Exchange
Contracts | | | Interest
Rate
Contracts | | | Other
Contracts | | | Total | |
Liabilities — Derivative Financial Instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized depreciation(a) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,964,822 | | | $ | — | | | $ | 1,964,822 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes cumulative depreciation on futures contracts if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities. | |
For the six months ended January 31, 2019, the effect of derivative financial instruments in the Statements of Operations were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contracts | | | Credit
Contracts | | | Equity
Contracts | | | Foreign
Currency
Exchange
Contracts | | | Interest
Rate
Contracts | | | Other Contracts | | | Total | |
Net Realized Gain (Loss) from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 274,036 | | | $ | — | | | $ | 274,036 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Change in Unrealized Appreciation (Depreciation) on: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (1,901,734 | ) | | $ | — | | | $ | (1,901,734 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| | | | |
Futures contracts: | | | | |
Average notional value of contracts — short | | $ | 42,095,887 | |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Long-Term Investments(a) | | $ | — | | | $ | 895,006,263 | | | $ | — | | | $ | 895,006,263 | |
Short-Term Securities | | | 270,137 | | | | — | | | | — | | | | 270,137 | |
| | | | | | | | | | | | | | | | |
| | $ | 270,137 | | | $ | 895,006,263 | | | $ | — | | | $ | 895,276,400 | |
| | | | | | | | | | | | | | | | |
Derivative Financial Instruments(b) | | | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Interest rate contracts | | $ | (1,964,822 | ) | | $ | — | | | $ | — | | | $ | (1,964,822 | ) |
| | | | | | | | | | | | | | | | |
| | (a) | See above Schedule of Investments for values in each sector. | |
| | (b) | Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument. | |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Liabilities: | | | | | | | | | | | | | | | | |
TOB Trust Certificates | | $ | — | | | $ | (112,386,871 | ) | | $ | — | | | $ | (112,386,871 | ) |
VRDP Shares at Liquidation Value | | | — | | | | (247,700,000 | ) | | | — | | | | (247,700,000 | ) |
| | | | | | | | | | | | | | | | |
| | $ | — | | | $ | (360,086,871 | ) | | $ | — | | | $ | (360,086,871 | ) |
| | | | | | | | | | | | | | | | |
During the six months ended January 31, 2019, there were no transfers between levels.
See notes to financial statements.
| | |
| 30 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) January 31, 2019 | | BlackRock MuniYield Quality Fund III, Inc. (MYI) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
Municipal Bonds — 116.8% | | | | | | | | |
| | |
| Alabama — 2.8% | | | | | | |
Auburn University, RB, Series A, 5.00%, 06/01/48 | | $ | 11,185 | | | $ | 12,725,734 | |
Birmingham-Jefferson Civic Center Authority, Special Tax Bonds, Series A, 4.00%, 07/01/43 | | | 4,000 | | | | 4,031,120 | |
City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC),
6.00%, 06/01/19(a) | | | 3,605 | | | | 3,654,641 | |
County of Tuscaloosa Board of Education, RB, Special Tax School Warrants, 5.00%, 02/01/43 | | | 2,485 | | | | 2,768,539 | |
Homewood Educational Building Authority, Refunding RB, Educational Facilities, Samford University, Series A, 5.00%, 12/01/47 | | | 2,835 | | | | 3,103,219 | |
| | | | | | | | |
| | | | 26,283,253 | |
| | |
| Alaska — 1.4% | | | | | | |
Alaska Industrial Development & Export Authority, RB, Providence Health Services, Series A, 5.50%, 10/01/41 | | | 2,690 | | | | 2,894,063 | |
Borough of Matanuska-Susitna Alaska, RB, Goose Creek Correctional Center (AGC)(a): | | | | | | | | |
6.00%, 09/01/19 | | | 3,700 | | | | 3,791,464 | |
6.00%, 09/01/19 | | | 6,450 | | | | 6,607,574 | |
| | | | | | | | |
| | | | 13,293,101 | |
| | |
| Arizona — 0.4% | | | | | | |
County of Maricopa Industrial Development Authority, Refunding RB, HonorHealth, Series A, 5.00%, 09/01/42 | | | 435 | | | | 480,605 | |
State of Arizona, COP, Department of Administration, Series A (AGM), 5.00%, 10/01/27 | | | 3,075 | | | | 3,141,697 | |
| | | | | | | | |
| | | | 3,622,302 | |
| | |
| California — 8.8% | | | | | | |
California Health Facilities Financing Authority, RB: | | | | | | | | |
St. Joseph Health System, Series A, 5.75%, 07/01/39 | | | 1,550 | | | | 1,575,978 | |
Sutter Health, Series B, 5.88%, 08/15/20(a) | | | 3,200 | | | | 3,410,016 | |
California Health Facilities Financing Authority, Refunding RB: | | | | | | | | |
Kaiser Permanente, Sub-Series A-2, 5.00%, 11/01/47 | | | 1,625 | | | | 2,092,383 | |
St. Joseph Health System, Series A, 5.00%, 07/01/37 | | | 2,965 | | | | 3,264,702 | |
California Statewide Communities Development Authority, RB, Kaiser Permanente, Series A, 5.00%, 04/01/42 | | | 4,030 | | | | 4,316,251 | |
City of San Jose California, Refunding ARB, Norman Y Mineta San Jose International Airport SJC, AMT: | | | | | | | | |
Series A, 5.00%, 03/01/36 | | | 1,160 | | | | 1,306,647 | |
Series A, 5.00%, 03/01/37 | | | 1,275 | | | | 1,430,397 | |
Series A-1, 5.75%, 03/01/34 | | | 2,300 | | | | 2,453,571 | |
County of San Joaquin California Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A, 6.00%, 03/01/21(a) | | | 1,830 | | | | 1,994,060 | |
Dublin Unified School District California, GO, CAB, Election of 2004, Series D, 0.00%, 08/01/34(b) | | | 5,000 | | | | 1,930,450 | |
Grossmont California Union High School District, GO, CAB, Election of 2004, 0.00%, 08/01/31(b) | | | 5,110 | | | | 3,479,655 | |
Long Beach Unified School District, GO, CAB, Election of 2008, Series B, 0.00%, 08/01/34(b) | | | 5,000 | | | | 2,890,000 | |
Mount San Antonio Community College District, GO, Refunding, CAB, Election of 2008, Series A, 6.25%, 08/01/43(c) | | | 3,975 | | | | 3,369,528 | |
Norwalk-La Mirada Unified School District, GO, Refunding, CAB, Election of 2002, Series E (AGC),
0.00%, 08/01/38(b) | | | 7,620 | | | | 3,495,827 | |
Poway Unified School District, GO, Refunding, CAB, School Facilities Improvement, Election of 2008, Series B(b): | | | | | | | | |
0.00%, 08/01/35 | | | 7,820 | | | | 4,334,704 | |
0.00%, 08/01/36 | | | 10,000 | | | | 5,284,300 | |
Rio Hondo Community College District California, GO, CAB, Election of 2004, Series C(b): | | | | | | | | |
0.00%, 08/01/37 | | | 8,000 | | | | 4,053,920 | |
0.00%, 08/01/38 | | | 12,940 | | | | 6,224,528 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| California (continued) | | | | | | |
San Diego California Unified School District, GO, CAB, Election of 2008, Series G(b): | | | | | | | | |
0.00%, 07/01/34 | | $ | 1,860 | | | $ | 928,735 | |
0.00%, 07/01/35 | | | 1,970 | | | | 925,033 | |
0.00%, 07/01/36 | | | 2,960 | | | | 1,307,106 | |
0.00%, 07/01/37 | | | 1,975 | | | | 820,494 | |
San Diego California Unified School District, GO, Refunding, CAB, Series R-1, 0.00%, 07/01/31(b) | | | 3,485 | | | | 2,350,319 | |
San Marcos Unified School District, GO, Election of 2010, Series A(a): | | | | | | | | |
5.00%, 08/01/21 | | | 1,800 | | | | 1,955,826 | |
5.00%, 08/01/21 | | | 1,600 | | | | 1,738,512 | |
State of California, GO, Refunding, Various Purposes: | | | | | | | | |
5.00%, 09/01/41 | | | 2,700 | | | | 2,893,131 | |
5.00%, 10/01/41 | | | 2,555 | | | | 2,743,457 | |
State of California, GO, Series 2007-2 (NPFGC), 5.50%, 04/01/30 | | | 10 | | | | 10,030 | |
State of California Public Works Board, LRB, Various Capital Projects, Series I, 5.00%, 11/01/38 | | | 5,040 | | | | 5,547,780 | |
State of California University, RB, Systemwide, Series A, 5.50%, 05/01/19(a) | | | 1,525 | | | | 1,539,945 | |
Walnut Valley Unified School District, GO, CAB, Election of 2007, Series B, 0.00%, 08/01/36(b) | | | 6,545 | | | | 3,343,121 | |
| | | | | | | | |
| | | | 83,010,406 | |
| | |
| Colorado — 0.8% | | | | | | |
Denver Convention Center Hotel Authority, Refunding RB, 5.00%, 12/01/36 | | | 1,500 | | | | 1,638,600 | |
Regional Transportation District, COP, Series A,
5.00%, 06/01/39 | | | 5,655 | | | | 6,192,055 | |
| | | | | | | | |
| | | | 7,830,655 | |
| | |
| Florida — 9.2% | | | | | | |
City of Jacksonville Florida, Refunding RB, Series A, 5.25%, 10/01/42 | | | 4,000 | | | | 4,560,480 | |
County of Brevard Florida Health Facilities Authority, Refunding RB, Health First, Inc. Project, 5.00%, 04/01/39 | | | 4,535 | | | | 4,884,331 | |
County of Broward Florida Airport System Revenue, RB, Series A , AMT, 5.00%, 10/01/40 | | | 3,000 | | | | 3,283,740 | |
County of Highlands Florida Health Facilities Authority, RB, Adventist Health System/Sunbelt Obligated Group: | | | | | | | | |
6.00%, 11/15/19(a) | | | 5 | | | | 5,167 | |
6.00%, 11/15/37 | | | 1,745 | | | | 1,801,224 | |
County of Lee Florida, Refunding ARB, Series A, AMT: | | | | | | | | |
5.63%, 10/01/26 | | | 2,600 | | | | 2,801,344 | |
5.38%, 10/01/32 | | | 3,440 | | | | 3,674,918 | |
County of Miami-Dade Florida, RB, Seaport: | | | | | | | | |
Department, Series A, 6.00%, 10/01/38 | | | 5,695 | | | | 6,514,909 | |
Department, Series B, AMT, 6.25%, 10/01/38 | | | 1,165 | | | | 1,338,235 | |
Department, Series B, AMT, 6.00%, 10/01/42 | | | 1,865 | | | | 2,124,738 | |
Series B, AMT, 6.00%, 10/01/30 | | | 1,820 | | | | 2,089,760 | |
County of Miami-Dade Florida Aviation, Refunding ARB, AMT, 5.00%, 10/01/34 | | | 530 | | | | 582,449 | |
County of Miami-Dade Florida Aviation, Refunding RB, Series B, AMT, 5.00%, 10/01/40 | | | 6,500 | | | | 7,222,540 | |
County of Miami-Dade Florida Educational Facilities Authority, RB, University of Miami, Series A, 5.00%, 04/01/40 | | | 14,360 | | | | 15,674,802 | |
County of Miami-Dade Florida Health Facilities Authority, Refunding RB, Nicklaus Children’s Hospital Project, 5.00%, 08/01/42 | | | 1,675 | | | | 1,854,292 | |
County of Orange Florida Health Facilities Authority, Refunding RB, Presbyterian Retirement Communities Project: | | | | | | | | |
5.00%, 08/01/41 | | | 1,550 | | | | 1,654,656 | |
5.00%, 08/01/47 | | | 4,590 | | | | 4,875,452 | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 31 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield Quality Fund III, Inc. (MYI) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Florida (continued) | | | | | | |
County of Palm Beach Florida Solid Waste Authority, Refunding RB, Series B: | | | | | | | | |
5.00%, 10/01/21(a) | | $ | 50 | | | $ | 54,161 | |
5.00%, 10/01/31 | | | 3,050 | | | | 3,300,496 | |
County of Sarasota Florida Public Hospital District, RB, Sarasota Memorial Hospital Project, Series A, 5.63%, 07/01/19(a) | | | 5,135 | | | | 5,216,749 | |
Greater Orlando Aviation Authority, ARB, Priority Sub-Series A, AMT, 5.00%, 10/01/42 | | | 4,760 | | | | 5,270,415 | |
South Miami Health Facilities Authority, Refunding RB, Baptist Health South Florida Obligated Group, 5.00%, 08/15/42 | | | 2,965 | | | | 3,309,059 | |
Town of Davie Florida, Refunding RB, Nova Southeastern University Project, 5.00%, 04/01/37 | | | 4,630 | | | | 5,139,300 | |
| | | | | | | | |
| | | | 87,233,217 | |
| | |
| Georgia — 0.4% | | | | | | |
County of Gainesville Georgia & Hall Hospital Authority, Refunding RB, Northeast Georgia Health System, Inc. Project, Series A (GTD), 5.50%, 08/15/54 | | | 1,405 | | | | 1,594,127 | |
Private Colleges & Universities Authority, RB, Savannah College of Art & Design: | | | | | | | | |
5.00%, 04/01/33 | | | 395 | | | | 430,846 | |
5.00%, 04/01/44 | | | 1,775 | | | | 1,892,381 | |
| | | | | | | | |
| | | | 3,917,354 | |
| | |
| Hawaii — 1.3% | | | | | | |
State of Hawaii Airports System Revenue, ARB, Series A,AMT, 5.00%, 07/01/43 | | | 2,385 | | | | 2,651,405 | |
State of Hawaii Department of Budget & Finance, Refunding RB, Hawaiian Electric Co., Inc. AMT, 4.00%, 03/01/37 | | | 5,275 | | | | 5,318,413 | |
State of Hawaii Department of Transportation, COP, AMT: | | | | | | | | |
5.00%, 08/01/27 | | | 2,000 | | | | 2,198,680 | |
5.00%, 08/01/28 | | | 1,775 | | | | 1,945,027 | |
| | | | | | | | |
| | | | 12,113,525 | |
| | |
| Illinois — 13.6% | | | | | | |
City of Chicago Illinois, Refunding GARB, O’Hare International Airport, AMT, Series B, 5.00%, 01/01/31 | | | 2,425 | | | | 2,582,043 | |
City of Chicago Illinois Midway International Airport, Refunding ARB, 2nd Lien, Series A, AMT, 5.00%, 01/01/34 | | | 3,035 | | | | 3,282,686 | |
City of Chicago Illinois O’Hare International Airport, GARB: | | | | | | | | |
3rd Lien, Series A, 5.75%, 01/01/21(a) | | | 7,555 | | | | 8,131,447 | |
3rd Lien, Series A, 5.75%, 01/01/39 | | | 1,445 | | | | 1,532,220 | |
Senior Lien, Series D, 5.25%, 01/01/42 | | | 8,285 | | | | 9,272,738 | |
Senior Lien, Series D, AMT, 5.00%, 01/01/42 | | | 2,865 | | | | 3,101,907 | |
City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/36 | | | 1,620 | | | | 1,711,643 | |
County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.13%, 12/01/38 | | | 3,250 | | | | 3,335,605 | |
County of Cook Illinois Forest Preserve District, GO, Refunding, Limited Tax Project, Series B,
5.00%, 12/15/37 | | | 615 | | | | 644,206 | |
Illinois Finance Authority, RB, Carle Foundation, Series A, 5.75%, 08/15/34 | | | 8,700 | | | | 9,393,564 | |
Illinois Finance Authority, Refunding RB: | | | | | | | | |
Northwestern Memorial Hospital,
Series A, 6.00%, 08/15/19(a) | | | 5,250 | | | | 5,368,703 | |
Silver Cross Hospital & Medical Centers, Series C, 5.00%, 08/15/44 | | | 985 | | | | 1,050,434 | |
Metropolitan Pier & Exposition Authority, RB, CAB, McCormick Place Expansion Project, Series A (NPFGC)(b): | | | | | | | | |
0.00%, 12/15/26 | | | 8,500 | | | | 6,307,425 | |
0.00%, 06/15/32 | | | 14,000 | | | | 7,856,520 | |
0.00%, 12/15/33 | | | 20,000 | | | | 10,397,200 | |
0.00%, 12/15/34 | | | 41,880 | | | | 20,577,319 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Illinois (continued) | | | | | | |
Metropolitan Pier & Exposition Authority, Refunding RB, CAB, McCormick Place Expansion Project, Series B (AGM), 0.00%, 06/15/44(b) | | $ | 9,430 | | | $ | 2,990,159 | |
Railsplitter Tobacco Settlement Authority, RB,
6.00%, 06/01/21(a) | | | 1,700 | | | | 1,862,639 | |
Regional Transportation Authority, RB, Series C (NPFGC), 7.75%, 06/01/20 | | | 385 | | | | 403,657 | |
State of Illinois, GO: | | | | | | | | |
5.25%, 07/01/29 | | | 3,160 | | | | 3,319,390 | |
5.25%, 02/01/33 | | | 5,860 | | | | 6,102,370 | |
5.50%, 07/01/33 | | | 2,235 | | | | 2,358,081 | |
5.25%, 02/01/34 | | | 5,360 | | | | 5,567,057 | |
5.50%, 07/01/38 | | | 1,200 | | | | 1,252,320 | |
State of Illinois Toll Highway Authority, RB, Series A, 5.00%, 01/01/42 | | | 8,540 | | | | 9,532,860 | |
| | | | | | | | |
| | | | 127,934,193 | |
| | |
| Indiana — 0.8% | | | | | | |
Indiana Finance Authority, RB, Series A: | | | | | | | | |
CWA Authority Project, 1st Lien, 5.25%, 10/01/38 | | | 2,900 | | | | 3,130,202 | |
Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 07/01/44 | | | 1,400 | | | | 1,474,522 | |
State of Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges, Series A, AMT, 5.00%, 07/01/40 | | | 2,425 | | | | 2,562,231 | |
| | | | | | | | |
| | | | 7,166,955 | |
| | |
| Iowa — 1.8% | | | | | | |
Iowa Finance Authority, RB, Iowa Health Care Facilities, Series A (AGC), 5.63%, 08/15/19(a) | | | 12,650 | | | | 12,911,096 | |
Iowa Student Loan Liquidity Corp., RB, Senior Series A-2, AMT: | | | | | | | | |
5.60%, 12/01/26 | | | 975 | | | | 1,014,751 | |
5.70%, 12/01/27 | | | 970 | | | | 1,008,606 | |
5.75%, 12/01/28 | | | 515 | | | | 535,136 | |
5.80%, 12/01/29 | | | 655 | | | | 679,851 | |
5.85%, 12/01/30 | | | 685 | | | | 710,201 | |
| | | | | | | | |
| | | | 16,859,641 | |
| | |
| Kentucky — 3.1% | | | | | | |
Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.38%, 01/01/40 | | | 1,000 | | | | 1,068,660 | |
Kentucky Public Energy Authority, RB, Gas Supply, Series C-1, 4.00%, 12/01/49(d) | | | 10,125 | | | | 10,670,130 | |
Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 6.60%, 07/01/39(c) | | | 8,225 | | | | 7,946,419 | |
State of Kentucky Property & Building Commission, Refunding RB, Project No. 93 (AGC): | | | | | | | | |
5.25%, 02/01/19(a) | | | 5,315 | | | | 5,315,000 | |
5.25%, 02/01/19(a) | | | 3,545 | | | | 3,545,000 | |
5.25%, 02/01/28 | | | 455 | | | | 456,274 | |
| | | | | | | | |
| | | | 29,001,483 | |
| | |
| Louisiana — 2.1% | | | | | | |
City of New Orleans Louisiana Aviation Board, ARB, Series B, AMT, 5.00%, 01/01/40 | | | 4,825 | | | | 5,242,990 | |
City of Shreveport Louisiana Water & Sewer Revenue, RB, Series A (AGM), 5.00%, 12/01/41 | | | 1,645 | | | | 1,836,165 | |
Jefferson Sales Tax District, RB, Series B (AGM): | | | | | | | | |
5.00%, 12/01/34 | | | 670 | | | | 775,445 | |
5.00%, 12/01/35 | | | 895 | | | | 1,032,096 | |
5.00%, 12/01/36 | | | 805 | | | | 924,277 | |
5.00%, 12/01/37 | | | 1,005 | | | | 1,151,398 | |
Louisiana Local Government Environmental Facilities & Community Development Authority, RB, East Baton Rouge Sewerage Commission Projects, Series A,
5.00%, 02/01/44 | | | 8,155 | | | | 8,945,546 | |
| | | | | | | | |
| | | | 19,907,917 | |
| | |
| 32 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield Quality Fund III, Inc. (MYI) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Massachusetts — 1.5% | | | | | | |
Massachusetts Development Finance Agency, RB, Emerson College Issue, Series A, 5.00%, 01/01/47 | | $ | 5,950 | | | $ | 6,374,770 | |
Massachusetts Development Finance Agency, Refunding RB, Emmanuel College Issue, Series A, 5.00%, 10/01/43 | | | 320 | | | | 337,888 | |
Massachusetts HFA, Refunding RB, AMT: | | | | | | | | |
Series A, 4.45%, 12/01/42 | | | 2,235 | | | | 2,274,113 | |
Series C, 5.35%, 12/01/42 | | | 1,000 | | | | 1,006,480 | |
Massachusetts School Building Authority, RB, Dedicated Sales Tax, Senior Series A, 5.00%, 05/15/43 | | | 3,495 | | | | 3,837,056 | |
| | | | | | | | |
| | | | 13,830,307 | |
| | |
| Michigan — 6.1% | | | | | | |
City of Detroit Michigan Water Supply System Revenue, RB, 2nd Lien, Series B (AGM), 6.25%, 07/01/19(a) | | | 1,075 | | | | 1,094,834 | |
City of Lansing Michigan, RB, Board of Water & Light Utilities System, Series A, 5.50%, 07/01/41 | | | 3,185 | | | | 3,441,074 | |
Michigan Finance Authority, Refunding RB: | | | | | | | | |
Henry Ford Health System, 3.25%, 11/15/42 | | | 2,505 | | | | 2,193,428 | |
Hospital; Trinity Health Credit Group, 5.00%, 12/01/39 | | | 16,040 | | | | 17,067,843 | |
Trinity Health Credit Group, 5.00%, 12/01/21(a) | | | 60 | | | | 65,299 | |
Michigan Strategic Fund, RB, 1-75 Improvement Project, AMT: | | | | | | | | |
5.00%, 12/31/43 | | | 9,940 | | | | 10,839,669 | |
(AGM), 4.25%, 12/31/38 | | | 2,000 | | | | 2,027,420 | |
Royal Oak Hospital Finance Authority Michigan, Refunding RB, Beaumont Health Credit Group, Series D, 5.00%, 09/01/39 | | | 1,330 | | | | 1,436,121 | |
State of Michigan Building Authority, Refunding RB, Facilities Program: | | | | | | | | |
Series I (AGC), 5.25%, 10/15/24 | | | 1,750 | | | | 1,790,740 | |
Series I (AGC), 5.25%, 10/15/25 | | | 3,250 | | | | 3,324,945 | |
Series I-A, 5.38%, 10/15/36 | | | 2,075 | | | | 2,250,524 | |
Series I-A, 5.38%, 10/15/41 | | | 1,900 | | | | 2,055,002 | |
Series II-A (AGM), 5.25%, 10/15/36 | | | 8,040 | | | | 8,724,767 | |
Western Michigan University, Refunding RB, General, University and College Improvements (AGM), 5.00%, 11/15/39 | | | 1,080 | | | | 1,207,623 | |
| | | | | | | | |
| | | | 57,519,289 | |
| | |
| Nebraska — 0.8% | | | | | | |
Central Plains Nebraska Energy Project, RB, Gas Project No. 3, 5.25%, 09/01/37 | | | 6,825 | | | | 7,382,671 | |
| | | | | | | | |
| | |
| Nevada — 3.4% | | | | | | |
City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 04/01/19(a) | | | 2,250 | | | | 2,265,548 | |
County of Clark Nevada, ARB, Las Vegas-McCarran International Airport, Series A: | | | | | | | | |
5.25%, 07/01/42 | | | 2,000 | | | | 2,049,400 | |
(AGM), 5.25%, 07/01/39 | | | 5,170 | | | | 5,303,851 | |
Las Vegas Convention & Visitors Authority, RB, Series B, 5.00%, 07/01/43 | | | 20,000 | | | | 22,369,600 | |
| | | | | | | | |
| | | | 31,988,399 | |
| | |
| New Jersey — 9.9% | | | | | | |
New Jersey EDA, RB: | | | | | | | | |
Goethals Bridge Replacement Project, AMT, Private Activity Bond, 5.38%, 01/01/43 | | | 4,920 | | | | 5,284,326 | |
Goethals Bridge Replacement Project, AMT, Private Activity Bond, 5.13%, 01/01/34 | | | 1,930 | | | | 2,076,564 | |
School Facilities Construction Bonds, Series DDD, 5.00%, 06/15/42 | | | 590 | | | | 617,040 | |
Series WW, 5.25%, 06/15/33 | | | 445 | | | | 483,510 | |
Series WW, 5.00%, 06/15/34 | | | 570 | | | | 608,652 | |
Series WW, 5.00%, 06/15/36 | | | 2,635 | | | | 2,795,313 | |
Series WW, 5.25%, 06/15/40 | | | 1,025 | | | | 1,086,264 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| New Jersey (continued) | | | | | | |
New Jersey EDA, Refunding RB, School Facilities Construction: | | | | | | | | |
Series N-1 (AMBAC), 5.50%, 09/01/24 | | $ | 6,325 | | | $ | 7,278,178 | |
Series N-1 (NPFGC), 5.50%, 09/01/28 | | | 1,685 | | | | 2,033,290 | |
New Jersey Higher Education Student Assistance Authority, Refunding RB, Series 1, AMT: | | | | | | | | |
5.50%, 12/01/25 | | | 565 | | | | 601,380 | |
5.50%, 12/01/26 | | | 815 | | | | 863,623 | |
5.75%, 12/01/28 | | | 90 | | | | 96,022 | |
5.88%, 12/01/33 | | | 6,895 | | | | 7,363,998 | |
New Jersey Housing & Mortgage Finance Agency, Refunding RB, M/F Housing, Series 2, AMT, 4.35%, 11/01/33 | | | 2,645 | | | | 2,730,592 | |
New Jersey Transportation Trust Fund Authority, RB: | | | | | | | | |
CAB, Transportation System,
Series A, 0.00%, 12/15/35(b) | | | 18,525 | | | | 8,746,579 | |
CAB, Transportation System, Series C (AGC) (AMBAC), 0.00%, 12/15/25(b) | | | 8,550 | | | | 6,927,210 | |
Federal Highway Reimbursement Revenue Notes, Series A, 5.00%, 06/15/28 | | | 4,205 | | | | 4,739,077 | |
Federal Highway Reimbursement Revenue Notes, Series A, 5.00%, 06/15/29 | | | 2,145 | | | | 2,402,421 | |
Transportation Program, Series AA, 5.25%, 06/15/33 | | | 4,150 | | | | 4,413,733 | |
Transportation Program, Series AA, 5.00%, 06/15/38 | | | 3,990 | | | | 4,182,677 | |
Transportation System, Series A, 5.50%, 06/15/41 | | | 2,980 | | | | 3,107,067 | |
Transportation System, Series A (NPFGC), 5.75%, 06/15/25 | | | 4,000 | | | | 4,724,200 | |
Transportation System, Series AA, 5.50%, 06/15/39 | | | 5,625 | | | | 5,964,131 | |
Transportation System, Series B, 5.50%, 06/15/31 | | | 1,000 | | | | 1,055,430 | |
Transportation System, Series B, 5.00%, 06/15/42 | | | 2,575 | | | | 2,654,696 | |
Transportation System, Series D, 5.00%, 06/15/32 | | | 1,825 | | | | 1,952,933 | |
New Jersey Transportation Trust Fund Authority, Refunding RB, Transportation System, Series A (BAM), 4.00%, 12/15/37 | | | 3,000 | | | | 3,039,000 | |
Tobacco Settlement Financing Corp., Refunding RB, Series A: | | | | | | | | |
5.00%, 06/01/46 | | | 4,000 | | | | 4,135,280 | |
5.25%, 06/01/46 | | | 1,035 | | | | 1,094,326 | |
| | | | | | | | |
| | | | 93,057,512 | |
| | |
| New Mexico — 0.1% | | | | | | |
New Mexico Hospital Equipment Loan Council, Refunding RB, Presbyterian Healthcare Services, 5.00%, 08/01/44 | | | 1,040 | | | | 1,143,823 | |
| | | | | | | | |
| | |
| New York — 5.9% | | | | | | |
City of New York Transitional Finance Authority, Refunding RB, Future Tax Secured, Series B, 5.00%, 11/01/32 | | | 4,150 | | | | 4,568,195 | |
City of New York Transitional Finance Authority Future Tax Secured, RB, Future Tax Secured: | | | | | | | | |
Subordinate Bond, Series C-3, 5.00%, 05/01/41 | | | 5,000 | | | | 5,706,300 | |
Sub-Series F-1, 5.00%, 05/01/39 | | | 3,360 | | | | 3,815,784 | |
Hudson Yards Infrastructure Corp., RB, Senior, Fiscal 2012: | | | | | | | | |
5.75%, 02/15/21(a) | | | 1,190 | | | | 1,287,521 | |
5.75%, 02/15/47 | | | 730 | | | | 784,049 | |
Metropolitan Transportation Authority, Refunding RB, Series B, 5.00%, 11/15/37 | | | 11,500 | | | | 12,756,375 | |
New York State Dormitory Authority, Refunding RB, Series A, 5.00%, 03/15/45 | | | 5,000 | | | | 5,699,600 | |
New York Transportation Development Corp., ARB, LaGuardia Airport Terminal B Redevelopment Project, Series A, AMT, 5.25%, 01/01/50 | | | 8,300 | | | | 8,824,643 | |
State of New York Dormitory Authority, ERB, Series B, 5.25%, 03/15/19(a) | | | 3,250 | | | | 3,263,748 | |
State of New York Urban Development Corp., RB, State Personal Income Tax, General Purpose, Series A, 5.00%, 03/15/43 | | | 7,500 | | | | 8,576,025 | |
| | | | | | | | |
| | | | 55,282,240 | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 33 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield Quality Fund III, Inc. (MYI) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Ohio — 3.0% | | | | | | |
American Municipal Power, Inc., RB, Combined Hydroelectric Projects, Series A, 5.00%, 02/15/41 | | $ | 4,000 | | | $ | 4,384,080 | |
American Municipal Power, Inc., Refunding RB, Combined Hydroelectric Projects, Series A, 5.00%, 02/15/38 | | | 3,055 | | | | 3,370,398 | |
County of Lucas Ohio, Refunding RB, Promedica Healthcare, Series A, 6.50%, 11/15/21(a) | | | 3,000 | | | | 3,381,510 | |
County of Montgomery Ohio, RB, Catholic Health Initiatives, Series D-2, 5.45%, 10/01/38 | | | 11,135 | | | | 12,147,506 | |
State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1: | | | | | | | | |
5.25%, 02/15/32 | | | 1,950 | | | | 2,169,414 | |
5.25%, 02/15/33 | | | 2,730 | | | | 3,034,968 | |
| | | | | | | | |
| | | | 28,487,876 | |
| | |
| Oregon — 0.3% | | | | | | |
Clackamas Community College District, GO, Convertible Deferred Interest Bonds, Series A, 5.00%, 06/15/38(c) | | | 425 | | | | 450,305 | |
County of Clackamas Community College District, GO, Convertible Deferred Interest Bonds, Series A, 5.00%, 06/15/39(c) | | | 395 | | | | 417,602 | |
County of Clackamas Oregon Community College District, GO, Convertible Deferred Interest Bonds, Series A, 5.00%, 06/15/40(c) | | | 420 | | | | 442,415 | |
County of Clackamas Oregon School District No. 12 North Clackamas, GO, CAB, Series A, 0.00%, 06/15/38(b) | | | 2,800 | | | | 1,292,704 | |
| | | | | | | | |
| | | | 2,603,026 | |
| | |
| Pennsylvania — 7.9% | | | | | | |
Commonwealth Financing Authority, RB: | | | | | | | | |
Series B, 5.00%, 06/01/42 | | | 3,305 | | | | 3,542,894 | |
Tobacco Master Settlement Payment, 5.00%, 06/01/34 | | | 2,180 | | | | 2,454,789 | |
Pennsylvania Economic Development Financing Authority, RB: | | | | | | | | |
AMT, 5.00%, 06/30/42 | | | 8,805 | | | | 9,404,973 | |
PA Bridges Finco LP, AMT, 5.00%, 12/31/34 | | | 7,115 | | | | 7,781,462 | |
Pennsylvania Rapid Bridge Replacement,
5.00%, 12/31/38 | | | 6,850 | | | | 7,380,601 | |
Pennsylvania Economic Development Financing Authority, Refunding RB, Series A, 4.00%, 11/15/42 | | | 10,445 | | | | 10,529,291 | |
Pennsylvania Higher Educational Facilities Authority, Refunding RB, Thomas Jefferson University, Series A,
5.25%, 09/01/50 | | | 8,075 | | | | 9,045,776 | |
Pennsylvania Turnpike Commission, RB: | | | | | | | | |
Series A, 5.00%, 12/01/38 | | | 1,775 | | | | 1,944,477 | |
Series A-1, 5.00%, 12/01/41 | | | 2,320 | | | | 2,544,599 | |
Series B, 5.00%, 12/01/40 | | | 4,920 | | | | 5,411,410 | |
Series C, 5.50%, 12/01/23(a) | | | 1,565 | | | | 1,832,991 | |
Sub-Series B-1, 5.00%, 06/01/42 | | | 7,330 | | | | 7,952,317 | |
Subordinate, Special Motor License Fund,
6.00%, 12/01/20(a) | | | 2,575 | | | | 2,772,090 | |
Pennsylvania Turnpike Commission, Refunding RB, Series A-1, 5.00%, 12/01/40 | | | 2,165 | | | | 2,366,995 | |
| | | | | | | | |
| | | | 74,964,665 | |
| | |
| Rhode Island — 1.6% | | | | | | |
Rhode Island Commerce Corp., RB, Airport Corp., Series D, 5.00%, 07/01/41 | | | 495 | | | | 541,718 | |
Rhode Island Health & Educational Building Corp., RB, Series A, 4.00%, 09/15/42 | | | 4,000 | | | | 4,043,480 | |
Tobacco Settlement Financing Corp., Refunding RB, Series B: | | | | | | | | |
4.50%, 06/01/45 | | | 3,000 | | | | 2,789,850 | |
5.00%, 06/01/50 | | | 7,465 | | | | 7,484,558 | |
| | | | | | | | |
| | | | 14,859,606 | |
| | |
| South Carolina — 5.4% | | | | | | |
South Carolina Jobs EDA, Refunding RB, Palmetto Health, Series A (AGM), 6.50%, 08/01/21(a) | | | 3,600 | | | | 4,016,088 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| South Carolina (continued) | | | | | | |
South Carolina Jobs-Economic Development Authority, RB, McLeod Health Obligated Group, 5.00%, 11/01/43 | | $ | 5,000 | | | $ | 5,583,400 | |
South Carolina Ports Authority, ARB, AMT,
5.00%, 07/01/38 | | | 3,380 | | | | 3,794,861 | |
State of South Carolina Ports Authority, RB, AMT, 5.25%, 07/01/50 | | | 6,530 | | | | 7,094,780 | |
State of South Carolina Public Service Authority, RB: | | | | | | | | |
Santee Cooper, Series A, 5.50%, 12/01/54 | | | 11,450 | | | | 12,277,033 | |
Series E, 5.50%, 12/01/53 | | | 4,525 | | | | 4,826,003 | |
State of South Carolina Public Service Authority, Refunding RB, Series B: | | | | | | | | |
Santee Cooper, 5.00%, 12/01/38 | | | 5,870 | | | | 6,182,871 | |
(AGM), 5.00%, 12/01/56 | | | 7,155 | | | | 7,611,489 | |
| | | | | | | | |
| | | | 51,386,525 | |
| | |
| Texas — 14.1% | | | | | | |
City of Dallas TX Waterworks & Sewer System Revenue, Refunding RB, Series C, 4.00%, 10/01/43 | | | 5,000 | | | | 5,199,050 | |
City of Houston Texas Combined Utility System, Refunding RB, Combined 1st Lien, Series A (AGC)(a): | | | | | | | | |
6.00%, 05/15/19 | | | 300 | | | | 303,687 | |
6.00%, 05/15/19 | | | 5,400 | | | | 5,465,556 | |
City of Houston Texas Combined Utility System Revenue, Refunding RB, Combined 1st Lien, Series A (AGC)(a): | | | | | | | | |
5.38%, 05/15/19 | | | 190 | | | | 192,005 | |
5.38%, 05/15/19 | | | 3,460 | | | | 3,496,019 | |
City of San Antonio Texas Electric & Gas Revenue, Refunding RB, 5.00%, 02/01/42 | | | 7,450 | | | | 8,394,585 | |
City of San Antonio Texas Electric & Gas Revenue, RB, Junior Lien, 5.00%, 02/01/38 | | | 1,450 | | | | 1,582,284 | |
County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A, 0.00%, 09/15/36(b) | | | 5,810 | | | | 2,851,257 | |
County of Tarrant Cultural Education Facilities Finance Corp., RB, Christus Health, Series B, 5.00%, 07/01/34 | | | 5,000 | | | | 5,695,100 | |
County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Cook Children’s Medical Center, 5.25%, 12/01/39 | | | 2,095 | | | | 2,322,077 | |
Dallas-Fort Worth International Airport, ARB, Joint Improvement, Series D, AMT, 5.00%, 11/01/38 | | | 10,980 | | | | 11,580,057 | |
Dallas-Fort Worth International Airport, Refunding ARB, Series F: | | | | | | | | |
5.25%, 11/01/33 | | | 2,745 | | | | 3,063,530 | |
5.00%, 11/01/35 | | | 5,000 | | | | 5,212,400 | |
Grand Parkway Transportation Corp., RB, Subordinate Tier Toll Revenue Bonds, TELA Supported, Series A,
5.00%, 10/01/43 | | | 7,940 | | | | 9,005,786 | |
Leander ISD, GO, Refunding, CAB, Series D (PSF-GTD), 0.00%, 08/15/38(b) | | | 9,685 | | | | 4,246,872 | |
North Texas Tollway Authority, RB, CAB, Special Project System, Series B, 0.00%, 09/01/31(a)(b) | | | 18,100 | | | | 5,226,013 | |
North Texas Tollway Authority, Refunding RB: | | | | | | | | |
1st Tier System, Series A, 6.00%, 01/01/28 | | | 1,175 | | | | 1,178,772 | |
1st Tier-Series A, 5.00%, 01/01/39 | | | 9,080 | | | | 10,292,725 | |
2nd Tier-Series B, 5.00%, 01/01/43 | | | 9,455 | | | | 10,489,093 | |
Series B, 5.00%, 01/01/40 | | | 1,710 | | | | 1,846,338 | |
San Antonio Public Facilities Corp., Refunding RB, Convention Center Refinancing & Expansion Project, CAB(b): | | | | | | | | |
0.00%, 09/15/35 | | | 680 | | | | 322,966 | |
0.00%, 09/15/36 | | | 12,195 | | | | 5,450,921 | |
0.00%, 09/15/37 | | | 8,730 | | | | 3,667,386 | |
Texas Municipal Gas Acquisition & Supply Corp. III, RB, Natural Gas Utility Improvements: | | | | | | | | |
5.00%, 12/15/31 | | | 1,665 | | | | 1,779,302 | |
5.00%, 12/15/32 | | | 3,930 | | | | 4,189,459 | |
| | |
| 34 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield Quality Fund III, Inc. (MYI) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
| | |
| Texas (continued) | | | | | | |
Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien, AMT, Blueridge Transportation Group, 5.00%, 12/31/45 | | $ | 3,630 | | | $ | 3,858,363 | |
Texas Transportation Commission, Refunding RB, Central Texas Turnpike System, 1st Tier, Series A, 5.00%, 08/15/41 | | | 11,345 | | | | 12,005,960 | |
Texas Water Development Board, RB, State Water Implementation Fund, Series B, 4.00%, 10/15/43 | | | 4,315 | | | | 4,462,185 | |
| | | | | | | | |
| | | | | | | 133,379,748 | |
|
| Utah — 1.2% | |
Salt Lake City Corp. Airport Revenue, ARB, Series A, AMT: | | | | | | | | |
5.00%, 07/01/42 | | | 3,490 | | | | 3,849,645 | |
5.00%, 07/01/43 | | | 3,190 | | | | 3,543,643 | |
Salt Lake City Corp. Airport Revenue, RB, AMT, Series A, 5.00%, 07/01/37 | | | 3,475 | | | | 3,922,371 | |
| | | | | | | | |
| | | | | | | 11,315,659 | |
|
| Washington — 6.6% | |
Port of Seattle Washington, ARB, AMT, Series A, 5.00%, 05/01/38 | | | 20,000 | | | | 22,251,800 | |
Port of Seattle Washington, RB, Intermediate Lien, Series C, AMT, 5.00%, 04/01/40 | | | 2,830 | | | | 3,102,359 | |
State of Washington Convention Center Public Facilities District, RB: | | | | | | | | |
Civic Convention Center, 5.00%, 07/01/38 | | | 9,260 | | | | 10,428,242 | |
Sub, 5.00%, 07/01/43 | | | 7,635 | | | | 8,494,319 | |
Washington Health Care Facilities Authority, RB: | | | | | | | | |
MultiCare Health System, Remarketing, Series B, 5.00%, 08/15/44 | | | 1,000 | | | | 1,070,680 | |
Providence Health & Services, Series A, 5.25%, 10/01/39 | | | 2,725 | | | | 2,816,587 | |
Washington Health Care Facilities Authority, Refunding RB: | | | | | | | | |
Catholic Health Initiatives, Series D, 6.38%, 10/01/36 | | | 5,400 | | | | 5,418,522 | |
Multicare Health System, Series B, 4.00%, 08/15/41 | | | 9,000 | | | | 9,095,220 | |
| | | | | | | | |
| | | | | | | 62,677,729 | |
|
| Wisconsin — 2.5% | |
Public Finance Authority, RB, KU Campus Development Corp., Central District Development Project, 5.00%, 03/01/46 | | | 560 | | | | 609,297 | |
State of Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Credit Group, Series E, 5.00%, 11/15/33 | | | 3,745 | | | | 3,821,773 | |
Wisconsin Health & Educational Facilities Authority, Refunding RB: | | | | | | | | |
Ascension Health Credit Group, Series A, 5.00%, 11/15/36 | | | 4,815 | | | | 5,390,296 | |
Ascension Health Credit Group, Series A, 5.00%, 11/15/39 | | | 5,000 | | | | 5,522,050 | |
Milwaukee Regional Medical Center Thermal Service, 5.00%, 04/01/44 | | | 7,350 | | | | 8,265,811 | |
| | | | | | | | |
| | | | | | | 23,609,227 | |
| | | | | | | | |
| |
Total Municipal Bonds — 116.8%
(Cost — $1,042,706,491) | | | | 1,101,662,304 | |
| | | | | | | | |
|
Municipal Bonds Transferred to Tender Option Bond Trusts(e) | |
| | |
Arizona — 1.0% | | | | | | | | |
City of Phoenix Civic Improvement Corp., Refunding RB, Senior Lien, AMT, 5.00%, 07/01/43 | | | 8,500 | | | | 9,511,202 | |
| | | | | | | | |
|
| California — 4.1% | |
City of Riverside California Electric Revenue, RB, Issue D (AGM), 5.00%, 10/01/38 | | | 17,685 | | | | 17,761,465 | |
Los Angeles California Unified School District, GO, Election of 2008, Series B-1, 5.25%, 07/01/42(f) | | | 7,074 | | | | 8,338,760 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| California (continued) | |
Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A, 6.00%, 08/01/19(a) | | $ | 5,248 | | | $ | 5,363,261 | |
San Diego California Community College District, GO, Election of 2002, 5.25%, 08/01/19(a) | | | 1,047 | | | | 1,066,620 | |
State of California, GO, Refunding, Various Purpose, 5.25%, 10/01/39 | | | 3,000 | | | | 3,443,760 | |
University of California, RB, Series O, 5.75%, 05/15/19(a) | | | 2,206 | | | | 2,231,340 | |
| | | | | | | | |
| | | | | | | 38,205,206 | |
|
| Colorado — 1.0% | |
City & County of Denver Colorado Airport System Revenue, Refunding ARB, Sub-System, Series A, AMT, 5.25%, 12/01/43(f) | | | 5,834 | | | | 6,664,107 | |
Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A, 5.50%, 07/01/34(f) | | | 2,469 | | | | 2,496,157 | |
| | | | | | | | |
| | | | | | | 9,160,264 | |
|
| Connecticut — 0.5% | |
State of Connecticut Health & Educational Facility Authority, Refunding RB, Trinity Health Credit Group, 5.00%, 12/01/45 | | �� | 3,932 | | | | 4,317,612 | |
| | | | | | | | |
|
| District of Columbia — 0.3% | |
District of Columbia, RB, Series A, 5.50%, 12/01/30(f) | | | 2,594 | | | | 2,669,785 | |
| | | | | | | | |
|
| Florida — 6.3% | |
City of Miami Beach Florida, RB, 5.00%, 09/01/45 | | | 8,760 | | | | 9,848,846 | |
City of Miami Beach Florida Stormwater Revenue, Refunding RB, 5.00%, 09/01/41 | | | 10,000 | | | | 11,300,281 | |
County of Miami-Dade Florida Transit System, Refunding RB, Sales Tax, 5.00%, 07/01/42 | | | 4,840 | | | | 5,229,233 | |
County of Miami-Dade Florida Water & Sewer System, RB, (AGM), 5.00%, 10/01/20(a) | | | 11,702 | | | | 12,334,564 | |
County of Orange Florida School Board, COP, Series A (AGC), 5.50%, 08/01/19(a) | | | 12,013 | | | | 12,238,884 | |
County of Pinellas Florida School Board, COP, Master Lease Program, Series A, 5.00%, 07/01/41 | | | 7,880 | | | | 8,831,825 | |
| | | | | | | | |
| | | | | | | 59,783,633 | |
|
| Illinois — 3.5% | |
State of Illinois, RB, Build Illinois, Series B, 5.25%, 06/15/19(a)(f) | | | 3,499 | | | | 3,543,624 | |
State of Illinois Toll Highway Authority, RB: | | | | | | | | |
Senior, Series C, 5.00%, 01/01/36 | | | 10,000 | | | | 11,197,196 | |
Series A, 5.00%, 01/01/38 | | | 5,836 | | | | 6,328,098 | |
Series A, 5.00%, 01/01/40 | | | 7,621 | | | | 8,536,582 | |
Series B, 5.00%, 01/01/40 | | | 2,939 | | | | 3,240,152 | |
| | | | | | | | |
| | | | | | | 32,845,652 | |
|
| Kansas — 1.7% | |
County of Wyandotte Kansas Unified School District, GO, Series A, 5.50%, 09/01/47 | | | 13,470 | | | | 15,816,731 | |
| | | | | | | | |
|
| Massachusetts — 3.0% | |
Commonwealth of Massachusetts, GO: | | | | | | | | |
Consolidated Loan, Series E, 5.25%, 09/01/43 | | | 20,000 | | | | 23,393,900 | |
Series A, 5.00%, 03/01/46 | | | 4,204 | | | | 4,627,476 | |
| | | | | | | | |
| | | | | | | 28,021,376 | |
|
| Michigan — 2.1% | |
Michigan Finance Authority, RB, Beaumont Health Credit Group, Series A, 5.00%, 11/01/44 | | | 5,591 | | | | 6,059,202 | |
State of Michigan Building Authority, Refunding RB, Series I: | | | | | | | | |
Facilities Program, 5.00%, 10/15/45 | | | 2,410 | | | | 2,726,819 | |
5.00%, 04/15/38 | | | 10,000 | | | | 11,375,251 | |
| | | | | | | | |
| | | | | | | 20,161,272 | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 35 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield Quality Fund III, Inc. (MYI) (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| Nevada — 2.9% | |
County of Clark Nevada, GOL, Stadium Improvement, Series A, 5.00%, 06/01/43 | | $ | 9,730 | | | $ | 11,096,664 | |
County of Clark Nevada Water Reclamation District, GO, Series B(a): | | | | | | | | |
5.50%, 07/01/19 | | | 510 | | | | 517,911 | |
5.75%, 07/01/19 | | | 4,813 | | | | 4,894,377 | |
Las Vegas Valley Water District Nevada, GO, Refunding, Water Improvement, Series A, 5.00%, 06/01/46 | | | 9,840 | | | | 10,960,800 | |
| | | | | | | | |
| | | | | | | 27,469,752 | |
|
| New Jersey — 2.1% | |
County of Hudson New Jersey Improvement Authority, RB, Hudson County Vocational-Technical Schools Project, 5.25%, 05/01/51 | | | 2,320 | | | | 2,607,587 | |
Garden State Preservation Trust, RB, Election of 2005, Series A (AGM), 5.75%, 11/01/28 | | | 10,000 | | | | 12,058,100 | |
New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B, 5.25%, 06/15/36(f) | | | 4,961 | | | | 5,170,692 | |
| | | | | | | | |
| | | | | | | 19,836,379 | |
|
| New York — 7.4% | |
City of New York Water & Sewer System, Refunding RB: | | | | | | | | |
2nd General Resolution, Fiscal 2013, Series CC, 5.00%, 06/15/47 | | | 15,521 | | | | 17,260,960 | |
Series DD, 5.00%, 06/15/35 | | | 4,740 | | | | 5,353,514 | |
Metropolitan Transportation Authority, RB, Transportation, Sub-Series D-1, 5.25%, 11/15/44 | | | 9,850 | | | | 11,036,186 | |
Metropolitan Transportation Authority, Refunding RB,Series C-1, 5.25%, 11/15/56 | | | 4,275 | | | | 4,737,176 | |
Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 198th Series, 5.25%, 11/15/56 | | | 6,402 | | | | 7,242,736 | |
State of New York Dormitory Authority, RB, Group B, State Sales Tax, Series A, 5.00%, 03/15/39 | | | 7,622 | | | | 8,646,899 | |
State of New York Urban Development Corp., RB, Personal Income Tax, General Purpose, Series A-1, 5.00%, 03/15/43 | | | 14,280 | | | | 15,656,056 | |
| | | | | | | | |
| | | | | | | 69,933,527 | |
|
| Pennsylvania — 0.3% | |
County of Westmoreland Pennsylvania Municipal Authority, Refunding RB, (BAM), 5.00%, 08/15/42 | | | 2,560 | | | | 2,806,387 | |
| | | | | | | | |
|
| Texas — 3.5% | |
Aldine Independent School District, GO, Refunding(PSF-GTD), 5.00%, 02/15/42 | | | 9,701 | | | | 10,987,681 | |
County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Baylor Health Care System Project, Series A, 5.00%, 11/15/38 | | | 1,799 | | | | 1,944,238 | |
County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Texas Health Resources System, Series A, 5.00%, 02/15/41 | | | 9,840 | | | | 10,885,033 | |
Dallas Fort Worth International Airport, ARB, Series H, AMT, 5.00%, 11/01/37(f) | | | 8,868 | | | | 9,353,627 | |
| | | | | | | | |
| | | | | | | 33,170,579 | |
| | |
| Virginia — 1.5% | | | | | | |
Hampton Roads Transportation Accountability Commission, RB, Transportation Fund, Senior Lien, Series A, 5.50%, 07/01/57 | | | 11,740 | | | | 13,926,353 | |
| | | | | | | | |
|
| Washington — 1.8% | |
Metropolitan Washington Airports Authority, Refunding ARB, Series A, AMT, 5.00%, 10/01/30 | | | 6,880 | | | | 7,438,897 | |
Washington Health Care Facilities Authority, Refunding RB, Seattle Children’s Hospital, Series B, 5.00%, 10/01/38 | | | 8,205 | | | | 9,448,167 | |
| | | | | | | | |
| | | | | | | 16,887,064 | |
| | | | | | | | |
| Security | | Par
(000) | | | Value | |
|
| Wisconsin — 4.1% | |
State of Wisconsin, Refunding RB, Series A, 6.00%, 05/01/19(a) | | $ | 14,780 | | | $ | 14,937,148 | |
State of Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health, Inc., Obligated Group, Series C, 5.25%, 04/01/19(a)(f) | | | 7,459 | | | | 7,501,251 | |
Wisconsin Health & Educational Facilities Authority, Refunding RB: | | | | | | | | |
Ascension Health Credit Group, 5.00%, 11/15/39 | | | 12,650 | | | | 13,970,769 | |
Froedtert & Community Health, Inc., Obligated Group, Series A, 5.00%, 04/01/42 | | | 2,490 | | | | 2,662,669 | |
| | | | | | | | |
| | | | | | | 39,071,837 | |
| | | | | | | | |
| |
Total Municipal Bonds Transferred to Tender Option Bond Trusts — 47.1%
(Cost — $436,569,873) | | | | 443,594,611 | |
| | | | | | | | |
| |
Total Long-Term Investments — 163.9%
(Cost — $1,479,276,364) | | | | 1,545,256,915 | |
| | | | | | | | |
| | |
| | | Shares | | | | |
|
| Short-Term Securities — 0.9% | |
BlackRock Liquidity Funds, MuniCash, Institutional Class, 1.24%(g)(h) | | | 8,629,327 | | | | 8,631,052 | |
| | | | | | | | |
| |
Total Short-Term Securities — 0.9%
(Cost — $8,630,415) | | | | 8,631,052 | |
| | | | | | | | |
| |
Total Investments — 164.8%
(Cost — $1,487,906,779) | | | | 1,553,887,967 | |
| |
Other Assets Less Liabilities — 1.2% | | | | 12,210,069 | |
| |
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (28.3)% | | | | (266,973,335 | ) |
| |
VRDP Shares, at Liquidation Value, Net of Deferred Offering
Costs — (37.7)% | | | | (355,952,998 | ) |
| | | | | | | | |
| |
Net Assets Applicable to Common Shares — 100.0% | | | $ | 943,171,703 | |
| | | | | | | | |
| (a) | U.S. 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) | Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end. |
| (d) | Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end. |
| (e) | Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details. |
| (f) | All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under agreements, which expire between June 15, 2019 to April 01, 2039, is $25,013,578. See Note 4 of the Notes to Financial Statements for details. |
| (g) | Annualized 7-day yield as of period end. |
| | |
| 36 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield Quality Fund III, Inc. (MYI) |
| (h) | During the six months ended January 31, 2019, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Affiliate | | Shares
Held at
07/31/18 | | | Net
Activity | | | Shares
Held at
01/31/19 | | | Value at
01/31/19 | | | Income | | | Net Realized Gain (Loss) (a) | | | Change in
Unrealized
Appreciation
(Depreciation) | |
BlackRock Liquidity Funds, MuniCash, Institutional Class | | | 14,318,158 | | | | (5,688,831 | ) | | | 8,629,327 | | | $ | 8,631,052 | | | $ | 64,548 | | | $ | (837 | ) | | $ | 218 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes net capital gain distributions, if applicable. | |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
| | | | | | | | | | | | | | | | |
| Description | | Number of
Contracts | | | Expiration
Date | | | Notional
Amount (000) | | | Value/
Unrealized
Appreciation
(Depreciation) | |
Short Contracts: | | | | | | | | | | | | | | | | |
10-Year U.S. Treasury Note | | | 337 | | | | 03/20/19 | | | $ | 41,272 | | | $ | (665,743 | ) |
Long U.S. Treasury Bond | | | 525 | | | | 03/20/19 | | | | 77,011 | | | | (3,162,789 | ) |
5-Year U.S. Treasury Note | | | 56 | | | | 03/29/19 | | | | 6,432 | | | | (119,570 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | $ | (3,948,102 | ) |
| | | | | | | | | | | | | | | | |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contracts | | | Credit
Contracts | | | Equity
Contracts | | | Foreign
Currency
Exchange
Contracts | | | Interest
Rate
Contracts | | | Other
Contracts | | | Total | |
Liabilities — Derivative Financial Instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized depreciation(a) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (3,948,102 | ) | | $ | — | | | $ | (3,948,102 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes cumulative appreciation (depreciation) on futures contracts if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities. | |
For the six months ended January 31, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contracts | | | Credit
Contracts | | | Equity
Contracts | | | Foreign
Currency
Exchange
Contracts | | | Interest
Rate
Contracts | | | Other
Contracts | | | Total | |
Net Realized Gain (Loss) from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 751,861 | | | $ | — | | | $ | 751,861 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Change in Unrealized Appreciation (Depreciation) on: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (3,811,508 | ) | | $ | — | | | $ | (3,811,508 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| | | | |
Futures contracts: | | | | |
Average notional value of contracts — short | | $ | 87,587,750 | |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
| | | | |
| SCHEDULES OF INVESTMENTS | | | 37 | |
| | |
Schedule of Investments (unaudited) (continued) January 31, 2019 | | BlackRock MuniYield Quality Fund III, Inc. (MYI) |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Long-Term Investments(a) | | $ | — | | | $ | 1,545,256,915 | | | $ | — | | | $ | 1,545,256,915 | |
Short-Term Securities | | | 8,631,052 | | | | — | | | | — | | | | 8,631,052 | |
| | | | | | | | | | | | | | | | |
| | $ | 8,631,052 | | | $ | 1,545,256,915 | | | $ | — | | | $ | 1,553,887,967 | |
| | | | | | | | | | | | | | | | |
Derivative Financial Instruments(b) | | | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Interest rate contracts | | $ | (3,948,102 | ) | | $ | — | | | $ | — | | | $ | (3,948,102 | ) |
| | | | | | | | | | | | | | | | |
| | (a) | See above Schedule of Investments for values in each state or political subdivision. | |
| | (b) | Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument. | |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Liabilities: | | | | | | | | | | | | | | | | |
TOB trust certificates | | $ | — | | | $ | (265,817,094 | ) | | $ | — | | | $ | (265,817,094 | ) |
VRDP Shares at Liquidation Value | | | — | | | | (356,400,000 | ) | | | — | | | | (356,400,000 | ) |
| | | | | | | | | | | | | | | | |
| | $ | — | | | $ | (622,217,094 | ) | | $ | — | | | $ | (622,217,094 | ) |
| | | | | | | | | | | | | | | | |
During the six months ended January 31, 2019, there were no transfers between levels.
See notes to financial statements.
| | |
| 38 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Assets and Liabilities (unaudited)
January 31, 2019
| | | | | | | | | | | | | | | | |
| | | MUE | | | MCA | | | MYN | | | MYI | |
| | | | |
ASSETS | | | | | | | | | | | | | | | | |
Investments at value — unaffiliated(a) | | $ | 476,754,078 | | | $ | 894,641,686 | | | $ | 895,006,263 | | | $ | 1,545,256,915 | |
Investments at value — affiliated(b) | | | — | | | | 249,845 | | | | 270,137 | | | | 8,631,052 | |
Cash pledged for futures contracts | | | 390,800 | | | | 763,750 | | | | 798,350 | | | | 1,785,600 | |
Receivables: | | | | | | | | | | | | | | | | |
Interest — unaffiliated | | | 5,375,693 | | | | 12,516,567 | | | | 9,192,434 | | | | 16,226,474 | |
Dividends — affiliated | | | 12,802 | | | | 855 | | | | 2,783 | | | | 10,475 | |
TOB Trust | | | — | | | | — | | | | 2,185,000 | | | | — | |
Prepaid expenses | | | 5,306 | | | | 6,239 | | | | 6,306 | | | | 7,746 | |
| | | | | | | | | | | | | | | | |
Total assets | | | 482,538,679 | | | | 908,178,942 | | | | 907,461,273 | | | | 1,571,918,262 | |
| | | | | | | | | | | | | | | | |
| | | | |
ACCRUED LIABILITIES | | | | | | | | | | | | | | | | |
Bank overdraft | | | 132,552 | | | | — | | | | — | | | | — | |
Payables: | | | | | | | | | | | | | | | | |
Income dividend distributions — Common Shares | | | 1,103,517 | | | | 1,789,097 | | | | 1,682,430 | | | | 3,441,609 | |
Interest expense and fees | | | 147,808 | | | | 1,060,259 | | | | 446,544 | | | | 1,156,241 | |
Variation margin on futures contracts | | | 151,586 | | | | 298,344 | | | | 310,891 | | | | 698,285 | |
Investment advisory fees | | | 214,398 | | | | 379,452 | | | | 380,520 | | | | 663,085 | |
Directors’ and Officer’s fees | | | 3,755 | | | | 281,119 | | | | 295,457 | | | | 509,408 | |
Investments purchased | | | — | | | | 10,590,980 | | | | 4,370,000 | | | | 149,288 | |
Other accrued expenses | | | 119,715 | | | | 154,975 | | | | 173,475 | | | | 358,551 | |
| | | | | | | | | | | | | | | | |
Total accrued liabilities | | | 1,873,331 | | | | 14,554,226 | | | | 7,659,317 | | | | 6,976,467 | |
| | | | | | | | | | | | | | | | |
| | | | |
OTHER LIABILITIES | | | | | | | | | | | | | | | | |
TOB Trust Certificates | | | 49,352,286 | | | | 212,664,205 | | | | 112,386,871 | | | | 265,817,094 | |
VMTP Shares, at liquidation value of $100,000 per share(c)(d) | | | 131,000,000 | | | | — | | | | — | | | | — | |
VRDP Shares, at liquidation value of $100,000 per share, net of deferred offering costs(c)(d) | | | — | | | | 166,245,364 | | | | 247,361,144 | | | | 355,952,998 | |
| | | | | | | | | | | | | | | | |
Total other liabilities | | | 180,352,286 | | | | 378,909,569 | | | | 359,748,015 | | | | 621,770,092 | |
| | | | | | | | | | | | | | | | |
Total liabilities | | | 182,225,617 | | | | 393,463,795 | | | | 367,407,332 | | | | 628,746,559 | |
| | | | | | | | | | | | | | | | |
| | | | |
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS | | $ | 300,313,062 | | | $ | 514,715,147 | | | $ | 540,053,941 | | | $ | 943,171,703 | |
| | | | | | | | | | | | | | | | |
| | | | |
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS CONSIST OF | | | | | | | | | | | | | | | | |
Paid-in capital(e)(f) | | $ | 290,717,417 | | | $ | 493,026,986 | | | $ | 524,464,224 | | | $ | 885,376,588 | |
Accumulated earnings | | | 9,595,645 | | | | 21,688,161 | | | | 15,589,717 | | | | 57,795,115 | |
| | | | | | | | | | | | | | | | |
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS | | $ | 300,313,062 | | | $ | 514,715,147 | | | $ | 540,053,941 | | | $ | 943,171,703 | |
| | | | | | | | | | | | | | | | |
| | | | |
Net asset value, per Common Share | | $ | 13.33 | | | $ | 14.96 | | | $ | 13.64 | | | $ | 13.84 | |
| | | | | | | | | | | | | | | | |
| | | | |
(a) Investments at cost — unaffiliated | | $ | 457,536,590 | | | $ | 869,700,968 | | | $ | 860,016,957 | | | $ | 1,479,276,364 | |
(b) Investments at cost — affiliated | | $ | — | | | $ | 249,845 | | | $ | 270,137 | | | $ | 8,630,415 | |
(c) Preferred Shares outstanding, par value $0.10 per share | | | 1,310 | | | | 1,665 | | | | 2,477 | | | | 3,564 | |
(d) Preferred Shares authorized | | | 9,490 | | | | 12,665 | | | | 14,637 | | | | 26,364 | |
(e) Common Shares outstanding, par value $0.10 per share | | | 22,520,759 | | | | 34,405,717 | | | | 39,586,584 | | | | 68,150,681 | |
(f) Common Shares authorized | | | 199,990,510 | | | | 199,987,335 | | | | 199,985,363 | | | | 199,973,636 | |
See notes to financial statements.
Statements of Operations (unaudited)
Six Months Ended January 31, 2019
| | | | | | | | | | | | | | | | |
| | | MUE | | | MCA | | | MYN | | | MYI | |
| | | | |
INVESTMENT INCOME | | | | | | | | | | | | | | | | |
Interest — unaffiliated | | $ | 10,213,848 | | | $ | 17,266,817 | | | $ | 17,235,792 | | | $ | 31,993,274 | |
Dividends — affiliated | | | 47,459 | | | | 14,127 | | | | 19,764 | | | | 64,548 | |
| | | | | | | | | | | | | | | | |
Total investment income | | | 10,261,307 | | | | 17,280,944 | | | | 17,255,556 | | | | 32,057,822 | |
| | | | | | | | | | | | | | | | |
| | | | |
EXPENSES | | | | | | | | | | | | | | | | |
Investment advisory | | | 1,327,861 | | | | 2,240,844 | | | | 2,253,202 | | | | 3,922,279 | |
Professional | | | 40,807 | | | | 54,277 | | | | 57,627 | | | | 84,979 | |
Accounting services | | | 35,768 | | | | 51,939 | | | | 56,675 | | | | 78,520 | |
Rating agency | | | 21,752 | | | | 21,762 | | | | 21,786 | | | | 21,821 | |
Transfer agent | | | 16,134 | | | | 18,569 | | | | 21,315 | | | | 38,073 | |
Directors and Officer | | | 14,672 | | | | 20,443 | | | | 21,059 | | | | 37,006 | |
Custodian | | | 5,132 | | | | 6,141 | | | | 4,930 | | | | 11,763 | |
Printing | | | 3,936 | | | | 4,732 | | | | 4,902 | | | | 6,328 | |
Registration | | | 4,787 | | | | 6,739 | | | | 7,754 | | | | 13,530 | |
Liquidity fees | | | — | | | | — | | | | 15,291 | | | | 98,311 | |
Remarketing fees on Preferred Shares | | | — | | | | — | | | | 1,417 | | | | 8,910 | |
Miscellaneous | | | 10,741 | | | | 16,875 | | | | — | | | | 23,102 | |
| | | | | | | | | | | | | | | | |
Total expenses excluding interest expense, fees and amortization of offering costs | | | 1,481,590 | | | | 2,442,321 | | | | 2,465,958 | | | | 4,344,622 | |
Interest expense, fees and amortization of offering costs(a) | | | 2,239,147 | | | | 4,290,171 | | | | 4,206,995 | | | | 7,143,160 | |
| | | | | | | | | | | | | | | | |
Total expenses | | | 3,720,737 | | | | 6,732,492 | | | | 6,672,953 | | | | 11,487,782 | |
Less fees waived and/or reimbursed by the Manager | | | (53,672 | ) | | | (712 | ) | | | (595 | ) | | | (4,198 | ) |
| | | | | | | | | | | | | | | | |
Total expenses after fees waived and/or reimbursed | | | 3,667,065 | | | | 6,731,780 | | | | 6,672,358 | | | | 11,483,584 | |
| | | | | | | | | | | | | | | | |
Net investment income | | | 6,594,242 | | | | 10,549,164 | | | | 10,583,198 | | | | 20,574,238 | |
| | | | | | | | | | | | | | | | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | | | | | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | | | | | |
Investments — unaffiliated | | | (50,006 | ) | | | (1,600,396 | ) | | | (2,829,499 | ) | | | (2,028,774 | ) |
Investments — affiliated | | | 2,138 | | | | (11 | ) | | | 87 | | | | (1,247 | ) |
Futures contracts | | | 234,126 | | | | 574,423 | | | | 274,036 | | | | 751,861 | |
Capital gain distributions from investment companies — affiliated | | | 549 | | | | — | | | | — | | | | 410 | |
| | | | | | | | | | | | | | | | |
| | | 186,807 | | | | (1,025,984 | ) | | | (2,555,376 | ) | | | (1,277,750 | ) |
| | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments — unaffiliated | | | (3,611,437 | ) | | | (6,033,603 | ) | | | 267,906 | | | | (4,461,916 | ) |
Investments — affiliated | | | (289 | ) | | | (25 | ) | | | (361 | ) | | | 218 | |
Futures contracts | | | (1,051,783 | ) | | | (2,141,292 | ) | | | (1,901,734 | ) | | | (3,811,508 | ) |
| | | | | | | | | | | | | | | | |
| | | (4,663,509 | ) | | | (8,174,920 | ) | | | (1,634,189 | ) | | | (8,273,206 | ) |
| | | | | | | | | | | | | | | | |
Net realized and unrealized loss | | | (4,476,702 | ) | | | (9,200,904 | ) | | | (4,189,565 | ) | | | (9,550,956 | ) |
| | | | | | | | | | | | | | | | |
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS RESULTING FROM OPERATIONS | | $ | 2,117,540 | | | $ | 1,348,260 | | | $ | 6,393,633 | | | $ | 11,023,282 | |
| | | | | | | | | | | | | | | | |
| (a) | Related to TOB Trusts, VMTP Shares and/or VRDP Shares. |
See notes to financial statements.
| | |
| 40 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets
| | | | | | | | |
| | | MUE | |
| | | Six Months Ended
01/31/19
(unaudited) | | | Year Ended
07/31/18 | |
| | |
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS | | | | | | | | |
| | |
OPERATIONS | | | | | | | | |
Net investment income | | $ | 6,594,242 | | | $ | 15,481,866 | |
Net realized gain | | | 186,807 | | | | 1,072,068 | |
Net change in unrealized appreciation (depreciation) | | | (4,663,509 | ) | | | (14,608,136 | ) |
| | | | | | | | |
Net increase in net assets applicable to Common Shareholders resulting from operations | | | 2,117,540 | | | | 1,945,798 | |
| | | | | | | | |
| | |
DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)(b) | | | | | | | | |
Decrease in net assets resulting from distributions to Common Shareholders | | | (7,071,518 | ) | | | (16,169,915 | ) |
| | | | | | | | |
| | |
CAPITAL SHARE TRANSACTIONS | | | | | | | | |
Reinvestment of common distributions | | | — | | | | 78,607 | |
| | | | | | | | |
| | |
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS(b) | | | | | | | | |
Total decrease in net assets applicable to Common Shareholders | | | (4,953,978 | ) | | | (14,145,510 | ) |
Beginning of period | | | 305,267,040 | | | | 319,412,550 | |
| | | | | | | | |
End of period | | $ | 300,313,062 | | | $ | 305,267,040 | |
| | | | | | | | |
| (a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (b) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
Statements of Changes in Net Assets (continued)
| | | | | | | | |
| | | MCA | |
| | | Six Months Ended
01/31/19
(unaudited) | | | Year Ended
07/31/18 | |
| | |
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS | | | | | | | | |
|
OPERATIONS | |
Net investment income | | $ | 10,549,164 | | | $ | 23,092,580 | |
Net realized gain (loss) | | | (1,025,984 | ) | | | 2,912,708 | |
Net change in unrealized appreciation (depreciation) | | | (8,174,920 | ) | | | (18,294,474 | ) |
| | | | | | | | |
Net increase in net assets applicable to Common Shareholders resulting from operations | | | 1,348,260 | | | | 7,710,814 | |
| | | | | | | | |
|
DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)(b) | |
Decrease in net assets resulting from distributions to Common Shareholders | | | (12,165,071 | ) | | | (23,481,902 | ) |
| | | | | | | | |
|
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS(b) | |
Total decrease in net assets applicable to Common Shareholders | | | (10,816,811 | ) | | | (15,771,088 | ) |
Beginning of period | | | 525,531,958 | | | | 541,303,046 | |
| | | | | | | | |
End of period | | $ | 514,715,147 | | | $ | 525,531,958 | |
| | | | | | | | |
| (a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (b) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
| | |
| 42 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (continued)
| | | | | | | | |
| | | MYN | |
| | | Six Months Ended
01/31/19
(unaudited) | | | Year Ended
07/31/18 | |
| | |
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS | | | | | | | | |
|
OPERATIONS | |
Net investment income | | $ | 10,583,198 | | | $ | 22,782,316 | |
Net realized gain (loss) | | | (2,555,376 | ) | | | 2,845,599 | |
Net change in unrealized appreciation (depreciation) | | | (1,634,189 | ) | | | (22,601,678 | ) |
| | | | | | | | |
Net increase in net assets applicable to Common Shareholders resulting from operations | | | 6,393,633 | | | | 3,026,237 | |
| | | | | | | | |
|
DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)(b) | |
Decrease in net assets resulting from distributions to Common Shareholders | | | (10,111,601 | ) | | | (23,456,159 | ) |
| | | | | | | | |
|
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS(b) | |
Total decrease in net assets applicable to Common Shareholders | | | (3,717,968 | ) | | | (20,429,922 | ) |
Beginning of period | | | 543,771,909 | | | | 564,201,831 | |
| | | | | | | | |
End of period | | $ | 540,053,941 | | | $ | 543,771,909 | |
| | | | | | | | |
| (a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (b) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
Statements of Changes in Net Assets (continued)
| | | | | | | | |
| | | MYI | |
| | | Six Months Ended
01/31/19
(unaudited) | | | Year Ended
07/31/18 | |
| | |
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS | | | | | | | | |
| | |
OPERATIONS | | | | | | | | |
Net investment income | | $ | 20,574,238 | | | $ | 46,465,254 | |
Net realized gain (loss) | | | (1,277,750 | ) | | | 6,625,739 | |
Net change in unrealized appreciation (depreciation) | | | (8,273,206 | ) | | | (36,598,743 | ) |
| | | | | | | | |
Net increase in net assets applicable to Common Shareholders resulting from operations | | | 11,023,282 | | | | 16,492,250 | |
| | | | | | | | |
| | |
DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)(b) | | | | | | | | |
Decrease in net assets resulting from distributions to Common Shareholders | | | (20,661,787 | ) | | | (50,233,328 | ) |
| | | | | | | | |
| | |
CAPITAL SHARE TRANSACTIONS | | | | | | | | |
Reinvestment of common distributions | | | — | | | | 957,599 | |
| | | | | | | | |
| | |
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS(b) | | | | | | | | |
Total decrease in net assets applicable to Common Shareholders | | | (9,638,505 | ) | | | (32,783,479 | ) |
Beginning of period | | | 952,810,208 | | | | 985,593,687 | |
| | | | | | | | |
End of period | | $ | 943,171,703 | | | $ | 952,810,208 | |
| | | | | | | | |
| (a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (b) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
| | |
| 44 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Cash Flows (unaudited)
Six Months Ended January 31, 2019
| | | | | | | | | | | | | | | | |
| | | MUE | | | MCA | | | MYN | | | MYI | |
|
CASH PROVIDED BY OPERATING ACTIVITIES | |
Net increase in net assets resulting from operations | | $ | 2,117,540 | | | $ | 1,348,260 | | | $ | 6,393,633 | | | $ | 11,023,282 | |
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: | |
Proceeds from sales of long-term investments and principal paydowns | | | 72,760,959 | | | | 151,583,934 | | | | 128,637,286 | | | | 223,051,076 | |
Purchases of long-term investments | | | (75,986,100 | ) | | | (157,621,298 | ) | | | (129,505,299 | ) | | | (231,266,028 | ) |
Net proceeds from sales of short-term securities | | | 2,903,883 | | | | 99,917 | | | | 2,461,457 | | | | 5,689,970 | |
Amortization of premium and accretion of discount on investments and other fees | | | 1,220,964 | | | | 3,290,354 | | | | 2,966,321 | | | | 1,511,994 | |
Net realized loss on investments | | | 47,868 | | | | 1,600,407 | | | | 2,829,412 | | | | 2,030,021 | |
Net unrealized (appreciation) depreciation on investments | | | 3,611,726 | | | | 6,033,628 | | | | (267,545 | ) | | | 4,461,698 | |
|
(Increase) Decrease in Assets: | |
Receivables: | |
Interest — unaffiliated | | | (44,895 | ) | | | 225,068 | | | | (111,726 | ) | | | 561,576 | |
Dividends — affiliated | | | (4,493 | ) | | | 1,255 | | | | 1,489 | | | | 5,228 | |
Prepaid expenses | | | 12,946 | | | | 16,001 | | | | 17,011 | | | | 24,835 | |
|
Increase (Decrease) in Liabilities: | |
Payables: | |
Investment advisory fees | | | (4,768 | ) | | | (1,996 | ) | | | (2,734 | ) | | | 1,059 | |
Interest expense and fees | | | 23,660 | | | | 160,807 | | | | 55,241 | | | | 253,045 | |
Directors’ and Officer’s fees | | | 946 | | | | (12,800 | ) | | | (13,768 | ) | | | (22,924 | ) |
Variation margin on futures contracts | | | 141,638 | | | | 237,165 | | | | 266,603 | | | | 594,728 | |
Other accrued expenses | | | (51,660 | ) | | | (87,062 | ) | | | (68,713 | ) | | | 5,251 | |
| | | | | | | | | | | | | | | | |
Net cash provided by operating activities | | | 6,750,214 | | | | 6,873,640 | | | | 13,658,668 | | | | 17,924,811 | |
| | | | | | | | | | | | | | | | |
|
CASH USED FOR FINANCING ACTIVITIES | |
Proceeds from TOB Trust Certificates | | | 5,585,909 | | | | 28,267,890 | | | | 9,077,501 | | | | 17,174,622 | |
Repayments of TOB Trust Certificates | | | (4,780,025 | ) | | | (22,538,997 | ) | | | (11,895,295 | ) | | | (13,059,165 | ) |
Proceeds from Loan for TOB Trust Certificates | | | — | | | | 11,902,245 | | | | — | | | | — | |
Repayments of Loan for TOB Trust Certificates | | | — | | | | (11,902,245 | ) | | | — | | | | — | |
Cash dividends paid to Common Shareholders | | | (7,184,122 | ) | | | (12,165,071 | ) | | | (10,111,601 | ) | | | (20,661,787 | ) |
Decrease in bank overdraft | | | (88,976 | ) | | | (207,228 | ) | | | (351,945 | ) | | | (468,566 | ) |
Amortization of deferred offering costs | | | — | | | | 5,766 | | | | 7,672 | | | | 10,085 | |
| | | | | | | | | | | | | | | | |
Net cash used for financing activities | | | (6,467,214 | ) | | | (6,637,640 | ) | | | (13,273,668 | ) | | | (17,004,811 | ) |
| | | | | | | | | | | | | | | | |
|
CASH | |
Net increase (decrease) in restricted and unrestricted cash and foreign currency | | | 283,000 | | | | 236,000 | | | | 385,000 | | | | 920,000 | |
Restricted and unrestricted cash and foreign currency at beginning of period | | | 107,800 | | | | 527,750 | | | | 413,350 | | | | 865,600 | |
| | | | | | | | | | | | | | | | |
Restricted and unrestricted cash and foreign currency at end of period | | $ | 390,800 | | | $ | 763,750 | | | $ | 798,350 | | | $ | 1,785,600 | |
| | | | | | | | | | | | | | | | |
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |
Cash paid during the period for interest expense | | $ | 2,215,487 | | | $ | 4,123,598 | | | $ | 4,144,082 | | | $ | 6,880,031 | |
| | | | | | | | | | | | | | | | |
| | | | |
RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AT THE END OF PERIOD TO THE STATEMENTS OF ASSETS AND LIABILITIES | | | | | | | | | | | | | | | | |
Cash pledged: | |
Futures contracts | | $ | 390,800 | | | $ | 763,750 | | | $ | 798,350 | | | $ | 1,785,600 | |
| | | | | | | | | | | | | | | | |
| | | | |
RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AT THE BEGINNING OF PERIOD TO THE STATEMENTS OF ASSETS AND LIABILITIES | | | | | | | | | | | | | | | | |
Cash pledged: | |
Futures contracts | | $ | 107,800 | | | $ | 527,750 | | | $ | 413,350 | | | $ | 865,600 | |
| | | | | | | | | | | | | | | | |
See notes to financial statements.
Financial Highlights
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | MUE | |
| | | Six Months Ended 01/31/19
(unaudited) | | | | | | Year Ended July 31, | |
| | | | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |
| | | | | | | | |
Net asset value, beginning of period | | $ | 13.55 | | | | | | | $ | 14.19 | | | $ | 15.08 | | | $ | 14.48 | | | $ | 14.42 | | | $ | 13.27 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.29 | | | | | | | | 0.69 | | | | 0.75 | | | | 0.78 | | | | 0.80 | | | | 0.82 | |
Net realized and unrealized gain (loss) | | | (0.20 | ) | | | | | | | (0.61 | ) | | | (0.87 | ) | | | 0.63 | | | | 0.09 | | | | 1.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 0.09 | | | | | | | | 0.08 | | | | (0.12 | ) | | | 1.41 | | | | 0.89 | | | | 2.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions to Common Shareholders from net investment income(b) | | | (0.31 | ) | | | | | | | (0.72 | ) | | | (0.77 | ) | | | (0.81 | ) | | | (0.83 | ) | | | (0.85 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Net asset value, end of period | | $ | 13.33 | | | | | | | $ | 13.55 | | | $ | 14.19 | | | $ | 15.08 | | | $ | 14.48 | | | $ | 14.42 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Market price, end of period | | $ | 12.01 | | | | | | | $ | 12.36 | | | $ | 14.17 | | | $ | 14.94 | | | $ | 13.13 | | | $ | 12.94 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Total Return Applicable to Common Shareholders(c) | |
Based on net asset value | | | 1.00 | %(d) | | | | | | | 0.87 | % | | | (0.50 | )% | | | 10.33 | % | | | 6.84 | % | | | 16.19 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on market price | | | (0.24 | )%(d) | | | | | | | (7.85 | )% | | | 0.29 | % | | | 20.55 | % | | | 7.96 | % | | | 12.30 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Ratios to Average Net Assets Applicable to Common Shareholders | |
Total expenses | | | 2.47 | %(e) | | | | | | | 2.24 | % | | | 1.96 | % | | | 1.56 | % | | | 1.50 | % | | | 1.61 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 2.43 | %(e) | | | | | | | 2.20 | % | | | 1.92 | % | | | 1.55 | % | | | 1.49 | % | | | 1.56 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly and excluding interest expense and fees, and amortization of offering costs(f) | | | 0.95 | %(e) | | | | | | | 0.95 | % | | | 0.95 | % | | | 0.95 | % | | | 0.96 | % | | | 0.95 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income to Common Shareholders | | | 4.37 | %(e) | | | | | | | 4.96 | % | | | 5.21 | % | | | 5.32 | % | | | 5.41 | % | | | 6.01 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Supplemental Data | |
Net assets applicable to Common Shareholders, end of period (000) | | $ | 300,313 | | | | | | | $ | 305,267 | | | $ | 319,413 | | | $ | 339,493 | | | $ | 325,911 | | | $ | 324,563 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
VMTP Shares outstanding at $100,000 liquidation value, end of period (000) | | $ | 131,000 | | | | | | | $ | 131,000 | | | $ | 131,000 | | | $ | 131,000 | | | $ | 131,000 | | | $ | 131,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset coverage per VMTP Shares at $100,000 liquidation value, end of period | | $ | 329,247 | | | | | | | $ | 333,028 | | | $ | 343,826 | | | $ | 359,155 | | | $ | 348,787 | | | $ | 347,758 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Borrowings outstanding, end of period (000) | | $ | 49,352 | | | | | | | $ | 48,546 | | | $ | 62,841 | | | $ | 57,549 | | | $ | 51,795 | | | $ | 52,497 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 15 | % | | | | | | | 21 | % | | | 19 | % | | | 15 | % | | | 13 | % | | | 28 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Total 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 distributions at actual reinvestment prices. |
| (d) | Aggregate total return. |
| (f) | Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
See notes to financial statements.
| | |
| 46 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | MCA | |
| | | Six Months Ended 01/31/19
(unaudited) | | | | | | Year Ended July 31, | |
| | | | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |
| | | | | | | | |
Net asset value, beginning of period | | $ | 15.27 | | | | | | | $ | 15.73 | | | $ | 16.77 | | | $ | 16.11 | | | $ | 16.14 | | | $ | 14.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.31 | | | | | | | | 0.67 | | | | 0.73 | | | | 0.81 | | | | 0.83 | | | | 0.87 | |
Net realized and unrealized gain (loss) | | | (0.27 | ) | | | | | | | (0.45 | ) | | | (0.94 | ) | | | 0.70 | | | | 0.02 | | | | 1.35 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 0.04 | | | | | | | | 0.22 | | | | (0.21 | ) | | | 1.51 | | | | 0.85 | | | | 2.22 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Distributions to Common Shareholders(b) | |
From net investment income | | | (0.31 | ) | | | | | | | (0.68 | ) | | | (0.78 | ) | | | (0.85 | ) | | | (0.88 | ) | | | (0.91 | ) |
From net realized gain | | | (0.04 | ) | | | | | | | — | | | | (0.05 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.35 | ) | | | | | | | (0.68 | ) | | | (0.83 | ) | | | (0.85 | ) | | | (0.88 | ) | | | (0.91 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Net asset value, end of period | | $ | 14.96 | | | | | | | $ | 15.27 | | | $ | 15.73 | | | $ | 16.77 | | | $ | 16.11 | | | $ | 16.14 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Market price, end of period | | $ | 13.00 | | | | | | | $ | 13.30 | | | $ | 15.18 | | | $ | 16.75 | | | $ | 14.71 | | | $ | 14.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Total Return Applicable to Common Shareholders(c) | |
Based on net asset value | | | 0.69 | %(d) | | | | | | | 1.86 | % | | | (0.92 | )% | | | 9.84 | % | | | 5.76 | % | | | 16.04 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on market price | | | 0.45 | %(d) | | | | | | | (8.07 | )% | | | (4.26 | )% | | | 20.15 | % | | | 8.47 | % | | | 12.16 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Ratios to Average Net Assets Applicable to Common Shareholders | |
Total expenses | | | 2.60 | %(e) | | | | | | | 2.22 | % | | | 1.91 | % | | | 1.46 | % | | | 1.32 | % | | | 1.40 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived | | | 2.60 | %(e) | | | | | | | 2.22 | % | | | 1.91 | % | | | 1.46 | % | | | 1.32 | % | | | 1.40 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and excluding interest expense, fees, and amortization of offering costs(f) | | | 0.94 | %(e) | | | | | | | 0.93 | % | | | 0.92 | % | | | 0.89 | % | | | 0.86 | % | | | 0.90 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income to Common Shareholders | | | 4.07 | %(e) | | | | | | | 4.33 | % | | | 4.64 | % | | | 4.94 | % | | | 5.09 | % | | | 5.63 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Supplemental Data | |
Net assets applicable to Common Shareholders, end of period (000) | | $ | 514,715 | | | | | | | $ | 525,532 | | | $ | 541,303 | | | $ | 576,764 | | | $ | 554,060 | | | $ | 555,127 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
VRDP Shares outstanding at $100,000 liquidation value, end of period (000) | | $ | 166,500 | | | | | | | $ | 166,500 | | | $ | 166,500 | | | $ | 166,500 | | | $ | 166,500 | | | $ | 166,500 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period | | $ | 409,138 | | | | | | | $ | 415,635 | | | $ | 425,107 | | | $ | 446,404 | | | $ | 432,769 | | | $ | 433,410 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Borrowings outstanding, end of period (000) | | $ | 212,664 | | | | | | | $ | 214,550 | | | $ | 195,488 | | | $ | 176,433 | | | $ | 172,574 | | | $ | 127,397 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 16 | % | | | | | | | 25 | % | | | 37 | % | | | 23 | % | | | 36 | % | | | 15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Total 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 distributions at actual reinvestment prices. |
| (d) | Aggregate total return. |
| (f) | Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VRDP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
See notes to financial statements.
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | MYN | |
| | | Six Months Ended 01/31/19
(unaudited) | | | | | | Year Ended July 31, | |
| | | | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |
| | | | | | | | |
Net asset value, beginning of period | | $ | 13.74 | | | | | | | $ | 14.25 | | | $ | 15.07 | | | $ | 14.16 | | | $ | 14.09 | | | $ | 13.17 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.27 | | | | | | | | 0.58 | | | | 0.64 | | | | 0.70 | | | | 0.75 | | | | 0.78 | |
Net realized and unrealized gain (loss) | | | (0.11 | ) | | | | | | | (0.50 | ) | | | (0.81 | ) | | | 0.94 | | | | 0.09 | | | | 0.97 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 0.16 | | | | | | | | 0.08 | | | | (0.17 | ) | | | 1.64 | | | | 0.84 | | | | 1.75 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions to Common Shareholders from net investment income(b) | | | (0.26 | ) | | | | | | | (0.59 | ) | | | (0.65 | ) | | | (0.73 | ) | | | (0.77 | ) | | | (0.83 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Net asset value, end of period | | $ | 13.64 | | | | | | | $ | 13.74 | | | $ | 14.25 | | | $ | 15.07 | | | $ | 14.16 | | | $ | 14.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Market price, end of period | | $ | 11.93 | | | | | | | $ | 11.89 | | | $ | 13.26 | | | $ | 14.40 | | | $ | 13.13 | | | $ | 12.71 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Total Return Applicable to Common Shareholders(c) | |
Based on net asset value | | | 1.47 | %(d) | | | | | | | 1.07 | % | | | (0.69 | )% | | | 12.19 | % | | | 6.54 | % | | | 14.21 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on market price | | | 2.55 | %(d) | | | | | | | (6.00 | )% | | | (3.29 | )% | | | 15.60 | % | | | 9.52 | % | | | 9.95 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Ratios to Average Net Assets Applicable to Common Shareholders | |
Total expenses | | | 2.48 | %(e) | | | | | | | 2.19 | % | | | 1.93 | % | | | 1.51 | % | | | 1.44 | % | | | 1.50 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 2.48 | %(e) | | | | | | | 2.19 | % | | | 1.93 | % | | | 1.50 | % | | | 1.44 | % | | | 1.50 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly and excluding interest expense and fees, and amortization of offering costs(f) | | | 0.92 | %(e) | | | | | | | 0.91 | % | | | 0.92 | % | | | 0.89 | % | | | 0.89 | % | | | 0.91 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income to Common Shareholders | | | 3.93 | %(e) | | | | | | | 4.11 | % | | | 4.52 | % | | | 4.79 | % | | | 5.22 | % | | | 5.82 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Supplemental Data | |
Net assets applicable to Common Shareholders, end of period (000) | | $ | 540,054 | | | | | | | $ | 543,772 | | | $ | 564,202 | | | $ | 596,528 | | | $ | 560,372 | | | $ | 557,606 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
VRDP Shares outstanding at $100,000 liquidation value, end of period (000) | | $ | 247,700 | | | | | | | $ | 247,700 | | | $ | 247,700 | | | $ | 247,700 | | | $ | 247,700 | | | $ | 247,700 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period | | $ | 318,027 | | | | | | | $ | 319,528 | | | $ | 327,776 | | | $ | 340,827 | | | $ | 326,230 | | | $ | 325,114 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Borrowings outstanding, end of period (000) | | $ | 112,387 | | | | | | | $ | 113,020 | | | $ | 113,374 | | | $ | 112,712 | | | $ | 93,113 | | | $ | 89,734 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 14 | % | | | | | | | 14 | % | | | 13 | % | | | 15 | % | | | 20 | % | | | 18 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Total 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 distributions at actual reinvestment prices. |
| (d) | Aggregate total return. |
| (f) | Interest expense, fees and amortization of offering costs related to TOBs and/or VRDP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
See notes to financial statements.
| | |
| 48 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | MYI | |
| | | Six Months Ended 01/31/19
(unaudited) | | | | | | Year Ended July 31, | |
| | | | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |
| | | | | | | | |
Net asset value, beginning of period | | $ | 13.98 | | | | | | | $ | 14.48 | | | $ | 15.49 | | | $ | 14.79 | | | $ | 14.84 | | | $ | 13.64 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.30 | | | | | | | | 0.68 | | | | 0.77 | | | | 0.84 | | | | 0.87 | | | | 0.89 | |
Net realized and unrealized gain (loss) | | | (0.14 | ) | | | | | | | (0.44 | ) | | | (0.96 | ) | | | 0.74 | | | | (0.03 | ) | | | 1.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 0.16 | | | | | | | | 0.24 | | | | (0.19 | ) | | | 1.58 | | | | 0.84 | | | | 2.07 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions to Common Shareholders from net investment income(b) | | | (0.30 | ) | | | | | | | (0.74 | ) | | | (0.82 | ) | | | (0.88 | ) | | | (0.89 | ) | | | (0.87 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Net asset value, end of period | | $ | 13.84 | | | | | | | $ | 13.98 | | | $ | 14.48 | | | $ | 15.49 | | | $ | 14.79 | | | $ | 14.84 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Market price, end of period | | $ | 12.44 | | | | | | | $ | 12.46 | | | $ | 14.66 | | | $ | 15.63 | | | $ | 14.04 | | | $ | 13.46 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Total Return Applicable to Common Shareholders(c) | |
Based on net asset value | | | 1.50 | %(d) | | | | | | | 2.02 | % | | | (1.02 | )% | | | 11.08 | % | | | 6.12 | % | | | 16.23 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on market price | | | 2.36 | %(d) | | | | | | | (10.18 | )% | | | (0.69 | )% | | | 18.07 | % | | | 11.06 | % | | | 12.35 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Ratios to Average Net Assets Applicable to Common Shareholders | |
Total expenses | | | 2.44 | %(e) | | | | | | | 2.11 | % | | | 1.85 | % | | | 1.45 | % | | | 1.39 | % | | | 1.47 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 2.44 | %(e) | | | | | | | 2.11 | % | | | 1.84 | % | | | 1.45 | % | | | 1.39 | % | | | 1.47 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly and excluding interest expense and fees, and amortization of offering costs(f) | | | 0.92 | %(e) | | | | | | | 0.89 | % | | | 0.89 | % | | | 0.88 | % | | | 0.88 | % | | | 0.91 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income to Common Shareholders | | | 4.37 | %(e) | | | | | | | 4.79 | % | | | 5.30 | % | | | 5.60 | % | | | 5.78 | % | | | 6.35 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Supplemental Data | |
Net assets applicable to Common Shareholders, end of period (000) | | $ | 943,172 | | | | | | | $ | 952,810 | | | $ | 985,594 | | | $ | 1,053,232 | | | $ | 1,003,621 | | | $ | 1,007,291 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
VRDP Shares outstanding at $100,000 liquidation value, end of period (000) | | $ | 356,400 | | | | | | | $ | 356,400 | | | $ | 356,400 | | | $ | 356,400 | | | $ | 356,400 | | | $ | 356,400 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period | | $ | 364,639 | | | | | | | $ | 367,343 | | | $ | 376,541 | | | $ | 395,520 | | | $ | 381,600 | | | $ | 382,629 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Borrowings outstanding, end of period (000) | | $ | 265,817 | | | | | | | $ | 261,702 | | | $ | 252,930 | | | $ | 261,803 | | | $ | 244,245 | | | $ | 262,507 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 14 | % | | | | | | | 22 | % | | | 16 | % | | | 10 | % | | | 11 | % | | | 15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average Common Shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Total 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 distributions at actual reinvestment prices. |
| (d) | Aggregate total return. |
| (f) | Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VRDP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details. |
See notes to financial statements.
Notes to Financial Statements (unaudited)
The following are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), asclosed-end management investment companies and are referred to herein collectively as the “Funds”, or individually as a “Fund”:
| | | | | | |
| Fund Name | | Herein Referred To As | | Organized | | Diversification
Classification |
BlackRock MuniHoldings Quality Fund II, Inc. | | MUE | | Maryland | | Diversified |
BlackRock MuniYield California Quality Fund, Inc. | | MCA | | Maryland | | Diversified |
BlackRock MuniYield New York Quality Fund, Inc. | | MYN | | Maryland | | Non-diversified |
BlackRock MuniYield Quality Fund III, Inc. | | MYI | | Maryland | | Diversified |
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 net asset values (“NAVs”) of their Common Shares on a daily basis.
The Funds, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, are included in a complex of non-index fixed-income mutual funds and all BlackRock-advisedclosed-end funds referred to as the Fixed-Income Complex.
| 2. | SIGNIFICANT ACCOUNTING POLICIES |
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of 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. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: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 theex-dividend date. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on an accrual basis.
Segregation and Collateralization:In cases where a Fund enters into certain investments (e.g., futures contracts) or certain borrowings (e.g., TOB Trust transactions) that would be treated as “senior securities” for 1940 Act purposes, a Fund may segregate or designate on itsbooks and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments or borrowings. Doing so allows the investment or borrowing to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.
Distributions: Distributions from net investment income are declared monthly and paid monthly. Distributions of capital gains are recorded on theex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.
Distributions to Preferred Shareholders are accrued and determined as described in Note 10.
Deferred Compensation Plan:Under the Deferred Compensation Plan (the “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 funds in the BlackRock Fixed-Income Complex 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 funds in the BlackRock Fixed-Income Complex.
The Plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Fund, as applicable. Deferred compensation liabilities are included in the Directors’ and Officer’s fees payable in the Statements of Assets and Liabilities and will remain as a liability of the Funds until such amounts are distributed in accordance with the Plan.
Recent Accounting Standards: In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update “Premium Amortization of Purchased Callable Debt Securities” which amends the amortization period for certain purchased callable debt securities. Under the new guidance, the premium amortization of purchased callable debt securities that have explicit,non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. The guidance will be applied on a modified retrospective basis and is effective for fiscal years, and their interim periods, beginning after December 15, 2018. Management is currently evaluating the impact of this guidance to the Funds.
In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update2018-13 “Changes to the Disclosure Requirements for Fair Value Measurement” which modifies disclosure requirements for fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Management is currently evaluating the impact of this guidance to the Funds.
Indemnifications:In the normal course of business, a Fund enters into contracts that contain a variety of representations that provide general indemnification. A Fund’s maximum exposure under these arrangements is unknown because it involves future potential claims against a Fund, which cannot be predicted with any certainty.
Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.
| | |
| 50 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
| 3. | INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: The Funds’ investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. 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 financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of each Fund (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 oversee the pricing function for all financial instruments.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
| | • | | 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. |
| | • | | Investments inopen-end U.S. mutual funds are valued at NAV each business day. |
| | • | | Futures contracts traded on exchanges are valued at their last sale price. |
If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such investments, or in the event that the 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 Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee will include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in anarm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.
Fair Value Hierarchy: Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial statement purposes as follows:
| | • | | Level 1 — Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Fund has the ability to access |
| | • | | 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) |
| | • | | Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including each 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. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued byprivately held companies or funds. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/ornon-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.
Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with each Fund’s policy, transfers between different levels of the fair value 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 investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
| 4. | SECURITIES AND OTHER INVESTMENTS |
Zero-Coupon Bonds: Zero-coupon bonds are normally issued at a significant discount from face value and do not provide for periodic interest payments. These bonds may experience greater volatility in market value than other debt obligations of similar maturity which provide for regular interest payments.
Forward Commitments and When-Issued Delayed Delivery Securities: Certain 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. A fund 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, a fund may be required to pay more at settlement than the security is worth. In addition, a fund is not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, a fund assumes 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, a fund’s maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions.
| | | | |
| NOTESTO FINANCIAL STATEMENTS | | | 51 | |
Notes to Financial Statements (unaudited) (continued)
Municipal Bonds Transferred to TOB Trusts: Certain funds leverage their assets through the use of “TOB Trust” transactions. The funds transfer municipal bonds into a special purpose trust (a “TOB Trust”). A TOB Trust issues two classes of beneficial interests: short-term floating rate interests (“TOB Trust Certificates”), which are sold to third party investors, and residual inverse floating rate interests (“TOB Residuals”), which are issued to the participating funds that contributed the municipal bonds to the TOB Trust. The TOB Trust Certificates have interest rates that reset weekly and their holders have the option to tender such certificates to the TOB Trust for redemption at par and any accrued interest at each reset date. The TOB Residuals held by a fund provide the fund with the right to cause the holders of a proportional share of the TOB Trust Certificates to tender their certificates to the TOB Trust at par plus accrued interest. The funds may withdraw a corresponding share of the municipal bonds from the TOB Trust. Other funds managed by the investment adviser may also contribute municipal bonds to a TOB Trust into which a fund has contributed bonds. If multiple BlackRock advised funds participate in the same TOB Trust, the economic rights and obligations under the TOB Residuals will be shared among the funds ratably in proportion to their participation in the TOB Trust.
TOB Trusts are supported by a liquidity facility provided by a third party 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 of par plus accrued interest on any business day. The tendered TOB Trust Certificates are remarketed by a Remarketing Agent. In the event of a failed remarketing, the TOB Trust may draw upon a loan from the Liquidity Provider to purchase the tendered TOB Trust Certificates. Any loans made by the Liquidity Provider will be secured by the purchased TOB Trust Certificates held by the TOB Trust and will be subject to an increased interest rate based on number of days the loan is outstanding.
The TOB Trust may be collapsed without the consent of a fund, upon the occurrence of a termination event, as defined in the TOB Trust agreement. Upon the occurrence of a termination event, a TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee of the TOB Trust, the Remarketing Agent and the Liquidity Provider. Upon certain termination events, TOB Trust Certificates holders will be paid before the TOB Residuals holders (i.e., the funds) whereas in other termination events, TOB Trust Certificates holders and TOB Residuals holders will be paid pro rata.
While a Fund’s investment policies and restrictions expressly permit investments in inverse floating rate securities, such as TOB Residuals, they restrict the ability of a fund to borrow money for purposes of making investments. MCA, MYN and MYI’s management believes that the fund’s restrictions on borrowings do not apply to the funds’ TOB Trust transactions. Each fund’s transfer of the municipal bonds to a TOB Trust is considered a secured borrowing for financial reporting purposes. The cash received by the TOB Trust from the sale of the TOB Trust Certificates, less certain transaction expenses, is paid to a fund. A fund typically invests the cash received in additional municipal bonds.
Accounting for TOB Trusts: The municipal bonds deposited into a TOB Trust are presented in a fund’s Schedule of Investments and the TOB Trust Certificates are shown in Other Liabilities in the Statements of Assets and Liabilities. Any loans drawn by the TOB Trust pursuant to the liquidity facility to purchase tendered TOB Trust Certificates are shown as Loan for TOB Trust Certificates. The carrying amount of a fund’s payable to the holder of the TOB Trust Certificates, as reported in the Statements of Assets and Liabilities as TOB Trust Certificates, approximates its fair value.
Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by a fund on an accrual basis. Interest expense incurred on the TOB Trust transaction and other expenses related to remarketing, administration, trustee, liquidity and other services to a TOB Trust are shown as interest expense, fees and amortization of offering costs in the Statements of Operations. Fees paid upon creation of the TOB Trust are recorded as debt issuance costs and are amortized to interest expense, fees and amortization of offering costs in the Statements of Operations to the expected maturity of the TOB Trust. In connection with the restructurings of the TOB Trusts tonon-bank sponsored TOB Trusts, a fund incurrednon-recurring, legal and restructuring fees, which are recorded as interest expense, fees and amortization of deferred offering costs in the Statements of Operations.
| | | | | | | | | | | | | | | | |
| | | Interest Expense | | | Liquidity Fees | | | Other Expenses | | | Total | |
MUE | | $ | 384,887 | | | $ | 106,562 | | | $ | 40,428 | | | $ | 531,877 | |
MCA | | | 1,636,898 | | | | 475,421 | | | | 144,823 | | | | 2,257,142 | |
MYN | | | 888,751 | | | | 253,085 | | | | 82,271 | | | | 1,224,107 | |
MYI | | | 2,131,182 | | | | 586,085 | | | | 181,825 | | | | 2,899,092 | |
For the six months ended January 31, 2019, the following table is a summary of each Fund’s TOB Trusts:
| | | | | | | | | | | | | | | | | | | | |
| | | Underlying Municipal Bonds Transferred to TOB Trusts (a) | | | Liability for TOB Trust Certificates (b) | | | Range of Interest Rates
on TOB Trust
Certificates at
Period End | | | Average
TOB Trust Certificates Outstanding | | | Daily Weighted
Average Rate
of Interest and
Other Expenses
on TOB Trusts | |
MUE | | $ | 83,884,795 | | | $ | 49,352,286 | | | | 1.29% — 1.61% | | | $ | 48,457,073 | | | | 2.18 | % |
MCA | | | 424,998,028 | | | | 212,664,205 | | | | 1.25% — 1.41% | | | | 207,660,149 | | | | 2.15 | |
MYN | | | 208,010,108 | | | | 112,386,871 | | | | 1.30% — 1.46% | | | | 111,903,299 | | | | 2.17 | |
MYI | | | 443,594,611 | | | | 265,817,094 | | | | 1.25% — 1.70% | | | | 265,556,570 | | | | 2.16 | |
| | (a) | The municipal bonds transferred to a TOB Trust are generally high grade municipal bonds. In certain cases, when municipal bonds transferred are lower grade municipal bonds, the TOB Trust transaction may include a credit enhancement feature that provides for the timely payment of principal and interest on the bonds to the TOB Trust by a credit enhancement provider in the event of default of the municipal bond. The TOB Trust would be responsible for the payment of the credit enhancement fee and the funds, as TOB Residuals holders, would be responsible for reimbursement of any payments of principal and interest made by the credit enhancement provider. The maximum potential amounts owed by the funds, for such reimbursements, as applicable, are included in the maximum potential amounts disclosed for recourse TOB Trusts. | |
| | (b) | TOB Trusts may be structured on anon-recourse or recourse basis. When a fund invests in TOB Trusts on anon-recourse basis, the Liquidity Provider may be required to make a payment under the liquidity facility to allow the TOB Trust to repurchase TOB Trust Certificates. The Liquidity Provider will be reimbursed from the liquidation of bonds held in the TOB Trust. If a fund invests in a TOB Trust on a recourse basis, a fund enters into a reimbursement agreement with the Liquidity Provider where a fund is required to reimburse the Liquidity Provider for any shortfall between the amount paid by the Liquidity Provider and proceeds received from liquidation of municipal bonds held in the TOB Trust (the “Liquidation Shortfall”). As a result, if a fund invests in a recourse TOB Trust, the fund will bear the risk of loss with respect to any Liquidation Shortfall. If multiple funds participate in any such TOB Trust, these losses will be shared ratably, including the maximum potential amounts owed by a fund at January 31, 2019, in proportion to their participation in the TOB Trust. The recourse TOB Trusts are identified in the Schedules of Investments including the maximum potential amounts owed by a fund at January 31, 2019. | |
| | |
| 52 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
For the six months ended January 31, 2019, the following table is a summary of each Fund’s Loan for TOB Trust Certificates:
| | | | | | | | | | | | | | | | |
| | | Loans Outstanding
at Period End | | | Range of Interest Rates
on Loans at Period End | | | Average
Loans
Outstanding | | | Daily Weighted
Average Rate
of Interest and
Other Expenses
on Loans | |
MCA | | $ | — | | | | — | % | | $ | 545,088 | | | | 0.82 | % |
| 5. | 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 manage their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange orover-the-counter.
Futures Contracts:Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
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 on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a 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. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.
Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited, if any, is shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. 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 market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest, foreign currency exchange rates or underlying assets.
| 6. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory:Each Fund entered into an Investment Advisory Agreement with the Manager, the Funds’ investment adviser and indirect, wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”), to provide investment advisory and administrative services. The Manager is responsible for the management of each Fund’s portfolio and provides the 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 equal to the following percentages of the average daily value of each Fund’s net assets:
| | | | | | | | | | | | | | | | |
| | | MUE | | | MCA | | | MYN | | | MYI | |
Investment advisory fees | | | 0.55 | % | | | 0.50 | % | | | 0.50 | % | | | 0.50 | % |
For purposes of calculating these fees, “net assets” mean the total assets of a Fund minus the sum of its accrued liabilities (which does not include liabilities represented by TOB Trusts and the liquidation preference of any outstanding preferred shares). It is understood that the liquidation preference of any outstanding preferred stock (other than accumulated dividends) and TOB Trusts is not considered a liability in determining a fund’s NAV.
Expense Waivers:With respect to each Fund, 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 (the “affiliated money market fund waiver”). These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the six months ended January 31, 2019, the amounts waived were as follows:
| | | | | | | | | | | | | | | | |
| | | MUE | | | MCA | | | MYN | | | MYI | |
Amounts waived | | $ | 2,944 | | | $ | 712 | | | $ | 595 | | | $ | 4,198 | |
The Manager contractually agreed to waive its investment advisory fee with respect to any portion of each Fund’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through June 30, 2019. The agreement can be renewed for annual periods thereafter, and may be terminated on 90 days’ notice, each subject to approval by a majority of the Funds’ Independent Directors. For the six months ended January 31, 2019, there were no fees waived by the Manager pursuant to these arrangements.
The Manager, for MUE, voluntarily agreed to waive its investment advisory fee on the proceeds of the Preferred Shares and TOB Trusts that exceed 35% of total assets minus the sum of its accrued liabilities (which does not include liabilities represented by TOB Trusts and the liquidation preference of any outstanding preferred shares). The voluntary waiver may be reduced or discontinued at any time without notice. This amount is included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the six months ended January 31, 2019, the waiver was $50,728.
| | | | |
| NOTESTO FINANCIAL STATEMENTS | | | 53 | |
Notes to Financial Statements (unaudited) (continued)
Directors and Officers:Certain directors and/or officers of the Funds are directors and/or officers of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Funds’ Chief Compliance Officer, which is included in Directors and Officer in the Statements of Operations.
For the six months ended January 31, 2019, purchases and sales of investments, excluding short-term securities, were as follows:
| | | | | | | | | | | | | | | | |
| | | MUE | | | MCA | | | MYN | | | MYI | |
Purchases | | $ | 73,661,635 | | | $ | 144,671,836 | | | $ | 133,875,299 | | | $ | 220,079,466 | |
Sales | | | 72,760,959 | | | | 150,553,410 | | | | 128,637,286 | | | | 220,974,456 | |
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 its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.
Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Fund’s U.S. federal tax returns generally remains open for each of the four years ended July 31, 2018. 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 has analyzed tax laws and regulations and their application to the Funds as of January 31, 2019, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
As of July 31, 2018, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
| | | | | | | | |
| Expires July 31, | | MUE | | | MYN | |
No expiration date(a) | | $ | 8,359,275 | | | $ | 14,138,506 | |
2019 | | | — | | | | 1,287,746 | |
| | | | | | | | |
| | $ | 8,359,275 | | | $ | 15,426,252 | |
| | | | | | | | |
| | (a) | Must be utilized prior to losses subject to expiration | |
As of January 31, 2019, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
| | | | | | | | | | | | | | | | |
| | | MUE | | | MCA | | | MYN | | | MYI | |
Tax cost | | $ | 408,380,522 | | | $ | 657,579,179 | | | $ | 748,312,292 | | | $ | 1,225,377,023 | |
| | | | | | | | | | | | | | | | |
Gross unrealized appreciation | | $ | 20,218,577 | | | $ | 26,608,968 | | | $ | 36,553,293 | | | $ | 71,014,012 | |
Gross unrealized depreciation | | | (2,174,636 | ) | | | (4,034,452 | ) | | | (3,940,878 | ) | | | (12,268,264 | ) |
| | | | | | | | | | | | | | | | |
Net unrealized appreciation | | $ | 18,043,941 | | | $ | 22,574,516 | | | $ | 32,612,415 | | | $ | 58,745,748 | |
| | | | | | | | | | | | | | | | |
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.
Inventories of municipal bonds held by brokers and dealers may decrease, which would lessen their ability to make a market in these securities. Such a reduction in market making capacity could potentially decrease a fund’s ability to buy or sell bonds. As a result, a fund may sell a security at a lower price, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative impact on performance. If a fund needed to sell large blocks of bonds, those sales could further reduce the bonds’ prices and impact performance.
In the normal course of business, certain Funds invest in securities or other instruments and may enter into certain transactions, and such activities subject each Fund to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations.
Each Fund may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force each Fund to reinvest in lower yielding securities. Each Fund may also be exposed to reinvestment risk, which is the risk that income from each Fund’s portfolio will decline if each Fund invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below each Fund portfolio’s current earnings rate.
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.
| | |
| 54 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
A Fund structures and “sponsors” the TOB Trusts in which it holds TOB Residuals and has certain duties and responsibilities, which may give rise to certain additional risks including, but not limited to, compliance, securities law and operational risks.
Should short-term interest rates rise, the Funds’ investments in the TOB Trusts 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.
The U.S. Securities and Exchange Commission (“SEC”) and various federal banking and housing agencies have adopted credit risk retention rules for securitizations (the “Risk Retention Rules”). The Risk Retention Rules would require the sponsor of a TOB Trust to retain at least 5% of the credit risk of the underlying assets supporting the TOB Trust’s municipal bonds. The Risk Retention Rules may adversely affect the Funds’ ability to engage in TOB Trust transactions or increase the costs of such transactions in certain circumstances.
TOB Trusts constitute an important component of the municipal bond market. Any modifications or changes to rules governing TOB Trusts may adversely impact the municipal market and the Funds, including through reduced demand for and liquidity of municipal bonds and increased financing costs for municipal issuers. The ultimate impact of any potential modifications on the TOB Trust market and the overall municipal market is not yet certain.
Counterparty Credit Risk:The Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions. The Funds manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes 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 approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.
A derivative contract may suffer amark-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, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists inexchange-traded futures and centrally cleared swaps 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 allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.
Concentration Risk:MCA and MYN invest a substantial amount of their assets in issuers located in a single state or limited number of states. This may subject each Fund to the risk that economic, political or social issues impacting a particular state or group of states could have an adverse and disproportionate impact on the income from, or the value or liquidity of, the Funds’ respective portfolios. Investment percentages in specific states or U.S. territories are presented in the Schedules of Investments.
As of period end, MUE and MYI invested a significant portion of their assets in securities in the transportation sector. MCA invested a significant portion of its assets in securities in the county, city, special district and school district sector. Changes in economic conditions affecting such sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.
Certain Funds invest a significant portion of their assets in fixed-income securities and/or use derivatives tied to the fixed-income markets. Changes in market interest rates or economic conditions may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Funds may be subject to a greater risk of rising interest rates due to the current period of historically low rates. The Federal Reserve has begun to raise the Federal Funds rate, and each increase results in more pronounced interest rate risk in the current market environment.
| 10. | 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 outstanding is $0.10. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without the 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:
| | | | | | | | |
| | | MUE | | | MYI | |
Six months ended January 31, 2019 | | | — | | | | — | |
Year ended July 31, 2018 | | | 5,535 | | | | 65,843 | |
For the six months ended January 31, 2019, shares issued and outstanding remained constant for each Fund. For the year ended July 31, 2018, shares issued and outstanding remained constant for MCA and MYN.
| | | | |
| NOTESTO FINANCIAL STATEMENTS | | | 55 | |
Notes to Financial Statements (unaudited) (continued)
On November 15, 2018, the Board authorized each Fund to participate in an open market share repurchase program. Under the program, each Fund may repurchase up to 5% of its outstanding common shares through November 30, 2019, based on common shares outstanding as of the close of business on November 30, 2018, subject to certain conditions. There is no assurance that the Funds will purchase shares in any particular amounts. For the six months ended January 31, 2019, the Funds did not repurchase any shares.
Preferred Shares
A Fund’s Preferred Shares rank prior to its 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 Common Shares or the repurchase of Common Shares if the Fund fails to maintain asset coverage of at least 200% of the liquidation preference of the its outstanding Preferred Shares. In addition, pursuant to the Preferred Shares’ governing instruments, a Fund is restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with its 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 instruments or comply with the basic maintenance amount requirement of the ratings agencies rating the Preferred Shares.
Holders of Preferred Shares have voting rights equal to the voting rights of holders of Common Shares (one vote per share) and vote together with holders of Common Shares (one vote per share) as a single class on certain matters. Holders of Preferred Shares, voting as a separate class, are also entitled to (i) elect two members of the Board, (ii) elect the full Board if dividends on the Preferred Shares are not paid for a period of two years and (iii) a separate class vote to amend the Preferred Share governing documents. In addition, the 1940 Act requires the approval of the holders of a majority of any outstanding Preferred Shares, voting as a separate class, to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Fund’ssub-classification as aclosed-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
MCA, MYN and MYI (for purposes of this section, a “VRDP Fund”) have issued SeriesW-7 VRDP Shares, $100,000 liquidation preference per share, in one or more privately negotiated offerings to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The VRDP Shares include a liquidity feature and may be subject to a special rate period. As of period end, the VRDP Shares outstanding were as follows:
| | | | | | | | | | | | | | | | |
| | | Issue
Date | | | Shares
Issued | | | Aggregate
Principal | | | Maturity
Date | |
MCA | | | 04/21/11 | | | | 1,665 | | | $ | 166,500,000 | | | | 05/01/41 | |
MYN | | | 04/21/11 | | | | 2,477 | | | | 247,700,000 | | | | 05/01/41 | |
MYI | | | 05/19/11 | | | | 3,564 | | | | 356,400,000 | | | | 06/01/41 | |
Redemption Terms: A 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, a VRDP Fund is required to begin to segregate liquid assets with the Fund’s custodian to fund the redemption. In addition, a VRDP Fund is required to redeem certain of its outstanding VRDP Shares if it fails to comply with certain asset coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, the VRDP Shares may also be redeemed, in whole or in part, at any time at the option of a VRDP Fund. The redemption price per VRDP Share is equal to the liquidation preference per share plus any outstanding unpaid dividends.
Liquidity Feature:VRDP Shares are subject to a fee agreement between the VRDP Fund and the liquidity provider that requires a per annum liquidity fee and, in some cases, an upfront or initial commitment fee, payable to the liquidity provider. These fees, if applicable, are shown as liquidity fees in the Statements of Operations. The fee agreement is set to expire, unless renewed or terminated in advance, on July 4, 2019.
In the event a fee agreement is not renewed or is terminated in advance, and the VRDP Fund does 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. In the event of such mandatory purchase, a VRDP Fund is required to redeem the VRDP Shares six months after the purchase date. Immediately after such mandatory purchase, the VRDP Fund is required to begin to segregate liquid assets with its custodian to fund the redemption. There is no assurance that a VRDP Fund will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.
Remarketing:A VRDP Fund may incur remarketing fees on the aggregate principal amount of all its VRDP Shares, which, if any, are included in remarketing fees on Preferred Shares in the Statements of Operations. During any special rate period (as described below), a VRDP Fund may incur nominal or no remarketing fees.
Ratings:As of period end, the VRDP Shares were assigned the following long-term ratings:
| | | | | | | | |
| | | Moody’s | | | Fitch | |
MCA | | | Aa2 | | | | AAA | |
MYN | | | Aa2 | | | | AAA | |
MYI | | | Aa1 | | | | AAA | |
Any short-term ratings on 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 and Fitch. 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. As of period end, the short-term ratings of the VRDP Shares were within the two highest rating categories as follows:
| | | | | | | | |
| | | Moody’s | | | Fitch | |
MYN | | | P-1 | | | | F1 | |
MYI | | | P-1 | | | | F1 | |
| | |
| 56 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
Special Rate Period: A VRDP Fund may commence a “special rate period” with respect to its VRDP Shares, during which the VRDP Shares will not be subject to any remarketing and the dividend rate will be based on a predetermined methodology. During a special rate period, short-term ratings on VRDP Shares are withdrawn. The following VRDP Fund has commenced or is set to commence a special rate period:
| | | | | | | | |
| | | Commencement
Date | | | Expiration Date
as of period
ended 01/31/19 | |
MCA | | | 06/21/12 | * | | | 06/19/19 | |
| | * | Issuance date of VRDP Shares. | |
The following VRDP Funds were in a special rate period that terminated during the reporting period:
| | | | | | | | |
| | | Commencement
Date | | | Termination
Date | |
MYN | | | 06/21/12 | * | | | 01/24/19 | |
MYI | | | 06/21/12 | * | | | 01/17/19 | |
| | * | Issuance date of VRDP Shares. | |
Prior to the expiration date, the VRDP Funds and the VRDP Shares holder may mutually agree to extend the special rate period. If a special rate period is not extended, the VRDP Shares will revert to remarketable securities upon the termination of the special rate period and will be remarketed and available for purchase by qualified institutional investors.
During the special rate period: (i) the liquidity and fee agreements remain in effect, (ii) VRDP Shares remain subject to mandatory redemption by the VRDP Fund on the maturity date, (iii) VRDP Shares will not be remarketed or subject to optional or mandatory tender events, (iv) the VRDP Fund is required to comply with the same asset coverage, basic maintenance amount and leverage requirements for the VRDP Shares as is required when the VRDP Shares are not in a special rate period, (v) the VRDP Fund will pay dividends monthly based on the sum of the Securities Industry and Financial Markets Association (“SIFMA”) Municipal Swap Index rate and a percentage per annum based on the long-term ratings assigned to the VRDP Shares and (vi) the VRDP Fund will pay nominal or no fees to the liquidity provider and remarketing agent.
If a VRDP Fund redeems its VRDP Shares prior to end of the special rate period and the VRDP Shares have long-term ratings above A1/A+ and its equivalent by all ratings agencies then rating the VRDP Shares, then such redemption may be subject to a redemption premium payable to the holder of the VRDP Shares based on the time remaining in the special rate period, subject to certain exceptions for redemptions that are required to comply with minimum asset coverage requirements.
Dividends:Except during the Special Rate Period, 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. 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 based upon either short-term rating. 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.
For the six months ended January 31, 2019, the annualized dividend rates for the VRDP Shares were as follows:
| | | | | | | | | | | | |
| | | MCA | | | MYN | | | MYI | |
Rate | | | 2.42 | % | | | 2.38 | % | | | 2.36 | % |
For the six months ended January 31, 2019, VRDP Shares issued and outstanding of each VRDP Fund remained constant.
VMTP Shares
MUE (for purposes of this section, a “VMTP Fund”) has issued SeriesW-7 VMTP Shares, $100,000 liquidation preference per share, in one or more privately negotiated offerings to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act. The VMTP Shares are subject to certain restrictions on transfer, and a VMTP Fund may also be required to register its VMTP Shares for sale under the Securities Act under certain circumstances. As of period end, the VMTP Shares outstanding were as follows:
| | | | | | | | | | | | | | | | |
| | | Issue
Date | | | Shares
Issued | | | Aggregate
Principal | | | Term
Redemption
Date | |
MUE | | | 12/16/11 | | | | 1,310 | | | $ | 131,000,000 | | | | 07/02/20 | |
Redemption Terms:A VMTP Fund is required to redeem its VMTP Shares on the term redemption date, unless earlier redeemed or repurchased or unless extended. There is no assurance that a term will be extended further or that any 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 the term redemption date, a VMTP Fund is required to begin to segregate liquid assets with its custodian to fund the redemption. In addition, a VMTP Fund is required to redeem certain of its outstanding VMTP Shares if it fails to comply with certain asset coverage, basic maintenance amount or leverage requirements.
| | | | |
| NOTESTO FINANCIAL STATEMENTS | | | 57 | |
Notes to Financial Statements (unaudited) (continued)
Subject to certain conditions, VMTP Shares may be redeemed, in whole or in part, at any time at the option of the VMTP Fund. The redemption price per VMTP Share is equal to the liquidation preference per share plus any outstanding unpaid dividends and applicable redemption premium. If a VMTP Fund redeems its VMTP Shares prior to the term redemption date and the VMTP Shares have long-term ratings above A1/A+ or its equivalent by the ratings agencies then rating the VMTP Shares, then such redemption may be 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 until the term redemption date, subject to certain exceptions for redemptions that are required to comply with minimum asset coverage requirements.
Dividends:Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread to the SIFMA Municipal Swap Index or to a percentage of theone-month LIBOR rate, as set forth in the VMTP Shares governing instrument. The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by the ratings agencies then rating the VMTP Shares. As of period end, the VMTP Shares were assigned the following long-term ratings:
| | | | | | | | |
| | | Moody’s | | | Fitch | |
MUE | | | Aa1 | | | | AAA | |
The dividend rate on VMTP Shares is subject to astep-up spread if the VMTP Fund fails to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions orgross-up payments, and complying with certain asset coverage and leverage requirements.
For the six months ended January 31, 2019, the average annualized dividend rate for MUE’s VMTP Shares was 2.59%.
Offering Costs:The Funds incurred costs in connection with the issuance of VRDP and VMTP Shares, which were recorded as a direct deduction from the carrying value of the related debt liability and will be amortized over the life of the VRDP and VMTP Shares with the exception of any upfront fees paid by a VRDP Fund to the liquidity provider which, if any, were amortized over the life of the liquidity agreement. Amortization of these costs is included in interest expense, fees and amortization of offering costs in the Statements of Operations.
Financial Reporting:The VRDP and VMTP Shares are considered debt of the issuer; therefore, the liquidation preference, which approximates fair value of the VRDP and VMTP Shares, is recorded as a liability in the Statements of Assets and Liabilities net of deferred offering costs. 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 and VMTP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VRDP and VMTP Shares are treated as equity for tax purposes. Dividends paid to holders of the VRDP and VMTP Shares are generally classified astax-exempt income fortax-reporting purposes. Dividends and amortization of deferred offering costs on VRDP and VMTP Shares are included in interest expense, fees and amortization of offering costs in the Statements of Operations:
| | | | | | | | |
| | | Dividends Accrued | | | Deferred Offering Costs
Amortization | |
MUE | | $ | 1,707,270 | | | $ | — | |
MCA | | | 2,027,263 | | | | 5,766 | |
MYN | | | 2,975,216 | | | | 7,672 | |
MYI | | | 4,233,983 | | | | 10,085 | |
| 11. | REGULATIONS-X AMENDMENTS |
On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act ReleaseNo. 33-10532, Disclosure Update and Simplification. The Funds have adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statements of Assets and Liabilities, Statements of Changes in Net Assets and Notes to the Financial Statements.
Prior year distribution information and undistributed net investment income in the Statements of Changes in Net Assets has been modified to conform to the current year presentation in accordance with the RegulationS-X changes.
Distributions for the year ended July 31, 2018 were classified as follows:
| | | | |
| | | Net Investment Income | |
MUE | | $ | 16,169,915 | |
MCA | | | 23,481,902 | |
MYN | | | 23,456,159 | |
MYI | | | 50,233,328 | |
Undistributed net investment income as of July 31, 2018 was as follows:
| | | | |
| | | Undistributed Net Investment Income | |
MUE | | $ | 836,903 | |
MCA | | | 945,392 | |
MYN | | | 2,205,494 | |
MYI | | | 4,983,874 | |
| | |
| 58 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
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:
| | | | | | | | | | | | | | | | | | | | |
| | | Common Dividend
Per Share | | | Preferred Shares (c) | |
| | | Paid (a) | | | Declared (b) | | | Shares | | | Series | | | Declared | |
MUE | | $ | 0.0490 | | | $ | 0.0490 | | | | VMTP | | | | W-7 | | | $ | 267,603 | |
MCA | | | 0.0520 | | | | 0.0520 | | | | VRDP | | | | W-7 | | | | 317,217 | |
MYN | | | 0.0425 | | | | 0.0425 | | | | VRDP | | | | W-7 | | | | 329,407 | |
MYI | | | 0.0505 | | | | 0.0505 | | | | VRDP | | | | W-7 | | | | 482,165 | |
| (a) | Net investment income dividend paid on March 1, 2019 to Common Shareholders of record on February 15, 2019. |
| (b) | Net investment income dividend declared on March 1, 2019, payable to Common Shareholders of record on March 15, 2019. |
| (c) | Dividends declared for period February 1, 2019 to February 28, 2019. |
| | | | |
| NOTESTO FINANCIAL STATEMENTS | | | 59 | |
Director and Officer Information
Richard E. Cavanagh, Co-Chair of the Board and Director
Karen P. Robards, Co-Chair of the Board and Director
Michael J. Castellano, Director
Cynthia L. Egan, Director
Frank J. Fabozzi, Director
Henry Gabbay, Director
R. Glenn Hubbard, Director
W. Carl Kester, Director
Catherine A. Lynch, Director
Robert Fairbairn, Director
John M. Perlowski, Director, President and Chief Executive Officer
Jonathan Diorio, Vice President
Neal J. Andrews, Chief Financial Officer
Jay M. Fife, Treasurer
Charles Park, Chief Compliance Officer
Janey Ahn, Secretary
As of the date of this report, the portfolio managers of MNY are Walter O’Connor and Christian Romaglino. Mr. Romaglino joined MYN’s portfolio management team effective October 1, 2018. Mr. Romaglino has been a Director of BlackRock, Inc. since 2017; a Portfolio Manager for the Municipal Mutual Fund Desk within BlackRock’s Global Fixed Income Group since 2017; and a Portfolio Manager at Brown Brothers Harriman from 2007 to 2017.
Effective January 1, 2019, Richard E. Cavanagh and Karen P. Robards were appointed as a Co-Chair of the Board. Prior to January 1, 2019, Mr. Cavanagh served as Chair of the Board and Ms. Robards served as Vice Chair of the Board. In addition, effective January 1, 2019, Henry Gabbay was appointed as a Director of each Fund.
Investment Adviser
BlackRock Advisors, LLC
Wilmington, DE 19809
Accounting Agent and Custodian
State Street Bank and Trust Company
Boston, MA 02111
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 10286
VRDP Liquidity Provider
Citibank, N.A.
New York, NY 10179
VRDP Remarketing Agent
Citigroup Global Markets Inc.
New York, NY 10179
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Boston, MA 02116
Legal Counsel
Willkie Farr & Gallagher LLP
New York, NY 10019
Address of the Funds
100 Bellevue Parkway
Wilmington, DE 19809
| | |
| 60 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Additional Information
Section 19(a) Notices
The amounts and sources of distributions reported in this notice are estimates that are subject to change based on the Fund’s investment experience during the remainder of the calendar year, are for financial reporting purposes and are not being provided for tax reporting purposes. The actual amounts and character of the distributions for tax reporting purposes will be reported to shareholders on Form 1099-DIV which is sent to shareholders shortly after calendar year end.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Total Fiscal Year to Date Cumulative
Distributions by Character | | | Percentage of Fiscal Year to Date Cumulative
Distributions by Character | |
| Fund | | Ticker | | | Net
Investment
Income | | | Net Realized Capital Gains Short Term | | | Net Realized
Capital Gains
Long Term | | | Return of
Capital* | | | Total Per
Common
Share | | | Net
Investment
Income | | | Net Realized
Capital Gains
Short Term | | | Net Realized
Capital Gains
Long Term | | | Return of
Capital | | | Total Per
Common
Share | |
BlackRock Holdings Quality Fund II, Inc. | | | MUE | | | $ | 0.305980 | | | $ | — | | | $ | — | | | $ | 0.008020 | | | $ | 0.314000 | | | | 97 | % | | | 0 | % | | | 0 | % | | | 3 | % | | | 100 | % |
| | * | MUE estimates that it has distributed more than the amount of earned income and net realized gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment is paid back to the shareholder. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. When distributions exceed total return performance, the difference will reduce the Fund’s net asset value per share. | |
Section 19(a) notices for the Funds, as applicable, are available on the BlackRock website athttp://www.blackrock.com.
Fund Certification
The Funds are listed for trading on the NYSE and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. The Funds filed with the SEC the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.
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 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 distributions 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. Except as disclosed on page 59, there have been no changes in the persons who are primarily responsible for the day-to-day management of the Funds’ portfolios.
In accordance with Section 23(c) of the Investment Company Act of 1940, each Fund may from time to time purchase shares of its common stock in the open market or in private transactions.
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 athttp://www.blackrock.com. Any reference to BlackRock’s website in this report 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
Shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual shareholder reports by enrolling in the electronic delivery program. Electronic copies of shareholder reports are available on BlackRock’s website.
To enroll in electronic delivery:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment advisers, banks or brokerages may offer this service.
| | | | |
| ADDITIONAL INFORMATION | | | 61 | |
Additional Information (continued)
Householding
The Funds will mail only one copy of shareholder documents, 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.
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. 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 upon request and without charge (1) by calling (800) 882-0052; (2) athttp://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) athttp://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 ofhttp://www.blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to 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.
| | |
| 62 | | 2019 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Glossary of Terms Used in this Report
| | |
| Portfolio Abbreviations |
| |
| AGC | | Assured Guarantee Corp. |
| |
| AGM | | Assured Guaranty Municipal Corp. |
| |
| AMBAC | | American Municipal Bond Assurance Corp. |
| |
| AMT | | Alternative Minimum Tax (subject to) |
| |
| ARB | | Airport Revenue Bonds |
| |
| BAM | | Build America Mutual Assurance Co. |
| |
| BARB | | Building Aid Revenue Bonds |
| |
| BOCES | | Board of Cooperative Educational Services |
| |
| CAB | | Capital Appreciation Bonds |
| |
| COP | | Certificates of Participation |
| |
| EDA | | Economic Development Authority |
| |
| EDC | | Economic Development Corp. |
| |
| ERB | | Education Revenue Bonds |
| |
| FHA | | Federal Housing Administration |
| |
| GARB | | General Airport Revenue Bonds |
| |
| GO | | General Obligation Bonds |
| |
| GTD | | Guaranteed |
| |
| HFA | | Housing Finance Agency |
| |
| IDA | | Industrial Development Authority |
| |
| IDB | | Industrial Development Board |
| |
| ISD | | Independent School District |
| |
| LRB | | Lease Revenue Bonds |
| |
| M/F | | Multi-Family |
| |
| NPFGC | | National Public Finance Guarantee Corp. |
| |
| PILOT | | Payment in Lieu of Taxes |
| |
| PSF-GTD | | Permanent School Fund Guaranteed |
| |
| Q-SBLF | | Qualified School Bond Loan Fund |
| |
| RB | | Revenue Bonds |
| |
| S/F | | Single-Family |
| |
| SONYMA | | State of New York Mortgage Agency |
| |
| SRF | | State Revolving Fund |
| | | | |
| GLOSSARYOF TERMS USEDINTHIS REPORT | | | 63 | |
This report is intended for current holders. It is not a prospectus. Past performance results shown in this report should not be considered a representation 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 short-term interest rates may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.
| | |
| MHMYINS4-1/19-SAR | |  |
| 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 |
(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 FormN-CSR filing.
| Item 7 – | Disclosure of Proxy Voting Policies and Procedures forClosed-End Management Investment Companies – Not Applicable to this semi-annual report |
| Item 8 – | Portfolio Managers ofClosed-End Management Investment Companies |
(a)(1) As of the date of filing this Report:
The registrant is managed by a team of investment professionals comprised of Walter O’Connor, CFA, Managing Director at BlackRock and Christian Romaglino, Director at BlackRock. Each is a member of BlackRock’s municipaltax-exempt management group. Each is jointly responsible for theday-to-day management of the registrant’s portfolio, which includes setting the registrant’s overall investment strategy, overseeing the management of the registrant and/or selection of its investments. Messrs. O’Connor and Romaglino have been members of the registrant’s portfolio management team since 2006 and 2018, respectively.
Information below is with respect to Mr. Romaglino, who became portfolio manager to the Fund on October 1, 2018.
| | |
Portfolio Manager | | Biography |
Christian Romaglino | | Director of BlackRock since 2017 |
(a)(2) As of January 31, 2019:
| | | | | | | | | | | | |
| | | (ii) Number of Other Accounts Managed and Assets by Account Type | | (iii) Number of Other Accounts and Assets for Which Advisory Fee is Performance-Based |
(i) Name of Portfolio Manager | | Other Registered Investment Companies | | Other Pooled Investment Vehicles | | Other Accounts | | Other Registered Investment Companies | | Other Pooled Investment Vehicles | | Other Accounts |
| | | | | | | |
Christian Romaglino | | 12 | | 0 | | 0 | | 0 | | 0 | | 0 |
| | | | | | | |
| | | $5.04 Billion | | $0 | | $0 | | $0 | | $0 | | $0 |
2
(iv) Portfolio Manager Potential Material Conflicts of Interest
BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, Inc., its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, Inc., or any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock, Inc.’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock, Inc. or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses materialnon-public information. Certain portfolio managers also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. It should also be noted that a portfolio manager may be managing hedge fund and/or long only accounts, or may be part of a team managing hedge fund and/or long only accounts, subject to incentive fees. Such portfolio managers may therefore be entitled to receive a portion of any incentive fees earned on such accounts. Currently, the portfolio manager of this Fund is not entitled to receive a portion of incentive fees of other accounts.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock, Inc. has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.
(a)(3) As of January 31, 2019:
Portfolio Manager Compensation Overview
The discussion below describes the portfolio managers’ compensation as of January 31, 2019.
BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.
3
Base Compensation. Generally, portfolio managers receive base compensation based on their position with the firm.
Discretionary Incentive Compensation.Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s performance and contribution to the overall performance of these portfolios and BlackRock. In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Funds or other accounts managed by the portfolio managers are measured. Among other things, BlackRock’s Chief Investment Officers make a subjective determination with respect to each portfolio manager’s compensation based on the performance of the Funds and other accounts managed by each portfolio manager relative to the various benchmarks. Performance of fixed income funds is measured on apre-tax and/orafter-tax basis over various time periods including1-,3- and5- year periods, as applicable. With respect to the portfolio manager, such benchmarks for the Fund and other accounts are: a combination of market-based indices (e.g., Standard & Poor’s Municipal Bond Index), certain customized indices and certain fund industry peer groups.
Distribution of Discretionary Incentive Compensation.Discretionary incentive compensation is distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/or deferred cash awards that notionally track the return of certain BlackRock investment products.
Portfolio managers receive their annual discretionary incentive compensation in the form of cash. Portfolio managers whose total compensation is above a specified threshold also receive deferred BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods. In some cases, additional deferred BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award to aid in retention, align interests with long-term shareholders and motivate performance. Deferred BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc. common stock. The portfolio manager of this Fund has deferred BlackRock, Inc. stock awards.
For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed in the form of deferred cash awards that notionally track the returns of select BlackRock investment products they manage, which provides direct alignment of portfolio manager discretionary incentive compensation with investment product results. Deferred cash awards vest ratably over a number of years and, once vested, settle in the form of cash. Only portfolio managers who manage specified products and whose total compensation is above a specified threshold are eligible to participate in the deferred cash award program.
Other Compensation Benefits.In addition to base salary and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:
Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock, Inc. employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay
4
contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to3-5% of eligible compensation up to the Internal Revenue Service limit ($275,000 for 2018). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock, Inc. contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the purchase date. All of the eligible portfolio managers are eligible to participate in these plans.
(a)(4)Beneficial Ownership of Securities – As of January 31, 2019.
| | |
Portfolio Manager | | Dollar Range of Equity Securities of the Fund Beneficially Owned |
Christian Romaglino | | None |
(b) Effective October 1, 2018, Christian Romaglino was added as a portfolio manager.
| Item 9 – | Purchases of Equity Securities byClosed-End Management Investment Company and Affiliated Purchasers |
| | | | | | | | |
| Period | | (a) Total | | (b) Average Price Paid per Share | | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | (d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs1 |
| | | Number of Shares Purchased |
| August 1 – 31, 2018 | | N/A | | N/A | | N/A | | N/A |
| September 1 – 30, 2018 | | N/A | | N/A | | N/A | | N/A |
| October1 - 31, 2018 | | N/A | | N/A | | N/A | | N/A |
| November 1 – 30, 2018 | | N/A | | N/A | | N/A | | N/A |
| December 1 – 31, 2018 | | 0 | | $0 | | 0 | | 1,979,329 |
| January 1 –31, 2019 | | 0 | | $0 | | 0 | | 1,979,329 |
| Total: | | 0 | | $0 | | 0 | | 1,979,329 |
1The Fund announced an open market share repurchase program on November 15, 2018 pursuant to which the Fund was authorized to repurchase, through November 30, 2019, up to 5% of its common shares based on common shares outstanding on November 30, 2018, in open market transactions, subject to certain conditions.
| 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 Rule30a-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 Rule30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
5
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule30a-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 – | Disclosure of Securities Lending Activities forClosed-End Management Investment |
Companies – Not Applicable
| Item 13 – | Exhibits attached hereto |
(a)(1) – Code of Ethics – Not Applicable to this semi-annual report
(a)(2) – Certifications – Attached hereto
(a)(3) – Not Applicable
(a)(4) – Not Applicable
(b) – Certifications – Attached hereto
6
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 New York Quality Fund, Inc.
| | | | |
| By: | | /s/ John M. Perlowski | | |
| | John M. Perlowski | | |
| | Chief Executive Officer (principal executive officer) of |
| | BlackRock MuniYield New York Quality Fund, Inc. |
Date: April 5, 2019
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 New York Quality Fund, Inc. |
Date: April 5, 2019
| | | | |
| By: | | /s/ Neal J. Andrews | | |
| | Neal J. Andrews | | |
| | Chief Financial Officer (principal financial officer) of |
| | BlackRock MuniYield New York Quality Fund, Inc. |
Date: April 5, 2019
7
