UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-07138
Name of Fund: BlackRock MuniYield New Jersey Quality Fund, Inc. (MJI)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock
MuniYield New Jersey 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: 07/31/2011
Date of reporting period: 07/31/2011
Item 1 – Report to Stockholders
Annual Report
BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)
BlackRock MuniYield Investment Quality Fund (MFT)
BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)
BlackRock MuniYield New Jersey Quality Fund, Inc. (MJI)
BlackRock MuniYield Pennsylvania Quality Fund (MPA)
| |
| Table of Contents | |
| | Page |
| Dear Shareholder | 3 |
| Annual Report: | |
| Municipal Market Overview | 4 |
| Fund Summaries | 5 |
| The Benefits and Risks of Leveraging | 11 |
| Derivative Financial Instruments | 11 |
| Financial Statements: | |
| Schedules of Investments | 12 |
| Statements of Assets and Liabilities | 33 |
| Statements of Operations | 34 |
| Statements of Changes in Net Assets | 35 |
| Statements of Cash Flows | 38 |
| Financial Highlights | 39 |
| Notes to Financial Statements | 45 |
| Report of Independent Registered Public Accounting Firm | 53 |
| Important Tax Information | 54 |
| Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements | 55 |
| Automatic Dividend Reinvestment Plan | 59 |
| Officers and Directors | 60 |
| Additional Information | 63 |
| | |
| 2 | ANNUAL REPORT | JULY 31, 2011 |
Dear Shareholder
Financial markets have been extremely volatile in the wake of the Standard & Poor’s downgrade of
US Treasury debt. While the August 5 announcement was the catalyst for the market turmoil, weaker-
than-expected economic data and Europe’s deepening financial crisis further compounded investor
uncertainty as the future direction of the global economy became increasingly questionable. Although
markets remain highly volatile and conditions are highly uncertain, BlackRock remains focused on
finding opportunities in this environment.
The pages that follow reflect your mutual fund’s reporting period ended July 31, 2011. Accordingly,
the below discussion is intended to provide you with additional perspective on the performance of
your investments during that period.
During the summer of 2010, investors were in “risk-off” mode as the global economy was sputtering
and the sovereign debt crisis was spreading across Europe. But markets were revived toward the end
of the summer on positive economic news and robust corporate earnings. The global economy had
finally gained traction and fear turned to optimism with the anticipation of a second round of quan-
titative easing (“QE2”) from the US Federal Reserve (the “Fed”). Stock markets rallied even though
the European debt crisis continued and inflationary pressures loomed over emerging markets. Fixed
income markets, however, saw yields move sharply upward (pushing prices down) especially on the
long end of the historically steep yield curve. While high yield bonds benefited from the risk rally, most
fixed income sectors declined in the fourth quarter. The tax-exempt municipal market faced additional
headwinds as it became evident that the Build America Bond program would not be extended and
municipal finance troubles abounded.
The new year brought spikes of volatility as political turmoil swept across the Middle East/North Africa
region and as prices of oil and other commodities soared. Natural disasters in Japan disrupted indus-
trial supply chains and concerns mounted over US debt and deficit issues. Equities quickly rebounded
as investors chose to focus on the continuing stream of strong corporate earnings and positive eco-
nomic data. Credit markets were surprisingly resilient in this environment and yields regained relative
stability in 2011. The tax-exempt market saw relief from its headwinds and steadily recovered from its
fourth-quarter lows. Equities, commodities and high yield bonds outpaced higher-quality assets as
investors increased their risk tolerance.
However, longer-term headwinds had been brewing. Inflationary pressures intensified in emerging
economies, many of which were overheating, and the European debt crisis continued to escalate.
Markets were met with a sharp reversal in May when political unrest in Greece pushed the nation closer
to defaulting on its debt.This development rekindled fears about the broader debt crisis and its further
contagion among peripheral European countries. Concurrently, it became evident that the pace of global
economic growth had slowed. Higher oil prices and supply chain disruptions finally showed up in eco-
nomic data. In the final month of the reporting period, the prolonged debt ceiling debate in Washington,
DC led to a loss of confidence in policymakers. Stocks generally declined from May through the end of
the period, but 6- and 12-month returns through the end of July remained in positive territory. In bond
markets, yields were volatile but generally moved lower for the period as a whole (pushing prices up).
Continued low short-term interest rates kept yields on money market securities near their all-time lows.
“Although markets remain highly
volatile and conditions are highly
uncertain, BlackRock remains
focused on finding opportunities in
this environment.”
Rob Kapito
President, BlackRock Advisors, LLC
| | |
| Total Returns as of July 31, 2011 | |
| | 6-month | 12-month |
| US large cap equities | 1.46% | 19.65% |
| (S&P 500® Index) | | |
| US small cap equities | 2.63 | 23.92 |
| (Russell 2000® Index) | | |
| International equities | 0.93 | 17.17 |
| (MSCI Europe, Australasia, | | |
| Far East Index) | | |
| Emerging market | 3.23 | 17.45 |
| equities (MSCI Emerging | | |
| Markets Index) | | |
| 3-month Treasury | 0.07 | 0.14 |
| bill (BofA Merrill Lynch | | |
| 3-Month Treasury | | |
| Bill Index) | | |
| US Treasury securities | 6.93 | 4.53 |
| (BofA Merrill Lynch 10- | | |
| Year US Treasury Index) | | |
| US investment grade | 4.23 | 4.44 |
| bonds (Barclays | | |
| Capital US Aggregate | | |
| Bond Index) | | |
| Tax-exempt municipal | 6.27 | 3.24 |
| bonds (Barclays Capital | | |
| Municipal Bond Index) | | |
| US high yield bonds | 3.90 | 12.89 |
| (Barclays Capital US | | |
| Corporate High Yield 2% | | |
| Issuer Capped Index) | | |
Past performance is no guarantee of future results. Index performance is
shown for illustrative purposes only. You cannot invest directly in an index.
| |
| THIS PAGE NOT PART OF YOUR FUND REPORT | 3 |
Municipal Market Overview
For the 12-Month Period Ended July 31, 2011
At the outset of the 12-month period, investor concerns were focused on the possibility of deflation and a double-dip in the US economy thus leading to a
flatter municipal yield curve at that time as compared to July 31, 2011. From July through September 2010, rates moved lower (and prices higher) across
the curve, reaching historic lows in August when the yield on 5-year issues touched 1.06%, the 10-year reached 2.18%, and the 30-year closed at 3.67%.
However, the market took a turn in October amid a “perfect storm” of events that ultimately resulted in the worst quarterly performance for municipals since
the Fed tightening cycle of 1994. Treasury yields lost support due to concerns over the US deficit and municipal valuations suffered a quick and severe
setback as it became evident that the Build America Bond (“BAB”) program would expire at the end of 2010. The BAB program opened the taxable market
to municipal issuers, which had successfully alleviated supply pressure in the traditional tax-exempt marketplace, bringing down yields in that space.
Towards the end of the fourth quarter 2010, news about municipal finance troubles mounted and damaged confidence among retail investors. From
mid-November through year end, weekly outflows from municipal mutual funds averaged over $2.5 billion. Political uncertainty surrounding the midterm
elections and tax policies along with the expiration of the BAB program exacerbated the situation. These conditions combined with seasonal illiquidity
sapped willful market participation from the trading community. December brought declining demand with no comparable reduction in supply as issuers
rushed their deals to market before the BAB program was retired. This supply-demand imbalance led to wider quality spreads and higher yields.
Demand is usually strong at the beginning of a new year, but retail investors continued to move away from municipal mutual funds in 2011. From
mid-November, outflows persisted for 29 consecutive weeks, totaling $35.1 billion before the trend finally broke in June. Weak demand has been counter-
balanced by lower supply in 2011. According to Thomson Reuters, year-to-date through July, new issuance was down 40% compared to the same period
last year. Issuers have been reluctant to bring new deals to the market due to higher interest rates, fiscal policy changes and a reduced need for municipal
borrowing. In this positive technical environment, the S&P/Investortools Main Municipal Bond Index gained 4.22% for the second quarter of 2011, its
best second-quarter performance since 1992, and municipals outperformed most other fixed income asset classes for the quarter.
Municipals displayed an impressive degree of resiliency throughout the month of July as Moody’s Investors Service signaled that its potential downgrade of
US government debt could also result in downgrades of a number of triple A-rated states and nearly 200 local general obligation issues. July also brought
weaker US economic data. The housing market remained sluggish, fewer jobs were created and consumer confidence declined. US Treasury yields moved
lower, dragging municipal yields down, which pushed bond prices up.
Overall, the municipal yield curve steepened during the period from July 31, 2010 to July 31, 2011. As measured by Thomson Municipal Market Data, yields
on AAA quality-rated 30-year municipals rose 38 basis points (“bps”) to 4.35%, while yields for 5-year maturities rallied by 13 bps to 1.16%, and 10-year
maturities increased by 10 bps to 2.67%. With the exception of the 2- to 5-year range, the yield spread between maturities increased over the
past year, with the greatest increase seen in the 5- to 30-year range, where the spread widened by 51 bps, while overall the slope between 2- and
30-year maturities increased by 35 bps to 3.95%.
The fundamental picture for municipalities is improving as most states began their new fiscal year with a balanced budget. Austerity is the general theme
across the country, while a small number of states continue to rely on the “kick the can” approach, using aggressive revenue projections and accounting
gimmicks to close their shortfalls. As long as economic growth stays positive, tax receipts for states should continue to rise and lead to better credit
fundamentals. BlackRock maintains a constructive view of the municipal market, recognizing that careful credit research and security selection remain
imperative amid uncertainty in the economic environment.
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
| | |
| 4 | ANNUAL REPORT | JULY 31, 2011 |
Fund Summary as of July 31, 2011 BlackRock MuniHoldings California Quality Fund, Inc.
Fund Overview
Effective November 9, 2010, BlackRock MuniHoldings California Insured Fund, Inc. changed its name to BlackRock MuniHoldings California Quality
Fund, Inc.
BlackRock MuniHoldings California Quality Fund, Inc.’s (MUC) (the “Fund”) investment objective is to provide shareholders with current income exempt
from federal and California income taxes. The Fund seeks to achieve its investment objective by investing primarily in municipal obligations exempt from fed-
eral income taxes (except that the interest may be subject to the federal alternative minimum tax) and California income taxes. Under normal market condi-
tions, the Fund invests at least 80% of its assets in investment grade 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.
Performance
Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of
Fund assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Single-State Insured Municipal Debt Funds cat-
egory into the Lipper California Municipal Debt Funds category. For the 12 months ended July 31, 2011, the Fund returned 0.16% based on market price
and 4.88% based on net asset value (“NAV”). For the same period, the closed-end Lipper California Municipal Debt Funds category posted an average
return of (1.84)% based on market price and 3.16% based on NAV, while the closed-end Lipper Single-State Insured Municipal Debt Funds category posted
an average return of (1.22)% based on market price and 3.22% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV,
which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion
relates to performance based on NAV. The Fund’s long duration posture benefited performance as bonds with longer maturities experienced the greatest
price appreciation as the yield curve flattened in the latter half of the period. Increased exposure to inverse floating rate instruments (tender option bonds)
while the municipal yield curve was historically steep boosted the Fund’s income accrual. Holdings of higher quality essential service revenue bonds had a
positive impact on performance as investors favored these securities versus general obligation bonds and school district credits, which lagged due to budget
concerns in California. Additionally, the Fund benefited from holding insured credits with relatively strong underlying issuers when monoline insurance com-
pany policies were losing their value to the retail marketplace. Conversely, some widening of credit spreads, especially among California school district and
health care issues, had a negative impact on returns. In addition, the Fund’s cash reserves detracted as yields fell and spreads tightened. The Fund held
short-call, high-coupon bonds, which have good defensive characteristics, but proved a drag on returns when rates fell.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
| |
| Symbol on New York Stock Exchange (“NYSE”) | MUC |
| Initial Offering Date | February 27, 1998 |
| Yield on Closing Market Price as of July 31, 2011 ($13.15)1 | 6.98% |
| Tax Equivalent Yield2 | 10.74% |
| Current Monthly Distribution per Common Share3 | $0.0765 |
| Current Annualized Distribution per Common Share3 | $0.9180 |
| Leverage as of July 31, 20114 | 43% |
Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution rate is not constant and is subject to change.
4 Represents Auction Market Preferred Shares (“AMPS”) and tender option bond trusts (“TOBs”) as a percentage of total managed assets, which is the total assets of the Fund,
including any assets attributable to AMPS and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and
Risks of Leveraging on page 11.
The table below summarizes the changes in the Fund’s market price and NAV per share:
| | | | | |
| | 7/31/11 | 7/31/10 | Change | High | Low |
| Market Price | $13.15 | $14.04 | (6.34)% | $14.69 | $12.07 |
| Net Asset Value | $14.27 | $14.55 | (1.92)% | $15.10 | $12.49 |
The following charts show the sector and credit quality allocations of the Fund’s long-term investments:
| | |
| Sector Allocations | | |
| | 7/31/11 | 7/31/10 |
| County/City/Special District/School District | 37% | 43% |
| Utilities | 30 | 26 |
| Transportation | 12 | 10 |
| Education | 11 | 10 |
| Corporate | 4 | 5 |
| Health | 4 | 2 |
| State | 2 | 4 |
| | |
| Credit Quality Allocations5 | | |
| | 7/31/11 | 7/31/10 |
| AAA/Aaa | 5% | 48% |
| AA/Aa | 64 | 32 |
| A | 17 | 20 |
| BBB/Baa | 5 | — |
| Not Rated | 9 | — |
5 Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investors Service
(“Moody’s”) ratings.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 5 |
Fund Summary as of July 31, 2011 BlackRock MuniHoldings New Jersey Quality Fund, Inc.
Fund Overview
Effective November 9, 2010, BlackRock MuniHoldings New Jersey Insured Fund, Inc. changed its name to BlackRock MuniHoldings New Jersey Quality
Fund, Inc.
BlackRock MuniHoldings New Jersey Quality Fund, Inc.’s (MUJ) (the “Fund”) investment objective is to provide shareholders with current income exempt
from federal income tax and New Jersey personal income taxes. The Fund seeks to achieve its investment objective by investing primarily in long-term,
investment grade municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax)
and New Jersey personal income taxes. 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.
Performance
Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of Fund
assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Single-State Insured Municipal Debt Funds category
into the Lipper New Jersey Municipal Debt Funds category. For the 12 months ended July 31, 2011, the Fund returned (2.77)% based on market price and
3.28% based on NAV. For the same period, the closed-end Lipper New Jersey Municipal Debt Funds category posted an average return of (3.20)% based
on market price and 3.20% based on NAV, while the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average return of
(1.22)% based on market price and 3.22% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which widened during the
period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance
based on NAV. The Fund’s holdings in spread sectors, including housing, health care and corporate-backed municipal bonds, enhanced performance as
these sectors provided a relatively high degree of incremental income in the low interest rate environment. The Fund’s holdings of high-coupon bonds and
shorter-duration bonds (bonds with lower sensitivity to interest rate movements) performed well as long-term rates climbed toward the end of 2010 and
into the early part of 2011. Conversely, the Fund’s exposure to bonds with longer duration (greater sensitivity to interest rate movements) and bonds with
longer-dated maturities detracted from performance as the municipal yield curve steepened over the 12-month period. The surprise non-extension of the
BAB program at the end of 2010 put additional upward pressure on the long end of the yield curve, where most of the BAB supply was issued.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
| |
| Symbol on NYSE | MUJ |
| Initial Offering Date | March 11, 1998 |
| Yield on Closing Market Price as of July 31, 2011 ($13.74)1 | 6.46% |
| Tax Equivalent Yield2 | 9.94% |
| Current Monthly Distribution per Common Share3 | $0.074 |
| Current Annualized Distribution per Common Share3 | $0.888 |
| Leverage as of July 31, 20114 | 37% |
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution rate is not constant and is subject to change.
4 Represents Variable Rate Demand Preferred Shares (“VRDP Shares”) and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets
attributable to VRDP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of
Leveraging on page 11.
The table below summarizes the changes in the Fund’s market price and NAV per share:
| | | | | |
| | 7/31/11 | 7/31/10 | Change | High | Low |
| Market Price | $13.74 | $15.05 | (8.70)% | $15.71 | $12.65 |
| Net Asset Value | $14.73 | $15.19 | (3.03)% | $15.65 | $13.43 |
The following charts show the sector and credit quality allocations of the Fund’s long-term investments:
| | |
| Sector Allocations | | |
| | 7/31/11 | 7/31/10 |
| State | 31% | 30% |
| Transportation | 19 | 18 |
| County/City/Special District/School District | 14 | 17 |
| Education | 12 | 12 |
| Health | 11 | 9 |
| Housing | 6 | 6 |
| Utilities | 5 | 6 |
| Tobacco | 1 | 1 |
| Corporate | 1 | 1 |
| | |
| Credit Quality Allocations5 | | |
| | 7/31/11 | 7/31/10 |
| AAA/Aaa | 11% | 38% |
| AA/Aa | 45 | 25 |
| A | 30 | 28 |
| BBB/Baa | 14 | 7 |
| Not Rated6 | — | 2 |
5 Using the higher of S&P’s and Moody’s ratings.
6 The investment advisor has deemed certain of these non-rated securities to be of
investment grade quality. As of July 31, 2011 and July 31, 2010, the market value
of these securities was $10,031, representing less than 1%, and $7,659,796,
representing 2%, respectively, of the Fund’s long-term investments.
| | |
| 6 | ANNUAL REPORT | JULY 31, 2011 |
Fund Summary as of July 31, 2011 BlackRock MuniYield Investment Quality Fund
Fund Overview
Effective November 9, 2010, BlackRock MuniYield Insured Investment Fund changed its name to BlackRock MuniYield Investment Quality Fund.
BlackRock MuniYield Investment Quality Fund’s (MFT) (the “Fund”) investment objective is to provide shareholders with as high a level of current income
exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its invest-
ment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to
the federal alternative minimum tax). Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment
grade 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.
Performance
Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of
Fund assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Insured Municipal Debt Funds (Leveraged) cat-
egory into the Lipper General Municipal Debt Funds (Leveraged) category. During the period, Lipper combined these categories into one General & Insured
Municipal Debt Funds (Leveraged) category. For the 12 months ended July 31, 2011, the Fund returned (7.32)% based on market price and 3.20% based
on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of (2.24)%
based on market price and 4.19% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a premium to NAV to a discount which
accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on
NAV. The Fund’s holdings in spread sectors, including housing and health care bonds, enhanced performance as these sectors provided a relatively high
degree of incremental income in the low interest rate environment. The Fund’s holdings of premium coupon bonds (6% or higher) and shorter-duration
bonds (bonds with lower sensitivity to interest rate movements) performed well as long-term interest rates climbed toward the end of 2010 and into the
early part of 2011. Conversely, the Fund’s exposure to bonds with longer duration (greater sensitivity to interest rate movements) and bonds with longer-
dated maturities detracted from performance as the municipal yield curve steepened over the 12-month period. The surprise non-extension of the BAB
program at the end of 2010 put additional upward pressure on the long end of the curve, where most of the BAB supply was issued.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
| |
| Symbol on NYSE | MFT |
| Initial Offering Date | October 30, 1992 |
| Yield on Closing Market Price as of July 31, 2011 ($12.39)1 | 6.88% |
| Tax Equivalent Yield2 | 10.58% |
| Current Monthly Distribution per Common Share3 | $0.071 |
| Current Annualized Distribution per Common Share3 | $0.852 |
| Leverage as of July 31, 20114 | 39% |
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution rate is not constant and is subject to change.
4 Represents AMPS and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to AMPS and TOBs, minus the sum of
accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 11.
The table below summarizes the changes in the Fund’s market price and NAV per share:
| | | | | |
| | 7/31/11 | 7/31/10 | Change | High | Low |
| Market Price | $12.39 | $14.28 | (13.24)% | $14.47 | $11.15 |
| Net Asset Value | $13.40 | $13.87 | (3.39)% | $14.38 | $11.96 |
The following charts show the sector and credit quality allocations of the Fund’s long-term investments:
| | |
| Sector Allocations | | |
| | 7/31/11 | 7/31/10 |
| Utilities | 30% | 27% |
| County/City/Special District/School District | 23 | 26 |
| Transportation | 18 | 16 |
| Health | 13 | 14 |
| State | 9 | 11 |
| Education | 3 | 2 |
| Housing | 3 | 4 |
| Tobacco | 1 | — |
| | |
| Credit Quality Allocations5 | | |
| | 7/31/11 | 7/31/10 |
| AAA/Aaa | 4% | 58% |
| AA/Aa | 13 | 22 |
| A | 69 | 17 |
| BBB/Baa | 8 | — |
| Not Rated | 6 | 36 |
5 Using the higher of S&P’s or Moody’s ratings.
6 The investment advisor has deemed certain of these non-rated securities to be of
investment grade quality. As of July 31, 2010, the market value of these securities
was $4,251,053, representing 2% of the Fund’s long-term investments.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 7 |
Fund Summary as of July 31, 2011 BlackRock MuniYield Michigan Quality Fund, Inc.
Fund Overview
Effective November 9, 2010, BlackRock MuniYield Michigan Insured Fund, Inc. changed its name to BlackRock MuniYield Michigan Quality Fund, Inc.
BlackRock MuniYield Michigan Quality Fund, Inc.’s (MIY) (the “Fund”) investment objective is to provide shareholders with as high a level of current income
exempt from federal and Michigan 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 federal income taxes (except that the interest
may be subject to the federal alternative minimum tax) and Michigan income taxes. Under normal market conditions, the Fund invests primarily in long-term
municipal obligations that are investment grade 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.
Performance
Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of
Fund assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Single-State Insured Municipal Debt Funds cat-
egory into the Lipper Michigan Municipal Debt Funds category. For the 12 months ended July 31, 2011, the Fund returned (1.67)% based on market price
and 4.78% based on NAV. For the same period, the closed-end Lipper Michigan Municipal Debt Funds category posted an average return of 0.18% based
on market price and 4.12% based on NAV, while the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average return of
(1.22)% based on market price and 3.22% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which widened during
the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to perform-
ance based on NAV. The Fund’s slightly long duration posture benefited performance as bonds with longer maturities experienced the greatest price appreci-
ation as the yield curve flattened amid the investor flight-to-quality in the latter half of the period. Exposure to inverse floating rate instruments (tender
option bonds) while the municipal yield curve was historically steep boosted the Fund’s income accrual. The Fund’s holdings of higher quality essential serv-
ice revenue bonds also had a positive impact on performance. Conversely, some widening of credit spreads, especially among Michigan and health care
issues, had a negative impact on returns. In addition, the Fund’s cash reserves detracted as yields fell and spreads tightened.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
| |
| Symbol on NYSE | MIY |
| Initial Offering Date | October 30, 1992 |
| Yield on Closing Market Price as of July 31, 2011 ($13.39)1 | 6.86% |
| Tax Equivalent Yield2 | 10.55% |
| Current Monthly Distribution per Common Share3 | $0.0765 |
| Current Annualized Distribution per Common Share3 | $0.9180 |
| Leverage as of July 31, 20114 | 38% |
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution rate is not constant and is subject to change.
4 Represents VRDP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOBs,
minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 11.
The table below summarizes the changes in the Fund’s market price and NAV per share:
| | | | | |
| | 7/31/11 | 7/31/10 | Change | High | Low |
| Market Price | $13.39 | $14.55 | (7.97)% | $15.28 | $12.12 |
| Net Asset Value | $14.63 | $14.92 | (1.94)% | $15.37 | $13.32 |
The following charts show the sector and credit quality allocations of the Fund’s long-term investments:
| | |
| Sector Allocations | | |
| | 7/31/11 | 7/31/10 |
| County/City/Special District/School District | 29% | 33% |
| Utilities | 16 | 12 |
| Health | 13 | 14 |
| Corporate | 10 | 11 |
| Transportation | 10 | 12 |
| State | 9 | 9 |
| Education | 8 | 6 |
| Housing | 5 | 3 |
| | |
| Credit Quality Allocations5 | | |
| | 7/31/11 | 7/31/10 |
| AAA/Aaa | 3% | 43% |
| AA/Aa | 67 | 26 |
| A | 27 | 28 |
| BBB/Baa | 2 | 1 |
| Not Rated6 | 1 | 2 |
5 Using the higher of S&P’s or Moody’s ratings.
6 The investment advisor has deemed certain of these non-rated securities to be of
investment grade quality. As of July 31, 2011 and July 31, 2010, the market value of
these securities was $1,064,957, representing 1%, and $2,921,098, representing
1%, respectively, of the Fund's long-term investments.
| | |
| 8 | ANNUAL REPORT | JULY 31, 2011 |
Fund Summary as of July 31, 2011 BlackRock MuniYield New Jersey Quality Fund, Inc.
Fund Overview
Effective November 9, 2010, BlackRock MuniYield New Jersey Insured Fund, Inc. changed its name to BlackRock MuniYield New Jersey Quality Fund, Inc.
BlackRock MuniYield New Jersey Quality Fund, Inc.’s (MJI) (the “Fund”) investment objective is to provide shareholders with as high a level of current income
exempt from federal income taxes and New Jersey personal income tax 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 federal income taxes (except that
the interest may be subject to the federal alternative minimum tax) and New Jersey personal income taxes. Under normal market conditions, the Fund invests
primarily in long-term municipal obligations that are investment grade quality at the time of investment. The Fund may invest directly in such securities or syn-
thetically through the use of derivatives.
No assurance can be given that the Fund’s investment objective will be achieved.
Performance
Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of Fund
assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Single-State Insured Municipal Debt Funds category
into the Lipper New Jersey Municipal Debt Funds category. For the 12 months ended July 31, 2011, the Fund returned (6.12)% based on market price and
3.10% based on NAV. For the same period, the closed-end Lipper New Jersey Municipal Debt Funds category posted an average return of (3.20)% based on
market price and 3.20% based on NAV, while the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average return of
(1.22)% based on market price and 3.22% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which widened during the
period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance
based on NAV. The Fund’s holdings in spread sectors, including housing, health care and corporate-backed municipal bonds, enhanced performance as
these sectors provided a relatively high degree of incremental income in the low interest rate environment. The Fund’s holdings of high-coupon bonds and
shorter-duration bonds (bonds with lower sensitivity to interest rate movements) performed well as long-term interest rates climbed toward the end of 2010
and into the early part of 2011. Conversely, the Fund’s exposure to bonds with longer duration (greater sensitivity to interest rate movements) and bonds with
longer-dated maturities detracted from performance as the municipal yield curve steepened over the 12-month period. The surprise non-extension of the BAB
program at the end of 2010 put additional upward pressure on the long end of the yield curve, where most of the BAB supply was issued.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
| |
| Symbol on NYSE | MJI |
| Initial Offering Date | October 30, 1992 |
| Yield on Closing Market Price as of July 31, 2011 ($13.16)1 | 6.57% |
| Tax Equivalent Yield2 | 10.11% |
| Current Monthly Distribution per Common Share3 | $0.072 |
| Current Annualized Distribution per Common Share3 | $0.864 |
| Leverage as of July 31, 20114 | 35% |
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution rate is not constant and is subject to change.
4 Represents VRDP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOBs,
minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 11.
The table below summarizes the changes in the Fund’s market price and NAV per share:
| | | | | |
| | 7/31/11 | 7/31/10 | Change | High | Low |
| Market Price | $13.16 | $14.92 | (11.80)% | $15.56 | $12.20 |
| Net Asset Value | $14.53 | $15.00 | (3.13)% | $15.49 | $13.27 |
The following charts show the sector and credit quality allocations of the Fund’s long-term investments:
| | |
| Sector Allocations | | |
| | 7/31/11 | 7/31/10 |
| State | 27% | 28% |
| Education | 17 | 16 |
| County/City/Special District/School District | 14 | 17 |
| Transportation | 12 | 9 |
| Health | 10 | 10 |
| Utilities | 9 | 9 |
| Housing | 7 | 7 |
| Corporate | 3 | 3 |
| Tobacco | 1 | 1 |
| | |
| Credit Quality Allocations5 | | |
| | 7/31/11 | 7/31/10 |
| AAA/Aaa | 10% | 31% |
| AA/Aa | 44 | 23 |
| A | 33 | 36 |
| BBB/Baa | 10 | 5 |
| Not Rated6 | 3 | 5 |
5 Using the higher of S&P’s and Moody’s ratings.
6 The investment advisor has deemed certain of these non-rated securities to be of
investment grade quality. As of July 31, 2011 and July 31, 2010, the market value of
these securities was $3,124,559, representing 3%, and $8,904,633, representing
5%, respectively, of the Fund’s long-term investments.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 9 |
Fund Summary as of July 31, 2011 BlackRock MuniYield Pennsylvania Quality Fund
Fund Overview
Effective November 9, 2010, BlackRock MuniYield Pennsylvania Insured Fund changed its name to BlackRock MuniYield Pennsylvania Quality Fund.
BlackRock MuniYield Pennsylvania Quality Fund’s (MPA) (the “Fund”) investment objective is to provide shareholders with as high a level of current income
exempt from federal and Pennsylvania 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 federal income taxes (except that the interest may be subject
to the federal alternative minimum tax) and Pennsylvania income taxes. Under normal market conditions, the Fund invests primarily in long-term municipal obli-
gations that are investment grade 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.
Performance
Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of Fund
assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Single-State Insured Municipal Debt Funds category
into the Lipper Pennsylvania Municipal Debt Funds category. For the 12 months ended July 31, 2011, the Fund returned (2.55)% based on market price
and 3.84% based on NAV. For the same period, the closed-end Lipper Pennsylvania Municipal Debt Funds category posted an average return of (2.55)%
based on market price and 3.46% based on NAV, while the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average return
of (1.22)% based on market price and 3.22% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which widened during
the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to perform-
ance based on NAV. The Fund benefited from high income accrual generated by its higher coupon bond holdings and low cash reserves. The Fund sought
investments with attractive valuations relative to their credit risk. Capital appreciation in the Fund’s holdings on the short end of the municipal yield curve,
where interest rates declined during the period, boosted returns. However, the Fund’s overall long duration (sensitivity to interest rates) detracted from per-
formance as long-term rates rose and the yield curve steepened due to municipal credit concerns and expiration of the BAB program. US Treasury financial
futures contracts used to hedge interest rate risk in the portfolio had a negative impact on performance.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These
views are not intended to be a forecast of future events and are no guarantee of future results.
Fund Information
| |
| Symbol on NYSE | MPA |
| Initial Offering Date | October 30, 1992 |
| Yield on Closing Market Price as of July 31, 2011 ($13.94)1 | 6.59% |
| Tax Equivalent Yield2 | 10.14% |
| Current Monthly Distribution per Common Share3 | $0.0765 |
| Current Annualized Distribution per Common Share3 | $0.9180 |
| Leverage as of July 31, 20114 | 37% |
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.
2 Tax equivalent yield assumes the maximum federal tax rate of 35%.
3 The distribution rate is not constant and is subject to change.
4 Represents VRDP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOBs,
minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 11.
The table below summarizes the changes in the Fund’s market price and NAV per share:
| | | | | |
| | 7/31/11 | 7/31/10 | Change | High | Low |
| Market Price | $13.94 | $15.26 | (8.65)% | $15.71 | $12.56 |
| Net Asset Value | $14.97 | $15.38 | (2.67)% | $15.86 | $13.45 |
The following charts show the sector and credit quality allocations of the Fund’s long-term investments:
| | |
| Sector Allocations | | |
| | 7/31/11 | 7/31/10 |
| County/City/Special District/School District | 30% | 29% |
| State | 16 | 23 |
| Health | 14 | 12 |
| Utilities | 13 | 12 |
| Transportation | 12 | 12 |
| Education | 8 | 5 |
| Corporate | 4 | 3 |
| Housing | 3 | 4 |
| | |
| Credit Quality Allocations5 | | |
| | 7/31/11 | 7/31/10 |
| AAA/Aaa | — | 41% |
| AA/Aa | 79% | 42 |
| A | 17 | 16 |
| BBB/Baa | 4 | 1 |
5 Using the higher of S&P’s or Moody’s ratings.
| | |
| 10 | ANNUAL REPORT | JULY 31, 2011 |
The Benefits and Risks of Leveraging
The Funds may utilize leverage to seek to enhance the yield and NAV of
their common shares (“Common Shares”). However, these objectives can-
not be achieved in all interest rate environments.
To leverage, the Funds issue AMPS and VRDP Shares (collectively, “Preferred
Shares”), which pay dividends at prevailing short-term interest rates, and
invest the proceeds in long-term municipal bonds. In general, the concept
of leveraging is based on the premise that the financing cost of assets to
be obtained from leverage, which will be based on short-term interest
rates, will normally be lower than the income earned by each Fund on its
longer-term portfolio investments. To the extent that the total assets of each
Fund (including the assets obtained from leverage) are invested in higher-
yielding portfolio investments, each Fund’s holders of Common Shares
(“Common Shareholders”) will benefit from the incremental net income.
To illustrate these concepts, assume a Fund’s Common Shares capital-
ization is $100 million and it issues Preferred Shares for an additional
$50 million, creating a total value of $150 million available for investment
in long-term municipal bonds. If prevailing short-term interest rates are
3% and long-term interest rates are 6%, the yield curve has a strongly
positive slope. In this case, the Fund pays dividends on the $50 million of
Preferred Shares based on the lower short-term interest rates. At the same
time, the securities purchased by the Fund with assets received from the
Preferred Shares issuance earn income based on long-term interest rates.
In this case, the dividends paid to holders of Preferred Shares (“Preferred
Shareholders”) are significantly lower than the income earned on the
Fund’s long-term investments, and therefore the Common Shareholders
are the beneficiaries of the incremental net income.
If short-term interest rates rise, narrowing the differential between short-
term and long-term interest rates, the incremental net income pickup on
the Common Shares will be reduced or eliminated completely. Furthermore,
if prevailing short-term interest rates rise above long-term interest rates, the
yield curve has a negative slope. In this case, the Fund pays dividends to
Preferred Shareholders on the higher short-term interest rates whereas the
Fund’s total portfolio earns income based on lower long-term interest rates.
Furthermore, the value of the Funds’ portfolio investments generally varies
inversely with the direction of long-term interest rates, although other
factors can influence the value of portfolio investments. In contrast, the
redemption value of the Funds’ Preferred Shares does not fluctuate in
relation to interest rates. As a result, changes in interest rates can influence
the Funds’ NAV positively or negatively in addition to the impact on Fund
performance from leverage from Preferred Shares discussed above.
The Funds may also leverage their assets through the use of TOBs, as
described in Note 1 of the Notes to Financial Statements. TOB investments
generally will provide the Funds with economic benefits in periods of
declining short-term interest rates, but expose the Funds to risks during
periods of rising short-term interest rates similar to those associated with
Preferred Shares issued by the Funds, as described above. Additionally,
fluctuations in the market value of municipal bonds deposited into the TOB
trust may adversely affect each Fund’s NAV per share.
The use of leverage may enhance opportunities for increased income to
the Funds and Common Shareholders, but as described above, it also cre-
ates risks as short- or long-term interest rates fluctuate. Leverage also will
generally cause greater changes in the Funds’ NAVs, market prices and
dividend rates than comparable portfolios without leverage. If the income
derived from securities purchased with assets received from leverage
exceeds the cost of leverage, the Funds’ net income will be greater than if
leverage had not been used. Conversely, if the income from the securities
purchased is not sufficient to cover the cost of leverage, each Fund’s net
income will be less than if leverage had not been used, and therefore the
amount available for distribution to Common Shareholders will be reduced.
Each Fund may be required to sell portfolio securities at inopportune times
or at distressed values in order to comply with regulatory requirements
applicable to the use of leverage or as required by the terms of leverage
instruments, which may cause a Fund to incur losses. The use of leverage
may limit each Fund’s ability to invest in certain types of securities or use
certain types of hedging strategies, such as in the case of certain restric-
tions imposed by ratings agencies that rate the Preferred Shares issued
by the Funds. Each Fund will incur expenses in connection with the use
of leverage, all of which are borne by Common Shareholders and may
reduce income to the Common Shares.
Under the Investment Company Act of 1940, the Funds are permitted to
issue Preferred Shares in an amount of up to 50% of their total managed
assets at the time of issuance. Under normal circumstances, each Fund
anticipates that the total economic leverage from Preferred Shares and/or
TOBs will not exceed 50% of its total managed assets at the time such
leverage is incurred. As of July 31, 2011, the Funds had economic leverage
from Preferred Shares and/or TOBs as a percentage of their total managed
assets as follows:
| |
| | Percent of |
| | Leverage |
| MUC | 43% |
| MUJ | 37% |
| MFT | 39% |
| MIY | 38% |
| MJI | 35% |
| MPA | 37% |
Derivative Financial Instruments
The Funds may invest in various derivative financial instruments, including
financial futures contracts as specified in Note 2 of the Notes to Financial
Statements, which may constitute forms of economic leverage. Such deriva-
tive financial instruments are used to obtain exposure to a market without
owning or taking physical custody of securities or to hedge market and/or
interest rate risks. Derivative financial instruments involve risks, including
the imperfect correlation between the value of a derivative financial instru-
ment and the underlying asset, possible default of the counterparty to the
transaction or illiquidity of the derivative financial instrument. The Funds’
ability to use a derivative financial instrument successfully depends on the
investment advisor’s ability to predict pertinent market movements accu-
rately, which cannot be assured. The use of derivative financial instruments
may result in losses greater than if they had not been used, may require a
Fund to sell or purchase portfolio investments at inopportune times or for
distressed values, may limit the amount of appreciation a Fund can realize
on an investment, may result in lower dividends paid to shareholders or
may cause a Fund to hold an investment that it might otherwise sell. The
Funds’ investments in these instruments are discussed in detail in the
Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 11 |
BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
Schedule of Investments July 31, 2011
(Percentages shown are based on Net Assets)
| | |
| | Par | |
| Municipal Bonds | (000) | Value |
| California — 113.3% | | |
| Corporate — 0.5% | | |
| City of Chula Vista California, Refunding RB, San Diego | | |
| Gas & Electric, Series A, 5.88%, 2/15/34 | $ 2,435 | $ 2,623,932 |
| County/City/Special District/School District — 40.6% | | |
| Alameda County Joint Powers Authority, Refunding RB, | | |
| Lease (AGM), 5.00%, 12/01/34 | 13,180 | 13,271,601 |
| Bonita Unified School District California, GO, Election | | |
| of 2004, Series B (NPFGC), 5.00%, 8/01/29 | 8,350 | 8,576,619 |
| Centinela Valley Union High School District, GO, Election | | |
| of 2010, Series A, 5.75%, 8/01/41 | 9,000 | 9,446,760 |
| Central Unified School District, GO, Election of 2008, | | |
| Series A (AGC), 5.63%, 8/01/33 | 2,600 | 2,734,134 |
| City of Garden Grove California, COP, Series A, Financing | | |
| Project (AMBAC), 5.50%, 3/01/26 | 4,040 | 4,153,847 |
| City of Lodi California, COP, Refunding, Series A (AGM), | | |
| 5.00%, 10/01/32 | 2,080 | 2,107,394 |
| City of Redding California, COP, Refunding, Series A | | |
| (AGM), 5.00%, 6/01/30 | 5,735 | 5,851,076 |
| Colton Joint Unified School District, GO, Series A | | |
| (NPFGC), 5.38%, 8/01/26 | 2,500 | 2,572,875 |
| Corona Department of Water & Power, COP (NPFGC), | | |
| 5.00%, 9/01/29 | 5,910 | 5,895,816 |
| County of Kern California, COP, Capital Improvements | | |
| Projects, Series A (AGC), 6.00%, 8/01/35 | 3,500 | 3,787,280 |
| Covina-Valley Unified School District California, GO, | | |
| Refunding, Series A (AGM), 5.50%, 8/01/26 | 2,395 | 2,494,081 |
| Culver City Redevelopment Finance Authority California, | | |
| Tax Allocation Bonds, Refunding, Series A (AGM), | | |
| 5.60%, 11/01/25 | 3,750 | 3,781,613 |
| Fullerton Joint Union High School District California, GO, | | |
| Election of 2002, Series B (NPFGC), 5.00%, 8/01/29 | 6,685 | 6,872,848 |
| Grossmont Healthcare District, GO, Election of 2006, | | |
| Series B, 6.13%, 7/15/40 | 2,000 | 2,173,980 |
| Los Angeles Community Redevelopment Agency | | |
| California, RB, Bunker Hill Project, Series A (AGM), | | |
| 5.00%, 12/01/27 | 10,000 | 10,268,200 |
| Los Angeles County Metropolitan Transportation Authority, | | |
| Refunding RB, Proposition A, First Tier, Senior, Series A | | |
| (AMBAC), 5.00%, 7/01/35 | 9,000 | 9,153,360 |
| Orange County Sanitation District, COP, Series A, | | |
| 5.00%, 2/01/35 | 2,500 | 2,569,250 |
| Oxnard Union High School District, GO, Refunding, | | |
| Election of 2004, Series A (AGM), 5.00%, 8/01/35 | 10,000 | 10,050,400 |
| Port of Oakland, Refunding RB, Series M (FGIC), | | |
| 5.38%, 11/01/27 | 21,965 | 22,003,878 |
| Redlands Unified School District California, GO, Election | | |
| of 2008 (AGM), 5.25%, 7/01/33 | 5,000 | 5,136,900 |
| Redwoods Community College District, GO, Election | | |
| of 2004 (NPFGC), 5.00%, 8/01/31 | 4,630 | 4,647,918 |
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| California (continued) | | | |
| County/City/Special District/School District (concluded) | | |
| Riverside Unified School District California, GO, Election | | |
| of 2001, Series B (NPFGC), 5.00%, 8/01/30 | $ 5,000 | $ 5,059,550 |
| Saddleback Valley Unified School District California, GO | | |
| (AGM), 5.00%, 8/01/29 | | 2,000 | 2,030,940 |
| San Bernardino Community College District, GO, Election | | |
| of 2002, Series A, 6.25%, 8/01/33 | | 310 | 346,034 |
| San Diego Community College District California, GO, | | | |
| Election of 2002 (AGM), 5.00%, 5/01/30 | | 7,000 | 7,177,590 |
| San Diego Regional Building Authority, RB, County | | | |
| Operations Center & Annex, Series A, 5.50%, 2/01/29 | 900 | 955,611 |
| San Francisco Community College District California, GO, | | |
| Election of 2001, Series C (AGM), 5.00%, 6/15/31 | 4,195 | 4,304,196 |
| San Jose Financing Authority, RB, Convention Center | | | |
| Expansion & Renovation Project: | | | |
| 5.75%, 5/01/36 | | 2,560 | 2,616,243 |
| 5.75%, 5/01/42 | | 4,500 | 4,662,720 |
| San Marcos Unified School District, GO, Election | | | |
| of 2010, Series A: | | | |
| 5.00%, 8/01/34 | | 3,740 | 3,763,412 |
| 5.00%, 8/01/38 | | 5,020 | 4,990,533 |
| San Mateo County Transportation District California, | | | |
| Refunding RB, Series A (NPFGC), 5.00%, 6/01/29 | | 5,650 | 5,790,290 |
| Santa Clara Redevelopment Agency California, | | | |
| Tax Allocation Bonds, Bayshore North Project, Series A | | |
| (AMBAC), 5.50%, 6/01/23 | | 10,000 | 10,026,900 |
| Snowline Joint Unified School District California, COP, | | | |
| Refunding, Refining Project (AGC), 5.75%, 9/01/38 | 5,635 | 6,080,165 |
| Tustin Unified School District, GO, Election of 2008, | | | |
| Series B, 6.00%, 8/01/36 | | 1,500 | 1,644,195 |
| Vista Unified School District California, GO, Series A | | | |
| (AGM), 5.25%, 8/01/25 | | 10,000 | 10,275,100 |
| Walnut Valley Unified School District, GO, Election | | | |
| of 2007, Measure S, Series A (AGM): | | | |
| 5.00%, 8/01/30 | | 1,000 | 1,023,720 |
| 5.00%, 2/01/33 | | 2,000 | 2,022,360 |
| West Contra Costa Unified School District California, | | | |
| GO (AGM): | | | |
| Election of 2002, Series B, 5.00%, 8/01/32 | | 6,690 | 6,713,348 |
| Election of 2005, Series A, 5.00%, 8/01/26 | | 2,595 | 2,677,547 |
| Election of 2005, Series A, 5.00%, 8/01/35 | | 12,000 | 12,047,400 |
| Westminster Redevelopment Agency California, | | | |
| Tax Allocation Bonds, Subordinate, Commercial | | | |
| Redevelopment Project No. 1 (AGC), 6.25%, 11/01/39 | 4,300 | 4,781,471 |
| | | | 236,539,155 |
| Education — 10.9% | | | |
| Anaheim City School District California, GO, Election | | | |
| of 2010 (AGM), 6.25%, 8/01/40 | | 3,750 | 4,171,725 |
| California State University, Refunding RB, Systemwide, | | |
| Series C (NPFGC), 5.00%, 11/01/35 | | 10,000 | 9,806,400 |
| | | | | |
| Portfolio Abbreviations | | | | |
| To simplify the listings of portfolio holdings in the | BHAC | Berkshire Hathaway Assurance Corp. | GO | General Obligation Bonds |
| Schedules of Investments, the names and descriptions of | CAB | Capital Appreciation Bonds | HDA | Housing Development Authority |
| many of the securities have been abbreviated according | CIFG | CDC IXIS Financial Guaranty | HFA | Housing Finance Agency |
| to the following list: | COP | Certificates of Participation | HRB | Housing Revenue Bonds |
| | | EDA | Economic Development Authority | IDA | Industrial Development Authority |
| ACA | ACA Financial Guaranty Corp. | EDC | Economic Development Corp. | ISD | Independent School District |
| AGC | Assured Guaranty Corp. | ERB | Education Revenue Bonds | LRB | Lease Revenue Bonds |
| AGM | Assured Guaranty Municipal Corp. | FGIC | Financial Guaranty Insurance Co. | NPFGC | National Public Finance Guarantee Corp. |
| AMBAC | American Municipal Bond Assurance Corp. | FSA | Financial Security Assurance Inc. | Q-SBLF | Qualified School Bond Loan Fund |
| AMT | Alternative Minimum Tax (subject to) | GAN | Grant Anticipation Notes | RB | Revenue Bonds |
| | | GARB | General Airport Revenue Bonds | S/F | Single-Family |
| See Notes to Financial Statements. | | | | |
| | |
| 12 | ANNUAL REPORT | JULY 31, 2011 |
BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
Schedule of Investments (continued)
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| California (continued) | | | |
| Education (concluded) | | | |
| Gavilan Joint Community College District, GO, Election | | |
| of 2004, Series D: | | | |
| 5.50%, 8/01/31 | $ 2,170 | $ 2,357,857 |
| 5.75%, 8/01/35 | | 8,400 | 9,076,704 |
| Riverside Community College District, GO, Election | | | |
| of 2004, Series C (AGM), 5.00%, 8/01/32 | | 8,750 | 8,890,525 |
| San Diego Community College District, GO, Election | | | |
| of 2006 (AGM), 5.00%, 8/01/30 | | 9,555 | 9,926,212 |
| University of California, RB: | | | |
| Limited Project, Series D (AGM), 5.00%, 5/15/37 | 5,950 | 5,915,430 |
| Series L, 5.00%, 5/15/36 | | 2,995 | 3,005,243 |
| University of California, Refunding RB, General, Series A | | |
| (AMBAC), 5.00%, 5/15/27 | | 10,500 | 10,679,445 |
| | | | 63,829,541 |
| Health — 6.2% | | | |
| ABAG Finance Authority for Nonprofit Corps, Sharp | | | |
| Healthcare, Refunding RB: | | | |
| 6.25%, 8/01/39 | | 5,000 | 5,217,200 |
| Series A, 6.00%, 8/01/30 | | 2,250 | 2,376,450 |
| California Health Facilities Financing Authority, RB, | | | |
| Providence Health Services, Series B, 5.50%, 10/01/39 | 3,970 | 4,064,089 |
| California Health Facilities Financing Authority, | | | |
| Refunding RB: | | | |
| Catholic Healthcare West, Series A, 6.00%, 7/01/34 | 3,700 | 3,892,474 |
| Sutter Health, Series B, 6.00%, 8/15/42 | | 9,655 | 10,285,278 |
| California Statewide Communities Development Authority, | | |
| RB, Health Facility Memorial Health Services, Series A, | | |
| 6.00%, 10/01/23 | | 4,915 | 5,096,364 |
| California Statewide Communities Development Authority, | | |
| Refunding RB, Kaiser Permanente, Series A (BHAC), | | |
| 5.00%, 4/01/31 | | 2,900 | 2,942,688 |
| City of Newport Beach California, RB, Hoag Memorial | | | |
| Hospital Presbyterian, 6.00%, 12/01/40 | | 1,820 | 1,973,044 |
| | | | 35,847,587 |
| State — 3.6% | | | |
| California Community College Financing Authority, RB, | | | |
| Grossmont-Palomar-Shasta, Series A (NPFGC), | | | |
| 5.63%, 4/01/26 | | 2,180 | 2,192,164 |
| California State Public Works Board, RB, Department | | | |
| of Education, Riverside Campus Project, Series B, | | | |
| 6.50%, 4/01/34 | | 3,670 | 3,918,129 |
| California State University, Refunding RB, Systemwide, | | |
| Series C (NPFGC), 5.00%, 11/01/28 | | 5,000 | 5,085,800 |
| University of California, RB, Limited Project, Series D | | | |
| (NPFGC), 5.00%, 5/15/41 | | 10,000 | 9,877,100 |
| | | | 21,073,193 |
| Transportation — 18.4% | | | |
| City of Fresno California, RB, Series B, AMT (AGM), | | | |
| 5.50%, 7/01/20 | | 4,455 | 4,561,875 |
| City of San Jose California, RB: | | | |
| Series A1, AMT, 6.25%, 3/01/34 | | 1,400 | 1,454,096 |
| Series D (NPFGC), 5.00%, 3/01/28 | | 5,000 | 4,922,250 |
| County of Orange California, RB, Series B, | | | |
| 5.75%, 7/01/34 | | 6,345 | 6,766,625 |
| County of Sacramento California, RB: | | | |
| Senior Series A (AGC), 5.50%, 7/01/41 | | 7,270 | 7,390,900 |
| Senior Series B, 5.75%, 7/01/39 | | 2,650 | 2,730,587 |
| Senior Series B, AMT (AGM), 5.75%, 7/01/28 | | 13,170 | 13,962,571 |
| Senior Series B, AMT (AGM), 5.25%, 7/01/33 | | 19,525 | 19,535,348 |
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| California (concluded) | | | |
| Transportation (concluded) | | | |
| Los Angeles Harbor Department, RB, Series B, | | | |
| 5.25%, 8/01/34 | $ 5,530 | $ 5,719,790 |
| Port of Oakland, RB, Series K, AMT (FGIC), | | | |
| 5.75%, 11/01/29 | | 22,160 | 22,164,432 |
| San Francisco City & County Airports Commission, RB, | | |
| Series E, 6.00%, 5/01/39 | | 9,650 | 10,378,768 |
| San Francisco City & County Airports Commission, | | | |
| Refunding RB, Second Series 34E, AMT (AGM), | | | |
| 5.75%, 5/01/24 | | 5,000 | 5,381,350 |
| San Joaquin County Transportation Authority, RB, | | | |
| Limited Tax, Measure K, Series A, 6.00%, 3/01/36 | | 2,400 | 2,628,792 |
| | | | 107,597,384 |
| Utilities — 33.1% | | | |
| Anaheim Public Financing Authority, RB, Electric System | | |
| Distribution Facilities, Series A, 5.38%, 10/01/36 | | 2,200 | 2,289,892 |
| City of Escondido California, COP, Refunding, Series A | | | |
| (NPFGC), 5.75%, 9/01/24 | | 465 | 466,702 |
| City of Glendale California, RB (AGC), 5.00%, 2/01/31 | 5,030 | 5,176,172 |
| City of Los Angeles California, Refunding RB, Sub, Series A: | | |
| 5.00%, 6/01/28 | | 2,000 | 2,117,020 |
| 5.00%, 6/01/32 | | 3,000 | 3,114,870 |
| Dublin-San Ramon Services District, Refunding RB, | | | |
| 6.00%, 8/01/41 | | 4,000 | 4,259,200 |
| East Bay Municipal Utility District, Refunding RB, | | | |
| Sub-Series A (AMBAC), 5.00%, 6/01/33 | | 6,545 | 6,775,580 |
| Eastern Municipal Water District, COP, Series H, | | | |
| 5.00%, 7/01/33 | | 2,500 | 2,527,600 |
| Imperial Irrigation District, RB, Refunding Systems, | | | |
| Series B, 5.00%, 11/01/31 | | 5,545 | 5,701,813 |
| Imperial Irrigation District, Refunding RB, System, | | | |
| 5.13%, 11/01/38 | | 9,500 | 9,582,270 |
| Los Angeles County Sanitation Districts Financing | | | |
| Authority, Refunding RB, Capital Project 14 (BHAC), | | | |
| 5.00%, 10/01/34 | | 7,915 | 8,033,408 |
| Metropolitan Water District of Southern California, RB, | | |
| Series B-1 (FGIC), 5.00%, 10/01/33 | | 9,000 | 9,119,430 |
| Oxnard Financing Authority, RB (NPFGC): | | | |
| Project, 5.00%, 6/01/31 | | 10,000 | 10,076,200 |
| Redwood Trunk Sewer & Headworks, Series A, | | | |
| 5.25%, 6/01/34 | | 13,000 | 13,189,930 |
| Sacramento City Financing Authority California, | | | |
| Refunding RB (NPFGC), 5.00%, 12/01/29 | | 8,775 | 8,811,767 |
| Sacramento Municipal Utility District, RB (NPFGC): | | | |
| Cosumnes Project, 5.13%, 7/01/29 | | 36,760 | 37,308,827 |
| Series R, 5.00%, 8/15/33 | | 22,150 | 22,179,238 |
| San Diego Public Facilities Financing Authority, | | | |
| Refunding RB, Senior, Series A, 5.25%, 5/15/34 | | 1,000 | 1,042,770 |
| San Francisco City & County Public Utilities | | | |
| Commission, RB: | | | |
| Local Water Main Sub, Series C, | | | |
| 5.00%, 11/01/41 (a) | | 5,000 | 5,083,950 |
| Series A (NPFGC), 5.00%, 11/01/32 | | 15,000 | 15,096,750 |
| Series B, 5.00%, 11/01/30 | | 14,000 | 14,674,100 |
| Turlock Public Financing Authority California, RB, Series A | | |
| (FGIC), 5.00%, 9/15/33 | | 6,655 | 6,705,312 |
| | | | 193,332,801 |
| Total Municipal Bonds — 113.3% | | | 660,843,593 |
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 13 |
BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
Schedule of Investments (continued)
(Percentages shown are based on Net Assets)
| | | |
| Municipal Bonds Transferred to | | Par | |
| Tender Option Bond Trusts (b) | | (000) | Value |
| California — 58.9% | | | |
| Corporate — 7.1% | | | |
| San Francisco Bay Area Rapid Transit District, | | | |
| Refunding RB, Series A (NPFGC), 5.00%, 7/01/30 | $ 23,100 | $ 23,930,214 |
| University of California, RB, Limited Project, Series B | | | |
| (AGM), 5.00%, 5/15/33 | | 17,397 | 17,462,666 |
| | | | 41,392,880 |
| County/City/Special District/School District — 23.8% | | |
| Contra Costa Community College District California, GO, | | |
| Election of 2002 (NPFGC), 5.00%, 8/01/28 | | 7,800 | 7,954,596 |
| Desert Community College District California, GO, | | | |
| Series C (AGM), 5.00%, 8/01/37 | | 16,530 | 16,580,912 |
| Foothill-De Anza Community College District, GO, | | | |
| Series C, 5.00%, 8/01/40 | | 10,000 | 10,245,300 |
| Los Angeles Community College District California, GO: | | |
| Election of 2001, Series A (NPFGC), 5.00%, 8/01/32 | 6,647 | 6,806,594 |
| Election of 2003, Series E (AGM), 5.00%, 8/01/31 | 11,216 | 11,490,308 |
| Election of 2008, Series A, 6.00%, 8/01/33 | | 9,596 | 10,690,670 |
| Ohlone Community College District, GO, Ohlone, Series B | | |
| (AGM), 5.00%, 8/01/30 | | 16,518 | 16,769,502 |
| Poway Unified School District, GO, Election of 2002, | | | |
| Improvement District 02, Series 1-B (AGM), | | | |
| 5.00%, 8/01/30 | | 10,000 | 10,177,000 |
| San Bernardino Community College District California, | | |
| GO, Election of 2002, Series C (AGM), 5.00%, 8/01/31 | 17,770 | 17,981,641 |
| San Diego Community College District California, GO, | | | |
| Election of 2002 (AGM), 5.00%, 5/01/30 | | 12,549 | 12,867,081 |
| San Francisco Bay Area Transit Financing Authority, | | | |
| Refunding RB, Series A (NPFGC), 5.00%, 7/01/34 | | 2,499 | 2,541,909 |
| San Jose Financing Authority, Refunding RB, Civic Center | | |
| Project, Series B (AMBAC), 5.00%, 6/01/32 | | 14,800 | 14,807,400 |
| | | | 138,912,913 |
| Education — 8.6% | | | |
| Chaffey Community College District, GO, Election | | | |
| of 2002, Series B (NPFGC), 5.00%, 6/01/30 | | 9,905 | 10,063,441 |
| Los Rios Community College District, GO, Election | | | |
| of 2008, Series A, 5.00%, 8/01/35 | | 11,000 | 11,071,280 |
| Riverside Community College District, GO, Election | | | |
| of 2004, Series C (NPFGC), 5.00%, 8/01/32 | | 8,910 | 9,025,206 |
| University of California, RB: | | | |
| Limited Project, Series D (AGM), 5.00%, 5/15/41 | 8,000 | 7,901,680 |
| Series O, 5.75%, 5/15/34 | | 11,190 | 12,100,195 |
| | | | 50,161,802 |
| Transportation — 1.7% | | | |
| San Mateo County Transportation Authority, | | | |
| Refunding RB, Series A (NPFGC), 5.00%, 6/01/32 | | 10,000 | 10,156,300 |
| Utilities — 17.7% | | | |
| City of Napa California, RB (AMBAC), 5.00%, 5/01/35 | 9,100 | 9,226,490 |
| East Bay Municipal Utility District, RB, Sub-Series A | | | |
| (NPFGC), 5.00%, 6/01/35 | | 12,070 | 12,306,210 |
| East Bay Municipal Utility District, Refunding RB, | | | |
| Sub-Series A (AMBAC), 5.00%, 6/01/37 | | 14,510 | 14,840,683 |
| Los Angeles Department of Water & Power, RB (AGM): | | |
| Power System, Sub-Series A-1, 5.00%, 7/01/31 | | 4,993 | 5,088,406 |
| System, Sub-Series A-2, 5.00%, 7/01/35 | | 7,500 | 7,594,275 |
| Metropolitan Water District of Southern California, RB, | | |
| Series A (AGM), 5.00%, 7/01/35 | | 12,870 | 13,098,571 |
| Rancho Water District Financing Authority, Refunding RB, | | |
| Series A (AGM), 5.00%, 8/01/34 | | 5,008 | 5,091,062 |
| Sacramento Regional County Sanitation District, RB, | | | |
| Sacramento Regional County Sanitation (NPFGC), | | | |
| 5.00%, 12/01/36 | | 4,500 | 4,567,275 |
| | |
| Municipal Bonds Transferred to | Par | |
| Tender Option Bond Trusts (b) | (000) | Value |
| California (concluded) | | |
| Utilities (concluded) | | |
| San Diego County Water Authority, COP, Refunding: | | |
| Series 2002-A (NPFGC), 5.00%, 5/01/32 | $ 10,000 | $ 10,074,400 |
| Series 2008-A (AGM), 5.00%, 5/01/33 | 16,740 | 17,094,553 |
| San Diego County Water Authority, COP, Series A (AGM), | | |
| 5.00%, 5/01/31 | 4,000 | 4,070,880 |
| | | 103,052,805 |
| Total Municipal Bonds Transferred to | | |
| Tender Option Bond Trusts — 58.9% | | 343,676,700 |
| Total Long-Term Investments | | |
| (Cost — $994,611,514) — 172.2% | | 1,004,520,293 |
| Short-Term Securities | Shares | |
| BIF California Municipal Money Fund, | | |
| 0.00% (c)(d) | 7,347,551 | 7,347,551 |
| Total Short-Term Securities | | |
| (Cost — $7,347,551) — 1.2% | | 7,347,551 |
| Total Investments (Cost — $1,001,959,065*) — 173.4% | 1,011,867,844 |
| Other Assets Less Liabilities — 0.9% | | 5,103,624 |
| Liability for TOB Trust Certificates, Including Interest | | |
| Expense and Fees Payable — (30.8)% | | (179,567,102) |
| AMPS, at Redemption Value — (43.5)% | | (254,004,237) |
| Net Assets Applicable to Common Shares — 100.0% | | $ 583,400,129 |
* The cost and unrealized appreciation (depreciation) of investments as of July 31,
2011, as computed for federal income tax purposes, were as follows:
| |
| Aggregate cost | $821,963,442 |
| Gross unrealized appreciation | $ 15,344,737 |
| Gross unrealized depreciation | (4,883,491) |
| Net unrealized appreciation | $ 10,461,246 |
(a) When-issued security. Unsettled when-issued transactions were as follows:
| | |
| | | Unrealized |
| Counterparty | Value | Appreciation |
| Citigroup Global Markets | $5,083,950 | $ 150 |
(b) Securities represent bonds transferred to a TOB in exchange for which the Fund
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details
of municipal bonds transferred to TOBs.
(c) Investments in companies considered to be an affiliate of the Fund during the
year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:
| | | | |
| | Shares Held | | Shares Held | |
| | at July 31, | Net | at July 31, | |
| Affiliate | 2010 | Activity | 2011 | Income |
| BIF California | | | | |
| Municipal | | | | |
| Money Fund | 71,270,966 | (63,923,415) | 7,347,551 | $ 5,739 |
(d) Represents the current yield as of report date.
• For Fund compliance purposes, the Fund’s sector classifications refer to any 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 Fund management.
These definitions may not apply for purposes of this report, which may combine
such sector sub-classifications for reporting ease.
See Notes to Financial Statements.
| | |
| 14 | ANNUAL REPORT | JULY 31, 2011 |
BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
Schedule of Investments (concluded)
• Fair Value Measurements — Various inputs are used in determining the fair value
of investments. These inputs are categorized in three broad levels for financial
statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• 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 the
Fund’s own assumptions used in determining the fair value of investments)
The categorization of a value determined for investments is based on the pricing
transparency of the investment and does not necessarily correspond to the Fund’s
perceived risk of investing in those securities. For information about the Fund’s
policy regarding valuation of investments and other significant accounting policies,
please refer to Note 1 of the Notes to Financial Statements.
The following table summarizes the inputs used as of July 31, 2011 in determining
the fair valuation of the Fund’s investments:
| | | | |
| Valuation Inputs | Level 1 | Level 2 | Level 3 | Total |
| Assets: | | | | |
| Investments: | | | | |
| Long-Term | | | | |
| Investments1 | — | $1,004,520,293 | — | $1,004,520,293 |
| Short-Term | | | | |
| Securities | $ 7,347,551 | — | — | 7,347,551 |
| Total | $ 7,347,551 | $1,004,520,293 | — | $1,011,867,844 |
1 See above Schedule of Investments for values in each sector.
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 15 |
BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)
Schedule of Investments July 31, 2011
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| New Jersey — 135.3% | | | |
| Corporate — 1.7% | | | |
| New Jersey EDA, RB, Disposal, Waste Management of | | |
| New Jersey, Series A, Mandatory Put Bonds, AMT, | | | |
| 5.30%, 6/01/15 (a) | $ 2,500 | $ 2,697,725 |
| New Jersey EDA, Refunding RB, New Jersey | | | |
| American Water Co., Inc. Project, Series A, AMT, | | | |
| 5.70%, 10/01/39 | | 2,500 | 2,526,125 |
| | | | 5,223,850 |
| County/City/Special District/School District — 19.3% | | |
| Borough of Hopatcong New Jersey, GO, Refunding, | | | |
| Sewer (AMBAC), 4.50%, 8/01/33 | | 2,690 | 2,717,626 |
| City of Perth Amboy New Jersey, GO, CAB (AGM) (b): | | | |
| 5.09%, 7/01/32 | | 4,605 | 4,470,258 |
| 5.10%, 7/01/33 | | 1,395 | 1,347,040 |
| 5.14%, 7/01/37 | | 1,470 | 1,396,118 |
| County of Middlesex New Jersey, COP (NPFGC): | | | |
| 5.25%, 6/15/23 | | 1,550 | 1,554,387 |
| Refunding, 5.50%, 8/01/16 | | 1,375 | 1,380,569 |
| County of Union New Jersey, GO: | | | |
| 4.00%, 3/01/29 | | 2,590 | 2,544,934 |
| 4.00%, 3/01/30 | | 2,590 | 2,533,357 |
| 4.00%, 3/01/31 | | 2,925 | 2,824,555 |
| East Orange Board of Education, COP (AGM), | | | |
| 5.50%, 8/01/12 | | 2,800 | 2,860,956 |
| Edgewater Borough Board of Education, GO (AGM): | | | |
| 4.25%, 3/01/34 | | 1,235 | 1,264,442 |
| 4.25%, 3/01/35 | | 1,300 | 1,324,336 |
| 4.30%, 3/01/36 | | 1,370 | 1,390,810 |
| Essex County Improvement Authority, LRB, County | | | |
| Correctional Facility Project, Series A (FGIC), | | | |
| 5.00%, 10/01/13 (c) | | 4,400 | 4,830,232 |
| Essex County Improvement Authority, Refunding RB: | | | |
| Consolidated (AMBAC), 5.25%, 12/15/18 | | 1,000 | 1,161,240 |
| Project Consolidation (NPFGC), 5.50%, 10/01/27 | 250 | 284,688 |
| Project Consolidation (NPFGC), 5.50%, 10/01/28 | 4,840 | 5,482,897 |
| Hudson County Improvement Authority, RB: | | | |
| County Secured, County Services Building Project | | |
| (AGM), 5.00%, 4/01/27 | | 750 | 781,500 |
| Harrison Parking Facility Project, Series C (AGC), | | | |
| 5.25%, 1/01/39 | | 2,000 | 2,075,800 |
| Harrison Parking Facility Project, Series C (AGC), | | | |
| 5.38%, 1/01/44 | | 3,600 | 3,757,500 |
| Middlesex County Improvement Authority, RB, | | | |
| Senior Citizens Housing Project, AMT (AMBAC), | | | |
| 5.50%, 9/01/30 | | 500 | 500,080 |
| Monmouth County Improvement Authority, Refunding RB, | | |
| Governmental Loan (AMBAC): | | | |
| 5.35%, 12/01/17 | | 5 | 5,015 |
| 5.38%, 12/01/18 | | 5 | 5,016 |
| Morristown Parking Authority, RB (NPFGC): | | | |
| 5.00%, 8/01/30 | | 1,830 | 1,913,906 |
| 5.00%, 8/01/33 | | 3,000 | 3,092,490 |
| New Jersey State Transit Corp., COP, Subordinate, | | | |
| Federal Transit Administration Grants, Series A (AGM), | | |
| 5.00%, 9/15/21 | | 2,000 | 2,068,540 |
| Newark Housing Authority, Refunding RB, Newark | | | |
| Redevelopment Project (NPFGC), 4.38%, 1/01/37 | | 620 | 571,770 |
| Salem County Improvement Authority, RB, Finlaw Street | | |
| Office Building (AGM), 5.38%, 8/15/28 | | 400 | 411,300 |
| South Jersey Port Corp., Refunding RB: | | | |
| 4.50%, 1/01/15 | | 3,750 | 3,883,987 |
| 4.50%, 1/01/16 | | 1,920 | 1,980,384 |
| | | | 60,415,733 |
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| New Jersey (continued) | | | |
| Education — 18.3% | | | |
| New Jersey EDA, RB, International Center For Public | | | |
| Health Project, University of Medicine and Dentistry | | |
| (AMBAC), 6.00%, 6/01/32 | $ 5,000 | $ 5,001,550 |
| New Jersey EDA, RB, School Facilities Construction, | | | |
| School Facilities Construction, Series Y, | | | |
| 5.00%, 9/01/33 | | 3,000 | 3,021,210 |
| New Jersey Educational Facilities Authority, RB: | | | |
| Montclair State University, Series A (AMBAC), | | | |
| 5.00%, 7/01/21 | | 1,200 | 1,275,960 |
| Montclair State University, Series A (AMBAC), | | | |
| 5.00%, 7/01/22 | | 2,880 | 3,035,059 |
| Richard Stockton College, Series F (NPFGC), | | | |
| 5.00%, 7/01/31 | | 2,625 | 2,643,086 |
| Rowan University, Series C (NPFGC), | | | |
| 5.00%, 7/01/14 (c) | | 3,260 | 3,673,857 |
| Rowan University, Series C (NPFGC), | | | |
| 5.13%, 7/01/14 (c) | | 3,615 | 4,087,011 |
| New Jersey Educational Facilities Authority, Refunding RB: | | |
| College of New Jersey, Series D (AGM), | | | |
| 5.00%, 7/01/35 | | 9,740 | 9,864,672 |
| Montclair State University, Series J (NPFGC), | | | |
| 4.25%, 7/01/30 | | 3,775 | 3,568,017 |
| New Jersey Institute of Technology, Series H, | | | |
| 5.00%, 7/01/31 | | 3,000 | 3,056,100 |
| Ramapo College, Series I (AMBAC), 4.25%, 7/01/31 | 1,250 | 1,163,925 |
| Ramapo College, Series I (AMBAC), 4.25%, 7/01/36 | 900 | 787,095 |
| Rowan University, Series B, 5.00%, 7/01/15 | | 335 | 374,135 |
| Stevens Institute of Technology, Series A, | | | |
| 5.00%, 7/01/27 | | 2,800 | 2,775,640 |
| Stevens Institute of Technology, Series A, | | | |
| 5.00%, 7/01/34 | | 900 | 830,718 |
| William Paterson University, Series C (AGC), | | | |
| 5.00%, 7/01/28 | | 250 | 261,745 |
| William Paterson University, Series C (AGC), | | | |
| 4.75%, 7/01/34 | | 4,000 | 4,056,400 |
| Rutgers-State University of New Jersey, Refunding RB, | | |
| Series F, 5.00%, 5/01/39 | | 1,000 | 1,030,380 |
| University of Medicine & Dentistry of New Jersey, COP | | |
| (NPFGC), 5.00%, 6/15/29 | | 2,000 | 2,000,940 |
| University of Medicine & Dentistry of New Jersey, RB, | | | |
| Series A (AMBAC), 5.50%, 12/01/27 | | 4,740 | 4,770,478 |
| | | | 57,277,978 |
| Health — 16.3% | | | |
| New Jersey Health Care Facilities Financing Authority, RB: | | |
| AHS Hospital Corp., 6.00%, 7/01/41 | | 3,080 | 3,237,265 |
| Greystone Park Psychiatric Hospital (AMBAC), | | | |
| 5.00%, 9/15/23 | | 10,775 | 11,139,303 |
| Meridian Health, Series I (AGC), 5.00%, 7/01/38 | 765 | 761,603 |
| Meridian Health, Series II (AGC), 5.00%, 7/01/38 | 6,360 | 6,331,761 |
| Meridian Health, Series V (AGC), 5.00%, 7/01/38 | 3,950 | 3,932,462 |
| South Jersey Hospital, 6.00%, 7/01/12 (c) | | 5,440 | 5,725,872 |
| Virtua Health (AGC), 5.50%, 7/01/38 | | 3,035 | 3,127,143 |
| New Jersey Health Care Facilities Financing Authority, | | | |
| Refunding RB: | | | |
| AHS Hospital Corp., Series A (AMBAC), | | | |
| 6.00%, 7/01/13 (d) | | 4,000 | 4,413,800 |
| Atlantic City Medical Center, 5.75%, 7/01/12 (c) | 1,525 | 1,602,363 |
| Atlantic City Medical Center, 6.25%, 7/01/17 (c) | 925 | 955,118 |
| Atlantic City Medical Center, 5.75%, 7/01/25 | | 1,975 | 1,998,305 |
| Hackensack University Medical (AGM), | | | |
| 4.63%, 1/01/30 | | 5,480 | 5,330,725 |
See Notes to Financial Statements.
| | |
| 16 | ANNUAL REPORT | JULY 31, 2011 |
BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)
Schedule of Investments (continued)
(Percentages shown are based on Net Assets)
| | |
| | Par | |
| Municipal Bonds | (000) | Value |
| New Jersey (continued) | | |
| Health (concluded) | | |
| New Jersey Health Care Facilities Financing Authority, | | |
| Refunding RB (concluded): | | |
| Hackensack University Medical Center (AGC), | | |
| 5.13%, 1/01/27 | $ 1,500 | $ 1,557,660 |
| Meridian Health System Obligation Group (AGM), | | |
| 5.38%, 7/01/24 | 1,000 | 1,000,930 |
| | | 51,114,310 |
| Housing — 6.0% | | |
| New Jersey State Housing & Mortgage Finance | | |
| Agency, RB: | | |
| Capital Fund Program, Series A (AGM), | | |
| 4.70%, 11/01/25 | 10,320 | 10,466,854 |
| Series A, AMT (NPFGC), 4.85%, 11/01/39 | 935 | 827,559 |
| Series AA, 6.50%, 10/01/38 | 2,350 | 2,544,627 |
| Series B (AGM), 1.10%, 5/01/12 | 2,850 | 2,854,360 |
| New Jersey State Housing & Mortgage Finance | | |
| Agency, Refunding RB, S/F Housing, Series T, AMT, | | |
| 4.70%, 10/01/37 | 745 | 696,039 |
| Newark Housing Authority, RB, South Ward Police | | |
| Facility (AGC): | | |
| 5.75%, 12/01/30 | 850 | 908,505 |
| 6.75%, 12/01/38 | 500 | 565,945 |
| | | 18,863,889 |
| State — 42.0% | | |
| Garden State Preservation Trust, RB (AGM): | | |
| CAB, Series B, 5.12%, 11/01/23 (e) | 9,000 | 5,229,090 |
| CAB, Series B, 5.20%, 11/01/25 (e) | 10,000 | 5,137,500 |
| Election of 2005, Series A, 5.80%, 11/01/21 | 1,960 | 2,281,126 |
| Election of 2005, Series A, 5.80%, 11/01/23 | 2,730 | 3,135,214 |
| Garden State Preservation Trust, Refunding RB, | | |
| Series C (AGM): | | |
| 5.25%, 11/01/20 | 5,000 | 5,988,450 |
| 5.25%, 11/01/21 | 7,705 | 9,251,702 |
| New Jersey EDA, RB: | | |
| Cigarette Tax, 5.63%, 6/15/19 | 1,000 | 1,000,320 |
| Cigarette Tax (Radian), 5.75%, 6/15/29 | 2,000 | 1,982,220 |
| Cigarette Tax (Radian), 5.50%, 6/15/31 | 585 | 550,614 |
| Cigarette Tax (Radian), 5.75%, 6/15/34 | 1,180 | 1,126,534 |
| Liberty State Park Project, Series C (AGM), | | |
| 5.00%, 3/01/22 | 2,670 | 2,853,322 |
| Motor Vehicle Surcharge, Series A (NPFGC), | | |
| 5.25%, 7/01/24 | 1,785 | 1,916,858 |
| Motor Vehicle Surcharge, Series A (NPFGC), | | |
| 5.25%, 7/01/25 | 4,000 | 4,256,480 |
| Motor Vehicle Surcharge, Series A (NPFGC), | | |
| 5.25%, 7/01/26 | 7,500 | 7,996,725 |
| Motor Vehicle Surcharge, Series A (NPFGC), | | |
| 5.25%, 7/01/33 | 11,105 | 11,290,787 |
| Motor Vehicle Surcharge, Series A (NPFGC), | | |
| 5.00%, 7/01/34 | 2,000 | 2,005,300 |
| School Facilities Construction, Series L (AGM), | | |
| 5.00%, 3/01/30 | 9,000 | 9,105,570 |
| School Facilities Construction, Series O, | | |
| 5.25%, 3/01/23 | 1,420 | 1,485,235 |
| School Facilities Construction, Series Z (AGC), | | |
| 6.00%, 12/15/34 | 2,800 | 3,015,516 |
| School Facilities, Series U (AMBAC), | | |
| 5.00%, 9/01/37 | 2,000 | 2,000,940 |
| New Jersey EDA, Refunding RB: | | |
| New Jersey American Water Co., Inc. Project, | | |
| Series B, AMT, 5.60%, 11/01/34 | 2,150 | 2,182,486 |
| School Facilities Construction, Series N-1 (NPFGC), | | |
| 5.50%, 9/01/27 | 1,000 | 1,096,690 |
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| New Jersey (continued) | | | |
| State (concluded) | | | |
| New Jersey Educational Facilities Authority, RB, Higher | | |
| Education Capital Improvement, Series A (AMBAC), | | |
| 5.13%, 9/01/12 (c) | $ 5,500 | $ 5,792,160 |
| New Jersey Sports & Exposition Authority, RB, Series A | | |
| (NPFGC), 6.00%, 3/01/13 | | 2,400 | 2,410,632 |
| New Jersey Sports & Exposition Authority, | | | |
| Refunding RB (NPFGC): | | | |
| 5.50%, 3/01/21 | | 5,890 | 6,539,137 |
| 5.50%, 3/01/22 | | 3,150 | 3,467,835 |
| New Jersey Transportation Trust Fund Authority, RB, | | | |
| Transportation System: | | | |
| CAB, Series C (AGM), 4.73%, 12/15/32 (e) | | 4,050 | 1,090,220 |
| CAB, Series C (AMBAC), 5.05%, 12/15/35 (e) | | 1,400 | 296,338 |
| CAB, Series C (AMBAC), 5.05%, 12/15/36 (e) | | 5,500 | 1,085,370 |
| Series A (AGC), 5.63%, 12/15/28 | | 2,000 | 2,123,060 |
| New Jersey Transportation Trust Fund Authority, | | | |
| Refunding RB, Transportation System: | | | |
| Series A (AGM), 5.25%, 12/15/20 | | 10,750 | 12,219,417 |
| Series B (NPFGC), 5.50%, 12/15/21 | | 9,165 | 10,460,931 |
| State of New Jersey, COP, Equipment Lease Purchase, | | |
| Series A, 5.25%, 6/15/27 | | 1,080 | 1,115,802 |
| | | | 131,489,581 |
| Tobacco — 1.7% | | | |
| Tobacco Settlement Financing Corp. New Jersey, RB, | | | |
| 7.00%, 6/01/13 | | 4,755 | 5,330,307 |
| Transportation — 25.8% | | | |
| Delaware River Port Authority, RB (AGM): | | | |
| Port District Project, Series B, 5.63%, 1/01/26 | | 2,425 | 2,427,740 |
| Series D, 5.00%, 1/01/40 | | 3,700 | 3,714,985 |
| Delaware River Port Authority Pennsylvania & New Jersey, | | |
| RB (AGM): | | | |
| 5.50%, 1/01/12 | | 5,000 | 5,020,500 |
| 5.63%, 1/01/13 | | 6,000 | 6,024,420 |
| New Jersey State Turnpike Authority, RB, Growth | | | |
| & Income Securities, Series B (AMBAC), 1/01/15 (e) | 7,615 | 6,240,188 |
| New Jersey State Turnpike Authority, Refunding RB: | | | |
| Series A (AGM), 5.25%, 1/01/26 | | 4,900 | 5,589,332 |
| Series A (AGM), 5.25%, 1/01/29 | | 2,000 | 2,270,880 |
| Series A (AGM), 5.25%, 1/01/30 | | 4,000 | 4,496,360 |
| Series A (BHAC), 5.25%, 1/01/29 | | 500 | 573,100 |
| Series C (NPFGC), 6.50%, 1/01/16 | | 910 | 1,083,746 |
| Series C (NPFGC), 6.50%, 1/01/16 (d) | | 4,355 | 4,865,101 |
| Series C-2005 (NPFGC), 6.50%, 1/01/16 (d) | | 255 | 313,778 |
| New Jersey Transportation Trust Fund Authority, | | | |
| RB, Transportation System, Series A (NPFGC), | | | |
| 5.75%, 6/15/24 | | 1,205 | 1,374,158 |
| New Jersey Transportation Trust Fund Authority, RB, | | | |
| Transportation System, Series A: | | | |
| 6.00%, 6/15/35 | | 4,365 | 4,841,833 |
| (AGM), 5.50%, 12/15/22 | | 150 | 170,751 |
| (AMBAC), 5.00%, 12/15/32 | | 1,425 | 1,445,890 |
| Port Authority of New York & New Jersey, RB: | | | |
| Consolidated 163rd Series, 5.00%, 7/15/39 | | 4,000 | 4,119,320 |
| JFK International Air Terminal, 6.00%, 12/01/42 | | 2,500 | 2,529,150 |
| Special Project, JFK International Air Terminal, | | | |
| Series 6, AMT (NPFGC), 6.25%, 12/01/11 | | 13,500 | 13,651,335 |
| Special Project, JFK International Air Terminal, | | | |
| Series 6, AMT (NPFGC), 6.25%, 12/01/15 | | 1,500 | 1,593,090 |
| Special Project, JFK International Air Terminal, | | | |
| Series 6, AMT (NPFGC), 5.75%, 12/01/25 | | 3,000 | 2,917,050 |
| Port Authority of New York & New Jersey, Refunding RB, | | |
| Consolidated, 152nd Series, AMT, 5.75%, 11/01/30 | 5,175 | 5,557,536 |
| | | | 80,820,243 |
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 17 |
BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)
Schedule of Investments (continued)
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| New Jersey (concluded) | | | |
| Utilities — 4.2% | | | |
| Essex County Utilities Authority, Refunding RB (AGC): | | | |
| 4.00%, 4/01/12 | $ 1,000 | $ 1,023,920 |
| 4.13%, 4/01/22 | | 2,000 | 2,075,200 |
| New Jersey EDA, RB, New Jersey American Water Co., Inc. | | |
| Project, Series A, AMT (AMBAC), 5.25%, 11/01/32 | | 3,000 | 3,001,650 |
| North Hudson Sewerage Authority, Refunding RB, | | | |
| Series A (NPFGC), 5.13%, 8/01/20 | | 4,335 | 4,687,132 |
| Rahway Valley Sewerage Authority, RB, CAB, Series A | | | |
| (NPFGC), 4.79%, 9/01/28 (e) | | 6,600 | 2,445,894 |
| | | | 13,233,796 |
| Total Municipal Bonds in New Jersey | | | 423,769,687 |
| Guam — 0.6% | | | |
| Utilities — 0.6% | | | |
| Guam Power Authority, Refunding RB, Series A (AGM), | | | |
| 5.00%, 10/01/37 | | 1,860 | 1,835,802 |
| Puerto Rico — 11.3% | | | |
| County/City/Special District/School District — 2.8% | | |
| Puerto Rico Sales Tax Financing Corp., RB, First | | | |
| Sub-Series A, 6.00%, 8/01/42 | | 2,500 | 2,612,950 |
| Puerto Rico Sales Tax Financing Corp., Refunding RB, | | | |
| First Sub-Series C (AGM), 5.13%, 8/01/42 | | 6,120 | 6,135,300 |
| | | | 8,748,250 |
| Health — 1.1% | | | |
| Puerto Rico Industrial Tourist Educational Medical | | | |
| & Environmental Control Facilities Financing Authority, | | |
| RB, Series A: | | | |
| Hospital Auxilio Mutuo Obligation Group (NPFGC), | | | |
| 6.25%, 7/01/24 | | 1,780 | 1,782,688 |
| Hospital De La Concepcion, 6.50%, 11/15/20 | | 1,750 | 1,771,280 |
| | | | 3,553,968 |
| Housing — 1.5% | | | |
| Puerto Rico Housing Finance Authority, Refunding RB, | | | |
| Subordinate, Capital Fund Modernization, | | | |
| 5.13%, 12/01/27 | | 4,500 | 4,583,700 |
| State — 1.6% | | | |
| Commonwealth of Puerto Rico, GO, Refunding, Public | | | |
| Improvement, Series C, 6.00%, 7/01/39 | | 2,080 | 2,123,201 |
| Puerto Rico Commonwealth Infrastructure | | | |
| Financing Authority, RB, CAB, Series A (AMBAC), | | | |
| 4.37%, 7/01/37 (e) | | 4,000 | 628,880 |
| Puerto Rico Public Buildings Authority, Refunding RB, | | | |
| Government Facilities, Series M-3 (NPFGC), | | | |
| 6.00%, 7/01/27 | | 2,125 | 2,241,599 |
| | | | 4,993,680 |
| Transportation — 1.3% | | | |
| Puerto Rico Highway & Transportation Authority, | | | |
| Refunding RB, Series CC (AGC), 5.50%, 7/01/31 | | 3,750 | 3,974,850 |
| | |
| | Par | |
| Municipal Bonds | (000) | Value |
| Puerto Rico (concluded) | | |
| Utilities — 3.0% | | |
| Puerto Rico Aqueduct & Sewer Authority, RB, | | |
| Senior Lien, Series A (AGC), 5.13%, 7/01/47 | $ 4,120 | $ 4,060,548 |
| Puerto Rico Electric Power Authority, RB, Series RR | | |
| (CIFG), 5.00%, 7/01/28 | 4,100 | 4,030,915 |
| Puerto Rico Electric Power Authority, Refunding RB, | | |
| Series VV (NPFGC), 5.25%, 7/01/26 | 1,325 | 1,359,490 |
| | | 9,450,953 |
| Total Municipal Bonds in Puerto Rico | | 35,305,401 |
| Total Municipal Bonds — 147.2% | | 460,910,890 |
| Municipal Bonds Transferred to | | |
| Tender Option Bond Trusts (f) | | |
| New Jersey — 7.1% | | |
| Housing — 1.6% | | |
| New Jersey State Housing & Mortgage Finance | | |
| Agency, RB, Capital Fund Program, Series A (AGM), | | |
| 5.00%, 5/01/27 | 4,790 | 5,109,829 |
| State — 3.5% | | |
| Garden State Preservation Trust, RB, Election of 2005, | | |
| Series A (AGM), 5.75%, 11/01/28 | 9,160 | 10,986,687 |
| Transportation — 2.0% | | |
| Port Authority of New York & New Jersey, Refunding RB, | | |
| Consolidated, 152nd Series, AMT, 5.25%, 11/01/35 | 5,998 | 6,123,930 |
| Total Municipal Bonds Transferred to | | |
| Tender Option Bond Trusts — 7.1% | | 22,220,446 |
| Total Long-Term Investments | | |
| (Cost — $472,908,437) — 154.3% | | 483,131,336 |
| Short-Term Securities | Shares | |
| BIF New Jersey Municipal Money Fund, | | |
| 0.04% (g)(h) | 9,941,803 | 9,941,803 |
| Total Short-Term Securities | | |
| (Cost — $9,941,803) — 3.2% | | 9,941,803 |
| Total Investments (Cost — $482,850,240*) — 157.5% | | 493,073,139 |
| Other Assets Less Liabilities — 1.9% | | 5,982,531 |
| Liability for TOB Trust Certificates, Including Interest | | |
| Expense and Fees Payable — (4.2)% | | (13,271,754) |
| VRDP Shares, at Liquidation Value — (55.2)% | | (172,700,000) |
| Net Assets Applicable to Common Shares — 100.0% | | $313,083,916 |
* The cost and unrealized appreciation (depreciation) of investments as of July 31,
2011, as computed for federal income tax purposes, were as follows:
| |
| Aggregate cost | $469,810,516 |
| Gross unrealized appreciation | $ 14,473,808 |
| Gross unrealized depreciation | (4,474,115) |
| Net unrealized appreciation | $ 9,999,693 |
See Notes to Financial Statements.
| | |
| 18 | ANNUAL REPORT | JULY 31, 2011 |
BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)
Schedule of Investments (concluded)
(a) Variable rate security. Rate shown is as of report date.
(b) Represents a step-up bond that pays an initial coupon rate for the first period and
then a higher coupon rate for the following periods. Rate shown is as of report date.
(c) US government securities, held in escrow, are used to pay interest on this security, as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(d) Security is collateralized by Municipal or US Treasury obligations.
(e) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(f) Securities represent bonds transferred to a TOB in exchange for which the Fund
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details
of municipal bonds transferred to TOBs.
(g) Investments in companies considered to be an affiliate of the Fund during the
year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:
| | | | |
| | Shares Held | | Shares Held | |
| | at July 31, | Net | at July 31, | |
| Affiliate | 2010 | Activity | 2011 | Income |
| BIF New Jersey | | | | |
| Municipal | | | | |
| Money Fund | 1,117,529 | 8,824,274 | 9,941,803 | $ 2,629 |
(h) Represents the current yield as of report date.
• For Fund compliance purposes, the Fund’s sector classifications refer to any 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 Fund management.
These definitions may not apply for purposes of this report, which may combine
such sector sub-classifications for reporting ease.
• Financial futures contracts sold as of July 31, 2011 were as follows:
| | | | | |
| | | | | Notional | Unrealized |
| Contracts | Issue | Exchange | Expiration | Value | Depreciation |
| 10-Year US | Chicago Board | September | | |
| 112 | Treasury Note | of Trade | 2011 | $13,732,037 | $ (344,963) |
• Fair Value Measurements — Various inputs are used in determining the fair value
of investments and derivative financial instruments. These inputs are categorized in
three broad levels for financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• 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 the
Fund’s own assumptions used in determining the fair value of investments and
derivative financial instruments)
The categorization of a value determined for investments and derivative financial
instruments is based on the pricing transparency of the investment and derivative
financial instrument and does not necessarily correspond to the Fund’s perceived
risk of investing in those securities. For information about the Fund’s policy regarding
valuation of investments and other significant accounting policies, please refer to
Note 1 of the Notes to Financial Statements.
The following tables summarize the inputs used as of July 31, 2011 in determining
the fair valuation of the Fund’s investments and derivative financial instruments:
| | | | |
| Valuation Inputs | Level 1 | Level 2 | Level 3 | Total |
| Assets: | | | | |
| Investments: | | | | |
| Long-Term | | | | |
| Investments1 | — | $ 483,131,336 | — | $ 483,131,336 |
| Short-Term | | | | |
| Securities | $ 9,941,803 | — | — | 9,941,803 |
| Total | $ 9,941,803 | $ 483,131,336 | — | $ 493,073,139 |
1 See above Schedule of Investments for values in each sector.
| | | | |
| Valuation Inputs Level 1 | Level 2 | Level 3 | Total |
| Derivate Financial Instruments2 | | | |
| Liabilities: | | | | |
| Interest rate | | | | |
| contracts | $ (344,963) | — | — | $ (344,963) |
2 Derivative financial instruments are financial futures contracts, which are valued
at the unrealized appreciation/depreciation on the instrument.
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 19 |
BlackRock MuniYield Investment Quality Fund (MFT)
Schedule of Investments July 31, 2011
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| Alabama — 4.3% | | | |
| Birmingham Special Care Facilities Financing Authority, | | |
| RB, Children’s Hospital (AGC): | | | |
| 6.13%, 6/01/34 | $ 1,500 | $ 1,630,500 |
| 6.00%, 6/01/39 | | 2,985 | 3,193,562 |
| | | | 4,824,062 |
| Arizona — 0.4% | | | |
| State of Arizona, COP, Dept Administration, Series A | | | |
| (AGM), 5.25%, 10/01/28 | | 480 | 502,354 |
| California — 18.3% | | | |
| California Educational Facilities Authority, RB, University | | |
| of Southern California, Series A, 5.25%, 10/01/38 | 1,960 | 2,058,941 |
| California Health Facilities Financing Authority, | | | |
| Refunding RB, Sutter Health, Series B, 6.00%, 8/15/42 | 1,150 | 1,225,072 |
| California State Public Works Board, RB, Various Capital | | |
| Projects, Series G-1 (AGC), 5.25%, 10/01/24 | | 2,000 | 2,148,880 |
| California State University, RB, Systemwide, Series A | | | |
| (AGM), 5.00%, 11/01/39 | | 1,000 | 993,930 |
| County of Sacramento California, RB, Senior, Series A | | |
| (AGC), 5.50%, 7/01/41 | | 1,400 | 1,423,282 |
| Los Angeles Community College District California, GO: | | |
| Election of 2001, Series A (FGIC), 5.00%, 8/01/32 | 2,780 | 2,846,553 |
| Election of 2008, Series C, 5.25%, 8/01/39 | | 1,000 | 1,051,250 |
| Redondo Beach Unified School District, GO, Election | | | |
| of 2008, Series E, 5.50%, 8/01/34 | | 1,000 | 1,057,540 |
| San Bernardino Community College District, GO, | | | |
| Election of 2002, Series A, 6.25%, 8/01/33 | | 840 | 937,642 |
| San Diego Public Facilities Financing Authority, | | | |
| Refunding RB, Series B (AGC), 5.38%, 8/01/34 | | 1,020 | 1,073,836 |
| San Jacinto Unified School District, GO, Election | | | |
| of 2006 (AGM), 5.25%, 8/01/32 | | 1,000 | 1,022,710 |
| San Jose California Apartment Revenue, | | | |
| 6.25%, 3/01/34 | | 1,250 | 1,298,300 |
| State of California, GO, Various Purpose (AGC), | | | |
| 5.50%, 11/01/39 | | 3,450 | 3,574,648 |
| | | | 20,712,584 |
| Colorado — 1.5% | | | |
| Colorado Health Facilities Authority, RB, Hospital | | | |
| NCMC Inc. Project, Series B (AGM), 6.00%, 5/15/26 | 1,300 | 1,441,869 |
| Regional Transportation District, COP, Series A, | | | |
| 5.00%, 6/01/25 | | 305 | 316,453 |
| | | | 1,758,322 |
| Florida — 11.8% | | | |
| City of Gainesville Florida, Refunding RB, Series C, | | | |
| 5.25%, 10/01/34 | | 2,000 | 2,093,200 |
| County of Lee Florida, RB, Series A, AMT (AGM), | | | |
| 6.00%, 10/01/29 | | 1,000 | 1,002,260 |
| County of Osceola Florida, RB, Series A (FGIC), | | | |
| 5.50%, 10/01/27 | | 1,100 | 1,113,475 |
| Florida Housing Finance Corp., HRB, Brittany | | | |
| Rosemont Apartments, Series C-1, AMT (AMBAC), | | | |
| 6.75%, 8/01/14 | | 500 | 501,120 |
| Jacksonville Economic Development Commission, RB, | | |
| Mayo Clinic, Series B (NPFGC), 5.50%, 11/15/36 | | 750 | 755,423 |
| Manatee County Housing Finance Authority, RB, | | | |
| Series A, AMT (Fannie Mae), 5.90%, 9/01/40 | | 550 | 597,196 |
| Santa Rosa County School Board, COP, Refunding, | | | |
| Series 2 (NPFGC), 5.25%, 2/01/26 | | 780 | 798,509 |
| South Broward Hospital District, RB, Hospital (NPFGC), | | |
| 5.63%, 5/01/12 (a) | | 3,000 | 3,149,760 |
| St. Lucie West Services District, RB (NPFGC), | | | |
| 5.25%, 10/01/34 | | 1,000 | 961,070 |
| Village Center Community Development District, RB, | | | |
| Series A (NPFGC): | | | |
| 5.38%, 11/01/34 | | 1,640 | 1,427,177 |
| 5.13%, 11/01/36 | | 1,000 | 830,410 |
| | |
| | Par | |
| Municipal Bonds | (000) | Value |
| Florida (concluded) | | |
| Volusia County IDA, RB, Student Housing-Stetson | | |
| University Project, Series A (CIFG), 5.00%, 6/01/35 $ | 200 | $ 166,616 |
| | | 13,396,216 |
| Georgia — 2.7% | | |
| Augusta-Richmond County Georgia, RB (AGM), | | |
| 5.25%, 10/01/39 | 1,000 | 1,025,440 |
| County of Fulton Georgia, RB (FGIC), 5.25%, 1/01/35 | 1,000 | 1,028,640 |
| Gwinnett County Hospital Authority, Refunding RB, | | |
| Gwinnett Hospital System, Series D (AGM), | | |
| 5.50%, 7/01/41 | 1,000 | 1,010,820 |
| | | 3,064,900 |
| Illinois — 15.2% | | |
| Chicago Board of Education Illinois, GO, Refunding, | | |
| Chicago School Reform Board, Series A (FGIC), | | |
| 5.50%, 12/01/26 | 680 | 707,574 |
| Chicago Transit Authority, RB, Federal Transit | | |
| Administration Section 5309, Series A (AGC), | �� | |
| 6.00%, 6/01/26 | 1,400 | 1,561,392 |
| City of Chicago Illinois, RB: | | |
| General, Third Lien, Series A, 5.75%, 1/01/39 | 770 | 803,526 |
| General, Third Lien, Series C (AGC), 5.25%, 1/01/35 | 785 | 798,321 |
| City of Chicago Illinois, Refunding RB: | | |
| General, Third Lien, Series C, 6.50%, 1/01/41 | 3,680 | 4,049,877 |
| Second Lien (NPFGC), 5.50%, 1/01/30 | 895 | 949,711 |
| Illinois Finance Authority, Refunding RB, Carle | | |
| Foundation, Series A, 6.00%, 8/15/41 | 1,555 | 1,568,948 |
| Illinois Municipal Electric Agency, RB, Series A (FGIC): | | |
| 5.25%, 2/01/28 | 1,565 | 1,624,767 |
| 5.25%, 2/01/35 | 1,000 | 1,011,900 |
| Railsplitter Tobacco Settlement Authority, RB: | | |
| 5.50%, 6/01/23 | 940 | 973,887 |
| 6.00%, 6/01/28 | 270 | 278,060 |
| State of Illinois, RB: | | |
| (AGM), 5.00%, 6/15/27 | 1,000 | 1,024,350 |
| Build Illinois, Series B, 5.25%, 6/15/28 | 1,750 | 1,849,225 |
| | | 17,201,538 |
| Indiana — 4.3% | | |
| Indiana Municipal Power Agency, RB, Series A (NPFGC), | | |
| 5.00%, 1/01/42 | 1,485 | 1,471,174 |
| Indianapolis Local Public Improvement Bond Bank, | | |
| Refunding RB, Waterworks Project, Series A (AGC), | | |
| 5.50%, 1/01/38 | 3,310 | 3,461,532 |
| | | 4,932,706 |
| Iowa — 0.7% | | |
| Iowa Finance Authority, Refunding RB, Iowa Health | | |
| System (AGC), 5.25%, 2/15/29 | 725 | 752,398 |
| Louisiana — 1.9% | | |
| Louisiana State Citizens Property Insurance Corp., RB, | | |
| Series C-3 (AGC), 6.13%, 6/01/25 | 1,405 | 1,536,115 |
| New Orleans Aviation Board Louisiana, Refunding RB, | | |
| Restructuring GARB (AGC): | | |
| Series A-1, 6.00%, 1/01/23 | 375 | 424,800 |
| Series A-2, 6.00%, 1/01/23 | 160 | 181,248 |
| | | 2,142,163 |
| Michigan — 18.0% | | |
| City of Detroit Michigan, RB: | | |
| Second Lien, Series B (AGM), 6.25%, 7/01/36 | 1,800 | 1,960,344 |
| Second Lien, Series B (AGM), 7.00%, 7/01/36 | 200 | 229,554 |
| Second Lien, Series B (FGIC), 5.50%, 7/01/29 | 1,640 | 1,662,173 |
| Senior Lien, Series B (AGM), 7.50%, 7/01/33 | 1,500 | 1,768,545 |
| Senior Lien, Series B (BHAC), 5.50%, 7/01/35 | 3,750 | 3,821,062 |
| System, Second Lien, Series A (BHAC), | | |
| 5.50%, 7/01/36 | 2,265 | 2,315,849 |
See Notes to Financial Statements.
| | |
| 20 | ANNUAL REPORT | JULY 31, 2011 |
BlackRock MuniYield Investment Quality Fund (MFT)
Schedule of Investments (continued)
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| Michigan (concluded) | | | |
| City of Detroit Michigan, Refunding RB: | | | |
| Second Lien, Series E (BHAC), 5.75%, 7/01/31 | $ 2,270 | $ 2,386,088 |
| Senior Lien, Series C-1 (AGM), 7.00%, 7/01/27 | | 1,650 | 1,937,875 |
| Michigan State Building Authority, RB, Facilities Program, | | |
| Series H (AGM), 5.00%, 10/15/26 | | 375 | 394,830 |
| Michigan State Building Authority, Refunding RB, | | | |
| Facilities Program, Series I (AGC): | | | |
| 5.25%, 10/15/22 | | 1,350 | 1,493,411 |
| 5.25%, 10/15/24 | | 615 | 667,330 |
| 5.25%, 10/15/25 | | 310 | 333,994 |
| Royal Oak Hospital Finance Authority Michigan, | | | |
| Refunding RB, William Beaumont Hospital, | | | |
| 8.25%, 9/01/39 | | 1,265 | 1,460,430 |
| | | | 20,431,485 |
| Minnesota — 2.9% | | | |
| City of Minneapolis Minnesota, Refunding RB, Series B | | |
| (AGC), 6.50%, 11/15/38 | | 3,000 | 3,268,140 |
| Nevada — 6.2% | | | |
| Clark County Water Reclamation District, GO, Series A, | | |
| 5.25%, 7/01/34 | | 2,000 | 2,085,420 |
| County of Clark Nevada, RB: | | | |
| Las Vegas-McCarran International Airport, Series A | | |
| (AGM), 5.25%, 7/01/39 | | 2,000 | 2,010,720 |
| Subordinate Lien, Series A-2 (FGIC), | | | |
| 5.00%, 7/01/36 | | 3,000 | 2,937,090 |
| | | | 7,033,230 |
| New Jersey — 1.3% | | | |
| New Jersey Health Care Facilities Financing Authority, | | | |
| RB, Virtua Health (AGC), 5.50%, 7/01/38 | | 1,400 | 1,442,504 |
| New York — 5.6% | | | |
| New York City Municipal Water Finance Authority, RB: | | | |
| Second General Resolution, Series EE, | | | |
| 5.38%, 6/15/43 | | 1,455 | 1,543,450 |
| Series FF-2, 5.50%, 6/15/40 | | 1,545 | 1,652,779 |
| New York City Transitional Finance Authority, RB, | | | |
| Fiscal 2009: | | | |
| Series S-3, 5.25%, 1/15/39 | | 1,000 | 1,038,720 |
| Series S-4 (AGC), 5.50%, 1/15/29 | | 2,000 | 2,158,380 |
| | | | 6,393,329 |
| Ohio — 1.4% | | | |
| Ohio Higher Educational Facility Commission, | | | |
| Refunding RB, Summa Health System, 2010 Project | | |
| (AGC), 5.25%, 11/15/40 | | 1,650 | 1,621,042 |
| Pennsylvania — 5.8% | | | |
| City of Philadelphia Pennsylvania, RB, Series C (AGM): | | |
| 5.00%, 8/01/35 | | 1,615 | 1,639,564 |
| 5.00%, 8/01/40 | | 2,880 | 2,904,941 |
| Pennsylvania Turnpike Commission, RB, Sub-Series A, | | |
| 6.00%, 12/01/41 | | 2,000 | 2,082,100 |
| | | | 6,626,605 |
| Puerto Rico — 1.3% | | | |
| Puerto Rico Sales Tax Financing Corp., RB, First Sub, | | | |
| Series A, 6.38%, 8/01/39 | | 1,425 | 1,528,683 |
| Texas — 24.7% | | | |
| Austin Community College District, RB, Educational | | | |
| Facilities Project, Round Rock Campus, | | | |
| 5.25%, 8/01/33 | | 2,250 | 2,331,292 |
| City of Austin Texas, Refunding RB, Series A (AGM): | | | |
| 5.00%, 11/15/28 | | 720 | 763,330 |
| 5.00%, 11/15/29 | | 915 | 962,159 |
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| Texas (concluded) | | | |
| City of Houston Texas, Refunding RB, Combined, | | | |
| First Lien, Series A (AGC): | | | |
| 6.00%, 11/15/35 | $ 2,700 | $ 3,004,830 |
| 6.00%, 11/15/36 | | 2,055 | 2,276,961 |
| 5.38%, 11/15/38 | | 1,000 | 1,052,220 |
| Clifton Higher Education Finance Corp., Refunding RB, | | |
| Baylor University, 5.25%, 3/01/32 | | 1,235 | 1,308,421 |
| County of Bexar Texas, RB, Venue Project, Motor Vehicle | | |
| Rental (BHAC): | | | |
| 5.00%, 8/15/27 | | 1,040 | 1,098,698 |
| 5.00%, 8/15/28 | | 1,090 | 1,144,707 |
| Dallas Area Rapid Transit, Refunding RB, Senior Lien, | | | |
| 5.25%, 12/01/38 | | 2,310 | 2,401,014 |
| Frisco ISD Texas, GO, School Building (AGC), | | | |
| 5.50%, 8/15/41 | | 1,210 | 1,281,668 |
| Harris County Health Facilities Development Corp., | | | |
| Refunding RB, Memorial Hermann Healthcare System, | | |
| Series B, 7.25%, 12/01/35 | | 500 | 553,790 |
| Lubbock Cooper ISD Texas, GO, School Building (AGC), | | |
| 5.75%, 2/15/42 | | 500 | 525,880 |
| North Texas Tollway Authority, RB: | | | |
| Special Projects System, Series A, 5.50%, 9/01/41 | 2,120 | 2,249,680 |
| System, First Tier, Series K-1 (AGC), 5.75%, 1/01/38 | 1,400 | 1,453,830 |
| North Texas Tollway Authority, Refunding RB, System, | | | |
| First Tier: | | | |
| (AGM), 6.00%, 1/01/43 | | 1,000 | 1,064,310 |
| Series A (AGC), 5.75%, 1/01/40 | | 1,500 | 1,551,105 |
| Series A (NPFGC), 5.13%, 1/01/28 | | 1,780 | 1,817,487 |
| Tarrant County Cultural Education Facilities Finance | | | |
| Corp., Refunding RB, Christus Health, Series A (AGC), | | |
| 6.50%, 7/01/37 | | 1,100 | 1,168,299 |
| | | | 28,009,681 |
| Utah — 0.9% | | | |
| City of Riverton Utah, RB, IHC Health Services Inc., | | | |
| 5.00%, 8/15/41 | | 1,000 | 1,000,630 |
| Virginia — 1.1% | | | |
| Virginia Public School Authority, RB, School Financing, | | |
| 6.50%, 12/01/35 | | 1,100 | 1,233,936 |
| Washington — 1.6% | | | |
| City of Seattle Washington, Refunding RB, Series A, | | | |
| 5.25%, 2/01/36 | | 1,000 | 1,057,480 |
| State of Washington, GO, Various Purpose, Series B, | | | |
| 5.25%, 2/01/36 | | 725 | 772,451 |
| | | | 1,829,931 |
| Total Municipal Bonds — 131.9% | | | 149,706,439 |
| Municipal Bonds Transferred to | | | |
| Tender Option Bond Trusts (b) | | | |
| Alabama — 1.3% | | | |
| Mobile Board of Water & Sewer Commissioners, RB | | | |
| (NPFGC), 5.00%, 1/01/31 | | 1,500 | 1,528,515 |
| California — 2.3% | | | |
| San Diego Community College District California, GO, | | |
| Election of 2002 (AGM), 5.00%, 5/01/30 | | 2,500 | 2,563,425 |
| District of Columbia — 0.8% | | | |
| District of Columbia Water & Sewer Authority, RB, | | | |
| Series A, 6.00%, 10/01/35 | | 750 | 860,365 |
See Notes to Financial Statements
| | |
| ANNUAL REPORT | JULY 31, 2011 | 21 |
BlackRock MuniYield Investment Quality Fund (MFT)
Schedule of Investments (concluded)
(Percentages shown are based on Net Assets)
| | | |
| Municipal Bonds Transferred to | | Par | |
| Tender Option Bond Trusts (b) | | (000) | Value |
| Florida — 4.1% | | | |
| City of Jacksonville Florida, RB, Better Jacksonville | | | |
| (NPFGC), 5.00%, 10/01/27 | | $ 1,320 | $ 1,341,635 |
| Hillsborough County Aviation Authority, RB, Series A, AMT | | |
| (AGC), 5.50%, 10/01/38 | | 2,499 | 2,478,177 |
| Lee County Housing Finance Authority, RB, Multi-County | | |
| Program, Series A-2 (Ginnie Mae), 6.00%, 9/01/40 | 735 | 810,235 |
| | | | 4,630,047 |
| Illinois — 2.7% | | | |
| Chicago Transit Authority, Refunding RB, Federal Transit | | |
| Administration Section 5309 (AGM), 5.00%, 6/01/28 | 2,999 | 3,020,028 |
| Kentucky — 0.9% | | | |
| Kentucky State Property & Building Commission, | | | |
| Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/27 | 1,002 | 1,075,838 |
| Nevada — 3.9% | | | |
| Clark County Water Reclamation District, GO: | | | |
| Limited Tax, 6.00%, 7/01/38 | | 2,010 | 2,203,804 |
| Series B, 5.50%, 7/01/29 | | 1,994 | 2,167,537 |
| | | | 4,371,341 |
| New Jersey — 2.4% | | | |
| New Jersey EDA, RB, School Facilities Construction, | | | |
| Series Z (AGC), 6.00%, 12/15/34 | | 1,000 | 1,076,970 |
| New Jersey State Housing & Mortgage Finance Agency, | | |
| RB, S/F Housing, Series CC, 5.25%, 10/01/29 | | 1,620 | 1,664,584 |
| | | | 2,741,554 |
| New York — 5.8% | | | |
| New York City Municipal Water Finance Authority, RB, | | |
| Series FF-2, 5.50%, 6/15/40 | | 1,095 | 1,171,084 |
| New York State Dormitory Authority, ERB, Series B, | | | |
| 5.25%, 3/15/38 | | 3,250 | 3,409,997 |
| New York State Thruway Authority, RB, Series G (AGM), | | |
| 5.00%, 1/01/32 | | 2,000 | 2,048,520 |
| | | | 6,629,601 |
| Texas — 2.5% | | | |
| City of San Antonio Texas, Refunding RB, Series A, | | | |
| 5.25%, 2/01/31 | | 2,609 | 2,808,628 |
| Total Municipal Bonds Transferred to | | | |
| Tender Option Bond Trusts — 26.7% | | | 30,229,342 |
| Total Long-Term Investments | | | |
| (Cost — $174,391,559) — 158.6% | | | 179,935,781 |
| Short-Term Securities | | Shares | |
| FFI Institutional Tax-Exempt Fund, 0.01% (c)(d) | 6,706,791 | 6,706,791 |
| Total Short-Term Securities | | | |
| (Cost — $6,706,791) — 5.9% | | | 6,706,791 |
| Total Investments (Cost — $181,098,350*) — 164.5% | | 186,642,572 |
| Liabilities in Excess of Other Assets — (0.9)% | | | (1,001,611) |
| Liability for TOB Trust Certificates, Including Interest | | |
| Expense and Fees Payable — (13.8)% | | | (15,691,042) |
| AMPS, at Redemption Value — (49.8)% | | | (56,527,127) |
| Net Assets Applicable to Common Shares — 100.0% | | $113,422,792 |
* The cost and unrealized appreciation (depreciation) of investments as of July 31,
2011, as computed for federal income tax purposes, were as follows:
| |
| Aggregate cost | $165,447,947 |
| Gross unrealized appreciation | $ 6,335,218 |
| Gross unrealized depreciation | (820,323) |
| Net unrealized appreciation | $ 5,514,895 |
(a) US government securities, held in escrow, are used to pay interest on this security, as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(b) Securities represent bonds transferred to a TOB in exchange for which the Fund
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details
of municipal bonds transferred to TOBs.
(c) Investments in companies considered to be an affiliate of the Fund during the
year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:
| | | | |
| | Shares Held | | Shares Held | |
| | at July 31, | Net | at July 31, | |
| Affiliate | 2010 | Activity | 2011 | Income |
| FFI Institutional | | | | |
| Tax-Exempt Fund | 8,124,572 | (1,417,781) | 6,706,791 | $ 5,621 |
(d) Represents the current yield as of report date.
• Financial futures contracts sold as of July 31, 2011 were as follows:
| | | | | |
| | | | | Notional | Unrealized |
| Contracts | Issue | Exchange | Expiration | Value | Depreciation |
| 10-Year US | Chicago Board | September | | |
| 30 | Treasury Note | of Trade | 2011 | $3,673,302 | $ (97,323) |
• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivative financial instruments. These inputs are categorized in
three broad levels for financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• 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 the
Fund’s own assumptions used in determining the fair value of investments and
derivative financial instruments)
The categorization of a value determined for investments and derivative financial
instruments is based on the pricing transparency of the investment and derivative
financial instrument and does not necessarily correspond to the Funds’ perceived
risk of investing in those securities. For information about the Funds’ policy regarding
valuation of investments and other significant accounting policies, please refer to
Note 1 of the Notes to Financial Statements.
The following tables summarize the inputs used as of July 31, 2011 in determining
the fair valuation of the Fund’s investments and derivative financial instruments:
| | | | |
| Valuation Inputs | Level 1 | Level 2 | Level 3 | Total |
| Assets: | | | | |
| Investments: | | | | |
| Long-Term | | | | |
| Investments1 | — | $ 179,935,781 | — | $ 179,935,781 |
| Short-Term | | | | |
| Securities | $ 6,706,791 | — | — | 6,706,791 |
| Total | $ 6,706,791 | $ 179,935,781 | — | $ 186,642,572 |
1 See above Schedule of Investments for values in each state or
political subdivision.
| | | | |
| Valuation Inputs Level 1 | Level 2 | Level 3 | Total |
| Derivate Financial Instruments2 | | | |
| Liabilities: | | | | |
| Interest rate | | | | |
| contracts | $ (97,323) | — | — | $ (97,323) |
2 Derivative financial instruments are financial futures contracts, which are valued
at the unrealized appreciation/depreciation on the instrument.
See Notes to Financial Statements.
| | |
| 22 | ANNUAL REPORT | JULY 31, 2011 |
BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)
Schedule of Investments July 31, 2011
(Percentages shown are based on Net Assets)
| | |
| | Par | |
| Municipal Bonds | (000) | Value |
| Michigan — 137.5% | | |
| Corporate — 10.9% | | |
| Delta County EDC, Refunding RB, Mead Westvaco- | | |
| Escanaba, Series B, AMT, 6.45%, 4/15/12 (a) | $ 1,500 | $ 1,565,280 |
| Dickinson County EDC Michigan, Refunding RB, | | |
| International Paper Co. Project, Series A, | | |
| 5.75%, 6/01/16 | 3,900 | 3,942,510 |
| Michigan Strategic Fund, Refunding RB, Detroit | | |
| Edison Co. Project, Series A, AMT (NPFGC), | | |
| 5.55%, 9/01/29 | 10,250 | 10,253,280 |
| Monroe County EDC Michigan, Refunding RB, | | |
| Detroit Edison Co. Project, Series AA (NPFGC), | | |
| 6.95%, 9/01/22 | 10,695 | 13,304,152 |
| | | 29,065,222 |
| County/City/Special District/School District — 39.7% | | |
| Adrian City School District Michigan, GO (AGM) (a): | | |
| 5.00%, 5/01/14 | 2,000 | 2,237,780 |
| 5.00%, 5/01/14 | 1,600 | 1,790,224 |
| Avondale School District Michigan, GO (AGC): | | |
| 4.00%, 5/01/20 | 1,000 | 1,015,300 |
| 4.30%, 5/01/22 | 400 | 408,180 |
| Bay City School District Michigan, GO, School Building | | |
| & Site (AGM), 5.00%, 5/01/36 | 6,115 | 6,168,567 |
| Birmingham City School District Michigan, GO, School | | |
| Building & Site (AGM), 5.00%, 11/01/33 | 1,000 | 1,012,800 |
| Charter Township of Canton Michigan, GO, Capital | | |
| Improvement (AGM): | | |
| 5.00%, 4/01/25 | 1,840 | 1,918,034 |
| 5.00%, 4/01/26 | 2,000 | 2,076,820 |
| 5.00%, 4/01/27 | 500 | 516,660 |
| City of Oak Park Michigan, GO, Street Improvement | | |
| (NPFGC), 5.00%, 5/01/30 | 500 | 513,360 |
| Comstock Park Public Schools, GO, School | | |
| Building & Site, Series B (Q-SBLF): | | |
| 5.50%, 5/01/36 | 750 | 771,030 |
| 5.50%, 5/01/41 | 1,355 | 1,390,894 |
| County of Genesee Michigan, GO, Refunding, Series A | | |
| (NPFGC), 5.00%, 5/01/19 | 600 | 648,690 |
| County of Genesee Michigan, GO, Water Supply System | | |
| (NPFGC), 5.13%, 11/01/33 | 1,000 | 1,004,670 |
| County of Wayne Michigan, GO (NPFGC): | | |
| Airport Hotel, Detroit Metropolitan Airport, Series A, | | |
| 5.00%, 12/01/30 | 1,750 | 1,640,555 |
| Building Authority, Capital Improvement, Series A, | | |
| 5.25%, 6/01/16 | 845 | 848,219 |
| Dearborn Brownfield Redevelopment Authority, GO, | | |
| Limited Tax, Redevelopment, Series A (AGC), | | |
| 5.50%, 5/01/39 | 3,300 | 3,406,854 |
| Detroit City School District Michigan, GO, School | | |
| Building & Site Improvement (FGIC): | | |
| Series A, 5.38%, 5/01/13 (a) | 1,300 | 1,412,944 |
| Series B, 5.00%, 5/01/28 | 3,100 | 3,047,982 |
| Eaton Rapids Public Schools Michigan, GO, School | | |
| Building & Site (AGM): | | |
| 5.25%, 5/01/20 | 1,325 | 1,439,149 |
| 5.25%, 5/01/21 | 1,675 | 1,814,125 |
| Gibraltar School District Michigan, GO, School | | |
| Building & Site: | | |
| (FGIC), 5.00%, 5/01/14 (a) | 2,940 | 3,289,537 |
| (NPFGC), 5.00%, 5/01/28 | 710 | 722,368 |
| Grand Blanc Community Schools Michigan, GO | | |
| (NPFGC), 5.63%, 5/01/20 (a) | 1,100 | 1,115,290 |
| Grand Rapids Building Authority Michigan, RB, Series A | | |
| (AMBAC) (a): | | |
| 5.50%, 10/01/12 | 435 | 461,713 |
| 5.50%, 10/01/12 | 600 | 636,846 |
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| Michigan (continued) | | | |
| County/City/Special District/School District (concluded) | | |
| Gull Lake Community School District, GO, Refunding | | | |
| (AGM), 4.00%, 5/01/26 | $ 995 | $ 972,155 |
| Gull Lake Community School District Michigan, GO, | | | |
| School Building & Site (AGM), 5.00%, 5/01/14 (a) | 3,625 | 4,063,407 |
| Harper Creek Community School District Michigan, GO, | | |
| Refunding (AGM), 5.00%, 5/01/22 | | 1,125 | 1,208,228 |
| Harper Woods School District Michigan, GO, Refunding, | | |
| School Building & Site (NPFGC), 5.00%, 5/01/34 | | 430 | 433,156 |
| Hudsonville Public Schools, GO, School Building & Site | | |
| (Q-SBLF), 5.25%, 5/01/41 | | 1,000 | 1,014,410 |
| Jenison Public Schools Michigan, GO, Building & Site | | |
| (NPFGC), 5.50%, 5/01/12 (a) | | 1,575 | 1,638,284 |
| L'Anse Creuse Public Schools Michigan, GO, School | | | |
| Building & Site (AGM): | | | |
| 5.00%, 5/01/12 | | 650 | 672,094 |
| 5.00%, 5/01/24 | | 1,000 | 1,056,020 |
| 5.00%, 5/01/25 | | 1,525 | 1,596,080 |
| 5.00%, 5/01/26 | | 1,600 | 1,664,416 |
| 5.00%, 5/01/35 | | 3,000 | 3,024,270 |
| Lansing Building Authority Michigan, GO, Series A | | | |
| (NPFGC), 5.38%, 6/01/13 (a) | | 1,510 | 1,648,860 |
| Lincoln Consolidated School District Michigan, GO, | | | |
| Refunding (NPFGC), 4.63%, 5/01/28 | | 5,000 | 5,030,400 |
| Livonia Public Schools School District Michigan, GO, | | | |
| Refunding, Series A (NPFGC), 5.00%, 5/01/24 | | 1,000 | 1,018,840 |
| Michigan State Building Authority, Facilities, Series I: | | | |
| 5.50%, 10/15/11 (a) | | 145 | 146,618 |
| 5.50%, 10/15/18 | | 2,355 | 2,373,534 |
| Michigan State Building Authority, RB, Facilities Program, | | |
| Series H (AGM), 5.00%, 10/15/26 | | 4,500 | 4,737,960 |
| Michigan State Building Authority, Refunding RB, | | | |
| Facilities Program, Series I (AGM), 5.50%, 10/15/11 | 9,000 | 9,099,000 |
| Montrose Community Schools, GO (NPFGC), | | | |
| 6.20%, 5/01/17 | | 1,000 | 1,203,040 |
| New Haven Community Schools Michigan, GO, Refunding, | | |
| School Building & Site (AGM), 5.00%, 5/01/23 | | 1,500 | 1,572,225 |
| Orchard View Schools Michigan, GO, School Building | | | |
| & Site (NPFGC), 5.00%, 11/01/13 (a) | | 5,320 | 5,865,885 |
| Pennfield School District Michigan, GO, School | | | |
| Building & Site (a): | | | |
| (FGIC), 5.00%, 5/01/14 | | 765 | 854,834 |
| (NPFGC), 5.00%, 5/01/14 | | 605 | 676,045 |
| Reed City Public Schools Michigan, GO, School Building | | |
| & Site (AGM), 5.00%, 5/01/14 (a) | | 1,425 | 1,597,340 |
| Rochester Community School District, GO (NPFGC), | | | |
| 5.00%, 5/01/19 | | 435 | 486,587 |
| Southfield Public Schools Michigan, GO, School Building | | |
| & Site, Series B (AGM), 5.00%, 5/01/14 (a) | | 2,000 | 2,241,880 |
| Thornapple Kellogg School District Michigan, GO, School | | |
| Building & Site (NPFGC), 5.00%, 5/01/32 | | 2,500 | 2,544,825 |
| Van Dyke Public Schools Michigan, GO, School Building | | |
| & Site (AGM), 5.00%, 5/01/28 | | 1,250 | 1,299,263 |
| West Bloomfield School District Michigan, GO, | | | |
| Refunding (NPFGC): | | | |
| 5.50%, 5/01/17 | | 1,710 | 1,752,049 |
| 5.50%, 5/01/18 | | 1,225 | 1,250,933 |
| Zeeland Public Schools Michigan, GO, School Building | | |
| & Site (NPFGC), 5.00%, 5/01/29 | | 1,600 | 1,624,544 |
| | | | 105,675,773 |
| Education — 8.9% | | | |
| Eastern Michigan University, Refunding RB, General | | | |
| (AMBAC), 6.00%, 6/01/20 | | 435 | 436,614 |
| Fraser Public School District, GO, School Building & Site | | |
| (AGM), 5.00%, 5/01/25 | | 2,000 | 2,074,520 |
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 23 |
BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)
Schedule of Investments (continued)
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| Michigan (continued) | | | |
| Education (concluded) | | | |
| Goodrich Area School District, GO, School Building | | | |
| & Site (Q-SBLF): | | | |
| 5.50%, 5/01/32 | $ 600 | $ 630,930 |
| 5.50%, 5/01/36 | | 1,200 | 1,235,496 |
| 5.50%, 5/01/41 | | 1,575 | 1,626,487 |
| Grand Valley State University Michigan, RB, General | | | |
| (NPFGC), 5.50%, 2/01/18 | | 2,070 | 2,289,896 |
| Michigan Higher Education Facilities Authority, RB, | | | |
| Limited Obligation, Hillsdale College Project, | | | |
| 5.00%, 3/01/35 | | 1,875 | 1,775,531 |
| Michigan Higher Education Facilities Authority, | | | |
| Refunding RB, Limited Obligation, Creative Studies (a): | | |
| 5.85%, 6/01/12 | | 1,235 | 1,291,365 |
| 5.90%, 6/01/12 | | 1,145 | 1,197,739 |
| Michigan Higher Education Student Loan Authority, | | | |
| RB, Student Loan, Series XVII-Q, AMT (AMBAC), | | | |
| 5.00%, 3/01/31 | | 3,000 | 2,852,400 |
| Michigan State University, Refunding RB, General, | | | |
| Series C, 5.00%, 2/15/40 | | 4,700 | 4,775,012 |
| Saginaw Valley State University Michigan, Refunding RB, | | |
| General (NPFGC), 5.00%, 7/01/24 | | 2,100 | 2,126,649 |
| Western Michigan University, Refunding RB, | | | |
| Refunding RB, General, 5.25%, 11/15/40 | | 1,500 | 1,502,235 |
| | | | 23,814,874 |
| Health — 20.4% | | | |
| Dickinson County Healthcare System, Refunding RB, | | | |
| Series A (ACA), 5.80%, 11/01/24 | | 3,100 | 3,112,152 |
| Flint Hospital Building Authority Michigan, Refunding RB | | |
| (ACA), Hurley Medical Center: | | | |
| 6.00%, 7/01/20 | | 1,125 | 1,118,801 |
| Series A (ACA), 5.38%, 7/01/20 | | 615 | 586,218 |
| Kalamazoo Hospital Finance Authority, RB, Bronson | | | |
| Methodist Hospital (AGM), 5.25%, 5/15/36 | | 4,750 | 4,772,847 |
| Kent Hospital Finance Authority Michigan, RB, Spectrum | | |
| Health, Series A, 5.00%, 11/15/29 | | 4,500 | 4,542,975 |
| Kent Hospital Finance Authority Michigan, Refunding RB, | | |
| Butterworth, Series A (NPFGC), 7.25%, 1/15/13 (b) | 1,170 | 1,223,469 |
| Michigan State Hospital Finance Authority, RB: | | | |
| Ascension Health Senior Credit Group, | | | |
| 5.00%, 11/15/25 | | 3,700 | 3,863,096 |
| Hospital, MidMichigan Obligation Group, Series A | | |
| (AMBAC), 5.50%, 4/15/18 | | 2,530 | 2,567,419 |
| McLaren Health Care, Series C, 5.00%, 8/01/35 | 1,000 | 963,460 |
| MidMichigan Obligation Group, Series A, | | | |
| 5.00%, 4/15/26 | | 620 | 618,673 |
| MidMichigan Obligation Group, Series A, | | | |
| 5.00%, 4/15/36 | | 3,750 | 3,417,863 |
| Trinity Health Credit, Series C, 5.38%, 12/01/30 | 3,410 | 3,426,129 |
| Michigan State Hospital Finance Authority, Refunding RB: | | |
| Henry Ford Health System, Series A, | | | |
| 5.25%, 11/15/46 | | 2,500 | 2,242,125 |
| Hospital, Crittenton, Series A, 5.63%, 3/01/27 | | 2,050 | 2,053,424 |
| Hospital, Oakwood Obligation Group, Series A, | | | |
| 5.00%, 7/15/21 | | 600 | 617,700 |
| Hospital, Oakwood Obligation Group, Series A, | | | |
| 5.00%, 7/15/25 | | 3,260 | 3,212,632 |
| Hospital, Oakwood Obligation Group, Series A, | | | |
| 5.00%, 7/15/37 | | 630 | 563,560 |
| Hospital, Sparrow Obligated, 5.00%, 11/15/31 | | 3,100 | 2,962,701 |
| Mclaren Health Care, 5.75%, 5/15/38 | | 4,500 | 4,608,720 |
| Trinity Health Credit, Series A, 6.25%, 12/01/28 | | 930 | 1,015,514 |
| Trinity Health Credit, Series A, 6.50%, 12/01/33 | | 1,000 | 1,094,330 |
| Trinity Health Credit, Series C, 5.38%, 12/01/23 | 1,000 | 1,015,600 |
| Trinity Health Credit, Series C, 5.38%, 12/01/30 (a) | 345 | 368,246 |
| Trinity Health Credit, Series D, 5.00%, 8/15/34 | | 3,100 | 3,066,458 |
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| Michigan (continued) | | | |
| Health (concluded) | | | |
| Royal Oak Hospital Finance Authority Michigan, | | | |
| Refunding RB, William Beaumont Hospital, | | | |
| 8.25%, 9/01/39 | $ 1,000 | $ 1,154,490 |
| | | | 54,188,602 |
| Housing — 7.2% | | | |
| Michigan State HDA, RB: | | | |
| Deaconess Tower AMT (Ginnie Mae), | | | |
| 5.25%, 2/20/48 | | 1,000 | 984,930 |
| Series A, 4.75%, 12/01/25 | | 4,400 | 4,399,736 |
| Series A, 6.00%, 10/01/45 | | 6,990 | 6,786,940 |
| Series A, AMT (NPFGC), 5.30%, 10/01/37 | | 130 | 129,994 |
| Williams Pavilion, AMT (Ginnie Mae), | | | |
| 4.75%, 4/20/37 | | 3,850 | 3,652,533 |
| Michigan State HDA, Refunding RB, Series A, | | | |
| 6.05%, 10/01/41 | | 3,260 | 3,340,783 |
| | | | 19,294,916 |
| State — 12.3% | | | |
| Michigan Municipal Bond Authority, RB: | | | |
| Local Government Loan Program, Group A (AMBAC), | | |
| 5.50%, 11/01/20 | | 1,065 | 1,064,958 |
| State Clean Water, 5.00%, 10/01/27 | | 1,250 | 1,322,775 |
| Michigan Municipal Bond Authority, Refunding RB, Local | | |
| Government, Charter County Wayne, Series B (AGC): | | |
| 5.00%, 11/01/14 | | 2,400 | 2,648,928 |
| 5.00%, 11/01/15 | | 1,500 | 1,675,575 |
| 5.00%, 11/01/16 | | 500 | 568,445 |
| 5.38%, 11/01/24 | | 125 | 135,876 |
| Michigan State Building Authority, Facilities Program, | | | |
| Refunding RB: | | | |
| Series I, 6.25%, 10/15/38 | | 3,900 | 4,167,423 |
| Series I, 5.50%, 10/15/45 | | 1,250 | 1,260,575 |
| Series I (AGC), 5.25%, 10/15/24 | | 4,000 | 4,340,360 |
| Series I (AGC), 5.25%, 10/15/25 | | 2,000 | 2,154,800 |
| Series I (AGC), 5.25%, 10/15/26 | | 600 | 644,196 |
| Series II (NPFGC), 5.00%, 10/15/29 | | 3,500 | 3,501,190 |
| Michigan Strategic Fund, RB, Cadillac Place Office | | | |
| Building Project, 5.25%, 10/15/31 | | 1,500 | 1,522,395 |
| State of Michigan, RB, GAN (AGM), 5.25%, 9/15/27 | 5,250 | 5,544,840 |
| State of Michigan, COP (AMBAC), 5.55%, 6/01/22 (b)(c) | 3,000 | 2,079,720 |
| | | | 32,632,056 |
| Transportation — 13.5% | | | |
| Sturgis Building Authority, RB, Sturgis Hospital Project | | |
| (NPFGC), 4.75%, 10/01/34 | | 475 | 437,960 |
| Wayne County Airport Authority, RB, Detroit Metropolitan | | |
| Wayne County Airport, AMT (NPFGC): | | | |
| 5.25%, 12/01/25 | | 7,525 | 7,509,423 |
| 5.25%, 12/01/26 | | 6,300 | 6,221,187 |
| 5.00%, 12/01/34 | | 9,160 | 8,100,554 |
| Wayne County Airport Authority, Refunding RB, AMT (AGC): | | |
| 5.75%, 12/01/25 | | 4,000 | 4,122,640 |
| 5.75%, 12/01/26 | | 1,000 | 1,024,540 |
| 5.38%, 12/01/32 | | 8,700 | 8,457,270 |
| | | | 35,873,574 |
| Utilities — 24.6% | | | |
| City of Detroit Michigan, RB: | | | |
| Second Lien, Series B (AGM), 7.00%, 7/01/36 | | 3,000 | 3,443,310 |
| Second Lien, Series B (NPFGC), 5.00%, 7/01/13 (a) | 1,550 | 1,686,695 |
| Second Lien, Series B (NPFGC), 5.00%, 7/01/34 | 2,420 | 2,201,764 |
| Senior Lien, Series A (AGM), 5.00%, 7/01/25 | | 4,000 | 4,003,280 |
| Senior Lien, Series A (NPFGC), 5.00%, 7/01/34 | | 6,900 | 6,539,268 |
| Series B (NPFGC), 5.25%, 7/01/13 (a) | | 11,790 | 12,886,234 |
See Notes to Financial Statements.
| | |
| 24 | ANNUAL REPORT | JULY 31, 2011 |
BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)
Schedule of Investments (continued)
(Percentages shown are based on Net Assets)
| | |
| | Par | |
| Municipal Bonds | (000) | Value |
| Michigan (concluded) | | |
| Utilities (concluded) | | |
| City of Detroit Michigan, Refunding RB: | | |
| Second Lien, Series C (AGM), 5.00%, 7/01/29 | $ 10,570 | $ 10,265,056 |
| (FGIC), 6.25%, 7/01/12 (b) | 280 | 293,219 |
| City of Grand Rapids Michigan, RB (NPFGC), | | |
| 5.00%, 1/01/34 | 11,385 | 11,510,918 |
| City of Port Huron Michigan, RB, Water Supply: | | |
| 5.25%, 10/01/31 | 310 | 308,450 |
| 5.63%, 10/01/40 | 1,000 | 982,330 |
| City of Saginaw Michigan, RB, Water Supply, Series A | | |
| (AGM), 5.00%, 7/01/31 | 390 | 390,304 |
| Lansing Board of Water & Light, RB, Series A: | | |
| 5.00%, 7/01/31 | 4,230 | 4,360,030 |
| 5.00%, 7/01/37 | 2,065 | 2,090,709 |
| 5.50%, 7/01/41 | 3,000 | 3,178,680 |
| Michigan Municipal Bond Authority, RB, Clean Water | | |
| Revolving-Pooled, 5.00%, 10/01/27 | 1,240 | 1,353,262 |
| | | 65,493,509 |
| Total Municipal Bonds in Michigan | | 366,038,526 |
| Guam — 1.1% | | |
| County/City/Special District/School District — 0.5% | | |
| Territory of Guam, RB, Section 30, Series A, | | |
| 5.63%, 12/01/29 | 1,400 | 1,415,190 |
| Utilities — 0.6% | | |
| Guam Power Authority, Refunding RB, Series A (AGM), | | |
| 5.00%, 10/01/37 | 1,565 | 1,544,639 |
| Total Municipal Bonds in Guam | | 2,959,829 |
| Puerto Rico — 5.9% | | |
| County/City/Special District/School District — 1.9% | | |
| Puerto Rico Sales Tax Financing Corp., Refunding RB, | | |
| First Sub-Series C (AGM), 5.13%, 8/01/42 | 5,100 | 5,112,750 |
| Housing — 0.8% | | |
| Puerto Rico Housing Finance Authority, Refunding RB, | | |
| Subordinate, Capital Fund Modernization, | | |
| 5.13%, 12/01/27 | 2,000 | 2,037,200 |
| State — 2.1% | | |
| Puerto Rico Public Buildings Authority, Refunding RB, | | |
| Government Facilities, Series M-3 (NPFGC), | | |
| 6.00%, 7/01/27 | 2,000 | 2,109,740 |
| Puerto Rico Sales Tax Financing Corp., Refunding RB, | | |
| CAB, Series A (NPFGC) (c): | | |
| 5.18%, 8/01/43 | 12,500 | 1,556,125 |
| 5.00%, 8/01/46 | 20,000 | 1,988,600 |
| | | 5,654,465 |
| Transportation — 1.1% | | |
| Puerto Rico Highway & Transportation Authority, | | |
| Refunding RB, Series CC (AGC), 5.50%, 7/01/31 | 2,750 | 2,914,890 |
| Total Municipal Bonds in Puerto Rico | | 15,719,305 |
| Total Municipal Bonds — 144.5% | | 384,717,660 |
| | |
| Municipal Bonds Transferred to | Par | |
| Tender Option Bond Trusts (d) | (000) | Value |
| Michigan — 11.9% | | |
| Corporate — 4.6% | | |
| Wayne State University, Refunding RB, General (AGM), | | |
| 5.00%, 11/15/35 | $ 12,210 | $ 12,410,488 |
| County/City/Special District/School District — 2.6% | | |
| Lakewood Public Schools Michigan, GO, School | | |
| Building & Site (AGM), 5.00%, 5/01/37 | 6,470 | 6,847,589 |
| Education — 4.7% | | |
| Portage Public Schools Michigan, GO, School | | |
| Building & Site (AGM), 5.00%, 5/01/31 | 4,650 | 4,767,506 |
| Saginaw Valley State University, Refunding RB, General | | |
| (AGM), 5.00%, 7/01/31 | 7,500 | 7,711,650 |
| | | 12,479,156 |
| Total Municipal Bonds Transferred to | | |
| Tender Option Bond Trusts — 11.9% | | 31,737,233 |
| Total Long-Term Investments | | |
| (Cost — $409,465,253) — 156.4% | | 416,454,893 |
| Short-Term Securities | Shares | |
| BIF Michigan Municipal Money Fund, 0.00% (e)(f) | 6,928,754 | 6,928,754 |
| Total Short-Term Securities | | |
| (Cost — $6,928,754) — 2.6% | | 6,928,754 |
| Total Investments (Cost — $416,394,007*) — 159.0% | | 423,383,647 |
| Other Assets Less Liabilities — 1.4% | | 3,740,955 |
| Liability for TOB Trust Certificates, Including Interest | | |
| Expense and Fees Payable — (6.1)% | | (16,198,351) |
| VRDP Shares, at Liquidation Value — (54.3)% | | (144,600,000) |
| Net Assets Applicable to Common Shares — 100.0% | | $266,326,251 |
* The cost and unrealized appreciation (depreciation) of investments as of July 31,
2011, as computed for federal income tax purposes, were as follows:
| |
| Aggregate cost | $400,386,301 |
| Gross unrealized appreciation | $ 13,601,675 |
| Gross unrealized depreciation | (6,794,329) |
| Net unrealized appreciation | $ 6,807,346 |
(a) US government securities, held in escrow, are used to pay interest on this security, as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(b) Security is collateralized by Municipal or US Treasury obligations.
(c) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(d) Securities represent bonds transferred to a TOB in exchange for which the Fund
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details
of municipal bonds transferred to TOBs.
(e) Investments in companies considered to be an affiliate of the Fund during the
year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:
| | | | |
| | Shares Held | | Shares Held | |
| | at July 31, | Net | at July 31, | |
| Affiliate | 2010 | Activity | 2011 | Income |
| BIF Michigan | | | | |
| Municipal | | | | |
| Money Fund | 1,734,583 | 5,194,171 | 6,928,754 | — |
(f) Represents the current yield as of report date.
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2011 25
BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)
Schedule of Investments (concluded)
• For Fund compliance purposes, the Fund’s sector classifications refer to any 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 Fund management.
These definitions may not apply for purposes of this report, which may combine
such sector sub-classifications for reporting ease.
• Financial futures contracts sold as of July 31, 2011 were as follows:
| | | | | |
| | | | | Notional | Unrealized |
| Contracts | Issue | Exchange | Expiration | Value | Depreciation |
| 10-Year US | Chicago Board | September | | |
| 96 | Treasury Note | of Trade | 2011 | $11,754,568 | $ (311,432) |
• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivative financial instruments. These inputs are categorized in
three broad levels for financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• 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 the
Fund’s own assumptions used in determining the fair value of investments and
derivative financial instruments)
The categorization of a value determined for investments and derivative financial
instruments is based on the pricing transparency of the investment and derivative
financial instrument and does not necessarily correspond to the Fund’s perceived
risk of investing in those securities. For information about the Fund’s policy regarding
valuation of investments and derivative financial instruments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following tables summarize the inputs used as of July 31, 2011 in determining
the fair valuation of the Fund’s investments and derivative financial instruments:
| | | | |
| Valuation Inputs | Level 1 | Level 2 | Level 3 | Total |
| Assets: | | | | |
| Investments: | | | | |
| Long-Term | | | | |
| Investments1 | — | $ 416,454,893 | — | $ 416,454,893 |
| Short-Term | | | | |
| Securities | $ 6,928,754 | — | — | 6,928,754 |
| Total | $ 6,928,754 | $ 416,454,893 | — | $ 423,383,647 |
1 See above Schedule of Investments for values in each sector.
| | | | |
| Valuation Inputs Level 1 | Level 2 | Level 3 | Total |
| Derivate Financial Instruments2 | | | |
| Liabilities: | | | | |
| Interest rate | | | | |
| contracts | $ (311,432) | — | — | $ (311,432) |
2 Derivative financial instruments are financial futures contracts, which are valued
at the unrealized appreciation/depreciation on the instrument.
See Notes to Financial Statements.
| | |
| 26 | ANNUAL REPORT | JULY 31, 2011 |
BlackRock MuniYield New Jersey Quality Fund, Inc. (MJI)
Schedule of Investments July 31, 2011
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| New Jersey — 126.8% | | | |
| Corporate — 3.9% | | | |
| New Jersey EDA, Refunding RB, New Jersey | | | |
| American Water Co., Inc. Project, Series A, AMT, | | | |
| 5.70%, 10/01/39 | $ 5,000 | $ 5,052,250 |
| County/City/Special District/School District — 17.8% | | |
| Borough of Hopatcong New Jersey, GO, Refunding, | | | |
| Sewer (AMBAC), 4.50%, 8/01/33 | | 750 | 757,703 |
| City of Perth Amboy New Jersey, GO, CAB (AGM), | | | |
| 5.00%, 7/01/35 (a) | | 1,250 | 1,196,875 |
| County of Hudson New Jersey, COP, Refunding (NPFGC), | | |
| 6.25%, 12/01/16 | | 1,000 | 1,146,800 |
| County of Middlesex New Jersey, COP, Refunding | | | |
| (NPFGC), 5.00%, 8/01/22 | | 3,000 | 3,007,530 |
| County of Union New Jersey, GO: | | | |
| 4.00%, 3/01/29 | | 1,060 | 1,041,556 |
| 4.00%, 3/01/30 | | 1,060 | 1,036,818 |
| 4.00%, 3/01/31 | | 1,200 | 1,158,792 |
| Edgewater Borough Board of Education, GO (AGM): | | | |
| 4.25%, 3/01/34 | | 300 | 307,152 |
| 4.25%, 3/01/35 | | 300 | 305,616 |
| 4.30%, 3/01/36 | | 300 | 304,557 |
| Essex County Improvement Authority, Refunding RB, AMT | | |
| (NPFGC), 4.75%, 11/01/32 | | 1,000 | 908,570 |
| Hudson County Improvement Authority, RB: | | | |
| CAB, Series A-1 (NPFGC), 4.52%, 12/15/32 (b) | | 1,000 | 258,260 |
| County Secured, County Services Building Project | | |
| (AGM), 5.00%, 4/01/27 | | 250 | 260,500 |
| Harrison Parking Facility Project, Series C (AGC), | | | |
| 5.25%, 1/01/39 | | 1,000 | 1,037,900 |
| Harrison Parking Facility Project, Series C (AGC), | | | |
| 5.38%, 1/01/44 | | 1,400 | 1,461,250 |
| Monmouth County Improvement Authority, RB, | | | |
| Governmental Loan (AMBAC): | | | |
| 5.00%, 12/01/17 (c) | | 600 | 609,732 |
| 5.00%, 12/01/17 | | 5 | 5,028 |
| 5.00%, 12/01/18 (c) | | 1,515 | 1,539,573 |
| 5.00%, 12/01/18 | | 5 | 5,021 |
| 5.00%, 12/01/19 (c) | | 1,535 | 1,559,898 |
| 5.00%, 12/01/19 | | 5 | 5,016 |
| Monmouth County Improvement Authority, Refunding RB, | | |
| Governmental Loan (AMBAC): | | | |
| 5.20%, 12/01/14 | | 5 | 5,011 |
| 5.25%, 12/01/15 | | 5 | 5,011 |
| New Jersey State Transit Corp., COP, Subordinate, | | | |
| Federal Transit Administration Grants, Series A (AGM), | | |
| 5.00%, 9/15/21 | | 1,000 | 1,034,270 |
| Newark Housing Authority, Refunding RB, Newark | | | |
| Redevelopment Project (NPFGC), 4.38%, 1/01/37 | | 3,600 | 3,319,956 |
| Salem County Improvement Authority, RB, Finlaw Street | | |
| Office Building (AGM), 5.38%, 8/15/28 | | 620 | 637,515 |
| | | | 22,915,910 |
| Education — 23.4% | | | |
| New Jersey Educational Facilities Authority, RB: | | | |
| Montclair State University, Series A (AMBAC), | | | |
| 5.00%, 7/01/21 | | 1,600 | 1,701,280 |
| Rowan University, Series C (NPFGC), | | | |
| 5.00%, 7/01/34 (c) | | 1,185 | 1,335,436 |
| New Jersey Educational Facilities Authority, Refunding RB: | | |
| College of New Jersey, Series D (AGM), | | | |
| 5.00%, 7/01/35 | | 3,805 | 3,853,704 |
| Montclair State University, Series J (NPFGC), | | | |
| 4.25%, 7/01/30 | | 2,895 | 2,736,267 |
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| New Jersey (continued) | | | |
| Education (concluded) | | | |
| New Jersey Institute of Technology, Series H, | | | |
| 5.00%, 7/01/31 | $ 1,000 | $ 1,018,700 |
| Ramapo College, Series I (AMBAC), 4.25%, 7/01/31 | 1,250 | 1,163,925 |
| Ramapo College, Series I (AMBAC), 4.25%, 7/01/36 | 3,890 | 3,401,999 |
| Rowan University, Series B (AGC), 5.00%, 7/01/26 | 2,575 | 2,726,075 |
| Stevens Institute of Technology, Series A, | | | |
| 5.00%, 7/01/34 | | 1,500 | 1,384,530 |
| William Paterson University, Series C (AGC), | | | |
| 4.75%, 7/01/34 | | 1,115 | 1,130,721 |
| William Paterson University, Series E (Syncora), | | | |
| 5.00%, 7/01/21 | | 1,725 | 1,777,975 |
| Rutgers-State University of New Jersey, Refunding RB, | | |
| Series F, 5.00%, 5/01/39 | | 4,000 | 4,121,520 |
| University of Medicine & Dentistry of New Jersey, RB, | | | |
| Series A (AMBAC): | | | |
| 5.50%, 12/01/18 | | 570 | 585,225 |
| 5.50%, 12/01/19 | | 1,145 | 1,171,919 |
| 5.50%, 12/01/20 | | 1,130 | 1,153,007 |
| 5.50%, 12/01/21 | | 865 | 881,020 |
| | | | 30,143,303 |
| Health — 11.9% | | | |
| New Jersey Health Care Facilities Financing Authority, RB: | | |
| AHS Hospital Corp., 6.00%, 7/01/41 | | 1,100 | 1,156,166 |
| Meridian Health, Series I (AGC), 5.00%, 7/01/38 | 740 | 736,714 |
| Meridian Health, Series II (AGC), 5.00%, 7/01/38 | 995 | 990,582 |
| Meridian Health, Series V (AGC), 5.00%, 7/01/38 | 965 | 960,715 |
| South Jersey Hospital, 6.00%, 7/01/26 (c) | | 4,000 | 4,210,200 |
| Virtua Health (AGC), 5.50%, 7/01/38 | | 1,000 | 1,030,360 |
| New Jersey Health Care Facilities Financing Authority, | | | |
| Refunding RB: | | | |
| Atlantic City Medical Center, 5.75%, 7/01/25 (c) | 525 | 551,633 |
| Atlantic City Medical System, 6.25%, 7/01/17 | | 325 | 335,582 |
| Atlantic City Medical System, 5.75%, 7/01/25 | | 790 | 799,322 |
| Hackensack University Medical (AGM), | | | |
| 4.63%, 1/01/30 | | 2,315 | 2,251,940 |
| Meridian Health System Obligation Group (AGM), | | |
| 5.25%, 7/01/19 | | 2,250 | 2,253,668 |
| | | | 15,276,882 |
| Housing — 8.6% | | | |
| New Jersey State Housing & Mortgage Finance | | | |
| Agency, RB: | | | |
| Capital Fund Program, Series A (AGM), | | | |
| 4.70%, 11/01/25 | | 3,805 | 3,859,145 |
| Home Buyer, Series CC, AMT (NPFGC), | | | |
| 5.80%, 10/01/20 | | 2,640 | 2,730,262 |
| Series A, AMT (FGIC), 4.90%, 11/01/35 | | 820 | 781,903 |
| Series A, AMT (NPFGC), 4.85%, 11/01/39 | | 400 | 354,036 |
| Series AA, 6.50%, 10/01/38 | | 925 | 1,001,608 |
| Series B (AGM), 1.10%, 5/01/12 | | 1,150 | 1,151,759 |
| New Jersey State Housing & Mortgage Finance | | | |
| Agency, Refunding RB, S/F Housing, Series T, AMT, | | | |
| 4.70%, 10/01/37 | | 490 | 457,797 |
| Newark Housing Authority, RB, South Ward Police | | | |
| Facility (AGC): | | | |
| 5.75%, 12/01/30 | | 400 | 427,532 |
| 6.75%, 12/01/38 | | 250 | 282,973 |
| | | | 11,047,015 |
| State — 33.7% | | | |
| Garden State Preservation Trust, RB (AGM): | | | |
| CAB, Series B, 5.12%, 11/01/23 (b) | | 6,725 | 3,907,292 |
| Election of 2005, Series A, 5.80%, 11/01/22 | | 2,605 | 2,996,479 |
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 27 |
BlackRock MuniYield New Jersey Quality Fund, Inc. (MJI)
Schedule of Investments (continued)
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| New Jersey (continued) | | | |
| State (concluded) | | | |
| New Jersey EDA, RB: | | | |
| CAB, Motor Vehicle Surcharge, Series R (NPFGC), | | | |
| 4.95%, 7/01/21 (b) | $ 2,325 | $ 1,424,342 |
| Cigarette Tax, 5.63%, 6/15/19 | | 430 | 430,138 |
| Cigarette Tax (Radian), 5.75%, 6/15/29 | | 785 | 778,021 |
| Cigarette Tax (Radian), 5.50%, 6/15/31 | | 225 | 211,775 |
| Motor Vehicle Surcharge, Series A (NPFGC), | | | |
| 5.25%, 7/01/25 | | 1,000 | 1,064,120 |
| Motor Vehicle Surcharge, Series A (NPFGC), | | | |
| 5.00%, 7/01/29 | | 3,900 | 3,986,970 |
| Motor Vehicle Surcharge, Series A (NPFGC), | | | |
| 5.25%, 7/01/33 | | 8,500 | 8,642,205 |
| Motor Vehicle Surcharge, Series A (NPFGC), | | | |
| 5.00%, 7/01/34 | | 1,765 | 1,769,677 |
| School Facilities Construction, Series Z (AGC), | | | |
| 6.00%, 12/15/34 | | 1,200 | 1,292,364 |
| School Facilities, Series U (AMBAC), 5.00%, 9/01/37 | 1,000 | 1,000,470 |
| New Jersey EDA, Refunding RB: | | | |
| New Jersey American Water Co., Inc. Project, | | | |
| Series B, AMT, 5.60%, 11/01/34 | | 1,000 | 1,015,110 |
| School Facilities Construction, Series K (NPFGC), | | | |
| 5.25%, 12/15/17 | | 750 | 830,925 |
| New Jersey Sports & Exposition Authority, | | | |
| Refunding RB (NPFGC): | | | |
| 5.50%, 3/01/21 | | 1,540 | 1,709,723 |
| 5.50%, 3/01/22 | | 1,050 | 1,155,945 |
| New Jersey Transportation Trust Fund Authority, RB, | | | |
| Transportation System: | | | |
| CAB, Series C (AGM), 4.85%, 12/15/32 (b) | | 4,750 | 1,278,653 |
| CAB, Series C (AMBAC), 5.05%, 12/15/35 (b) | | 2,760 | 584,209 |
| Series A (AGC), 5.63%, 12/15/28 | | 780 | 827,993 |
| New Jersey Transportation Trust Fund Authority, | | | |
| Refunding RB, Transportation System: | | | |
| Series A (AGM), 5.25%, 12/15/20 | | 4,250 | 4,830,933 |
| Series B (NPFGC), 5.50%, 12/15/21 | | 1,000 | 1,141,400 |
| State of New Jersey, COP, Equipment Lease Purchase, | | | |
| Series A, 5.25%, 6/15/27 | | 500 | 516,575 |
| State of New Jersey, GO, Refunding, Series D (FGIC), | | | |
| 6.00%, 2/15/13 | | 1,725 | 1,868,365 |
| | | | 43,263,684 |
| Tobacco — 1.5% | | | |
| Tobacco Settlement Financing Corp. New Jersey, RB, | | | |
| 7.00%, 6/01/41 (c) | | 1,715 | 1,922,498 |
| Transportation — 15.4% | | | |
| Delaware River Port Authority, RB, Series D (AGM), | | | |
| 5.00%, 1/01/40 | | 1,500 | 1,506,075 |
| New Jersey State Turnpike Authority, RB, Growth & Income | | |
| Securities, Series B (AMBAC), 5.15%, 1/01/35 (a) | | 3,005 | 2,462,477 |
| New Jersey State Turnpike Authority, Refunding RB, | | | |
| Series A (AGM), 5.25%, 1/01/29 | | 2,000 | 2,270,880 |
| New Jersey Transportation Trust Fund Authority, RB, | | | |
| Transportation System, Series A: | | | |
| 6.00%, 6/15/35 | | 2,000 | 2,218,480 |
| (AGM), 5.50%, 12/15/22 | | 150 | 170,751 |
| (AMBAC), 5.00%, 12/15/32 | | 730 | 740,702 |
| Port Authority of New York & New Jersey, RB: | | | |
| Consolidated, 93rd Series, 6.13%, 6/01/94 | | 1,000 | 1,116,650 |
| Consolidated, 163rd Series, 5.00%, 7/15/39 | | 1,000 | 1,029,830 |
| JFK International Air Terminal, 6.00%, 12/01/42 | | 1,500 | 1,517,490 |
| Port Authority of New York & New Jersey, | | | |
| Refunding RB, AMT: | | | |
| Consolidated 152nd Series, 5.75%, 11/01/30 | | 2,000 | 2,147,840 |
| Consolidated, 155th Series (AGM), 4.25%, 12/01/32 | 5,000 | 4,603,650 |
| | | | 19,784,825 |
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| New Jersey (concluded) | | | |
| Utilities — 10.6% | | | |
| Essex County Utilities Authority, Refunding RB (AGC), | | | |
| 4.13%, 4/01/22 | $ 1,000 | $ 1,037,600 |
| Jersey City Municipal Utilities Authority, Refunding RB | | | |
| (AMBAC), 6.25%, 1/01/14 | | 2,870 | 3,043,377 |
| New Jersey EDA, RB, New Jersey American Water Co., Inc. | | |
| Project, Series A, AMT (AMBAC), 5.25%, 11/01/32 | 1,000 | 1,000,550 |
| New Jersey EDA, Refunding RB, United Water of | | | |
| New Jersey Inc., Series B (AMBAC), 4.50%, 11/01/25 | 1,000 | 1,012,070 |
| North Hudson Sewerage Authority, Refunding RB, | | | |
| Series A (NPFGC), 5.13%, 8/01/20 | | 1,710 | 1,848,903 |
| Rahway Valley Sewerage Authority, RB, CAB, Series A | | | |
| (NPFGC) (b): | | | |
| 4.74%, 9/01/26 | | 4,100 | 1,770,831 |
| 4.42%, 9/01/33 | | 2,350 | 604,913 |
| Union County Utilities Authority, Refunding RB, | | | |
| Senior Lease, Ogden Martin, Series A, AMT (AMBAC): | | |
| 5.38%, 6/01/17 | | 1,590 | 1,592,290 |
| 5.38%, 6/01/18 | | 1,670 | 1,671,804 |
| | | | 13,582,338 |
| Total Municipal Bonds in New Jersey | | | 162,988,705 |
| Guam — 0.6% | | | |
| Utilities — 0.6% | | | |
| Guam Power Authority, Refunding RB, Series A (AGM), | | |
| 5.00%, 10/01/37 | | 735 | 725,438 |
| Puerto Rico — 14.0% | | | |
| County/City/Special District/School District — 2.6% | | |
| Puerto Rico Sales Tax Financing Corp., RB, First | | | |
| Sub-Series A, 6.00%, 8/01/42 | | 1,000 | 1,045,180 |
| Puerto Rico Sales Tax Financing Corp., Refunding RB, | | |
| First Sub-Series C (AGM), 5.13%, 8/01/42 | | 2,380 | 2,385,950 |
| | | | 3,431,130 |
| Education — 1.4% | | | |
| Puerto Rico Industrial Tourist Educational Medical | | | |
| & Environmental Control Facilities Financing Authority, | | |
| RB, University Plaza Project, Series A (NPFGC), | | | |
| 5.00%, 7/01/33 | | 2,000 | 1,816,640 |
| Health — 3.3% | | | |
| Puerto Rico Industrial Tourist Educational Medical | | | |
| & Environmental Control Facilities Financing Authority, | | |
| RB, Hospital De La Concepcion, Series A, | | | |
| 6.13%, 11/15/30 | | 4,220 | 4,237,344 |
| State — 2.8% | | | |
| Commonwealth of Puerto Rico, GO, Refunding, Public | | |
| Improvement, Series C, 6.00%, 7/01/39 | | 1,500 | 1,531,155 |
| Puerto Rico Commonwealth Infrastructure Financing | | | |
| Authority, RB, CAB, Series A (b): | | | |
| (AMBAC), 4.37%, 7/01/37 | | 2,250 | 353,745 |
| (FGIC), 4.49%, 7/01/30 | | 2,750 | 779,048 |
| Puerto Rico Public Buildings Authority, Refunding RB, | | | |
| Government Facilities, Series M-3 (NPFGC), | | | |
| 6.00%, 7/01/27 | | 850 | 896,639 |
| | | | 3,560,587 |
| Transportation — 1.0% | | | |
| Puerto Rico Highway & Transportation Authority, | | | |
| Refunding RB, Series CC (AGC), 5.50%, 7/01/31 | | 1,185 | 1,256,053 |
| Utilities — 2.9% | | | |
| Puerto Rico Aqueduct & Sewer Authority, RB, | | | |
| Senior Lien, Series A (AGC), 5.13%, 7/01/47 | | 1,750 | 1,724,747 |
See Notes to Financial Statements.
| | |
| 28 | ANNUAL REPORT | JULY 31, 2011 |
BlackRock MuniYield New Jersey Quality Fund, Inc. (MJI)
Schedule of Investments (concluded)
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| Puerto Rico (concluded) | | | |
| Utilities (concluded) | | | |
| Puerto Rico Electric Power Authority, RB: | | | |
| Series RR (CIFG), 5.00%, 7/01/28 | $ 1,000 | $ 983,150 |
| Series XX, 5.75%, 7/01/36 | | 1,000 | 1,021,630 |
| | | | 3,729,527 |
| Total Municipal Bonds in Puerto Rico | | | 18,031,281 |
| Total Municipal Bonds — 141.4% | | | 181,745,424 |
| Municipal Bonds Transferred to | | | |
| Tender Option Bond Trusts (d) | | | |
| New Jersey — 6.2% | | | |
| Housing — 1.6% | | | |
| Austin Trust, RB, Inverse, Series 8 (FSA), 5.00%, 5/01/27 | 1,980 | 2,112,204 |
| State — 3.1% | | | |
| Garden State Preservation Trust, RB, Drivers, | | | |
| Series 2865 (FSA), 5.75%, 11/01/28 | | 3,300 | 3,958,086 |
| Transportation — 1.5% | | | |
| Port Authority of New York & New Jersey, RB, | | | |
| 5.25%, 11/01/35 (e) | | 1,829 | 1,867,799 |
| Total Municipal Bonds Transferred to | | | |
| Tender Option Bond Trusts — 6.2% | | | 7,938,089 |
| Total Long-Term Investments | | | |
| (Cost — $188,271,441) — 147.6% | | | 189,683,513 |
| Short-Term Securities | | Shares | |
| BIF New Jersey Municipal Money Fund | | | |
| 0.00% (f)(g) | 6,306,835 | 6,306,835 |
| Total Short-Term Securities | | | |
| (Cost — $6,306,835) — 4.9% | | | 6,306,835 |
| Total Investments (Cost — $194,578,276*) — 152.5% | | | 195,990,348 |
| Other Assets Less Liabilities — 1.2% | | | 1,578,084 |
| Liability for TOB Trust Certificates, Including Interest | | | |
| Expense and Fees Payable — (3.6)% | | | (4,687,470) |
| VRDP Shares, at Liquidation Value — (50.1)% | | | (64,400,000) |
| Net Assets Applicable to Common Shares — 100.0% | | | $128,480,962 |
* •The cost and unrealized appreciation (depreciation) of investments as of July 31,
2011, as computed for federal income tax purposes, were as follows:
| |
| Aggregate cost | $189,814,296 |
| Gross unrealized appreciation | $ 5,273,466 |
| Gross unrealized depreciation | (3,781,783) |
| Net unrealized appreciation | $ 1,491,683 |
(a) Represents a step-up bond that pays an initial coupon rate for the first period and
then a higher coupon rate for the following periods. Rate shown is as of report date.
(b) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(c) US government securities, held in escrow, are used to pay interest on this security, as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(d) Securities represent bonds transferred to a TOB in exchange for which the Fund
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details
of municipal bonds transferred to tender option bond trusts.
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933.
These securities may be resold in transactions exempt from registration to qualified
institutional investors.
(f) Investments in companies considered to be an affiliate of the Fund during the
year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:
| | | | |
| | Shares Held | | Shares Held | |
| | at July 31, | Net | at July 31, | |
| Affiliate | 2010 | Activity | 2011 | Income |
| BIF New Jersey | | | | |
| Municipal | | | | |
| Money Fund | 4,549,254 | 1,757,581 | 6,306,835 | $ 1,068 |
(g) Represents the current yield as of report date.
• For Fund compliance purposes, the Fund’s sector classifications refer to any 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 Fund management.
These definitions may not apply for purposes of this report, which may combine
such sector sub-classifications for reporting ease.
• Financial futures contracts sold as of July 31, 2011 were as follows:
| | | | | |
| | | | | Notional | Unrealized |
| Contracts | Issue | Exchange | Expiration | Value | Depreciation |
| 10-Year US | Chicago Board | September | | |
| 47 | Treasury Note | of Trade | 2011 | $5,754,840 | $ (152,472) |
• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivative financial instruments. These inputs are categorized in
three broad levels for financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• 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 the
Fund’s own assumptions used in determining the fair value of investments and
derivative financial instruments)
The categorization of a value determined for investments and derivative financial
instruments is based on the pricing transparency of the investment and derivative
financial instrument and does not necessarily correspond to the Fund’s perceived
risk of investing in those securities. For information about the Fund’s policy regarding
valuation of investments and derivative financial instruments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following tables summarize the inputs used as of July 31, 2011 in determining
the fair valuation of the Fund’s investments and derivative financial instruments:
| | | | |
| Valuation Inputs | Level 1 | Level 2 | Level 3 | Total |
| Assets: | | | | |
| Investments: | | | | |
| Long-Term | | | | |
| Investments1 | — | $ 189,683,513 | — | $ 189,683,513 |
| Short-Term | | | | |
| Securities | $ 6,306,835 | — | — | 6,306,835 |
| Total | $ 6,306,835 | $ 189,683,513 | — | $ 195,990,348 |
1 See above Schedule of Investments for values in each sector.
| | | | |
| Valuation Inputs Level 1 | Level 2 | Level 3 | Total |
| Derivate Financial Instruments2 | | | |
| Liabilities: | | | | |
| Interest rate | | | | |
| contracts | $ (152,472) | — | — | $ (152,472) |
2 Derivative financial instruments are financial futures contracts, which are valued
at the unrealized appreciation/depreciation on the instrument.
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 29 |
BlackRock MuniYield Pennsylvania Quality Fund (MPA)
Schedule of Investments July 31, 2011
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| Pennsylvania — 110.1% | | | |
| Corporate — 5.5% | | | |
| Beaver County IDA, Refunding RB, FirstEnergy, | | | |
| Mandatory Put Bonds, 3.38%, 1/01/35 (a) | $ 1,200 | $ 1,197,144 |
| Delaware County IDA Pennsylvania, Refunding RB, | | | |
| Water Facilities, Aqua Pennsylvania Inc. Project, | | | |
| Series B, AMT (NPFGC), 5.00%, 11/01/36 | | 2,520 | 2,487,769 |
| Montgomery County IDA Pennsylvania, RB, Philadelphia | | |
| Presbytery Homes, 6.63%, 12/01/30 | | 265 | 270,634 |
| Northumberland County IDA, Refunding RB, | | | |
| Aqua Pennsylvania Inc. Project, AMT (NPFGC), | | | |
| 5.05%, 10/01/39 | | 4,500 | 4,355,190 |
| Pennsylvania Economic Development Financing | | | |
| Authority, RB, Series A, Waste Management, Inc. | | | |
| Project, AMT, 5.10%, 10/01/27 | | 1,200 | 1,183,020 |
| | | | 9,493,757 |
| County/City/Special District/School District — 40.5% | | |
| Chambersburg Area School District, GO (NPFGC): | | | |
| 5.25%, 3/01/26 | | 2,115 | 2,234,159 |
| 5.25%, 3/01/27 | | 2,500 | 2,629,225 |
| City of Philadelphia Pennsylvania, GO, Refunding, | | | |
| Series A (AGM), 5.25%, 12/15/32 | | 7,000 | 7,171,500 |
| Connellsville Area School District, GO, Series B (AGM), | | |
| 5.00%, 11/15/37 | | 1,000 | 1,005,520 |
| County of York Pennsylvania, GO, 5.00%, 3/01/36 | | 400 | 407,592 |
| Delaware Valley Regional Financial Authority, RB, | | | |
| Series A (AMBAC), 5.50%, 8/01/28 | | 1,000 | 1,029,030 |
| East Stroudsburg Area School District, GO, Series A | | | |
| (NPFGC), 7.75%, 9/01/27 | | 2,000 | 2,402,860 |
| Erie County Conventional Center Authority, RB (NPFGC), | | |
| 5.00%, 1/15/36 | | 8,850 | 8,860,974 |
| Marple Newtown School District, GO (AGM), | | | |
| 5.00%, 6/01/31 | | 3,500 | 3,666,110 |
| Northeastern School District York County, GO, Series B | | |
| (NPFGC), 5.00%, 4/01/32 | | 1,585 | 1,625,782 |
| Philadelphia Redevelopment Authority, RB: | | | |
| Neighborhood Transformation, Series A (NPFGC), | | | |
| 5.50%, 4/15/22 | | 1,750 | 1,780,923 |
| Quality Redevelopment Neighborhood, Series B, | | | |
| AMT (FGIC), 5.00%, 4/15/27 | | 4,645 | 4,575,139 |
| Philadelphia School District, GO, Refunding, Series A | | | |
| (BHAC), 5.00%, 6/01/34 | | 1,000 | 1,025,810 |
| Philadelphia School District, GO: | | | |
| Series B (FGIC), 5.63%, 8/01/12 (b) | | 6,250 | 6,587,625 |
| Series E, 6.00%, 9/01/38 | | 4,800 | 5,059,872 |
| Philipsburg Osceola Area School District Pennsylvania, | | |
| GO (AGM), 5.00%, 4/01/41 | | 1,000 | 996,860 |
| Reading School District, GO (AGM), 5.00%, 1/15/29 | 4,000 | 4,133,800 |
| Shaler Area School District Pennsylvania, GO, CAB | | | |
| (Syncora), 4.81%, 9/01/30 (c) | | 6,145 | 2,261,421 |
| State Public School Building Authority, LRB, Philadelphia | | |
| School District Project (AGM), 5.25%, 6/01/13 | | 6,500 | 7,082,855 |
| Township of North Londonderry Pennsylvania, GO (AGM), | | |
| 4.75%, 9/01/40 | | 3,860 | 3,909,910 |
| York City School District, GO, Series A (Syncora), | | | |
| 5.25%, 6/01/22 | | 1,040 | 1,105,603 |
| | | | 69,552,570 |
| Education — 8.8% | | | |
| Adams County IDA, Refunding RB, Gettysburg College, | | |
| 5.00%, 8/15/26 | | 100 | 104,815 |
| Pennsylvania Higher Educational Facilities Authority, RB: | | |
| Drexel University, Series A, 5.25%, 5/01/41 | | 2,750 | 2,774,860 |
| Drexel University, Series A (NPFGC), 5.00%, 5/01/37 | 1,500 | 1,503,075 |
| Series AE (NPFGC), 4.75%, 6/15/32 | | 8,845 | 8,901,962 |
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| Pennsylvania (continued) | | | |
| Education (concluded) | | | |
| Pennsylvania Higher Educational Facilities Authority, | | | |
| Refunding RB, State System Higher Education, | | | |
| Series Al, 5.00%, 6/15/35 | $ 1,780 | $ 1,826,102 |
| | | | 15,110,814 |
| Health — 13.8% | | | |
| Allegheny County Hospital Development Authority, RB, | | |
| Health Center, UPMC Health, Series B (NPFGC), | | | |
| 6.00%, 7/01/26 | | 2,000 | 2,288,140 |
| Centre County Hospital Authority, RB, Mount Nittany | | | |
| Medical Center Project, 7.00%, 11/15/46 | | 2,020 | 2,176,126 |
| County of Lehigh Pennsylvania, RB, Lehigh Valley Health | | |
| Network, Series A (AGM), 5.00%, 7/01/33 | | 7,995 | 8,022,503 |
| Cumberland County Municipal Authority, RB, Diakon | | | |
| Lutheran, 6.38%, 1/01/39 | | 500 | 506,590 |
| Lycoming County Authority, Refunding RB, Susquehanna | | |
| Health System Project, 5.75%, 7/01/39 | | 1,160 | 1,093,973 |
| Monroe County Hospital Authority Pennsylvania, | | | |
| Refunding RB, Pocono Medical Center, | | | |
| 5.13%, 1/01/37 | | 1,265 | 1,177,525 |
| Montgomery County Higher Education & Health Authority, | | |
| Refunding RB, Abington Memorial Hospital, Series A, | | |
| 5.13%, 6/01/33 | | 1,760 | 1,718,077 |
| Montgomery County IDA Pennsylvania, RB, Acts | | | |
| Retirement Life Community: | | | |
| 4.50%, 11/15/36 | | 295 | 229,790 |
| Series A-1, 6.25%, 11/15/29 | | 235 | 242,015 |
| Philadelphia Hospitals & Higher Education Facilities | | | |
| Authority, Refunding RB, Presbyterian Medical Center, | | |
| 6.65%, 12/01/19 (d) | | 3,000 | 3,699,840 |
| Sayre Health Care Facilities Authority, Refunding RB, | | | |
| Guthrie Health, Series A, 5.88%, 12/01/31 | | 590 | 595,646 |
| South Fork Municipal Authority, Refunding RB, | | | |
| Conemaugh Valley Memorial, Series B (AGC), | | | |
| 5.38%, 7/01/35 | | 2,000 | 2,017,540 |
| | | | 23,767,765 |
| Housing — 2.7% | | | |
| Pennsylvania HFA, Refunding RB, AMT: | | | |
| S/F Mortgage, Series 92-A, 4.75%, 4/01/31 | | 710 | 685,306 |
| Series 99-A, 5.15%, 4/01/38 | | 800 | 794,208 |
| Philadelphia New Public Housing Authority, RB, Series A | | |
| (AGM), 5.50%, 12/01/18 | | 3,000 | 3,142,170 |
| | | | 4,621,684 |
| State — 6.2% | | | |
| Pennsylvania Turnpike Commission, RB, Series C of 2003 | | |
| Pennsylvania Turnpike (NPFGC), 5.00%, 12/01/32 | | 3,600 | 3,688,596 |
| State Public School Building Authority, RB (AGM): | | | |
| CAB, Corry Area School District, | | | |
| 4.85%, 12/15/22 (c) | | 1,640 | 1,009,912 |
| CAB, Corry Area School District, | | | |
| 4.45%, 12/15/23 (c) | | 1,980 | 1,143,213 |
| CAB, Corry Area School District, | | | |
| 4.89%, 12/15/24 (c) | | 1,980 | 1,073,615 |
| CAB, Corry Area School District, | | | |
| 4.92%, 12/15/25 (c) | | 1,770 | 903,904 |
| School District Philadelphia Project, Series B, | | | |
| 5.00%, 6/01/26 | | 1,500 | 1,553,145 |
| State Public School Building Authority, Refunding RB, | | | |
| Harrisburg School District Project, Series A (AGC), | | | |
| 5.00%, 11/15/33 | | 1,200 | 1,231,848 |
| | | | 10,604,233 |
See Notes to Financial Statements.
| | |
| 30 | ANNUAL REPORT | JULY 31, 2011 |
BlackRock MuniYield Pennsylvania Quality Fund (MPA)
Schedule of Investments (continued)
(Percentages shown are based on Net Assets)
| | | |
| | | Par | |
| Municipal Bonds | | (000) | Value |
| Pennsylvania (concluded) | | | |
| Transportation — 13.7% | | | |
| City of Philadelphia Pennsylvania, RB, Series A, | | | |
| 5.00%, 6/15/40 | $ 1,500 | $ 1,493,100 |
| Delaware River Port Authority, RB, Series D (AGC), | | | |
| 5.00%, 1/01/40 | | 1,560 | 1,566,318 |
| Pennsylvania Turnpike Commission, RB: | | | |
| Series A (AMBAC), 5.50%, 12/01/31 | | 7,800 | 8,120,970 |
| Series A (AMBAC), 5.25%, 12/01/32 | | 350 | 358,795 |
| Sub-Series A, 6.00%, 12/01/41 | | 700 | 728,735 |
| Sub-Series B (AGM), 5.25%, 6/01/39 | | 3,500 | 3,531,080 |
| Philadelphia Authority for Industrial Development, | | | |
| Refunding RB, Philadelphia Airport System Project, | | | |
| Series A, AMT (NPFGC): | | | |
| 5.50%, 7/01/17 | | 4,000 | 4,051,120 |
| 5.50%, 7/01/18 | | 3,655 | 3,702,369 |
| | | | 23,552,487 |
| Utilities — 18.9% | | | |
| Allegheny County Sanitation Authority, Refunding RB, | | | |
| Series A (NPFGC), 5.00%, 12/01/30 | | 5,000 | 5,085,400 |
| City of Philadelphia Pennsylvania, RB: | | | |
| 1998 General Ordinance, 4th Series (AGM), | | | |
| 5.00%, 8/01/32 | | 4,500 | 4,500,855 |
| Ninth Series, 5.25%, 8/01/40 | | 1,430 | 1,374,459 |
| Series A, 5.25%, 1/01/36 | | 700 | 708,113 |
| Series C (AGM), 5.00%, 8/01/40 | | 3,000 | 3,025,980 |
| Delaware County IDA Pennsylvania, RB, Pennsylvania | | | |
| Suburban Water Co. Project, Series A, AMT (AMBAC), | | |
| 5.15%, 9/01/32 | | 5,500 | 5,521,340 |
| Lycoming County Water & Sewer Authority, RB, (AGM), | | |
| 5.00%, 11/15/41 | | 400 | 396,884 |
| Northampton Boro Municipal Authority, RB (NPFGC), | | | |
| 5.00%, 5/15/34 | | 935 | 943,415 |
| Pennsylvania Economic Development Financing Authority, | | |
| RB, Philadelphia Biosolids Facility, 6.25%, 1/01/32 | 900 | 931,482 |
| Pennsylvania IDA, Refunding RB, Economic Development | | |
| (AMBAC), 5.50%, 7/01/20 | | 7,000 | 7,248,710 |
| Reading Area Water Authority Pennsylvania, RB (AGM), | | |
| 5.00%, 12/01/27 | | 2,680 | 2,802,556 |
| | | | 32,539,194 |
| Total Municipal Bonds in Pennsylvania | | | 189,242,504 |
| Guam — 2.4% | | | |
| County/City/Special District/School District — 0.5% | | |
| Territory of Guam, RB, Section 30, Series A, | | | |
| 5.63%, 12/01/29 | | 805 | 813,734 |
| Transportation — 1.4% | | | |
| Guam International Airport Authority, Refunding RB, | | | |
| General, Series C, AMT (NPFGC), 5.00%, 10/01/23 | 2,500 | 2,466,225 |
| Utilities — 0.5% | | | |
| Guam Power Authority, Refunding RB, Series A (AGM), | | |
| 5.00%, 10/01/37 | | 850 | 838,942 |
| Total Municipal Bonds in Guam | | | 4,118,901 |
| Puerto Rico — 0.7% | | | |
| State — 0.7% | | | |
| Commonwealth of Puerto Rico, GO, Refunding, Public | | |
| Improvement, Series A-4 (AGM), 5.25%, 7/01/30 | | 1,270 | 1,301,242 |
| Total Municipal Bonds in Puerto Rico | | | 1,301,242 |
| Total Municipal Bonds — 113.2% | | | 194,662,647 |
| | | |
| Municipal Bonds Transferred to | | Par | |
| Tender Option Bond Trusts (e) | | (000) | Value |
| Pennsylvania — 38.7% | | | |
| County/City/Special District/School District — 4.3% | | |
| East Stroudsburg Area School District, GO, Refunding | | |
| (AGM), 5.00%, 9/01/25 | $ 7,000 | $ 7,441,980 |
| Education — 4.0% | | | |
| Pennsylvania Higher Educational Facilities Authority, | | | |
| RB, University of Pennsylvania Health System, | | | |
| 5.75%, 8/15/41 | | 4,270 | 4,468,854 |
| University of Pittsburgh Pennsylvania, RB, Capital Project, | | |
| Series B, 5.00%, 9/15/28 | | 2,202 | 2,381,462 |
| | | | 6,850,316 |
| Health — 7.0% | | | |
| Geisinger Authority, RB: | | | |
| 5.13%, 6/01/34 | | 2,500 | 2,554,025 |
| 5.25%, 6/01/39 | | 3,128 | 3,196,782 |
| 5.13%, 6/01/41 | | 6,270 | 6,363,987 |
| | | | 12,114,794 |
| Housing — 1.6% | | | |
| Pennsylvania HFA, Refunding RB, AMT, 4.70%, 10/01/37 | 2,970 | 2,762,754 |
| State — 17.7% | | | |
| Commonwealth of Pennsylvania, GO, First Series, | | | |
| 5.00%, 3/15/28 | | 5,203 | 5,613,311 |
| Pennsylvania Turnpike Commission, RB, Series C of 2003 | | |
| Pennsylvania Turnpike (NPFGC), 5.00%, 12/01/32 | 10,000 | 10,246,100 |
| State Public School Building Authority, Refunding RB,, | | |
| School District of Philadelphia Project, Series B (AGM), | | |
| 5.00%, 6/01/26 | | 14,026 | 14,523,183 |
| | | | 30,382,594 |
| Transportation — 4.1% | | | |
| City of Philadelphia Pennsylvania, RB, AMT (AGM), | | | |
| 5.00%, 6/15/37 | | 7,500 | 6,965,625 |
| Total Municipal Bonds Transferred to | | | |
| Tender Option Bond Trusts — 38.7% | | | 66,518,063 |
| Total Long-Term Investments | | | |
| (Cost — $257,398,475) — 151.9% | | | 261,180,710 |
| Short-Term Securities | | Shares | |
| BIF Pennsylvania Municipal Money Fund, 0.00% (g)(f) 8,744,788 | 8,744,788 |
| Total Short-Term Securities | | | |
| (Cost — $8,744,788) — 5.1% | | | 8,744,788 |
| Total Investments (Cost — $266,143,263*) — 157.0% | | 269,925,498 |
| Other Assets Less Liabilities — 1.2% | | | 2,099,807 |
| Liability for TOB Trust Certificates, Including Interest | | |
| Expense and Fees Payable — (19.6)% | | | (33,787,548) |
| VRDP Shares, at Liquidation Value — (38.6)% | | | (66,300,000) |
| Net Assets Applicable to Common Shares — 100.0% | | $171,937,757 |
* The cost and unrealized appreciation (depreciation) of investments as of July 31,
2011, as computed for federal income tax purposes, were as follows:
| |
| Aggregate cost | $232,388,089 |
| Gross unrealized appreciation | $ 5,420,031 |
| Gross unrealized depreciation | (1,647,527) |
| Net unrealized appreciation | $ 3,772,504 |
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 31 |
BlackRock MuniYield Pennsylvania Quality Fund (MPA)
Schedule of Investments (concluded)
|
| (a) Variable rate security. Rate shown is as of report date. |
| (b) US government securities, held in escrow, are used to pay interest on this security, as |
| well as to retire the bond in full at the date indicated, typically at a premium to par. |
| (c) Represents a zero-coupon bond. Rate shown reflects the current yield as of |
| report date. |
| (d) Security is collateralized by Municipal or US Treasury obligations. |
| (e) Securities represent bonds transferred to a TOB in exchange for which the Fund |
| acquired residual interest certificates. These securities serve as collateral in a |
| financing transaction. See Note 1 of the Notes to Financial Statements for details |
| of municipal bonds transferred to TOBs. |
| (f) Investments in companies considered to be an affiliate of the Fund during the |
| year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, |
| as amended, were as follows: |
| | | | |
| | Shares Held | | Shares Held | |
| | at July 31, | Net | at July 31, | |
| Affiliate | 2010 | Activity | 2011 | Income |
| BIF Pennsylvania | | | | |
| Municipal | | | | |
| Money Fund | 8,508,134 | 236,655 | 8,744,788 | — |
(g) Represents the current yield as of report date.
• For Fund compliance purposes, the Fund’s sector classifications refer to any 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 Fund management.
These definitions may not apply for purposes of this report, which may combine
such sector sub-classifications for reporting ease.
• Financial futures contracts sold as of July 31, 2011 were as follows:
| | | | | |
| | | | | Notional | Unrealized |
| Contracts | Issue | Exchange | Expiration | Value | Depreciation |
| 10-Year US | Chicago Board | September | | |
| 70 | Treasury Note | of Trade | 2011 | $8,571,039 | $ (227,086) |
• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivative financial instruments. These inputs are categorized in
three broad levels for financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• 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 the
Fund’s own assumptions used in determining the fair value of investments and
derivative financial instruments)
The categorization of a value determined for investments and derivative financial
instruments is based on the pricing transparency of the investment and derivative
financial instrument and does not necessarily correspond to the Fund’s perceived
risk of investing in those securities. For information about the Fund’s policy regarding
valuation of investments and derivative financial instrument and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following tables summarize the inputs used as of July 31, 2011 in determining
the fair valuation of the Fund’s investments and derivative financial instruments:
| | | | |
| Valuation Inputs | Level 1 | Level 2 | Level 3 | Total |
| Assets: | | | | |
| Investments: | | | | |
| Long-Term | | | | |
| Investments1 | — | $ 261,180,710 | — | $ 261,180,710 |
| Short-Term | | | | |
| Securities | $ 8,744,788 | — | — | 8,744,788 |
| Total | $ 8,744,788 | $ 261,180,710 | — | $ 269,925,498 |
1 See above Schedule of Investments for values in each sector.
| | | | |
| Valuation Inputs Level 1 | Level 2 | Level 3 | Total |
| Derivate Financial Instruments2 | | | |
| Liabilities: | | | | |
| Interest rate | | | | |
| contracts | $ (227,086) | — | — | $ (227,086) |
2 Derivative financial instruments are financial futures contracts, which are valued
at the unrealized appreciation/depreciation on the instrument.
See Notes to Financial Statements.
| | |
| 32 | ANNUAL REPORT | JULY 31, 2011 |
| | | | | | |
| Statements of Assets and Liabilities | | | | | |
| | BlackRock | BlackRock | BlackRock | BlackRock | BlackRock | BlackRock |
| | MuniHoldings | MuniHoldings | MuniYield | MuniYield | MuniYield | MuniYield |
| | California | New Jersey | Investment | Michigan | New Jersey | Pennsylvania |
| | Quality | Quality | Quality | Quality | Quality | Quality |
| | Fund, Inc. | Fund, Inc. | Fund | Fund, Inc. | Fund, Inc. | Fund |
| July 31, 2011 | (MUC) | (MUJ) | (MFT) | (MIY) | (MJI) | (MPA) |
| Assets | | | | | | |
| Investments at value — unaffiliated1 | $1,004,520,293 | $ 483,131,336 | $ 179,935,781 | $ 416,454,893 | $ 189,683,513 | $ 261,180,710 |
| Investments at value — affiliated2 | 7,347,551 | 9,941,803 | 6,706,791 | 6,928,754 | 6,306,835 | 8,744,788 |
| Cash | — | 38,262 | — | — | — | — |
| Cash pledged as collateral for financial futures contracts | — | 175,000 | 40,000 | 150,000 | 62,040 | 115,000 |
| Interest receivable | 13,898,187 | 4,505,180 | 2,218,349 | 4,862,169 | 1,607,358 | 2,792,361 |
| Investments sold receivable | — | 3,047,219 | 1,012,244 | — | 634,528 | — |
| Deferred offering costs | — | 447,045 | — | 505,876 | 166,704 | 299,901 |
| TOB trust receivable | — | — | 500,000 | — | — | — |
| Income receivable — affiliated | 352 | — | — | — | — | — |
| Prepaid expenses | 25,700 | 15,487 | 9,558 | 29,074 | 4,560 | 24,610 |
| Other assets | 108,645 | — | — | — | — | — |
| Total assets | 1,025,900,728 | 501,301,332 | 190,422,723 | 428,930,766 | 198,465,538 | 273,157,370 |
| Accrued Liabilities | | | | | | |
| Investments purchased payable | 5,084,696 | — | 3,996,701 | — | — | — |
| Income dividends payable — Common Shares | 3,126,897 | 1,573,077 | 600,924 | 1,392,782 | 636,622 | 878,702 |
| Investment advisory fees payable | 416,457 | 222,556 | 78,078 | 180,869 | 83,098 | 114,959 |
| Margin variation payable | — | 133,000 | 35,625 | 114,000 | 55,812 | 83,125 |
| Interest expense and fees payable | 123,946 | 47,764 | 11,312 | 8,351 | 3,101 | 22,635 |
| Officer's and Directors' fees payable | 104,954 | 4,559 | 551 | 3,328 | 980 | 717 |
| Offering costs payable | — | — | — | 69,390 | — | 31,816 |
| Other accrued expenses payable | 196,256 | 273,530 | 69,883 | 45,795 | 120,594 | 22,754 |
| Total accrued liabilities | 9,053,206 | 2,254,486 | 4,793,074 | 1,814,515 | 900,207 | 1,154,708 |
| Other Liabilities | | | | | | |
| TOB trust certificates | 179,443,156 | 13,262,930 | 15,679,730 | 16,190,000 | 4,684,369 | 33,764,905 |
| VRDP Shares, at liquidation value of | | | | | | |
| $100,000 per share3,4 | — | 172,700,000 | — | 144,600,000 | 64,400,000 | 66,300,000 |
| Total other liabilities | 179,443,156 | 185,962,930 | 15,679,730 | 160,790,000 | 69,084,369 | 100,064,905 |
| Total Liabilities | 188,496,362 | 188,217,416 | 20,472,804 | 162,604,515 | 69,984,576 | 101,219,613 |
| AMPS at Redemption Value | | | | | | |
| $25,000 per share at liquidation preference, | | | | | | |
| plus unpaid dividends3,4 | 254,004,237 | — | 56,527,127 | — | — | — |
| Net Assets Applicable to Common Shareholders | $ 583,400,129 | $ 313,083,916 | $ 113,422,792 | $ 266,326,251 | $ 128,480,962 | $ 171,937,757 |
| Net Assets Applicable to Common Shareholders Consist of | | | | | |
| Paid-in capital5,6 | $ 584,137,285 | $ 298,856,823 | $ 117,993,284 | $ 263,568,602 | $ 124,667,995 | $ 170,089,240 |
| Undistributed net investment income | 12,027,500 | 6,799,663 | 2,052,104 | 4,320,295 | 3,176,174 | 2,578,207 |
| Accumulated net realized loss | (22,673,435) | (2,450,506) | (12,069,495) | (8,240,854) | (622,807) | (4,284,839) |
| Net unrealized appreciation/depreciation | 9,908,779 | 9,877,936 | 5,446,899 | 6,678,208 | 1,259,600 | 3,555,149 |
| Net Assets Applicable to Common Shareholders | $ 583,400,129 | $ 313,083,916 | $ 113,422,792 | $ 266,326,251 | $ 128,480,962 | $ 171,937,757 |
| Net asset value per Common Share | $ 14.27 | $ 14.73 | $ 13.40 | $ 14.63 | $ 14.53 | $ 14.97 |
| 1 Investments at cost — unaffiliated | $ 994,611,514 | $ 472,908,437 | $ 174,391,559 | $ 409,465,253 | $ 188,271,441 | $ 257,398,475 |
| 2 Investments at cost — affiliated | $ 7,347,551 | $ 9,941,803 | $ 6,706,791 | $ 6,928,754 | $ 6,306,835 | $ 8,744,788 |
| 3 AMPS/VRDP Shares outstanding: | | | | | | |
| Par value $0.05 per share | 10,160 | — | 2,261 | — | — | 663 |
| Par value $0.10 per share | — | 1,727 | — | 1,446 | 644 | — |
| 4 AMPS/VRDP Shares authorized | 15,600 | 9,847 | 1 million | 8,046 | 3,584 | 1,000,663 |
| 5 Common Shares outstanding | 40,874,458 | 21,257,794 | 8,463,721 | 18,206,301 | 8,841,971 | 11,486,303 |
| 6 Common Shares authorized | 200 million | 200 million | unlimited | 200 million | 200 million | unlimited |
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 33 |
| | | | | | |
| Statements of Operations | | | | | | |
| | BlackRock | BlackRock | BlackRock | BlackRock | BlackRock | BlackRock |
| | MuniHoldings | MuniHoldings | MuniYield | MuniYield | MuniYield | MuniYield |
| | California | New Jersey | Investment | Michigan | New Jersey | Pennsylvania |
| | Quality | Quality | Quality | Quality | Quality | Quality |
| | Fund, Inc. | Fund, Inc. | Fund | Fund, Inc. | Fund, Inc. | Fund |
| Year Ended July 31, 2011 | (MUC) | (MUJ) | (MFT) | (MIY) | (MJI) | (MPA) |
| Investment Income | | | | | | |
| Interest | $ 46,700,697 | $ 23,231,167 | $ 9,089,928 | $ 20,561,348 | $ 9,427,827 | $ 12,866,710 |
| Income — affiliated | 13,962 | 2,629 | 5,621 | — | 1,068 | — |
| Total income | 46,714,659 | 23,233,796 | 9,095,549 | 20,561,348 | 9,428,895 | 12,866,710 |
| Expenses | | | | | | |
| Investment advisory | 5,518,001 | 2,718,584 | 919,590 | 2,113,149 | 979,507 | 1,361,203 |
| Remarketing fees on Preferred Shares | 378,675 | 262,679 | 84,936 | 206,747 | 100,576 | 97,046 |
| Professional | 192,110 | 144,110 | 70,333 | 135,348 | 74,952 | 75,094 |
| Liquidity fees | — | 107,946 | — | 471,618 | 40,254 | 202,632 |
| Accounting services | 108,754 | 80,919 | 40,727 | 68,513 | 43,062 | 46,169 |
| Officer and Directors | 73,312 | 35,215 | 12,788 | 35,912 | 17,022 | 19,154 |
| Transfer agent | 67,170 | 63,983 | 37,836 | 57,669 | 36,324 | 47,689 |
| Printing | 51,480 | 27,142 | 11,426 | 26,756 | 14,263 | 18,518 |
| Custodian | 43,036 | 28,101 | 13,275 | 26,398 | 12,364 | 15,902 |
| Registration | 14,398 | 10,914 | 9,561 | 9,519 | 9,659 | 9,519 |
| Miscellaneous | 97,472 | 81,484 | 44,826 | 80,335 | 45,073 | 49,940 |
| Total expenses excluding interest expense, fees and | | | | | | |
| amortization of offering costs | 6,544,408 | 3,561,077 | 1,245,298 | 3,231,964 | 1,373,046 | 1,942,866 |
| Interest expense, fees and amortization of offering costs1 | 1,339,060 | 168,080 | 128,455 | 357,522 | 60,433 | 368,122 |
| Total expenses | 7,883,468 | 3,729,157 | 1,373,753 | 3,589,486 | 1,433,479 | 2,310,988 |
| Less fees waived by advisor | (724,414) | (125,789) | (2,218) | (15,182) | (9,877) | (7,819) |
| Total expenses after fees waived | 7,159,054 | 3,603,368 | 1,371,535 | 3,574,304 | 1,423,602 | 2,303,169 |
| Net investment income | 39,555,605 | 19,630,428 | 7,724,014 | 16,987,044 | 8,005,293 | 10,563,541 |
| Realized and Unrealized Gain (Loss) | | | | | | |
| Net realized gain (loss) from: | | | | | | |
| Investments | (7,054,539) | (78,387) | (1,729,296) | 1,488,460 | 574,701 | 662,072 |
| Financial futures contracts | (2,247,321) | (979,102) | (244,529) | (822,730) | (402,795) | (518,733) |
| | (9,301,860) | (1,057,489) | (1,973,825) | 665,730 | 171,906 | 143,339 |
| Net change in unrealized appreciation/depreciation on: | | | | | | |
| Investments | (3,975,773) | (8,534,682) | (2,142,965) | (5,287,265) | (4,168,036) | (4,315,913) |
| Financial futures contracts | 107,141 | (344,963) | (97,323) | (311,432) | (152,472) | (227,086) |
| | (3,868,632) | (8,879,645) | (2,240,288) | (5,598,697) | (4,320,508) | (4,542,999) |
| Total realized and unrealized loss | (13,170,492) | (9,937,134) | (4,214,113) | (4,932,967) | (4,148,602) | (4,399,660) |
| Dividends to AMPS Shareholders From | | | | | | |
| Net investment income | (931,589) | (627,047) | (308,831) | (651,184) | (394,067) | (313,247) |
| Net Increase in Net Assets Applicable to | | | | | | |
| Common Shareholders Resulting from Operations | $ 25,453,524 | $ 9,066,247 | $ 3,201,070 | $ 11,402,893 | $ 3,462,624 | $ 5,850,634 |
| 1 Related to TOBs and/or VRDP Shares. | | | | | | |
See Notes to Financial Statements.
| | |
| 34 | ANNUAL REPORT | JULY 31, 2011 |
| | | | |
| Statements of Changes in Net Assets | | | | |
| | BlackRock MuniHoldings | BlackRock MuniHoldings |
| | California Quality Fund, Inc. (MUC) | New Jersey Quality Fund, Inc. (MUJ) |
| | Year Ended July 31, | Year Ended July 31, |
| Increase (Decrease) in Net Assets Applicable to Common Shareholders: | 2011 | 2010 | 2011 | 2010 |
| Operations | | | | |
| Net investment income | $ 39,555,605 | $ 37,720,022 | $ 19,630,428 | $ 21,238,876 |
| Net realized gain (loss) | (9,301,860) | 12,432 | (1,057,489) | 115,574 |
| Net change in unrealized appreciation/depreciation | (3,868,632) | 50,346,834 | (8,879,645) | 14,444,238 |
| Dividends and distributions to AMPS Shareholders from: | | | | |
| Net investment income | (931,589) | (1,056,149) | (627,047) | (701,553) |
| Net realized gain | — | — | — | (30,004) |
| Net increase in net assets applicable to Common | | | | |
| Shareholders resulting from operations | 25,453,524 | 87,023,139 | 9,066,247 | 35,067,131 |
| Dividends and Distributions to Common Shareholders From | | | | |
| Net investment income | (36,787,012) | (32,433,883) | (18,852,930) | (17,941,752) |
| Net realized gain | — | — | — | (300,750) |
| Decrease in net assets resulting from dividends and distributions to Common Shareholders | (36,787,012) | (32,433,883) | (18,852,930) | (18,242,502) |
| Capital Share Transactions | | | | |
| Reinvestment of common dividends | — | — | 189,682 | — |
| Net Assets Applicable to Common Shareholders | | | | |
| Total increase (decrease) in net assets applicable to Common Shareholders | (11,333,488) | 54,589,256 | (9,597,001) | 16,824,629 |
| Beginning of year | 594,733,617 | 540,144,361 | 322,680,917 | 305,856,288 |
| End of year | $ 583,400,129 | $ 594,733,617 | $ 313,083,916 | $ 322,680,917 |
| Undistributed net investment income | $ 12,027,500 | $ 9,839,827 | $ 6,799,663 | $ 6,646,637 |
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 35 |
| | | | |
| Statements of Changes in Net Assets | | | | |
| | BlackRock MuniYield | BlackRock MuniYield |
| | Investment Quality Fund (MFT) | Michigan Quality Fund, Inc. (MIY) |
| | Year Ended July 31, | Year Ended July 31, |
| Increase (Decrease) in Net Assets Applicable to Common Shareholders: | 2011 | 2010 | 2011 | 2010 |
| Operations | | | | |
| Net investment income | $ 7,724,014 | $ 7,787,174 | $ 16,987,044 | $ 17,856,258 |
| Net realized gain (loss) | (1,973,825) | (253,144) | 665,730 | 1,485,878 |
| Net change in unrealized appreciation/depreciation | (2,240,288) | 8,538,990 | (5,598,697) | 15,566,856 |
| Dividends to AMPS Shareholders from net investment income | (308,831) | (335,411) | (651,184) | (835,377) |
| Net increase in net assets applicable to Common | | | | |
| Shareholders resulting from operations | 3,201,070 | 15,737,609 | 11,402,893 | 34,073,615 |
| Dividends to Common Shareholders From | | | | |
| Net investment income | (7,210,628) | (6,905,867) | (16,686,075) | (16,094,370) |
| Capital Share Transactions | | | | |
| Reinvestment of common dividends | 91,502 | 75,047 | — | — |
| Net Assets Applicable to Common Shareholders | | | | |
| Total increase (decrease) in net assets applicable to Common Shareholders | (3,918,056) | 8,906,789 | (5,283,182) | 17,979,245 |
| Beginning of year | 117,340,848 | 108,434,059 | 271,609,433 | 253,630,188 |
| End of year | $ 113,422,792 | $ 117,340,848 | $ 266,326,251 | $ 271,609,433 |
| Undistributed net investment income | $ 2,052,104 | $ 1,855,567 | $ 4,320,295 | $ 4,676,060 |
See Notes to Financial Statements.
| | |
| 36 | ANNUAL REPORT | JULY 31, 2011 |
| | | | |
| Statements of Changes in Net Assets | | | | |
| | BlackRock MuniYield | BlackRock MuniYield |
| | New Jersey Quality Fund, Inc. (MJI) | Pennsylvania Quality Fund (MPA) |
| | Year Ended July 31, | Year Ended July 31, |
| Increase (Decrease) in Net Assets Applicable to Common Shareholders: | 2011 | 2010 | 2011 | 2010 |
| Operations | | | | |
| Net investment income | $ 8,005,293 | $ 8,588,358 | $ 10,563,541 | $ 10,608,015 |
| Net realized gain | 171,906 | 421,725 | 143,339 | 930,379 |
| Net change in unrealized appreciation/depreciation | (4,320,508) | 8,014,923 | (4,542,999) | 10,792,131 |
| Dividends and distributions to AMPS Shareholders from: | | | | |
| Net investment income | (394,067) | (375,004) | (313,247) | (373,148) |
| Net realized gain | — | (93,892) | — | — |
| Net increase in net assets applicable to Common | | | | |
| Shareholders resulting from operations | 3,462,624 | 16,556,110 | 5,850,634 | 21,957,377 |
| Dividends and Distributions to Common Shareholders From | | | | |
| Net investment income | (7,636,680) | (7,425,642) | (10,531,527) | (9,345,182) |
| Net realized gain | — | (883,128) | — | — |
| Decrease in net assets resulting from dividends and distributions to | | | | |
| Common Shareholders | (7,636,680) | (8,308,770) | (10,531,527) | (9,345,182) |
| Capital Share Transactions | | | | |
| Reinvestment of common dividends and distributions | 373,793 | 227,441 | 88,230 | — |
| Net Assets Applicable to Common Shareholders | | | | |
| Total increase (decrease) in net assets applicable to Common Shareholders | (3,800,263) | 8,474,781 | (4,592,663) | 12,612,195 |
| Beginning of year | 132,281,225 | 123,806,444 | 176,530,420 | 163,918,225 |
| End of year | $ 128,480,962 | $ 132,281,225 | $ 171,937,757 | $ 176,530,420 |
| Undistributed net investment income | $ 3,176,174 | $ 3,198,975 | $ 2,578,207 | $ 2,904,565 |
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 37 |
| | | | | |
| Statements of Cash Flows | | | | | |
| | BlackRock | BlackRock | BlackRock | BlackRock | BlackRock |
| | MuniHoldings | MuniHoldings | MuniYield | MuniYield | MuniYield |
| | California | New Jersey | Michigan | New Jersey | Pennsylvania |
| | Quality | Quality | Quality | Quality | Quality |
| | Fund, Inc. | Fund, Inc. | Fund, Inc. | Fund, Inc. | Fund |
| Year Ended July 31, 2011 | (MUC) | (MUJ) | (MIY) | (MJI) | (MPA) |
| Cash Provided by Operating Activities | | | | | |
| Net increase in net assets resulting from operations, | | | | | |
| excluding dividends to AMPS Shareholders | $ 26,385,113 | $ 9,693,294 | $ 12,054,077 | $ 3,856,691 | $ 6,163,881 |
| Adjustments to reconcile net increase in net assets resulting | | | | | |
| from operations to net cash provided by operating activities: | | | | | |
| (Increase) decrease in interest receivable | (2,043,469) | 304,976 | 112,821 | 69,648 | (135,195) |
| Increase in income receivable – affiliated | (4) | — | — | — | — |
| Increase in other assets | (13,408) | — | — | — | — |
| Decrease (increase) in prepaid expenses | 12,221 | 2,518 | (8,699) | 3,540 | (11,579) |
| Decrease (increase) in cash pledged as collateral | | | | | |
| for financial futures contracts | 84,400 | (175,000) | (150,000) | (62,040) | (115,000) |
| Increase (decrease) in investment advisory fees payable | 28,369 | (11,300) | (7,712) | (3,842) | (4,677) |
| Increase (decrease) in interest expense and fees payable | 11,299 | 37,900 | (459) | (371) | (2,618) |
| Increase (decrease) in other affiliates payable | (5,983) | (3,189) | (2,713) | (1,234) | (1,732) |
| Increase (decrease) in other accrued expenses payable | 48,617 | 172,393 | (27,797) | 70,079 | (35,111) |
| Increase (decrease) in margin variation payable | (35,938) | 133,000 | 114,000 | 55,812 | 83,125 |
| Increase (decrease) in Officer’s and Directors’ fees payable | 7,371 | 3,847 | 2,877 | 771 | 331 |
| Net realized and unrealized loss on investments | 11,030,312 | 8,613,069 | 3,798,805 | 3,593,335 | 3,653,841 |
| Amortization of premium and accretion of discount on investments | 3,015,790 | (104,193) | 584,295 | (382,151) | 284,217 |
| Proceeds from sales of long-term investments | 237,539,571 | 67,980,640 | 71,583,623 | 25,748,148 | 39,738,064 |
| Purchases of long-term investments | (300,091,989) | (58,060,298) | (65,049,188) | (23,287,890) | (33,673,318) |
| Net proceeds from sales (purchases) of short-term securities | 63,923,415 | (8,824,274) | (5,194,171) | (1,757,581) | (236,654) |
| Cash provided by operating activities | 39,895,687 | 19,763,383 | 17,809,759 | 7,902,915 | 15,707,575 |
| Cash Used for Financing Activities | | | | | |
| Cash receipts from TOB trust certificates | 15,500,000 | — | — | — | 5,334,936 |
| Cash payments for TOB trust certificates | (17,911,477) | — | — | — | (10,015,167) |
| Cash payments on redemption of AMPS | — | (172,700,000) | (144,650,000) | (64,475,000) | (66,350,000) |
| Cash receipts from issuance of VRDP Shares | — | 172,700,000 | 144,600,000 | 64,400,000 | 66,300,000 |
| Increase in deferred offering costs | — | (447,045) | (505,876) | (166,704) | (299,901) |
| Increase in offering costs payable | — | — | 69,390 | — | 31,816 |
| Cash dividends paid to Common Shareholders | (36,541,764) | (18,641,086) | (16,658,766) | (7,261,119) | (10,391,196) |
| Cash dividends paid to AMPS Shareholders | (942,446) | (636,990) | (664,507) | (400,092) | (318,063) |
| Cash used for financing activities | (39,895,687) | (19,725,121) | (17,809,759) | (7,902,915) | (15,707,575) |
| Cash | | | | | |
| Net increase in cash | — | 38,262 | — | — | — |
| Cash at beginning of year | — | — | — | — | — |
| Cash at end of year | — | $ 38,262 | — | — | — |
| Cash Flow Information | | | | | |
| Cash paid during the year for interest and fees | $ 1,327,761 | $ 92,276 | $ 255,601 | $ 46,670 | $ 335,746 |
| Noncash Financing Activities | | | | | |
| Capital shares issued in reinvestment of dividends paid to Common Shareholders | — | $ 189,682 | — | $ 373,793 | $ 88,230 |
A Statement of Cash Flows is presented when a Fund has a significant amount of borrowings during the year, based on the average borrowings outstanding in relation to total
average assets.
See Notes to Financial Statements.
| | |
| 38 | ANNUAL REPORT | JULY 31, 2011 |
Financial Highlights
BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
| | | | | | | |
| | | | | | | | |
| | | | Period | | | | |
| | Year Ended July 31, | July 1, 2009 | Year Ended June 30, | |
| | | | to July 31, | | | | |
| | 2011 | 2010 | 2009 | 2009 | 2008 | | 2007 |
| Per Share Operating Performance | | | | | | | |
| Net asset value, beginning of period | $ 14.55 | $ 13.21 | $ 13.05 | $ 13.84 | $ 14.48 | $ 14.44 |
| Net investment income1 | 0.97 | 0.92 | 0.08 | 0.90 | 0.96 | | 1.01 |
| Net realized and unrealized gain (loss) | (0.33) | 1.24 | 0.14 | (0.89) | (0.60) | | 0.07 |
| Dividends to AMPS Shareholders from | | | | | | | |
| net investment income | (0.02) | (0.03) | (0.00)2 | (0.15) | (0.32) | | (0.31) |
| Net increase (decrease) from investment operations | 0.62 | 2.13 | 0.22 | (0.14) | 0.04 | | 0.77 |
| Dividends to Common Shareholders from | | | | | | | |
| net investment income | (0.90) | (0.79) | (0.06) | (0.65) | (0.68) | | (0.73) |
| Net asset value, end of period | $ 14.27 | $ 14.55 | $ 13.21 | $ 13.05 | $ 13.84 | $ 14.48 |
| Market price, end of period | $ 13.15 | $ 14.04 | $ 12.18 | $ 11.07 | $ 12.24 | $ 13.92 |
| Total Investment Return3 | | | | | | | |
| Based on net asset value | 4.88% | 16.96% | 1.75%4 | 0.21% | 0.64% | | 5.46% |
| Based on market price | 0.16% | 22.40% | 10.59%4 | (3.88)% | (7.41)% | | 5.02% |
| Ratios to Average Net Assets Applicable to Common Shareholders | | | | | | | |
| Total expenses5 | 1.38% | 1.23% | 1.34%6,7 | 1.59% | 1.58% | | 1.66% |
| Total expenses after fees waived5 | 1.25% | 1.12% | 1.19%6,7 | 1.40% | 1.50% | | 1.60% |
| Total expenses after fees waived and excluding interest | | | | | | | |
| expense and fees5,8 | 1.02% | 0.98% | 1.06%6,7 | 1.02% | 1.14% | | 1.12% |
| Net investment income5 | 6.93% | 6.52% | 6.59%6,7 | 7.08% | 6.72% | | 6.81% |
| Dividends to AMPS Shareholders | 0.16% | 0.18% | 0.23%6 | 1.15% | 2.22% | | 2.11% |
| Net investment income to Common Shareholders | 6.77% | 6.34% | 6.36%6,7 | 5.93% | 4.50% | | 4.70% |
| Supplemental Data | | | | | | | |
| Net assets applicable to Common Shareholders, | | | | | | | |
| end of period (000) | $ 583,400 | $ 594,734 | $ 540,144 | $ 533,256 | $ 565,757 | $ 592,053 |
| AMPS outstanding at $25,000 liquidation | | | | | | | |
| preference, end of period (000) | $ 254,000 | $ 254,000 | $ 254,000 | $ 287,375 | $ 287,375 | $ 390,000 |
| Portfolio turnover | 24% | 25% | 1% | 19% | 43% | | 35% |
| Asset coverage per AMPS at $25,000 | | | | | | | |
| liquidation preference, end of period | $ 82,421 | $ 83,538 | $ 78,166 | $ 71,392 | $ 74,225 | $ 62,965 |
1 Based on average Common Shares outstanding.
2 Amount is less than $(0.01) per share.
3 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable,
total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
4 Aggregate total investment return.
5 Do not reflect the effect of dividends to AMPS Shareholders.
6 Annualized.
7 Certain non-recurring expenses have been included in the ratio but not annualized. If these expenses were annualized, the ratios of total expenses, total expenses after fees waived,
total expenses after fees waived excluding interest expense and fees, net investment income and net investment income to Common Shareholders would have been 1.43%, 1.28%,
1.15%, 6.50% and 6.27%, respectively.
8 Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 39 |
Financial Highlights
BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)
| | | | | | |
| | Year Ended July 31, |
| | 2011 | 2010 | 2009 | | 2008 | 2007 |
| Per Share Operating Performance | | | | | | |
| Net asset value, beginning of year | $ 15.19 | $ 14.40 | $ 14.35 | $ 14.86 | $ 14.91 |
| Net investment income1 | 0.93 | 1.00 | 0.98 | | 0.93 | 1.03 |
| Net realized and unrealized gain (loss) | (0.47) | 0.67 | (0.11) | | (0.47) | (0.03) |
| Dividends and distributions to AMPS Shareholders from: | | | | | | |
| Net investment income | (0.03) | (0.03) | (0.16) | | (0.31) | (0.31) |
| Net realized gain | — | (0.00)2 | — | | — | — |
| Net increase from investment operations | 0.43 | 1.64 | 0.71 | | 0.15 | 0.69 |
| Dividends and distributions to Common Shareholders from: | | | | | | |
| Net investment income | (0.89) | (0.84) | (0.66) | | (0.66) | (0.74) |
| Net realized gain | — | (0.01) | — | | — | — |
| Total dividends and distributions to Common Shareholders | (0.89) | (0.85) | (0.66) | | (0.66) | (0.74) |
| Net asset value, end of year | $ 14.73 | $ 15.19 | $ 14.40 | $ 14.35 | $ 14.86 |
| Market price, end of year | $ 13.74 | $ 15.05 | $ 13.38 | $ 12.93 | $ 14.40 |
| Total Investment Return3 | | | | | | |
| Based on net asset value | 3.28% | 11.95% | 6.13% | | 1.35% | 4.71% |
| Based on market price | (2.77)% | 19.37% | 9.45% | | (5.76)% | 0.99% |
| Ratios to Average Net Assets Applicable to Common Shareholders | | | | | | |
| Total expenses4 | 1.21% | 1.13% | 1.30% | | 1.30% | 1.45% |
| Total expenses after fees waived4 | 1.17% | 1.08% | 1.21% | | 1.23% | 1.40% |
| Total expenses after fees waived and excluding interest expense, | | | | | | |
| fees and amortization of offering costs4,5 | 1.11% | 1.05% | 1.10% | | 1.15% | 1.17% |
| Net investment income4 | 6.36% | 6.71% | 7.04% | | 6.22% | 6.77% |
| Dividends to AMPS Shareholders | 0.21% | 0.22% | 1.13% | | 2.11% | 2.03% |
| Net investment income to Common Shareholders | 6.15% | 6.49% | 5.91% | | 4.11% | 4.74% |
| Supplemental Data | | | | | | |
| Net assets applicable to Common Shareholders, end of year (000) | $ 313,084 | $ 322,681 | $ 305,856 | $ 304,947 | $ 315,769 |
| AMPS outstanding at $25,000 liquidation preference, end of year (000) | — | $ 172,700 | $ 172,700 | $ 176,700 | $ 203,000 |
| VRDP Shares outstanding at $100,000 liquidation value, end of year (000) | $ 172,700 | — | — | | — | — |
| Portfolio turnover | 12% | 13% | 9% | | 12% | 17% |
| Asset coverage per AMPS at $25,000 liquidation preference, end of year | — | $ 71,713 | $ 69,2786 | $ 68,1526 | $ 63,8986 |
| Asset coverage per VRDP Share at $100,000 liquidation value, end of year | $ 281,288 | — | — | | — | — |
1 Based on average Common Shares outstanding.
2 Amount is less than $(0.01) per share.
3 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where
applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
4 Do not reflect the effect of dividends to AMPS Shareholders.
5 Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 1 and Note 8 of the Notes to Financial Statements for details of
municipal bonds transferred to TOBs and VRDP Shares, respectively.
6 Amounts have been recalculated to conform with current year presentation.
See Notes to Financial Statements.
| | |
| 40 | ANNUAL REPORT | JULY 31, 2011 |
Financial Highlights
BlackRock MuniYield Investment Quality Fund (MFT)
| | | | | | |
| | | | | | | |
| | | | | Period | | |
| | | | November 1, 2007 | |
| | Year Ended July 31, | to July 31, | Year Ended October 31, |
| | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 |
| Per Share Operating Performance | | | | | | |
| Net asset value, beginning of period | $ 13.87 | $ 12.83 | $ 13.42 | $ 14.38 | $ 14.91 | $ 14.72 |
| Net investment income1 | 0.91 | 0.92 | 0.94 | 0.71 | 0.95 | 0.97 |
| Net realized and unrealized gain (loss) | (0.49) | 0.98 | (0.70) | (0.97) | (0.49) | 0.24 |
| Dividends to AMPS Shareholders from net investment income | (0.04) | (0.04) | (0.15) | (0.22) | (0.31) | (0.27) |
| Net increase (decrease) from investment operations | 0.38 | 1.86 | 0.09 | (0.48) | 0.15 | 0.94 |
| Dividends to Common Shareholders from net investment income | (0.85) | (0.82) | (0.68) | (0.48) | (0.68) | (0.75) |
| Net asset value, end of period | $ 13.40 | $ 13.87 | $ 12.83 | $ 13.42 | $ 14.38 | $ 14.91 |
| Market price, end of period | $ 12.39 | $ 14.28 | $ 11.80 | $ 11.75 | $ 12.74 | $ 14.21 |
| Total Investment Return2 | | | | | | |
| Based on net asset value | 3.20% | 14.99% | 1.94% | (2.97)%3 | 1.39% | 6.87% |
| Based on market price | (7.32)% | 28.72% | 7.08% | (4.11)%3 | (5.75)% | 5.73% |
| Ratios to Average Net Assets Applicable to Common Shareholders | | | | | | |
| Total expenses4 | 1.23% | 1.19% | 1.40% | 1.51%5 | 1.54% | 1.46% |
| Total expenses after fees waived4 | 1.23% | 1.19% | 1.37% | 1.49%5 | 1.52% | 1.45% |
| Total expenses after fees waived and excluding interest expense and fees4,6 | 1.11% | 1.09% | 1.19% | 1.18%5 | 1.20% | 1.17% |
| Net investment income4 | 6.91% | 6.80% | 7.54% | 6.60%5 | 6.53% | 6.58% |
| Dividends to AMPS Shareholders | 0.28% | 0.29% | 1.23% | 2.07%5 | 2.13% | 1.87% |
| Net investment income to Common Shareholders | 6.63% | 6.51% | 6.31% | 4.53%5 | 4.40% | 4.71% |
| Supplemental Data | | | | | | |
| Net assets applicable to Common Shareholders, end of period (000) | $ 113,423 | $ 117,341 | $ 108,434 | $ 113,449 | $ 121,574 | $ 126,042 |
| AMPS outstanding at $25,000 liquidation preference, end of period (000) | $ 56,525 | $ 56,525 | $ 56,525 | $ 62,250 | $ 72,000 | $ 72,000 |
| Portfolio turnover | 29% | 38% | 43% | 21% | 26% | 34% |
| Asset coverage per AMPS at $25,000 liquidation preference, end of period | $ 75,165 | $ 76,900 | $ 72,961 | $ 70,569 | $ 67,220 | $ 68,769 |
1 Based on average Common Shares outstanding.
2 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where
applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
3 Aggregate total investment return.
4 Do not reflect the effect of dividends to AMPS Shareholders.
5 Annualized.
6 Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 41 |
Financial Highlights
BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)
| | | | | | | | |
| | | | | | | | | |
| | | | | | Period | | |
| | | | | November 1, 2007 | | |
| | | Year Ended July 31, | | to July 31, | | Year Ended October 31, |
| | 2011 | 2010 | | 2009 | 2008 | | 2007 | 2006 |
| Per Share Operating Performance | | | | | | | | |
| Net asset value, beginning of period | $ 14.92 | $ 13.93 | $ 14.16 | $ 15.03 | $ 15.45 | $ 15.32 |
| Net investment income1 | 0.93 | 0.98 | | 1.00 | 0.70 | | 1.06 | 1.04 |
| Net realized and unrealized gain (loss) | (0.26) | 0.94 | | (0.40) | (0.82) | | (0.45) | 0.22 |
| Dividends to AMPS Shareholders from net investment income | (0.04) | (0.05) | | (0.16) | (0.23) | | (0.32) | (0.29) |
| Net increase (decrease) from investment operations | 0.63 | 1.87 | | 0.44 | (0.35) | | 0.29 | 0.97 |
| Dividends to Common Shareholders from net investment income | (0.92) | (0.88) | | (0.67) | (0.52) | | (0.71) | (0.84) |
| Net asset value, end of period | $ 14.63 | $ 14.92 | $ 13.93 | $ 14.16 | $ 15.03 | $ 15.45 |
| Market price, end of period | $ 13.39 | $ 14.55 | $ 12.25 | $ 12.30 | $ 13.40 | $ 14.67 |
| Total Investment Return2 | | | | | | | | |
| Based on net asset value | 4.78% | 14.31% | | 4.66% | (2.02)%3 | | 2.30% | 6.64% |
| Based on market price | (1.67)% | 26.76% | | 5.95% | (4.54)%3 | | (3.95)% | 1.32% |
| Ratios to Average Net Assets Applicable to Common Shareholders | | | | | | | | |
| Total expenses4 | 1.37% | 1.07% | | 1.27% | 1.42%5 | | 1.55% | 1.62% |
| Total expenses after fees waived4 | 1.36% | 1.07% | | 1.25% | 1.40%5 | | 1.55% | 1.61% |
| Total expenses after fees waived and excluding interest expense, | | | | | | | | |
| fees and amortization of offering costs4,6 | 1.23% | 1.03% | | 1.09% | 1.13%5 | | 1.12% | 1.11% |
| Net investment income4 | 6.48% | 6.72% | | 7.37% | 6.19%5 | | 6.95% | 6.84% |
| Dividends to AMPS Shareholders | 0.25% | 0.31% | | 1.19% | 2.05%5 | | 2.12% | 1.87% |
| Net investment income to Common Shareholders | 6.23% | 6.41% | | 6.18% | 4.14%5 | | 4.83% | 4.97% |
| Supplemental Data | | | | | | | | |
| Net assets applicable to Common Shareholders, end of period (000) | $ 266,326 | $ 271,609 | $ 253,630 | $ 257,806 | $ 273,593 | $ 281,350 |
| AMPS outstanding at $25,000 liquidation preference, end of period (000) | — | $ 144,650 | $ 144,650 | $ 144,650 | $ 165,000 | $ 165,000 |
| VRDP Shares outstanding at $100,000 liquidation value, end of period (000) . | $ 144,600 | — | | — | — | | — | — |
| Portfolio turnover | 16% | 15% | | 9% | 21% | | 10% | 15% |
| Asset coverage per AMPS at $25,000 liquidation preference, end of period | — | $ 71,945 | $ 68,838 | $ 69,563 | $ 66,461 | $ 67,638 |
| Asset coverage per VRDP share at $100,000 liquidation value, end of period | $ 284,181 | — | | — | — | | — | — |
1 Based on average Common Shares outstanding.
2 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where
applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
3 Aggregate total investment return.
4 Do not reflect the effect of dividends to AMPS Shareholders.
5 Annualized.
6 Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 1 and Note 8 of the Notes to Financial Statements for details of
municipal bonds transferred to TOBs and VRDP Shares, respectively.
See Notes to Financial Statements.
| | |
| 42 | ANNUAL REPORT | JULY 31, 2011 |
Financial Highlights
BlackRock MuniYield New Jersey Quality Fund, Inc. (MJI)
| | | | | | | |
| | | | | | | | |
| | | | | Period | | |
| | | | | November 1, 2007 | | |
| | Year Ended July 31, | to July 31, | | Year Ended October 31, |
| | 2011 | 2010 | 2009 | 2008 | | 2007 | 2006 |
| Per Share Operating Performance | | | | | | | |
| Net asset value, beginning of period | $ 15.00 | $ 14.07 | $ 14.23 | $ 15.02 | $ 15.42 | $ 15.07 |
| Net investment income1 | 0.91 | 0.98 | 0.96 | 0.69 | | 0.96 | 0.97 |
| Net realized and unrealized gain (loss) | (0.48) | 0.94 | (0.27) | (0.76) | | (0.42) | 0.36 |
| Dividends and distributions to AMPS Shareholders from: | | | | | | | |
| Net investment income | (0.04) | (0.04) | (0.15) | (0.21) | | (0.28) | (0.25) |
| Net realized gain | — | (0.01) | (0.01) | (0.01) | | (0.00)2 | — |
| Net increase (decrease) from investment operations | 0.39 | 1.87 | 0.53 | (0.29) | | 0.26 | 1.08 |
| Dividends and distributions to Common Shareholders from: | | | | | | | |
| Net investment income | (0.86) | (0.84) | (0.67) | (0.49) | | (0.65) | (0.73) |
| Net realized gain | — | (0.10) | (0.02) | (0.01) | | (0.01) | — |
| Total dividends and distributions to Common Shareholders | (0.86) | (0.94) | (0.69) | (0.50) | | (0.66) | (0.73) |
| Net asset value, end of period | $ 14.53 | $ 15.00 | $ 14.07 | $ 14.23 | $ 15.02 | $ 15.42 |
| Market price, end of period | $ 13.16 | $ 14.92 | $ 12.82 | $ 12.81 | $ 13.70 | $ 14.96 |
| Total Investment Return3 | | | | | | | |
| Based on net asset value | 3.10% | 13.90% | 4.94% | (1.67)%4 | | 2.00% | 7.50% |
| Based on market price | (6.12)% | 24.34% | 6.22% | (2.95)%4 | | (4.10)% | 7.28% |
| Ratios to Average Net Assets Applicable to Common Shareholders | | | | | | | |
| Total expenses5 | 1.13% | 1.06% | 1.22% | 1.24%6 | | 1.37% | 1.59% |
| Total expenses after fees waived5 | 1.12% | 1.05% | 1.21% | 1.24%6 | | 1.37% | 1.59% |
| Total expenses after fees waived and excluding interest expense, | | | | | | | |
| fees and amortization of offering costs5,7 | 1.08% | 1.02% | 1.11% | 1.18%6 | | 1.17% | 1.15% |
| Net investment income5 | 6.32% | 6.64% | 7.10% | 6.18%6 | | 6.30% | 6.46% |
| Dividends to AMPS Shareholders | 0.31% | 0.29% | 1.12% | 1.87%6 | | 1.81% | 1.63% |
| Net investment income to Common Shareholders | 6.01% | 6.35% | 5.98% | 4.31%6 | | 4.49% | 4.83% |
| Supplemental Data | | | | | | | |
| Net assets applicable to Common Shareholders, end of period (000) | $ 128,481 | $ 132,281 | $ 123,806 | $ 125,233 | $ 132,174 | $ 135,767 |
| AMPS outstanding at $25,000 liquidation preference, end of period (000) | — | $ 64,475 | $ 64,475 | $ 65,700 | $ 73,500 | $ 73,500 |
| VRDP Shares outstanding at $100,000 liquidation value, end of period (000) . | $ 64,400 | — | — | — | | — | — |
| Portfolio turnover | 12% | 12% | 8% | 13% | | 23% | 11% |
| Asset coverage per AMPS at $25,000 liquidation preference, end of period | — | $ 76,294 | $ 73,008 | $ 72,666 | $ 69,965 | $ 71,185 |
| Asset coverage per VRDP share at $100,000 liquidation value, end of period | $ 299,505 | — | — | — | | — | — |
1 Based on average Common Shares outstanding.
2 Amount is less than $(0.01) per share.
3 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applica-
ble, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
4 Aggregate total investment return.
5 Do not reflect the effect of dividends to AMPS Shareholders.
6 Annualized.
7 Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 1 and Note 8 of the Notes to Financial Statements for details of municipal
bonds transferred to TOBs and VRDP Shares, respectively.
See Notes to Financial Statements.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 43 |
Financial Highlights
BlackRock MuniYield Pennsylvania Quality Fund (MPA)
| | | | | | | |
| | | | | | | | |
| | | | | Period | | |
| | | | | November 1, 2007 | | Year Ended October 31, |
| | | Year Ended July 31, | | to July 31, | | | |
| | 2011 | 2010 | 2009 | 2008 | | 2007 | 2006 |
| Per Share Operating Performance | | | | | | | |
| Net asset value, beginning of period | $ 15.38 | $ 14.28 | $ 14.30 | $ 15.49 | $ 15.89 | $ 15.57 |
| Net investment income1 | 0.92 | 0.92 | 0.93 | 0.71 | | 1.01 | 1.01 |
| Net realized and unrealized gain (loss) | (0.38) | 1.02 | (0.15) | (1.18) | | (0.40) | 0.36 |
| Dividends to AMPS Shareholders from net investment income | (0.03) | (0.03) | (0.14) | (0.22) | | (0.32) | (0.27) |
| Net increase (decrease) from investment operations | 0.51 | 1.91 | 0.64 | (0.69) | | 0.29 | 1.10 |
| Dividends to Common Shareholders from net investment income | (0.92) | (0.81) | (0.66) | (0.50) | | (0.69) | (0.78) |
| Capital charges with respect to the issuance of Preferred Shares | — | — | — | — | | — | (0.00)2 |
| Net asset value, end of period | $ 14.97 | $ 15.38 | $ 14.28 | $ 14.30 | $ 15.49 | $ 15.89 |
| Market price, end of period | $ 13.94 | $ 15.26 | $ 12.87 | $ 12.43 | $ 13.67 | $ 14.60 |
| Total Investment Return3 | | | | | | | |
| Based on net asset value | 3.84% | 14.18% | 5.88% | (4.18)%4 | | 2.19% | 7.52% |
| Based on market price | (2.55)% | 25.70% | 9.78% | (5.62)%4 | | (1.85)% | 3.16% |
| Ratios to Average Net Assets Applicable to Common Shareholders | | | | | | | |
| Total expenses5 | 1.37% | 1.15% | 1.27% | 1.50%6 | | 1.72% | 1.70% |
| Total expenses after fees waived5 | 1.36% | 1.15% | 1.25% | 1.48%6 | | 1.72% | 1.69% |
| Total expenses after fees waived and excluding interest expense, | | | | | | | |
| fees and amortization of offering costs5,7 | 1.14% | 1.00% | 1.06% | 1.13%6 | | 1.13% | 1.13% |
| Net investment income5 | 6.24% | 6.17% | 6.82% | 6.18%6 | | 6.44% | 6.49% |
| Dividends to AMPS Shareholders | 0.18% | 0.22% | 1.00% | 1.93%6 | | 2.02% | 1.76% |
| Net investment income to Common Shareholders | 6.06% | 5.95% | 5.82% | 4.25%6 | | 4.42% | 4.73% |
| Supplemental Data | | | | | | | |
| Net assets applicable to Common Shareholders, end of period (000) | $ 171,938 | $ 176,530 | $ 163,918 | $ 164,119 | $ 177,807 | $ 182,402 |
| AMPS outstanding at $25,000 liquidation preference, end of period (000) | — | $ 66,350 | $ 66,350 | $ 77,400 | $ 102,000 | $ 102,000 |
| VRDP Shares outstanding at $100,000 liquidation value, end of period (000) . | $ 66,300 | — | — | — | | — | — |
| Portfolio turnover | 11% | 6% | 18% | 24% | | 35% | 25% |
| Asset coverage per AMPS at $25,000 liquidation preference, end of period | — | $ 91,517 | $ 86,765 | $ 78,018 | $ 68,585 | $ 69,717 |
| Asset coverage per VRDP share at $100,000 liquidation value, end of period | $ 359,333 | — | — | — | | — | — |
1 Based on average Common Shares outstanding.
2 Amount is less than $(0.01) per share.
3 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where
applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
4 Aggregate total investment return.
5 Do not reflect the effect of dividends to AMPS Shareholders.
6 Annualized.
7 Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 1 and Note 8 of the Notes to Financial Statements for details of
municipal bonds transferred to TOBs and VRDP Shares, respectively.
See Notes to Financial Statements.
| | |
| 44 | ANNUAL REPORT | JULY 31, 2011 |
Notes to Financial Statements
1. Organization and Significant Accounting Policies:
BlackRock MuniHoldings California Quality Fund, Inc. (“MUC”), formerly
BlackRock MuniHoldings California Insured Fund, Inc., BlackRock
MuniHoldings New Jersey Quality Fund, Inc. (“MUJ”), formerly BlackRock
MuniHoldings New Jersey Insured Fund. Inc., BlackRock MuniYield
Investment Quality Fund (“MFT”), formerly BlackRock MuniYield Insured
Investment Fund, BlackRock MuniYield Michigan Quality Fund, Inc. (“MIY”),
formerly BlackRock MuniYield Michigan Insured Fund, Inc., BlackRock
MuniYield New Jersey Quality Fund, Inc. (“MJI”), formerly MuniYield New
Jersey Insured Fund, Inc., and BlackRock MuniYield Pennsylvania Quality
Fund (“MPA”), formerly MuniYield Pennsylvania Insured Fund (collectively,
the “Funds”), are registered under the Investment Company Act of 1940, as
amended (the “1940 Act”), as non-diversified, closed-end management
investment companies. MUC, MUJ, MIY and MJI are organized as Maryland
corporations. MFT and MPA are organized as Massachusetts business
trusts. The Funds' financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America
("US GAAP"), which may require management to make estimates and
assumptions that affect the reported amounts and disclosures in the finan-
cial statements. Actual results could differ from those estimates. The Board
of Directors and the Board of Trustees of the Funds are referred to through-
out this report as the “Board of Directors” or the “Board”. The Funds deter-
mine and make available for publication the NAV of their Common Shares
on a daily basis.
The following is a summary of significant accounting policies followed by
the Funds:
Valuation: US GAAP defines fair value as the price the Funds would receive
to sell an asset or pay to transfer a liability in an orderly transaction
between market participants at the measurement date. The Funds fair value
their financial instruments at market value using independent dealers or
pricing services under policies approved by each Fund’s Board. 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, pric-
ing services may use certain information with respect to transactions in
such investments, quotations from dealers, pricing matrixes, market trans-
actions in comparable investments and information with respect to various
relationships between investments. Financial futures contracts traded on
exchanges are valued at their last sale price. Investments in open-end reg-
istered investment companies are valued at net asset value each business
day. Short-term securities with remaining maturities of 60 days or less may
be valued at amortized cost, which approximates fair value.
In the event that application of these methods of valuation results in a
price for an investment which is deemed not to be representative of the
market value of such investment or is not available, the investment will be
valued in accordance with a policy approved by the Board as reflecting fair
value (“Fair Value Assets”). When determining the price for Fair Value
Assets, the investment advisor and/or the sub-advisor seeks to determine
the price that each Fund might reasonably expect to receive from the cur-
rent sale of that asset in an arm’s-length transaction. Fair value determina-
tions shall be based upon all available factors that the investment advisor
and/or sub-advisor deems relevant. The pricing of all Fair Value Assets is
subsequently reported to the Board or a committee thereof.
Zero-Coupon Bonds: The Funds may invest in zero-coupon bonds, which
are normally issued at a significant discount from face value and do not
provide for periodic interest payments. Zero-coupon bonds may experience
greater volatility in market value than similar maturity debt obligations
which provide for regular interest payments.
Forward Commitments and When-Issued Delayed Delivery Securities: The
Funds may purchase securities on a when-issued basis and may purchase
or sell securities on a forward commitment basis. Settlement of such trans-
actions normally occurs within a month or more after the purchase or sale
commitment is made. The Funds may purchase securities under such con-
ditions with the intention of actually acquiring them, but may enter into a
separate agreement to sell the securities before the settlement date. Since
the value of securities purchased may fluctuate prior to settlement, the
Funds may be required to pay more at settlement than the security is
worth. In addition, the Funds are not entitled to any of the interest earned
prior to settlement. When purchasing a security on a delayed delivery basis,
the Funds assume the rights and risks of ownership of the security, includ-
ing the risk of price and yield fluctuations. In the event of default by the
counterparty, the Funds' maximum amount of loss is the unrealized appre-
ciation of unsettled when-issued transactions, which is shown in the
Schedules of Investments.
Municipal Bonds Transferred to TOBs: The Funds leverage their assets
through the use of TOBs. A TOB is established by a third party sponsor
forming a special purpose entity, into which one or more funds, or an agent
on behalf of the funds, transfers municipal bonds. Other funds managed by
the investment advisor may also contribute municipal bonds to a TOB into
which a Fund has contributed bonds. A TOB typically issues two classes of
beneficial interests: short-term floating rate certificates, which are sold to
third party investors, and residual certificates (“TOB Residuals”), which are
generally issued to the participating funds that made the transfer. The TOB
Residuals held by a Fund include the right of a Fund (1) to cause the hold-
ers of a proportional share of the short-term floating rate certificates to
tender their certificates at par, including during instances of a rise in short-
term interest rates, and (2) to transfer, within seven days, a corresponding
share of the municipal bonds from the TOB to a Fund. The TOB may also be
terminated without the consent of a Fund upon the occurrence of certain
events as defined in the TOB agreements. Such termination events may
include the bankruptcy or default of the municipal bond, a substantial
downgrade in credit quality of the municipal bond, the inability of the TOB
to obtain quarterly or annual renewal of the liquidity support agreement, a
substantial decline in market value of the municipal bond or the inability to
remarket the short-term floating rate certificates to third party investors.
During the year ended July 31, 2011, no TOBs that the Funds participated
in were terminated without the consent of the Funds.
The cash received by the TOB from the sale of the short-term floating rate
certificates, less transaction expenses, is paid to a Fund, which typically
invests the cash in additional municipal bonds. Each Fund's transfer of the
municipal bonds to a TOB is accounted for as a secured borrowing, there-
fore the municipal bonds deposited into a TOB are presented in the Funds'
| | |
| ANNUAL REPORT | JULY 31, 2011 | 45 |
Notes to Financial Statements (continued)
Schedules of Investments and the proceeds from the issuance of the short-
term floating rate certificates are shown as TOB trust certificates under
other liabilities in the Statements of Assets and Liabilities.
Interest income, including amortization and accretion of premiums and dis-
counts, from the underlying municipal bonds is recorded by the Funds on
an accrual basis. Interest expense incurred on the secured borrowing and
other expenses related to remarketing, administration and trustee services
to a TOB are shown as interest expense, fees and amortization of offering
costs in the Statements of Operations. The short-term floating rate certifi-
cates have interest rates that generally reset weekly and their holders have
the option to tender certificates to the TOB for redemption at par at each
reset date. At July 31, 2011, the aggregate value of the underlying munici-
pal bonds transferred to TOBs, the related liability for TOB trust certificates
and the range of interest rates on the liability for TOB trust certificates were
as follows:
| | | |
| | Underlying | Liability | |
| | Municipal Bonds | for TOB Trust | Range of |
| | Transferred to TOBs | Certificates | Interest Rates |
| MUC | $343,676,700 | $179,443,156 | 0.08% – 0.14% |
| MUJ | $ 22,220,446 | $ 13,262,930 | 0.11% – 0.17% |
| MFT | $ 30,229,342 | $ 15,679,730 | 0.08% – 0.22% |
| MIY | $ 31,737,233 | $ 16,190,000 | 0.11% – 0.21% |
| MJI | $ 7,938,089 | $ 4,684,369 | 0.11% – 0.17% |
| MPA | $ 66,518,063 | $ 33,764,905 | 0.12% – 0.34% |
For the year ended July 31, 2011, the Funds' average TOB trust certificates
outstanding and the daily weighted average interest rate, including fees,
were as follows:
| | |
| | Average TOB | Daily Weighted |
| | Trust Certificates | Average |
| | Outstanding | Interest Rate |
| MUC | $179,603,970 | 0.75% |
| MUJ | $ 13,262,930 | 0.69% |
| MFT | $ 15,884,148 | 0.81% |
| MIY | $ 16,190,000 | 0.68% |
| MJI | $ 4,684,369 | 0.68% |
| MPA | $ 36,712,946 | 0.79% |
Should short-term interest rates rise, the Funds' investments in TOBs may
adversely affect the Funds' net investment income and dividends to
Common Shareholders. Also, fluctuations in the market values of municipal
bonds deposited into the TOB may adversely affect the Funds' net asset
values per share.
Segregation and Collateralization: In cases in which the 1940 Act and the
interpretive positions of the Securities and Exchange Commission (“SEC”)
require that the Funds either deliver collateral or segregate assets in con-
nection with certain investments (e.g., financial futures contracts), the
Funds will, consistent with SEC rules and/or certain interpretive letters
issued by the SEC, segregate collateral or designate on their books and
records cash or liquid securities having a market value at least equal to the
amount that would otherwise be required to be physically segregated.
Furthermore, based on requirements and agreements with certain
exchanges and third party broker-dealers, each party to such transactions
has requirements to deliver/deposit securities as collateral for certain
investments.
Investment Transactions and Investment Income: For financial reporting
purposes, investment transactions are recorded on the dates the transac-
tions are entered into (the trade dates). Realized gains and losses on
investment transactions are determined on the identified cost basis.
Dividend income is recorded on the ex-dividend dates. Interest income,
including amortization and accretion of premiums and discounts on debt
securities, is recognized on the accrual basis.
Dividends and Distributions: Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on
the ex-dividend dates. The amount and timing of dividends and distribu-
tions are determined in accordance with federal income tax regulations,
which may differ from US GAAP. Dividends and distributions to AMPS and
VRDP Shareholders are accrued and determined as described in Note 7.
Income Taxes: It is each Fund's policy to comply with the requirements
of the Internal Revenue Code of 1986, as amended, applicable to regu-
lated investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no federal income tax
provision is required.
Each Fund files US federal and various state and local tax returns. No
income tax returns are currently under examination. The statute of limita-
tions on the Funds' US federal tax returns remains open for the two years
ended July 31, 2011, the period ended July 31, 2009 and for the year
ended June 30, 2009 for MUC, for each of the four years ended July 31,
2011 for MUJ and for each of the three years ended July 31, 2011 and
period ended July 31, 2008 for MFT, MIY, MJI and MPA. The statutes of limi-
tations on each Fund’s state and local tax returns may remain open for an
additional year depending upon the jurisdiction. Management does not
believe there are any uncertain tax positions that require recognition of a
tax liability.
Recent Accounting Standard: In May 2011, the Financial Accounting
Standards Board issued amended guidance to improve disclosure about
fair value measurements which will require the following disclosures for fair
value measurements categorized as Level 3: quantitative information about
the unobservable inputs and assumptions used in the fair value measure-
ment, a description of the valuation policies and procedures and a narra-
tive description of sensitivity of the fair value measurement to changes in
unobservable inputs and the interrelationships between those unobserv-
able inputs. In addition, the amounts and reasons for all transfers in and
out of Level 1 and Level 2 will be required to be disclosed. The amended
guidance is effective for financial statements for fiscal years beginning after
December 15, 2011, and interim periods within those fiscal years.
Management is evaluating the impact of this guidance on the Funds’ finan-
cial statements and disclosures.
Deferred Compensation and BlackRock Closed-End Share Equivalent
Investment Plan: Under the deferred compensation plan approved by each
Fund's Board, independent Directors (“Independent Directors”) may defer a
portion of their annual complex-wide compensation. Deferred amounts
earn an approximate return as though equivalent dollar amounts had been
invested in common shares of certain other BlackRock Closed-End Funds
selected by the Independent Directors. This has approximately the same
| | |
| 46 | ANNUAL REPORT | JULY 31, 2011 |
Notes to Financial Statements (continued)
economic effect for the Independent Directors as if the Independent
Directors had invested the deferred amounts directly in certain other
BlackRock Closed-End Funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of each
Fund. Each Fund may, however, elect to invest in common shares of certain
other BlackRock Closed-End Funds selected by the Independent Directors
in order to match its deferred compensation obligations. Investments to
cover each Fund's deferred compensation liability, if any, are included in
other assets in the Statements of Assets and Liabilities. Dividends and dis-
tributions from the BlackRock Closed-End Fund investments under the plan
are included in income — affiliated in the Statements of Operations.
Offering Costs: Certain Funds incurred costs in connection with its issuance
of VRDP Shares, which were recorded as a deferred charge and will be
amortized over the 30-year life of the VRDP Shares with the exception of
upfront fees paid to the liquidity provider which are amortized over the life
of the liquidity agreement. Amortization of these costs is included in inter-
est expense, fees and amortization of offering costs in the Statements of
Operations.
Other: Expenses directly related to a Fund are charged to that Fund. Other
operating expenses shared by several funds are pro rated among those
funds on the basis of relative net assets or other appropriate methods.
The Funds have an arrangement with the custodians whereby fees may be
reduced by credits earned on uninvested cash balances, which, if applica-
ble, are shown as fees paid indirectly in the Statements of Operations. The
custodians impose fees on overdrawn cash balances, which can be offset
by accumulated credits earned or may result in additional custody charges.
2. Derivative Financial Instruments:
The Funds engage in various portfolio investment strategies using derivative
contracts both to increase the returns of the Funds and to economically
hedge, or protect, their exposure to certain risks such as interest rate risk.
These contracts may be transacted on an exchange.
Losses may arise if the value of the contract decreases due to an unfavor-
able change in the market rates or values of the underlying instrument or if
the counterparty does not perform under the contract. Counterparty risk
related to exchange-traded financial futures contracts is deemed to be
minimal due to the protection against defaults provided by the exchange
on which these contracts trade.
Financial Futures Contracts: The Funds purchase or sell financial futures
contracts and options on financial futures contracts to gain exposure to, or
economically hedge against, changes in interest rates (interest rate risk).
Financial futures contracts are agreements between the Funds and the
counterparty to buy or sell a specific quantity of an underlying instrument
at a specified price and at a specified date. Depending on the terms of the
particular contract, futures contracts are settled either through physical
delivery of the underlying instrument on the settlement date or by payment
of a cash settlement amount on the settlement date. Pursuant to the con-
tract, the Funds agree to receive from or pay to the broker an amount of
cash equal to the daily fluctuation in value of the contract. Such receipts or
payments are known as margin variation and are recorded by the Funds as
unrealized appreciation or depreciation. When the contract is closed, the
Funds record a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it
was closed. The use of financial futures contracts involves the risk of an
imperfect correlation in the movements in the price of financial futures
contracts, interest rates and the underlying assets.
Derivative Financial Instruments Categorized by Risk Exposure:
| | | | | |
| | Fair Values of Derivative Financial Instruments as of July 31, 2011 | | |
| | Liability Derivatives | | | |
| | MUJ | MFT | MIY | MJI | MPA |
| | Statement of Assets | | | |
| | and Liabilities Location | | | Value |
| | Net unrealized | | | | |
| Interest rate contracts | appreciation/depreciation* $ (344,963) | $ (97,323) | $ (311,432) | $ (152,472) | $ (227,086) |
| * Includes cumulative appreciation/depreciation on financial futures contracts as reported in the Schedules of Investments. Only current day’s margin variation is reported within the |
| Statements of Assets and Liabilities. |
| | | | | | | |
| | The Effect of Derivative Financial Instruments in the Statements of Operations | | |
| | | Year Ended July 31, 2011 | | | | |
| | | Net Realized Loss from | | | | |
| | MUC | MUJ | | MFT | MIY | MJI | MPA |
| Interest rate contracts: | | | | | | | |
| Financial futures contracts | $ (2,247,321) | $ (979,102) | $ (244,529) | $ (822,730) | $ (402,795) | $ (518,733) |
| | | | | | |
| | Net Change in Unrealized Appreciation/Depreciation on | |
| | MUC | MUJ | MFT | MIY | MJI | MPA |
| Interest rate contracts: | | | | | | |
| Financial futures contracts | $ 107,141 | $ (344,963) | $ (97,323) | $ (311,432) | $ (152,472) | $ (227,086) |
For the year ended July 31, 2011, the average quarterly balances of outstanding derivative financial instruments were as follows:
| | | | | | |
| | MUC | MUJ | MFT | MIY | MJI | MPA |
| Financial futures contracts: | | | | | | |
| Average number of contracts sold | 50 | 56 | 15 | 48 | 24 | 32 |
| Average notional value of contracts sold | $ 5,925,686 | $ 6,751,394 | $ 1,836,807 | $ 5,782,971 | $ 2,831,246 | $ 3,831,580 |
| | |
| ANNUAL REPORT | JULY 31, 2011 | 47 |
Notes to Financial Statements (continued)
3. Investment Advisory Agreement and Other Transactions
with Affiliates:
The PNC Financial Services Group, Inc. ("PNC") and Barclays Bank PLC
("Barclays") are the largest stockholders of BlackRock, Inc. ("BlackRock").
Due to the ownership structure, PNC is an affiliate of the Funds for 1940
Act purposes, but Barclays is not.
Each Fund entered into an Investment Advisory Agreement with BlackRock
Advisors, LLC (the “Manager”), the Funds' investment advisor, an indirect,
wholly owned subsidiary of BlackRock, to provide investment advisory and
administration services. The Manager is responsible for the management
of each Fund's portfolio and provides the necessary personnel, facilities,
equipment and certain other services necessary to the operations of each
Fund. For such services, each Fund pays the Manager a monthly fee based
on a percentage of each Fund’s average daily net assets at the following
annual rates:
| |
| MUC | 0.55% |
| MUJ | 0.55% |
| MFT | 0.50% |
| MIY | 0.50% |
| MJI | 0.50% |
| MPA | 0.50% |
Average daily net assets are the average daily value of each Fund’s total
assets minus the sum of its accrued liabilities.
The Manager voluntarily agreed to waive its investment advisory fees by the
amount of investment advisory fees each Fund pays to the Manager indi-
rectly through its investment in affiliated money market funds, however the
Manager does not waive its investment advisory fees by the amount of
investment advisory fees paid through each Fund's investment in other
affiliated investment companies, if any. These amounts are shown as, or
included in, fees waived by advisor in the Statements of Operations. For
the year ended July 31, 2011, the amounts waived were as follows:
| |
| MUC | $36,803 |
| MUJ | $20,423 |
| MFT | $ 2,218 |
| MIY | $15,182 |
| MJI | $ 9,877 |
| MPA | $ 7,819 |
The Manager, for MUC and MUJ, has voluntarily agreed to waive its invest-
ment advisory fee on the proceeds of the Preferred Shares and TOBs that
exceed 35% of the respective Fund’s net assets applicable to Common
Shareholders. These amounts are included in fees waived by advisor in the
Statements of Operations. For the year ended July 31, 2011, the amounts
waived were as follows:
| |
| MUC | $687,611 |
| MUJ | $105,366 |
The Manager entered into a sub-advisory agreement with BlackRock
Investment Management, LLC (“BIM”), an affiliate of the Manager. The
Manager pays BIM for services it provides, a monthly fee that is a percent-
age of the investment advisory fees paid by each Fund to the Manager.
For the year ended July 31, 2011, the Funds reimbursed the Manager for
certain accounting services, which are included in accounting services in
the Statements of Operations. The reimbursements were as follows:
| |
| MUC | $ 8,355 |
| MUJ | $40,140 |
| MFT | $ 1,522 |
| MIY | $ 3,448 |
| MJI | $ 1,634 |
| MPA | $ 2,239 |
Effective January 1, 2011, the Funds no longer reimburse the Manager for
accounting services.
Certain officers and/or directors of the Funds are officers and/or directors
of BlackRock or its affiliates. The Funds reimburse the Manager for com-
pensation paid to the Funds' Chief Compliance Officer.
4. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended July 31, 2011, were as follows:
| | |
| | Purchases | Sales |
| MUC | $296,081,305 | $237,040,613 |
| MUJ | $ 58,060,298 | $ 66,931,314 |
| MFT | $ 55,325,892 | $ 51,420,703 |
| MIY | $ 65,049,188 | $ 71,583,623 |
| MJI | $ 23,287,890 | $ 26,116,289 |
| MPA | $ 30,619,018 | $ 39,738,064 |
5. Income Tax Information:
Reclassifications: US GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax report-
ing. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of July 31, 2011 attributable
to amortization methods on fixed income securities, non-deductible expenses, the expiration of capital loss carryforwards and the sale of bonds received
from TOBs were reclassified to the following accounts:
| | | | | | |
| | MUC | MUJ | MFT | MIY | MJI | MPA |
| Paid-in capital | $ (1,543,437) | $ (2,575) | — | $ (7,414) | $ (2,653) | $ (5,758) |
| Undistributed net investment income | $ 350,669 | $ 2,575 | $ (8,018) | $ (5,550) | $ 2,653 | $ (45,125) |
| Accumulated net realized loss | $ 1,192,768 | — | $ 8,018 | $ 12,964 | — | $ 50,883 |
| | |
| 48 | ANNUAL REPORT | JULY 31, 2011 |
Notes to Financial Statements (continued)
The tax character of distributions paid during the fiscal years ended July 31, 2011 and July 31, 2010 was as follows:
| | | | | | | |
| | | MUC | MUJ | MFT | MIY | MJI | MPA |
| Tax-exempt Income | 7/31/2011 | $ 37,718,601 | $ 19,556,821 | $ 7,519,459 | $ 17,584,477 | $ 8,053,155 | $ 10,809,279 |
| | 7/31/2010 | 33,490,032 | 18,643,305 | 7,241,278 | 16,929,747 | 7,778,168 | 9,718,330 |
| Ordinary Income | 7/31/2011 | — | — | — | — | — | 111,850 |
| | 7/31/2010 | — | — | — | — | 34,535 | — |
| Long term capital gains | 7/31/2011 | — | — | — | — | — | — |
| | 7/31/2010 | — | 330,754 | — | — | 964,963 | — |
| Total distributions | 7/31/2011 | $ 37,718,601 | $ 19,556,821 | $ 7,519,459 | $ 17,584,477 | $ 8,053,155 | $ 10,921,129 |
| | 7/31/2010 | $ 33,490,032 | $ 18,974,059 | $ 7,241,278 | $ 16,929,747 | $ 8,777,666 | $ 9,718,330 |
As of July 31, 2011, the tax components of accumulated net earnings (losses) were as follows:
| | | | | | | |
| | MUC | MUJ | MFT | MIY | | MJI | MPA |
| Undistributed tax-exempt income | $ 11,599,623 | $ 6,383,703 | $ 1,967,630 | $ 3,960,031 | $ 2,749,091 | $ 2,504,581 |
| Undistributed ordinary income | 7,183 | 3 | 4 | 285,451 | | 280,292 | 174 |
| Capital loss carryforwards | (10,854,001) | (566,673) | (9,918,934) | (7,547,110) | | (341,211) | (3,892,390) |
| Net unrealized gains (losses)* | (1,489,961) | 8,410,060 | 3,380,808 | 6,059,277 | | 1,124,795 | 3,236,152 |
| Total | $ (737,156) | $ 14,227,093 | $ (4,570,492) | $ 2,757,649 | $ 3,812,967 | $ 1,848,517 |
| * The differences between book-basis and tax-basis net unrealized gains (losses) were attributable primarily to the tax deferral of losses on wash sales, the tax deferral of losses on |
| straddles, amortization methods for premiums and discounts on fixed income securities, the realization for tax purposes of unrealized gains/losses on certain futures contracts, |
| the deferral of post-October capital losses for tax purposes, the treatment of residual interests in TOBs and the deferral of compensation to directors. | | |
As of July 31, 2011, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates
as follows:
| | | | | | |
| Expires July 31, | MUC | MUJ | MFT | MIY | MJI | MPA |
| 2012 | — | — | $ 1,910,577 | $ 3,826,164 | — | — |
| 2016 | $ 2,097,897 | — | 659,619 | 1,689,814 | — | — |
| 2017 | 8,756,104 | — | 993,919 | 2,031,132 | — | $ 2,948,179 |
| 2018 | — | — | 6,354,819 | | — | 893,908 |
| 2019 | — | $ 566,673 | — | — | $ 341,211 | 50,303 |
| Total | $ 10,854,001 | $ 566,673 | $ 9,918,934 | $ 7,547,110 | $ 341,211 | $ 3,892,390 |
Under the recently enacted Regulated Investment Company Modernization Act of 2010, capital losses incurred by the Fund after July 31, 2011 will not be
subject to expiration. In addition, these losses must be utilized prior to the losses incurred in pre-enactment taxable years.
6. Concentration, Market and Credit Risk:
MUC, MUJ, MIY, MJI, and MPA invest a substantial amount of their assets in
issuers located in a single state or limited number of states. Please see the
Schedules of Investments for concentrations in specific states.
Many municipalities insure repayment of their bonds, which may reduce the
potential for loss due to credit risk. The market value of these bonds may
fluctuate for other reasons, including market perception of the value of
such insurance, and there is no guarantee that the insurer will meet
its obligation.
In the normal course of business, the Funds invest in securities and enter
into transactions where risks exist due to fluctuations in the market (market
risk) or failure of the issuer of a security to meet all its obligations (issuer
credit risk). The value of securities held by the Funds may decline in
response to certain events, including those directly involving the issuers
whose securities are owned by the Funds; conditions affecting the general
economy; overall market changes; local, regional or global political, social
or economic instability; and currency and interest rate and price fluctua-
tions. Similar to issuer credit risk, the Funds may be exposed to counter-
party credit risk, or the risk that an entity with which the Funds have
unsettled or open transactions may fail to or be unable to perform on its
commitments. The Funds manage counterparty credit risk by entering into
transactions only with counterparties that they believe have the financial
resources to honor their obligations and by monitoring the financial stability
of those counterparties. Financial assets, which potentially expose the
Funds to market, issuer and counterparty credit risks, consist principally of
financial instruments and receivables due from counterparties. The extent
of the Funds' exposure to market, issuer and counterparty credit risks with
respect to these financial assets is generally approximated by their value
recorded in the Funds' Statements of Assets and Liabilities, less any
collateral held by the Funds.
As of July 31, 2011, MUC and MFT invested a significant portion of their
assets in securities in the County/City/Special District/School District and
Utilities sectors. MUJ and MJI invested a significant portion of their assets
in securities in the State sector. MIY invested a significant portion of its
assets in securities in the County/City/Special District/School District sec-
tor. MPA invested a significant portion of its assets in securities in the
County/City/Special District/School District and State sectors. Changes in
economic conditions affecting the County/City/Special District/School
| | |
| ANNUAL REPORT | JULY 31, 2011 | 49 |
Notes to Financial Statements (continued)
District, State and Utilities sectors would have a greater impact on the
Funds and could affect the value, income and/or liquidity of positions in
such securities.
7. Capital Share Transactions:
MFT and MPA are authorized to issue an unlimited number of Common
Shares of beneficial interest, par value $0.10 per share together with 1
million Preferred Shares of beneficial interest, par value $0.05 per share.
Each Fund’s Board is authorized, however, to reclassify any unissued shares
of Common Shares without approval of Common Shareholders.
MUC, MUJ, MIY, and MJI are authorized to issue 200 million shares, par
value $0.10 per share or $0.05 per share, all of which were initially classi-
fied as Common Shares. Each Fund’s Board is authorized, however, to
reclassify any unissued shares of Common Shares without approval of
Common Shareholders.
Common Shares
For the years shown, shares issued and outstanding increased by the
following amounts as a result of dividend reinvestment:
| | |
| | Year Ended | Year Ended |
| | July 31, 2011 | July 31, 2010 |
| MUJ | 12,381 | — |
| MFT | 6,451 | 5,456 |
| MJI | 24,556 | 15,316 |
| MPA | 5,736 | — |
Shares issued and outstanding remained constant for MUC and MIY
for the years ended July 31, 2011 and July 31, 2010.
AMPS
The AMPS are redeemable at the option of each Fund, in whole or in part,
on any dividend payment date at their liquidation preference per share plus
any accumulated and unpaid dividends whether or not declared. The AMPS
are also subject to mandatory redemption at their liquidation preference
plus any accumulated and unpaid dividends, whether or not declared,
if certain requirements relating to the composition of the assets and
liabilities of a Fund, as set forth in each Fund's Articles of Amendment/
Statement of Preferences (the “Governing Instrument”) are not satisfied.
From time to time in the future, each Fund may effect repurchases of its
AMPS at prices below their liquidation preference as agreed upon by the
Fund and seller. Each Fund also may redeem its AMPS from time to time
as provided in the applicable Governing Instrument. Each Fund intends to
effect such redemptions and/or repurchases to the extent necessary to
maintain applicable asset coverage requirements or for such other reasons
as the Board may determine.
The Funds had the following series of AMPS outstanding, effective yields
and reset frequency as of July 31, 2011:
| | | | |
| | | | | Reset |
| | | | Effective | Frequency |
| | Series | AMPS | Yield | Days |
| MUC | A | 1,251 | 0.11% | 7 |
| | B | 2,527 | 0.12% | 7 |
| | C | 2,084 | 0.12% | 7 |
| | D | 1,928 | 0.12% | 7 |
| | E | 2,370 | 0.12% | 7 |
| MFT | A | 1,884 | 0.11% | 7 |
| | B | 377 | 1.26% | 7 |
Dividends on seven-day AMPS are cumulative at a rate which is reset every
seven days, based on the results of an auction. If the AMPS fail to clear the
auction on an auction date, each Fund is required to pay the maximum
applicable rate on the AMPS to holders of such shares for successive divi-
dend periods until such time as the shares are successfully auctioned. The
maximum applicable rate on the AMPS is as footnoted in the table below.
The low, high and average dividend rates on the AMPS for each Fund for
the period were as follows:
| | | | |
| | Series | Low | High | Average |
| MUC | A1 | 0.11% | 0.50% | 0.37% |
| | B1 | 0.11% | 0.50% | 0.36% |
| | C1 | 0.11% | 0.50% | 0.36% |
| | D1 | 0.11% | 0.50% | 0.37% |
| | E1 | 0.11% | 0.50% | 0.37% |
| MUJ | A1 | 0.12% | 0.50% | 0.38% |
| | B1 | 0.12% | 0.50% | 0.38% |
| | C1 | 0.15% | 0.50% | 0.38% |
| | D1 | 0.14% | 0.50% | 0.38% |
| | E1 | 0.13% | 0.50% | 0.38% |
| MFT | A1 | 0.11% | 0.50% | 0.37% |
| | B2 | 1.26% | 1.56% | 1.44% |
| MIY | A1 | 0.37% | 0.50% | 0.41% |
| | B1 | 0.35% | 0.50% | 0.41% |
| | C1 | 0.37% | 0.50% | 0.41% |
| | D2 | 1.43% | 1.56% | 1.48% |
| MJI | A1 | 0.11% | 0.50% | 0.37% |
| | B7 | 1.26% | 1.56% | 1.45% |
| MPA | A1 | 0.24% | 0.50% | 0.40% |
| | B1 | 0.32% | 0.50% | 0.41% |
| | C2 | 1.32% | 1.56% | 1.46% |
1 The maximum applicable rate on this series of AMPS is the higher of 110% of the AA
commercial paper rate or 110% of 90% of Kenny S&P 30-day High Grade Index rate
divided by 1.00 minus the marginal tax rate.
2 The maximum applicable rate on this series of AMPS is the higher of 110% plus or
times (i) the Telerate/BBA LIBOR or (ii) 90% of Kenny S&P 30-day High Grade Index
rate divided by 1.00 minus the marginal tax rate.
Since February 13, 2008, the AMPS of the Funds failed to clear any of
their auctions. As a result, the AMPS dividend rates were reset to the maxi-
mum applicable rate, which ranged from 0.11% to 1.56% for the year
ended July 31, 2011. A failed auction is not an event of default for the
Funds but it has a negative impact on the liquidity of AMPS. A failed auc-
tion occurs when there are more sellers of a Fund's AMPS than buyers.
| | |
| 50 | ANNUAL REPORT | JULY 31, 2011 |
Notes to Financial Statements (continued)
A successful auction for the Funds' AMPS may not occur for some time, if
ever, and even if liquidity does resume, AMPS Shareholders may not have
the ability to sell the AMPS at their liquidation preference.
MUC and MFT may not declare dividends or make other distributions on
Common Shares or purchase any such shares if, at the time of the declara-
tion, distribution or purchase, asset coverage with respect to the outstand-
ing AMPS is less than 200%.
MUC and MFT pay commissions of 0.15% on the aggregate principal
amount of all shares that fail to clear their auctions and 0.25% on the
aggregate principal amount of all shares that successfully clear their auc-
tions. Certain broker dealers have individually agreed to reduce commis-
sions for failed auctions.
During the year ended July 31, 2011, certain funds announced the follow-
ing redemptions of AMPS at a price of $25,000 per share plus any
accrued and unpaid dividends through the redemption date:
| | | | |
| | | Redemption | Shares | Aggregate |
| | Series | Date | Redeemed Principal |
| MUJ | A7 | 7/19/11 | 1,157 | $28,925,000 |
| | B7 | 7/22/11 | 1,157 | $28,925,000 |
| | C7 | 7/20/11 | 2,042 | $51,050,000 |
| | D7 | 7/21/11 | 1,599 | $39,975,000 |
| | E7 | 7/18/11 | 953 | $23,825,000 |
| MJI | A7 | 7/25/11 | 1,965 | $49,125,000 |
| | B7 | 7/22/11 | 614 | $15,350,000 |
| MIY | A7 | 5/18/11 | 1,753 | $43,825,000 |
| | B7 | 5/16/11 | 1,753 | $43,825,000 |
| | C7 | 5/12/11 | 1,403 | $35,075,000 |
| | D7 | 5/17/11 | 877 | $21,925,000 |
| MPA | A7 | 6/14/11 | 1,041 | $26,025,000 |
| | B7 | 6/08/11 | 1,249 | $31,225,000 |
| | C7 | 6/10/11 | 364 | $ 9,100,000 |
The Funds financed the AMPS redemptions with proceeds received from
the issuance of VRDP Shares.
AMPS issued and outstanding remained constant for the years ended July
31, 2011 and July 31, 2010 for MUC and MFT.
VRDP Shares
MUJ, MIY, MJI and MPA issued Series W-7 VRDP Shares, $100,000 liquida-
tion value per share, in a privately negotiated offering. The VRDP Shares
were offered to qualified institutional buyers as defined pursuant to Rule
144A under the Securities Act of 1933 and include a liquidity feature that
allows the VRDP Shareholders to have their shares purchased by the liquid
ity provider in the event of a failed remarketing. The Funds are required to
redeem the VRDP Shares owned by the liquidity provider after six months
of continuous, unsuccessful remarketing. The Funds entered into a fee
agreement with the liquidity provider that required an initial commitment
and per annum liquidity fee which is shown as liquidity fees in the
Statements of Operations. The VRDP Shares issued for the year ended
July 31, 2011 were as follows:
| | | | |
| | | Issue | Shares | Maturity |
| | Series | Date | Issued | Date |
| MUJ | W-7 | 6/30/11 | 1,727 | 7/01/41 |
| MIY | W-7 | 4/21/11 | 1,446 | 5/01/41 |
| MJI | W-7 | 6/30/11 | 644 | 7/01/41 |
| MPA | W-7 | 5/19/11 | 663 | 6/01/41 |
Dividends on the VRDP Shares are set weekly at a rate established by a
remarketing agent. Subject to certain conditions, VRDP Shares may be
redeemed, in whole or in part, at any time at the option of each Fund. Each
Fund also may redeem the VRDP Shares if it fails to maintain certain asset
coverage requirements and such failure is not cured timely. The redemption
price per share is equal to the liquidation value per share. For the year
ended July 31, 2011, all of the Funds’ VRDP Shares have successfully
remarketed since issuance, with average dividend rates as follows:
| |
| | Rate |
| MUJ | 0.25% |
| MJI | 0.25% |
| MIY | 0.36% |
| MPA | 0.31% |
For financial reporting purposes, the liquidation value of VRDP Shares
is recorded as a liability in the Statements of Assets and Liabilities.
Unpaid dividends are included in interest expense and fees payable in
the Statements of Assets and Liabilities, and the dividends paid on the
VRDP Shares are included as a component of interest expense, fees and
amortization of offering costs in the Statements of Operations. Dividends
paid to holders of VRDP Shares are classified as tax-exempt income for
tax-reporting purposes.
The holders of Preferred Shares have voting rights equal to the holders of
Common Shares (one vote per share) and will vote together with holders
of Common Shares (one vote per share) as a single class. However, the
holders of Preferred Shares, voting as a separate class, are also entitled to
elect two Directors for each Fund. In addition, the 1940 Act requires that
along with approval by shareholders that might otherwise be required, the
approval of the holders of a majority of any outstanding Preferred Shares,
voting separately as a class would be required to (a) adopt any plan of
reorganization that would adversely affect the Preferred Shares, (b) change
a Fund’s sub-classification as a closed-end investment company or change
its fundamental investment restrictions or (c) change its business so as to
cease to be an investment company.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 51 |
Notes to Financial Statements (concluded)
8. Subsequent Events:
Management’s evaluation of the impact of all subsequent events on the
Funds’ financial statements was completed through the date the financial
statements were issued and the following items were noted:
The Funds paid a net investment income dividend in the following amounts
per share on September 1, 2011 to Common Shareholders of record on
August 15, 2011:
| |
| | Common Dividend Per Share |
| MUC | $0.0765 |
| MUJ | $0.0740 |
| MFT | $0.0710 |
| MIY | $0.0765 |
| MJI | $0.0720 |
| MPA | $0.0765 |
The dividends declared on AMPS or VRDP Shares for the period August 1,
2011 to August 31, 2011 were as follows:
| | |
| | | Dividends |
| | Series | Declared |
| MUC AMPS | A | $ 7,206 |
| | B | $13,317 |
| | C | $ 9,878 |
| | D | $ 8,869 |
| | E | $14,362 |
| MUJ VRDP | W-7 | $43,199 |
| MFT AMPS | A | $10,852 |
| | B | $ 9,614 |
| MIY VRDP | W-7 | $43,182 |
| MJI VRDP | W-7 | $17,097 |
| MPA VRDP | W-7 | $19,799 |
| | |
| 52 | ANNUAL REPORT | JULY 31, 2011 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
BlackRock MuniHoldings California Quality Fund, Inc.,
BlackRock MuniHoldings New Jersey Quality Fund, Inc.,
BlackRock MuniYield Michigan Quality Fund, Inc.,
BlackRock MuniYield New Jersey Quality Fund, Inc.
and to the Shareholders and Board of Trustees of
BlackRock MuniYield Investment Quality Fund and
BlackRock MuniYield Pennsylvania Quality Fund:
We have audited the accompanying statements of assets and liabilities of
BlackRock MuniHoldings California Quality Fund, Inc. (formerly BlackRock
MuniHoldings California Insured Fund, Inc.), BlackRock MuniHoldings New
Jersey Quality Fund, Inc. (formerly BlackRock MuniHoldings New Jersey
Insured Fund. Inc.), BlackRock MuniYield Investment Quality Fund
(formerly BlackRock MuniYield Insured Investment Fund), BlackRock
MuniYield Michigan Quality Fund, Inc. (formerly BlackRock MuniYield
Michigan Insured Fund, Inc.), BlackRock MuniYield New Jersey Quality
Fund, Inc. (formerly MuniYield New Jersey Insured Fund, Inc.), and
BlackRock MuniYield Pennsylvania Quality Fund (formerly MuniYield
Pennsylvania Insured Fund) (collectively, the "Funds"), including the sched-
ules of investments, as of July 31, 2011, and the related statements of
operations for the year then ended, the statements of changes in net
assets for each of the two years in the period then ended, and the financial
highlights for each of the periods presented and the statements of cash
flows of BlackRock Muniholdings California Quality Fund, Inc., BlackRock
MuniHoldings New Jersey Quality Fund, Inc., BlackRock MuniYield Michigan
Quality Fund, Inc., BlackRock MuniYield New Jersey Quality Fund, Inc., and
BlackRock MuniYield Pennsylvania Quality Fund for the year then ended.
These financial statements and financial highlights are the responsibility
of the Funds’ management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial highlights are free of
material misstatement. The Funds are not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting.
Our audits included consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the cir-
cumstances, but not for the purpose of expressing an opinion on the effec-
tiveness of the Funds’ internal control over financial reporting. Accordingly,
we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant esti-
mates made by management, as well as evaluating the overall financial
statement presentation. Our procedures included confirmation of securities
owned as of July 31, 2011, by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, such financial statements and financial highlights referred
to above present fairly, in all material respects, the financial positions
of BlackRock MuniHoldings California Quality Fund, Inc., BlackRock
MuniHoldings New Jersey Quality Fund, Inc., BlackRock MuniYield
Investment Quality Fund, BlackRock MuniYield Michigan Quality Fund,
Inc., BlackRock MuniYield New Jersey Quality Fund, Inc., and BlackRock
MuniYield Pennsylvania Quality Fund as of July 31, 2011, the results of
their operations for the year then ended, the changes in their net assets
for each of the two years in the period then ended, the financial highlights
for each of the periods presented, and the cash flows of BlackRock
Muniholdings California Quality Fund, Inc. and BlackRock Muniyield
Pennsylvania Quality Fund, Inc. for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
September 28, 2011
| | |
| ANNUAL REPORT | JULY 31, 2011 | 53 |
Important Tax Information
The following table summarizes the taxable per share distributions paid by MPA during the taxable year ended July 31, 2011.
| | |
| | Payable Date | Ordinary Income* |
| Common Shareholders | 12/31/10 | $0.009377 |
| AMPS Shareholders | | |
| Series A | 12/07/10 | $1.14 |
| Series B | 12/08/10 | $1.14 |
| Series C | 11/26/10 | $4.21 |
| * Additionally, all ordinary income distributions are comprised of interest related dividends for non-US residents and are eligible for exemption from US withholding tax for nonresident |
| aliens and foreign corporations. | | |
All other net investment income distributions paid by MPA during the taxable year ended July 31, 2011 qualify as tax-exempt interest dividends for federal
income tax purposes.
All of the net investment income distributions paid by MUC, MUJ, MFT, MIY and MJI during the taxable year ended July 31, 2011 qualify as tax-exempt
interest dividends for federal income tax purposes.
| | |
| 54 | ANNUAL REPORT | JULY 31, 2011 |
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements
The Board of Directors or Trustees, as applicable, (each, a “Board,” collec-
tively, the “Boards,” and the members of which are referred to as “Board
Members”) of BlackRock MuniHoldings California Quality Fund, Inc.
(“MUC”), BlackRock MuniHoldings New Jersey Quality Fund, Inc. (“MUJ”),
BlackRock MuniYield Investment Quality Fund (“MFT”), BlackRock MuniYield
Michigan Quality Fund, Inc. (“MIY”), BlackRock MuniYield New Jersey
Quality Fund, Inc. (“MJI”) and BlackRock MuniYield Pennsylvania Quality
Fund (“MPA” and together with MUC, MUJ, MFT, MIY and MJI, each a “Fund,”
and, collectively, the “Funds”) met on April 14, 2011 and May 12 — 13,
2011 to consider the approval of each Fund’s investment advisory agree-
ment (each, an “Advisory Agreement”) with BlackRock Advisors, LLC (the
“Manager”), each Fund’s investment advisor. The Board of each Fund also
considered the approval of the sub-advisory agreement (each, a “Sub-
Advisory Agreement”) between the Manager and BlackRock Investment
Management, LLC (the “Sub-Advisor”), with respect to each Fund. The
Manager and the Sub-Advisor are referred to herein as “BlackRock.” The
Advisory Agreements and the Sub-Advisory Agreements are referred to
herein as the “Agreements.”
Activities and Composition of the Board
Each Board consists of eleven individuals, nine of whom are not
“interested persons” of such Fund as defined in the Investment Company
Act of 1940 (the “1940 Act”) (the “Independent Board Members”). The
Board Members are responsible for the oversight of the operations of the
Funds and perform the various duties imposed on the directors of invest-
ment companies by the 1940 Act. The Independent Board Members have
retained independent legal counsel to assist them in connection with their
duties. The Chairman of the Board is an Independent Board Member.
Each Board has established five standing committees: an Audit Committee,
a Governance and Nominating Committee, a Compliance Committee, a
Performance Oversight Committee and an Executive Committee, each
of which is composed of Independent Board Members (except for the
Executive Committee, which also has one interested Board Member) and
is chaired by an Independent Board Member. The Board of each of MFT
and MUC, has also established a Committee on Auction Market Preferred
Shares. In addition, the Board of each of MIY, MJI, MPA and MUJ had
established a Committee on Auction Market Preferred Shares prior to the
redemption of all of its Fund's outstanding auction market preferred
shares. Further, each Board established an ad hoc committee, the Joint
Product Pricing Committee, which consisted of Independent Board
Members and the directors/trustees of the boards of certain other
BlackRock-managed funds, who were not “interested persons” of their
respective funds.
The Agreements
Pursuant to the 1940 Act, the Boards are required to consider the cont-
inuation of the Agreements on an annual basis. In connection with this
process, the Boards assessed, among other things, the nature, scope and
quality of the services provided to the Funds by BlackRock, its personnel
and its affiliates, including investment management, administrative and
shareholder services, oversight of fund accounting and custody, marketing
services, risk oversight, compliance program and assistance in meeting
applicable legal and regulatory requirements.
The Boards, acting directly and through their respective committees, con-
sidered at each of their meetings, and from time to time as appropriate,
factors that are relevant to its annual consideration of the renewal of the
Agreements, including the services and support provided by BlackRock to
the Funds and their shareholders. Among the matters the Boards consid-
ered were: (a) investment performance for one-, three- and five-year peri-
ods, as applicable, against peer funds, and applicable benchmarks, if any,
as well as senior management’s and portfolio managers’ analysis of the
reasons for any over performance or underperformance against their peers
and/or benchmark, as applicable; (b) fees, including advisory and other
amounts paid to BlackRock and its affiliates by the Funds for services such
as call center and fund accounting; (c) Fund operating expenses and how
BlackRock allocates expenses to the Funds; (d) the resources devoted to,
risk oversight of, and compliance reports relating to, implementation of the
Funds’ investment objectives, policies and restrictions; (e) the Funds’ com-
pliance with its Code of Ethics and other compliance policies and proce-
dures; (f) the nature, cost and character of non-investment management
services provided by BlackRock and its affiliates; (g) BlackRock’s and
other service providers’ internal controls and risk and compliance oversight
mechanisms; (h) BlackRock’s implementation of the proxy voting policies
approved by the Boards; (i) execution quality of portfolio transactions;
(j) BlackRock’s implementation of the Funds’ valuation and liquidity proce-
dures; (k) an analysis of contractual and actual management fee ratios
for products with similar investment objectives across the open-end
fund, closed-end fund and institutional account product channels, as
applicable; (l) BlackRock’s compensation methodology for its investment
professionals and the incentives it creates; and (m) periodic updates on
BlackRock’s business.
Board Considerations in Approving the Agreements
The Approval Process: Prior to the April 14, 2011 meeting, the Boards
requested and received materials specifically relating to the Agreements.
The Boards are engaged in a process with BlackRock to review periodically
the nature and scope of the information provided to better assist their
deliberations. The materials provided in connection with the April meeting
included (a) information independently compiled and prepared by Lipper,
Inc. (“Lipper”) on Fund fees and expenses and the investment performance
of the Funds as compared with a peer group of funds as determined
by Lipper and a customized peer group selected by BlackRock (collect-
ively, “Peers”); (b) information on the profitability of the Agreements to
BlackRock and a discussion of fall-out benefits to BlackRock and its
affiliates and significant shareholders; (c) a general analysis provided by
BlackRock concerning investment management fees (a combination of the
advisory fee and the administration fee, if any) charged to other clients,
such as institutional clients and open-end funds, under similar investment
mandates, as applicable; (d) the impact of economies of scale; (e) a
summary of aggregate amounts paid by each Fund to BlackRock and
(f) if applicable, a comparison of management fees to similar BlackRock
closed-end funds, as classified by Lipper.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 55 |
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)
At an in-person meeting held on April 14, 2011, the Boards reviewed
materials relating to their consideration of the Agreements. As a result of
the discussions that occurred during the April 14, 2011 meeting, and as a
culmination of the Boards’ year-long deliberative process, the Boards pre-
sented BlackRock with questions and requests for additional information.
BlackRock responded to these requests with additional written information
in advance of the May 12-13, 2011 Board meeting.
At an in-person meeting held on May 12-13, 2011, each Board, including
the Independent Board Members, unanimously approved the continuation
of the Advisory Agreement between the Manager and its Fund and the Sub-
Advisory Agreement between the Manager and the Sub-Advisor with respect
to its Fund, each for a one-year term ending June 30, 2012. In approving
the continuation of the Agreements, the Boards considered: (a) the nature,
extent and quality of the services provided by BlackRock; (b) the invest-
ment performance of the Funds and BlackRock; (c) the advisory fee and
the cost of the services and profits to be realized by BlackRock and its
affiliates from their relationship with the Funds; (d) economies of scale;
(e) fall-out benefits to BlackRock as a result of its relationship with the
Funds; and (f) other factors deemed relevant by the Board Members.
The Boards also considered other matters they deemed important to the
approval process, such as services related to the valuation and pricing of
Fund portfolio holdings, direct and indirect benefits to BlackRock and its
affiliates and significant shareholders from their relationship with Funds
and advice from independent legal counsel with respect to the review
process and materials submitted for the Boards’ review. The Boards noted
the willingness of BlackRock personnel to engage in open, candid discus-
sions with the Boards. The Boards did not identify any particular informa-
tion as controlling, and each Board Member may have attributed different
weights to the various items considered.
A. Nature, Extent and Quality of the Services Provided by BlackRock:
The Boards, including the Independent Board Members, reviewed the
nature, extent and quality of services provided by BlackRock, including
the investment advisory services and the resulting performance of the
Funds. Throughout the year, the Boards compared Fund performance to
the performance of a comparable group of closed-end funds and/or
the performance of a relevant benchmark, if any. The Boards met with
BlackRock’s senior management personnel responsible for investment
operations, including the senior investment officers. Each Board also
reviewed the materials provided by its Fund’s portfolio management
team discussing Fund performance and the Fund’s investment objective,
strategies and outlook.
The Boards considered, among other factors, the number, education and
experience of BlackRock’s investment personnel generally and their Funds’
portfolio management teams, investments by portfolio managers in the
funds they manage, BlackRock’s portfolio trading capabilities, BlackRock’s
use of technology, BlackRock’s commitment to compliance, BlackRock’s
credit analysis capabilities, BlackRock’s risk analysis capabilities and
BlackRock’s approach to training and retaining portfolio managers and
other research, advisory and management personnel. The Boards engaged
in a review of BlackRock’s compensation structure with respect to their
Funds’ portfolio management teams and BlackRock’s ability to attract and
retain high-quality talent and create performance incentives.
In addition to advisory services, the Boards considered the quality of the
administrative and non-investment advisory services provided to the Funds.
BlackRock and its affiliates provide the Funds with certain administrative
and other services (in addition to any such services provided to the Funds
by third parties) and officers and other personnel as are necessary for
the operations of the Funds. In addition to investment advisory services,
BlackRock and its affiliates provide the Funds with other services, including
(i) preparing disclosure documents, such as the prospectus and the state-
ment of additional information in connection with the initial public offering
and periodic shareholder reports; (ii) preparing communications with ana-
lysts to support secondary market trading of the Funds; (iii) assisting with
daily accounting and pricing; (iv) preparing periodic filings with regulators
and stock exchanges; (v) overseeing and coordinating the activities of other
service providers; (vi) organizing Board meetings and preparing the materi-
als for such Board meetings; (vii) providing legal and compliance support;
and (viii) performing other administrative functions necessary for the oper-
ation of the Funds, such as tax reporting, fulfilling regulatory filing require-
ments and call center services. The Boards reviewed the structure and
duties of BlackRock’s fund administration, accounting, legal and compli-
ance departments and considered BlackRock’s policies and procedures for
assuring compliance with applicable laws and regulations.
B. The Investment Performance of the Fund and BlackRock: The Boards,
including the Independent Board Members, also reviewed and considered
the performance history of their Funds. In preparation for the April 14,
2011 meeting, the Boards worked with BlackRock and Lipper to develop a
template for, and was provided with reports independently prepared by
Lipper, which included a comprehensive analysis of each Fund’s perform-
ance. The Boards also reviewed a narrative and statistical analysis of the
Lipper data that was prepared by BlackRock, which analyzed various fac-
tors that affect Lipper’s rankings. In connection with their review, each
Board received and reviewed information regarding the investment perform-
ance of its Fund as compared to funds in that Fund’s applicable Lipper
category and a customized peer group selected by BlackRock. The Boards
were provided with a description of the methodology used by Lipper to
select peer funds. The Boards and each Board’s Performance Oversight
Committee regularly review, and meet with Fund management to discuss,
the performance of the Funds throughout the year.
The Board of MFT noted that MFT performed below the median of its
Customized Lipper Peer Group Composite in each of the one-, three- and
five-year periods reported. The Board of MFT and BlackRock reviewed and
discussed the reasons for MFT’s underperformance during these periods
compared with its Peers. The Board of MFT was informed that, among other
things, performance was hindered by exposure to Florida insured bonds
backed by monoline insurers.
The Board of MFT and BlackRock discussed BlackRock’s strategy for
improving MFT’s performance and BlackRock’s commitment to providing
the resources necessary to assist MFT’s portfolio managers and to improve
MFT’s performance, in part through the repositioning of MFT’s portfolio.
| | |
| 56 | ANNUAL REPORT | JULY 31, 2011 |
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)
The Boards of MIY and MUC noted that, in general, each Fund performed
better than its respective Peers in that each Fund’s performance was at or
above the median of its respective Customized Lipper Peer Group
Composite in each of the one-, three- and five-year periods reported.
The Board of MPA noted that MPA performed below the median of its
Customized Lipper Peer Group Composite in each of the one-, three- and
five-year periods reported. The Board of MPA and BlackRock reviewed and
discussed the reasons for MPA’s underperformance during these periods
compared with its Peers. The Board of MPA was informed that, among other
things, MPA’s longer duration stance subjected MPA to greater price
volatility as the municipal market saw rates rise.
The Board of MPA and BlackRock discussed BlackRock’s strategy for
improving MPA’s performance and BlackRock’s commitment to providing
the resources necessary to assist MPA’s portfolio managers and to improve
MPA’s performance.
The Boards of MJI and MUJ noted that, in general, each Fund performed
better than its respective Peers in that each Fund’s performance was at
or above the median of its respective Customized Lipper Peer Group
Composite in two of the one-, three- and five-year periods reported.
The Boards noted that BlackRock has made changes to the organization of
the overall fixed income group management structure designed to result in
a strengthened leadership team.
C. Consideration of the Advisory/Management Fees and the Cost of the
Services and Profits to be Realized by BlackRock and its Affiliates from
their Relationship with the Fund: Each Board, including the Independent
Board Members, reviewed its Fund’s contractual management fee ratio
compared with the other funds in its Lipper category. It also compared
the Fund’s total expense ratio, as well as actual management fee ratio,
to those of other funds in its Lipper category. The Boards considered the
services provided and the fees charged by BlackRock to other types of
clients with similar investment mandates, including separately managed
institutional accounts.
The Boards received and reviewed statements relating to BlackRock’s
financial condition and profitability with respect to the services it provided
the Funds. The Boards were also provided with a profitability analysis that
detailed the revenues earned and the expenses incurred by BlackRock for
services provided to the Funds. The Boards reviewed BlackRock’s profitabil-
ity with respect to the Funds and other funds the Boards currently oversee
for the year ended December 31, 2010 compared to available aggregate
profitability data provided for the years ended December 31, 2009, and
December 31, 2008. The Boards reviewed BlackRock’s profitability with
respect to other fund complexes managed by the Manager and/or its affili-
ates. The Boards reviewed BlackRock’s assumptions and methodology of
allocating expenses in the profitability analysis, noting the inherent limita-
tions in allocating costs among various advisory products. The Boards rec-
ognized that profitability may be affected by numerous factors including,
among other things, fee waivers and expense reimbursements by the
Manager, the types of funds managed, expense allocations and business
mix, and the difficulty of comparing profitability as a result of those factors.
The Boards noted that, in general, individual fund or product line profit-
ability of other advisors is not publicly available. The Boards considered
BlackRock’s overall operating margin, in general, compared to the operating
margin for leading investment management firms whose operations include
advising closed-end funds, among other product types. That data indicates
that operating margins for BlackRock, in general and with respect to its
registered funds, are generally consistent with margins earned by similarly
situated publicly traded competitors. In addition, the Boards considered,
among other things, certain third party data comparing BlackRock’s operat-
ing margin with that of other publicly-traded asset management firms. That
third party data indicates that larger asset bases do not, in themselves,
translate to higher profit margins.
In addition, the Boards considered the cost of the services provided to the
Funds by BlackRock, and BlackRock’s and its affiliates’ profits relating to
the management of the Funds and the other funds advised by BlackRock
and its affiliates. As part of its analysis, the Boards reviewed BlackRock’s
methodology in allocating its costs to the management of the Funds. The
Boards also considered whether BlackRock has the financial resources
necessary to attract and retain high quality investment management per-
sonnel to perform its obligations under the Agreements and to continue to
provide the high quality of services that is expected by the Boards.
Each Board noted that its Fund’s contractual management fee ratio (a
combination of the advisory fee and the administration fee, if any) was
lower than or equal to the median contractual management fee ratio paid
by the Fund’s Peers, in each case before taking into account any expense
reimbursements or fee waivers.
D. Economies of Scale: Each Board, including the Independent Board
Members, considered the extent to which economies of scale might be
realized as the assets of its Fund increase. Each Board also considered the
extent to which its Fund benefits from such economies and whether there
should be changes in the advisory fee rate or structure in order to enable
the Fund to participate in these economies of scale, for example through
the use of breakpoints in the advisory fee based upon the asset level of
the Fund. Based on the ad hoc Joint Product Pricing Committees’ and the
Boards’ review and consideration of this issue, the Boards concluded that
closed-end funds are typically priced at scale at a fund’s inception;
therefore, the implementation of breakpoints was not necessary.
The Boards noted that most closed-end funds do not have fund level
breakpoints because closed-end funds generally do not experience sub-
stantial growth after the initial public offering. The Boards noted that only
one closed-end fund in the Fund Complex has breakpoints in its advisory
fee structure.
E. Other Factors Deemed Relevant by the Board Members: The Boards,
including the Independent Board Members, also took into account other
ancillary or “fall-out” benefits that BlackRock or its affiliates and significant
shareholders may derive from their respective relationships with the Funds,
| | |
| ANNUAL REPORT | JULY 31, 2011 | 57 |
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)
both tangible and intangible, such as BlackRock’s ability to leverage its
investment professionals who manage other portfolios and risk manage-
ment personnel, an increase in BlackRock’s profile in the investment
advisory community, and the engagement of BlackRock’s affiliates as serv-
ice providers to the Funds, including for securities lending services. The
Boards also considered BlackRock’s overall operations and its efforts to
expand the scale of, and improve the quality of, its operations. The Boards
also noted that BlackRock may use and benefit from third party research
obtained by soft dollars generated by certain registered fund transactions
to assist in managing all or a number of its other client accounts. The
Boards further noted that BlackRock’s funds may invest in affiliated ETFs
without any offset against the management fees payable by the funds
to BlackRock.
In connection with its consideration of the Agreements, the Boards also
received information regarding BlackRock’s brokerage and soft dollar
practices. The Boards received reports from BlackRock which included
information on brokerage commissions and trade execution practices
throughout the year.
The Boards noted the competitive nature of the closed-end fund market-
place and that shareholders are able to sell their Fund shares in the sec-
ondary market if they believe that the Fund’s fees and expenses are too
high or if they are dissatisfied with the performance of the Fund.
Conclusion
Each Board, including the Independent Board Members, unanimously
approved the continuation of the Advisory Agreement between the
Manager and its Fund for a one-year term ending June 30, 2012 and the
Sub-Advisory Agreement between the Manager and the Sub-Advisor, with
respect to its Fund, for a one-year term ending June 30, 2012. As part of
its approval, the Boards considered the detailed review of BlackRock’s fee
structure, as it applies to the Funds, conducted by the ad hoc Joint Product
Pricing Committee. Based upon their evaluations of all of the aforemen-
tioned factors in their totality, the Boards, including the Independent Board
Members, were satisfied that the terms of the Agreements were fair and
reasonable and in the best interest of the Funds and their shareholders.
In arriving at their decision to approve the Agreements, the Boards did
not identify any single factor or group of factors as all-important or control-
ling, but considered all factors together, and different Board Members may
have attributed different weights to the various factors considered. The
Independent Board Members were also assisted by the advice of inde-
pendent legal counsel in making these determinations. The contractual fee
arrangements for the Funds reflect the results of several years of review by
the Board Members and predecessor Board Members, and discussions
between such Board Members (and predecessor Board Members) and
BlackRock. As a result, the Board Members’ conclusions may be based in
part on their consideration of these arrangements in prior years.
| | |
| 58 | ANNUAL REPORT | JULY 31, 2011 |
Automatic Dividend Reinvestment Plan
Pursuant to each Fund’s Dividend Reinvestment Plan (the “Reinvestment
Plan”), Common Shareholders are automatically enrolled to have all
distributions of dividends and capital gains reinvested by BNY Mellon
Shareowner Services for MUC, MUJ, MFT, MIY and MJI and Computershare
Trust Company, N.A. for MPA (individually, the “Reinvestment Plan Agent” or
together, the “Reinvestment Plan Agents”) in the respective Fund’s shares
pursuant to the Reinvestment Plan. Shareholders who do not participate in
the Reinvestment Plan will receive all distributions in cash paid by check
and mailed directly to the shareholders of record (or if the shares are held
in street name or other nominee name, then to the nominee) by the
Reinvestment Plan Agent, which serves as agent for the shareholders
in administering the Reinvestment Plan.
After the Funds declare a dividend or determine to make a capital gain dis-
tribution, the Reinvestment Plan Agents will acquire shares for the partici-
pants’ accounts, depending upon the following circumstances, either (i)
through receipt of unissued but authorized shares from the Fund (“newly
issued shares”) or (ii) by purchase of outstanding shares on the open mar-
ket or on the Fund’s primary exchange. If, on the dividend payment date,
the net asset value per share (“NAV”) is equal to or less than the market
price per share plus estimated brokerage commissions (such condition
often referred to as a “market premium”), the Reinvestment Plan Agent will
invest the dividend amount in newly issued shares on behalf of the partici-
pants. The number of newly issued shares to be credited to each partici-
pant’s account will be determined by dividing the dollar amount of the
dividend by the NAV on the date the shares are issued. However, if the NAV
is less than 95% of the market price on the payment date, the dollar
amount of the dividend will be divided by 95% of the market price on the
payment date. If, on the dividend payment date, the NAV is greater than the
market value per share plus estimated brokerage commissions (such con-
dition often referred to as a “market discount”), the Reinvestment Plan
Agent will invest the dividend amount in shares acquired on behalf of the
participants in open market purchases. If the Reinvestment Plan Agents are
unable to invest the full dividend amount in open market purchases, or if
the market discount shifts to a market premium during the purchase
period, the Reinvestment Plan Agents will invest any uninvested portion in
newly issued shares.
Participation in the Reinvestment Plan is completely voluntary and may be
terminated or resumed at any time without penalty by notice if received
and processed by the Reinvestment Plan Agent prior to the dividend record
date; otherwise such termination or resumption will be effective with
respect to any subsequently declared dividend or other distribution.
The Reinvestment Plan Agent’s fees for the handling of the reinvestment
of dividends and distributions will be paid by each Fund. However, each
participant will pay a pro rata share of brokerage commissions incurred
with respect to the Reinvestment Plan Agent’s open market purchases
in connection with the reinvestment of dividends and distributions. The
automatic reinvestment of dividends and distributions will not relieve
participants of any federal income tax that may be payable on such
dividends or distributions.
Each Fund reserves the right to amend or terminate the Reinvestment Plan.
There is no direct service charge to participants in the Reinvestment Plan;
however, each Fund reserves the right to amend the Reinvestment Plan
to include a service charge payable by the participants. Participants that
request a sale of shares through Computershare Trust Company, N.A. are
subject to a $2.50 sales fee and a $0.15 per share sold brokerage com-
mission. Participants that request a sale of shares through BNY Mellon
Shareowner Services are subject to a $0.02 per share sold brokerage
commission. All correspondence concerning the Reinvestment Plan should
be directed to the respective Reinvestment Plan Agent: BNY Mellon
Shareowner Services, P.0. Box 358035, Pittsburgh, PA 15252-8035,
Telephone: (866) 216-0242 for shareholders of MUC, MUJ, MFT, MIY and
MJI or Computershare Trust Company, N.A., P.O. Box 43078, Providence, RI
02940-3078, Telephone: (800) 699-1BFM or overnight correspondence
should be directed to the Reinvestment Plan Agent at 250 Royall Street,
Canton, MA 02021 for shareholders of MPA.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 59 |
| | | | | |
| Officers and Directors | | | |
| | | | | Number of | |
| | | Length of | | BlackRock- | |
| | Position(s) | Time | | Advised Funds | |
| Name, Address | Held with | Served as | | and Portfolios | Public |
| and Year of Birth | Funds | a Director2 | Principal Occupation(s) During Past Five Years | Overseen | Directorships |
| Independent Directors1 | | | | |
| Richard E. Cavanagh | Chairman of | Since | Trustee, Aircraft Finance Trust from 1999 to 2009; Director, The Guardian Life | 95 Funds | Arch Chemical |
| 55 East 52nd Street | the Board and | 2007 | Insurance Company of America since 1998; Trustee, Educational Testing Service | 95 Portfolios | (chemical and allied |
| New York, NY 10055 | Director | | from 1997 to 2009 and Chairman thereof from 2005 to 2009; Senior Advisor, | | products) |
| 1946 | | | The Fremont Group since 2008 and Director thereof since 1996; Adjunct Lecturer, | | |
| | | | Harvard University since 2007; President and Chief Executive Officer, The Conference | | |
| | | | Board, Inc. (global business research organization) from 1995 to 2007. | | |
| Karen P. Robards | Vice | Since | Partner of Robards & Company, LLC (financial advisory firm) since 1987; | 95 Funds | AtriCure, Inc. |
| 55 East 52nd Street | Chairperson | 2007 | Co-founder and Director of the Cooke Center for Learning and Development | 95 Portfolios | (medical devices) |
| New York, NY 10055 | of the Board, | | (a not-for-profit organization) since 1987; Director of Care Investment Trust, Inc. | | |
| 1950 | Chairperson of | | (health care real estate investment trust) from 2007 to 2010; Director of Enable | | |
| | the Audit | | Medical Corp. from 1996 to 2005; Investment Banker at Morgan Stanley from | | |
| | Committee | | 1976 to 1987. | | |
| | and Director | | | | |
| Michael J. Castellano | Director and | Since | Managing Director and Chief Financial Officer of Lazard Group LLC from 2001 | 95 Funds | None |
| 55 East 52nd Street | Member of | 2011 | to 2011; Chief Financial Officer of Lazard Ltd from 2004 to 2011; Director, | 95 Portfolios | |
| New York, NY 10055 | the Audit | | Support Our Aging Religions (non-profit) since 2009; Director, National Advisory | | |
| 1946 | Committee | | Board of Church Management at Villanova University since 2010. | | |
| Frank J. Fabozzi | Director and | Since | Editor of and Consultant for The Journal of Portfolio Management since 1986; | 95 Funds | None |
| 55 East 52nd Street | Member of | 2007 | Professor of Finance, EDHEC Business School since 2011; Professor in the | 95 Portfolios | |
| New York, NY 10055 | the Audit | | Practice of Finance and Becton Fellow, Yale University School of Management | | |
| 1948 | Committee | | from 2006 to 2011; Adjunct Professor of Finance and Becton Fellow, Yale | | |
| | | | University from 1994 to 2006. | | |
| Kathleen F. Feldstein | Director | Since | President of Economics Studies, Inc. (private economic consulting firm) since | 95 Funds | The McClatchy |
| 55 East 52nd Street | | 2007 | 1987; Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee | 95 Portfolios | Company |
| New York, NY 10055 | | | Emeritus thereof since 2008; Member of the Board of Partners Community | | (publishing); |
| 1941 | | | Healthcare, Inc. from 2005 to 2009; Member of the Corporation of Partners | | BellSouth (tele- |
| | | | HealthCare since 1995; Trustee, Museum of Fine Arts, Boston since 1992; Member | | communications); |
| | | | of the Visiting Committee to the Harvard University Art Museum since 2003; Director, | | Knight Ridder |
| | | | Catholic Charities of Boston since 2009. | | (publishing) |
| James T. Flynn | Director and | Since | Chief Financial Officer of JPMorgan & Co., Inc. from 1990 to 1995. | 95 Funds | None |
| 55 East 52nd Street | Member of | 2007 | | 95 Portfolios | |
| New York, NY 10055 | the Audit | | | | |
| 1939 | Committee | | | | |
| Jerrold B. Harris | Director | Since | Trustee, Ursinus College since 2000; Director, Troemner LLC (scientific equipment) | 95 Funds | BlackRock Kelso |
| 55 East 52nd Street | | 2007 | since 2000; Director of Delta Waterfowl Foundation since 2001; President and | 95 Portfolios | Capital Corp. |
| New York, NY 10055 | | | Chief Executive Officer, VWR Scientific Products Corporation from 1990 to 1999. | | (business |
| 1942 | | | | | development |
| | | | | | company) |
| | |
| 60 | ANNUAL REPORT | JULY 31, 2011 |
| | | | | |
| Officers and Directors (continued) | | |
| | | | | Number of | |
| | | Length of | | BlackRock- | |
| | Position(s) | Time | | Advised Funds | |
| Name, Address | Held with | Served as | | and Portfolios | Public |
| and Year of Birth | Funds | a Director2 | Principal Occupation(s) During Past Five Years | Overseen | Directorships |
| Independent Directors1 (concluded) | | | | |
| R. Glenn Hubbard | Director | Since | Dean, Columbia Business School since 2004; Columbia faculty member since | 95 Funds | ADP (data and |
| 55 East 52nd Street | | 2007 | 1988; Co-Director, Columbia Business School’s Entrepreneurship Program from | 95 Portfolios | information services); |
| New York, NY 10055 | | | 1997 to 2004; Chairman, U.S. Council of Economic Advisers under the President | | KKR Financial |
| 1958 | | | of the United States from 2001 to 2003; Chairman, Economic Policy Committee | | Corporation (finance); |
| | | | of the OECD from 2001 to 2003. | | Metropolitan Life |
| | | | | | Insurance Company |
| | | | | | (insurance) |
| W. Carl Kester | Director and | Since | George Fisher Baker Jr. Professor of Business Administration, Harvard Business | 95 Funds | None |
| 55 East 52nd Street | Member of | 2007 | School; Deputy Dean for Academic Affairs from 2006 to 2010; Chairman of the | 95 Portfolios | |
| New York, NY 10055 | the Audit | | Finance Department, Harvard Business School from 2005 to 2006; Senior | | |
| 1951 | Committee | | Associate Dean and Chairman of the MBA Program of Harvard Business School | | |
| from 1999 to 2005; Member of the faculty of Harvard Business School |
| | | | since 1981. | | |
| | 1 Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. | | |
| | 2 Date shown is the earliest date a person has served for the Funds covered by this annual report. Following the combination of Merrill Lynch Investment |
| | Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were |
| | realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows certain Directors as joining the Funds’ board in |
| | 2007, each Director first became a member of the board of other legacy MLIM or legacy BlackRock Funds as follows: Richard E. Cavanagh, 1994; Frank J. |
| | Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 2004; W. Carl Kester, 1995; and Karen P. |
| | Robards, 1998. | | | |
| Interested Directors3 | | | | | |
| Paul L. Audet | Director | Since | Senior Managing Director, BlackRock, Inc., and Head of BlackRock’s Real Estate | 95 Funds | None |
| 55 East 52nd Street | | 2011 | business from 2008 to 2011; Member of BlackRock’s Global Operating and | 95 Portfolios | |
| New York, NY 10055 | | | Corporate Risk Management Committees and of the BlackRock Alternative Investors | | |
| 1953 | | | Executive Committee and Investment Committee for the Private Equity Fund of | | |
| | | | Funds business since 2008; Head of BlackRock's Global Cash Management | | |
| | | | business from 2005 to 2010; Acting Chief Financial Officer of BlackRock from | | |
| | | | 2007 to 2008; Chief Financial Officer of BlackRock from 1998 to 2005; Senior | | |
| | | | Vice President of Finance at PNC Bank Corp. and Chief Financial Officer of the | | |
| | | | Investment Management and Mutual Fund Processing businesses from 1996 to | | |
| | | | 1998 and Head of PNC’s Mergers & Acquisitions unit from 1992 to 1998; Member | | |
| | | | of PNC’s Corporate Asset-Liability Committee and Marketing Committees from 1992 | | |
| | | | to 1998; Chief Financial Officer of PNC’s eastern operations from 1991 to 1992; | | |
| | | | Senior Vice President of First Fidelity Bancorporation, responsible for the Corporate | | |
| | | | Finance, Asset-Liability Committee, and Mergers & Acquisitions functions from | | |
| | | | 1986 to 1991. | | |
| Henry Gabbay | Director | Since | Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, | 162 Funds | None |
| 55 East 52nd Street | | 2007 | Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC | 293 Portfolios | |
| New York, NY 10055 | | | from 1998 to 2007; President of BlackRock Funds and BlackRock Bond Allocation | | |
| 1947 | | | Target Shares from 2005 to 2007; Treasurer of certain closed-end funds in the | | |
| | | | BlackRock fund complex from 1989 to 2006. | | |
| | 3 Mr. Audet is an “interested person,” as defined in the 1940 Act, of the Funds based on his position with BlackRock, Inc. and its affiliates. Mr. Gabbay is |
| | an “interested person” of the Funds based on his former positions with BlackRock, Inc. and its affiliates as well as his ownership of BlackRock, Inc. and |
| | The PNC Financial Services Group, Inc. securities. Directors serve until their resignation, removal or death, or until December 31 of the year in which they |
| | turn 72. | | | | |
| | |
| ANNUAL REPORT | JULY 31, 2011 | 61 |
| | | |
| Officers and Directors (concluded) |
| | Position(s) | | |
| Name, Address | Held with | Length of | |
| and Year of Birth | Funds | Time Served | Principal Occupation(s) During Past Five Years |
| Officers1 | | | |
| John M. Perlowski | President | Since | Managing Director of BlackRock, Inc. since 2009; Global Head of BlackRock Fund Administration since 2009; |
| 55 East 52nd Street | and Chief | 2010 | Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, |
| New York, NY 10055 | Executive | | L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual Funds from 2003 to 2009 and Senior Vice President |
| 1964 | Officer | | thereof from 2007 to 2009; Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director of Family |
| Resource Network (charitable foundation) since 2009. |
|
| Anne Ackerley | Vice | Since | Managing Director of BlackRock, Inc. since 2000; President and Chief Executive Officer of the BlackRock-advised funds |
| 55 East 52nd Street | President | 20072 | from 2009 to 2011; Vice President of the BlackRock-advised funds from 2007 to 2009; Chief Operating Officer |
| New York, NY 10055 | | | of BlackRock’s Global Client Group since 2009; Chief Operating Officer of BlackRock’s U.S. Retail Group from 2006 |
| 1962 | | | to 2009; Head of BlackRock’s Mutual Fund Group from 2000 to 2006. |
| Brendan Kyne | Vice | Since | Managing Director of BlackRock, Inc. since 2010; Director of BlackRock, Inc. from 2008 to 2009; Head of Product |
| 55 East 52nd Street | President | 2009 | Development and Management for BlackRock’s US Retail Group since 2009, Co-head thereof from 2007 to |
| New York, NY 10055 | | | 2009; Vice President of BlackRock, Inc. from 2005 to 2008. |
| 1977 | | | |
| Neal Andrews | Chief | Since | Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund |
| 55 East 52nd Street | Financial | 2007 | Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006. |
| New York, NY 10055 | Officer | | |
| 1966 | | | |
| Jay Fife | Treasurer | Since | Managing Director of BlackRock, Inc. since 2007; Director of BlackRock, Inc. in 2006; Assistant Treasurer of the MLIM |
| 55 East 52nd Street | | 2007 | and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from |
| New York, NY 10055 | | | 2001 to 2006. |
| 1970 | | | |
| Brian Kindelan | Chief | Since | Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel of |
| 55 East 52nd Street | Compliance | 2007 | BlackRock, Inc. since 2005. |
| New York, NY 10055 | Officer and | | |
| 1959 | Anti-Money | | |
| | Laundering | | |
| | Officer | | |
| Ira P. Shapiro | Secretary | Since | Managing Director of BlackRock, Inc. since 2009; Managing Director and Associate General Counsel of Barclays |
| 55 East 52nd Street | | 2010 | Global Investors from 2008 to 2009 and Principal thereof from 2004 to 2008. |
| New York, NY 10055 | | | |
| 1963 | | | |
| | 1 Officers of the Funds serve at the pleasure of the Boards. |
| | 2 Ms. Ackerley was President and Chief Executive Officer from 2009 to 2011. |
| | | | | |
| Investment Advisor | Custodians | Transfer Agent | AMPS Auction Agent | Accounting Agent | Legal Counsel |
| BlackRock Advisors, LLC | State Street Bank | Common Shares | BNY Mellon | State Street Bank | Skadden, Arps, Slate, |
| Wilmington, DE 19809 | and Trust Company3 | Computershare Trust | Shareowner Services | and Trust Company | Meagher & Flom LLP |
| | Boston, MA 02111 | Company, N.A.3 | Jersey City, NJ 07310 | Boston, MA 02116 | New York, NY 10036 |
| Sub-Advisor | | Providence, RI 02940 | | | |
| BlackRock Investment | The Bank of | | VRDP Tender | Independent Registered | Address of the Funds |
| Management, LLC | New York Mellon4 | BNY Mellon | and Paying Agent | Public Accounting Firm | 100 Bellevue Parkway |
| Princeton, NJ 08540 | New York, NY 10286 | Shareowner Services4 | The Bank of New York Mellon | Deloitte & Touche LLP | Wilmington, DE 19809 |
| | | Jersey City, NJ 07310 | New York, NY 10289 | Boston, MA 02116 | |
| | | | VRDP Remarketing Agents | | |
| | | | Citigroup Global Markets Inc.5 | | |
| 3 For MPA. | | | New York, NY 10179 | | |
| 4 For MUC, MUJ, MFT, MIY and MJI. | | | | |
| 5 For MIY and MPA | | | Merrill Lynch, Pierce, | | |
| 6 For MUJ and MJI | | | Fenner & Smith Incorporated6 | | |
| | | | New York, NY 10036 | | |
| | | | | |
| | | | | | |
Effective April 14, 2011, Michael J. Castellano became Director of the Funds and Member of the Audit Committee.
Effective July 28, 2011, Richard S. Davis resigned as Director of the Funds, and Paul L. Audet became Director of the Funds.
| | |
| 62 | ANNUAL REPORT | JULY 31, 2011 |
Additional Information
Proxy Results
The Annual Meeting of Shareholders was held on July 28, 2011 for shareholders of record on May 31, 2011 to elect director nominees for each Fund. There
were no broker non-votes with regard to any of the Funds.
| | | | | | | | | |
| | | Paul L. Audet | | Michael J. Castellano | Richard E. Cavanagh |
| | | Votes | | | Votes | | | Votes | |
| | Votes For | Withheld | Abstain | Votes For | Withheld | Abstain | Votes For | Withheld | Abstain |
| MUC | 32,734,839 | 1,483,685 | 0 | 32,749,484 | 1,469,040 | 0 | 32,793,558 | 1,424,966 | 0 |
| MUJ | 17,610,100 | 800,664 | 0 | 17,587,299 | 823,465 | 0 | 17,594,742 | 816,022 | 0 |
| MFT | 6,507,508 | 187,721 | 0 | 6,504,728 | 190,501 | 0 | 6,504,728 | 190,501 | 0 |
| MIY | 14,384,288 | 374,988 | 0 | 14,379,680 | 379,596 | 0 | 14,389,358 | 369,918 | 0 |
| MJI | 7,459,089 | 257,992 | 0 | 7,377,268 | 339,813 | 0 | 7,376,633 | 340,448 | 0 |
| MPA | 9,994,338 | 257,433 | 0 | 10,001,483 | 250,288 | 0 | 9,977,549 | 274,222 | 0 |
| | | Frank J. Fabozzi¹ | Kathleen F. Feldstein | | James T. Flynn |
| | | Votes | | | Votes | | | Votes | |
| | Votes For | Withheld | Abstain | Votes For | Withheld | Abstain | Votes For | Withheld | Abstain |
| MUC | 5,512 | 91 | 0 | 32,597,919 | 1,620,605 | 0 | 32,682,950 | 1,535,574 | 0 |
| MUJ | 5,271 | 1,245 | 0 | 17,304,843 | 1,105,921 | 0 | 17,305,467 | 1,105,297 | 0 |
| MFT | 1,914 | 13 | 0 | 6,497,012 | 198,217 | 0 | 6,504,728 | 190,501 | 0 |
| MIY | 1,167 | 279 | 0 | 14,370,774 | 388,502 | 0 | 14,328,326 | 430,950 | 0 |
| MJI | 1,895 | 44 | 0 | 7,384,191 | 332,890 | 0 | 7,434,149 | 282,932 | 0 |
| MPA | 458 | 80 | 0 | 9,935,761 | 316,010 | 0 | 9,943,932 | 307,839 | 0 |
| | | Henry Gabbay | | | Jerrold B. Harris | | R. Glenn Hubbard |
| | | Votes | | | Votes | | | Votes | |
| | Votes For | Withheld | Abstain | Votes For | Withheld | Abstain | Votes For | Withheld | Abstain |
| MUC | 32,772,404 | 1,446,120 | 0 | 32,759,854 | 1,458,670 | 0 | 32,422,087 | 1,796,437 | 0 |
| MUJ | 17,609,381 | 801,383 | 0 | 17,576,130 | 834,634 | 0 | 17,542,810 | 867,954 | 0 |
| MFT | 6,507,508 | 187,721 | 0 | 6,504,728 | 190,501 | 0 | 6,499,798 | 195,431 | 0 |
| MIY | 14,390,772 | 368,504 | 0 | 14,385,704 | 373,572 | 0 | 14,376,868 | 382,408 | 0 |
| MJI | 7,457,782 | 259,299 | 0 | 7,457,603 | 259,478 | 0 | 7,393,792 | 323,289 | 0 |
| MPA | 9,994,934 | 256,837 | 0 | 9,982,346 | 269,425 | 0 | 9,914,881 | 336,890 | 0 |
| | | W. Carl Kester¹ | | | Karen P. Robards | | | |
| | | Votes | | | Votes | | | | |
| | Votes For | Withheld | Abstain | Votes For | Withheld | Abstain | | | |
| MUC | 5,512 | 91 | 0 | 32,618,983 | 1,599,541 | 0 | | | |
| MUJ | 5,271 | 1,245 | 0 | 17,621,997 | 788,767 | 0 | | | |
| MFT | 1,914 | 13 | 0 | 6,501,510 | 193,719 | 0 | | | |
| MIY | 1,167 | 279 | 0 | 14,344,019 | 415,257 | 0 | | | |
| MJI | 1,895 | 44 | 0 | 7,408,492 | 308,589 | 0 | | | |
| MPA | 458 | 80 | 0 | 9,991,623 | 260,148 | 0 | | | |
| 1 Voted on by holders of Preferred Shares only. | | | | | | | | | |
| | |
| ANNUAL REPORT | JULY 31, 2011 | 63 |
Additional Information (continued)
Board Approvals
On September 1, 2010, the Board of Directors (the “Boards”) of MUC,
MUJ, MFT, MIY, MJI and MPA (the “Funds”) have approved changes to cer-
tain investment policies of the Funds.
Historically, under normal market conditions, each Fund has been required
to invest at least 80% of its assets in municipal bonds either (i) insured
under an insurance policy purchased by the Fund or (ii) insured under an
insurance policy obtained by the issuer of the municipal bond or any other
party. In September 2008, the Funds adopted an amended investment pol-
icy of purchasing only municipal bonds insured by insurance providers with
claims-paying abilities rated investment grade at the time of investment
(the “Insurance Investment Policy”).
Following the onset of the credit and liquidity crises, the claims-paying abil-
ity rating of most of the municipal bond insurance providers has been low-
ered by the rating agencies. These downgrades have called into question
the long-term viability of the municipal bond insurance market, which has
the potential to severely limit the ability of BlackRock Advisors, LLC, the
Fund's investment advisor (the "Manager"), to manage the Funds under the
Insurance Investment Policy.
As a result, on September 1, 2010, the Manager recommended, and the
Boards approved, the removal of the Insurance Investment Policy. As a
result of this investment policy change, the Funds would not be required to
dispose of assets currently held within the Funds. The Funds will maintain,
and have no current intention to amend, their investment policy of, under
normal market conditions, generally investing in municipal obligations rated
investment grade at the time of investment.
As each Fund increases the amount of its assets that are invested in
municipal obligations that are not insured, the Fund’s shareholders will be
exposed to the risk of the failure of such securities’ issuers to pay interest
and repay principal and will not have the benefit of protection provided
under municipal bond insurance policies. As a result, shareholders will be
more dependent on the analytical ability of the Manager to evaluate the
credit quality of issuers of municipal obligations in which the Fund invests.
The Boards believe that the amended investment policy is in the best inter-
ests of each Fund and its shareholders because it believes that the poten-
tial benefits from increased flexibility outweigh the potential increase in risk
from the lack of insurance policies provided by weakened insurance
providers. Of course, the new investment policy cannot assure that each
Fund will achieve its investment objective.
As disclosed in each Fund’s prospectus, each Fund is required to provide
shareholders 60 days notice of a change to the Insurance Investment
Policy. Accordingly, a notice describing the changes discussed above was
mailed to shareholders of record as of September 1, 2010. The new invest-
ment policy took effect on November 9, 2010. The Manager has been grad-
ually repositioning each Fund’s portfolios over time, and during such
period, each Fund may continue to hold a substantial portion of its assets
in insured municipal bonds. At this time, the repositioning of each Fund’s
portfolio is still taking place, and the Funds will continue to be subject to
risks associated with investing a substantial portion of their assets in
insured municipal bonds until the repositioning is complete. No action is
required by shareholders of the Funds in connection with this change.
In connection with this change in non-fundamental policy, each of the
Funds underwent a name change to reflect its new portfolio characteristics.
Each Fund continues to trade on the New York Stock Exchange under its
current ticker symbol.
The approved changes did not alter any Fund’s investment objective.
Dividend Policy
The Funds’ dividend policy is to distribute all or a portion of their net
investment income to its shareholders on a monthly basis. In order to pro-
vide shareholders with a more stable level of dividend distributions, the
Funds may at times pay out less than the entire amount of net investment
income earned in any particular month and may at times in any particular
month pay out such accumulated but undistributed income in addition to
net investment income earned in that month. As a result, the dividends
paid by the Funds for any particular month may be more or less than the
amount of net investment income earned by the Funds during such month.
The Funds’ current accumulated but undistributed net investment income,
if any, is disclosed in the Statements of Assets and Liabilities, which com-
prises part of the financial information included in this report.
| | |
| 64 | ANNUAL REPORT | JULY 31, 2011 |
Additional Information (continued)
General Information
On June 10, 2010, BlackRock Advisors, LLC, the Funds’ investment advisor
(the “Manager”), announced that MUJ and MIY each received a demand
letter from a law firm on behalf of Common Shareholders of MUJ and MIY.
The demand letters allege that the Manager and officers and Boards of
Directors (the “Boards”) of MUJ and MIY breached their fiduciary duties
by redeeming at par certain of MUJ and MIY’s Preferred Shares, and
demanded that the Boards take action to remedy those alleged breaches.
In response to the demand letter, the Boards established a Demand
Review Committee (the “Committee”) of the Independent Directors to
investigate the claims made in the demand letters with the assistance of
independent counsel. Based upon its investigation, the Committee recom-
mended that the Boards reject the demand specified in the demand let-
ters. After reviewing the findings of the Committee, the Board for each Fund
unanimously adopted the Committee’s recommendation and unanimously
voted to reject the demand.
The Funds do not make available copies of their Statements of Additional
Information because the Funds’ shares are not continuously offered, which
means that the Statement of Additional Information of each Fund has not
been updated after completion of the respective Fund’s offerings and the
information contained in each Fund’s Statement of Additional Information
may have become outdated.
During the period there were no material changes in the Funds’ investment
objectives or policies or to the Funds’ charters or by-laws that would delay
or prevent a change of control of the Funds that were not approved by the
shareholders or in the principal risk factors associated with investment in
the Funds. There have been no changes in the persons who are primarily
responsible for the day-to-day management of the Funds’ portfolios.
Quarterly performance, semi-annual and annual reports and other informa-
tion regarding the Funds may be found on BlackRock’s website, which can
be accessed at http://www.blackrock.com. This reference to BlackRock’s
website is intended to allow investors public access to information regard-
ing the Funds and does not, and is not intended to, incorporate
BlackRock’s website in this report.
Electronic Delivery
Electronic copies of most financial reports are available on the Funds’ web-
sites or shareholders can sign up for e-mail notifications of quarterly state-
ments, annual and semi-annual reports by enrolling in the Funds’ electronic
delivery program.
Shareholders Who Hold Accounts with Investment Advisors, Banks
or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisors, banks or brokerages may offer this service.
Householding
The Funds will mail only one copy of shareholder documents, including
annual and semi-annual reports and proxy statements, to shareholders
with multiple accounts at the same address. This practice is commonly
called “householding” and is intended to reduce expenses and eliminate
duplicate mailings of shareholder documents. Mailings of your shareholder
documents may be householded indefinitely unless you instruct us
otherwise. If you do not want the mailing of these documents to be
combined with those for other members of your household, please
call (800) 441-7762.
Availability of Quarterly Schedule of Investments
Each Fund files its complete schedule of portfolio holdings with the SEC
for the first and third quarters of each fiscal year on Form N-Q. The Funds’
Forms N-Q are available on the SEC’s website at http://www.sec.gov and
may also be reviewed and copied at the SEC’s Public Reference Room in
Washington, DC. Information on how to access documents on the SEC’s
website without charge may be obtained by calling (800) SEC-0330. Each
Fund’s Forms N-Q may also be obtained upon request and without charge
by calling (800) 441-7762.
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 avail-
able (1) without charge, upon request, by calling (800) 441-7762;
(2) at http://www.blackrock.com; and (3) on the SEC’s website
at http://www.sec.gov.
Availability of Proxy Voting Record
Information about how the Funds voted proxies relating to securities
held in the Funds’ portfolios during the most recent 12-month period
ended June 30 is available upon request and without charge (1) at
http://www.blackrock.com or by calling (800) 441-7762 and
(2) on the SEC’s website at http://www.sec.gov.
Availability of Fund Updates
BlackRock will update performance data for the Funds on a monthly basis
on its website in the “Closed-end Funds” section of www.blackrock.com.
Investors and others are advised to periodically check the website for
updated performance information and the release of other material
information about the Funds.
| | |
| ANNUAL REPORT | JULY 31, 2011 | 65 |
Additional Information (concluded)
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.
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and for-
mer fund investors and individual clients (collectively, “Clients”) and to
safeguarding their non-public personal information. The following infor-
mation 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 applica-
tions, 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 pro-
cedures relating to the proper storage and disposal of such information.
| | |
| 66 | ANNUAL REPORT | JULY 31, 2011 |
This report is transmitted to shareholders only. 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 the short-term dividend rates of the Preferred Shares, currently set at the maximum reset rate as a result of failed
auctions, may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.
Item 2 – Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end
of the period covered by this report, applicable to the registrant’s principal executive officer,
principal financial officer, principal accounting officer or controller, or persons performing
similar functions. During the period covered by this report, there have been no amendments
to or waivers granted under the code of ethics. A copy of the code of ethics is available
without charge at www.blackrock.com.
Item 3 – Audit Committee Financial Expert – The registrant’s board of directors (the “board of
directors”), has determined that (i) the registrant has the following audit committee financial
experts serving on its audit committee and (ii) each audit committee financial expert is
independent:
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards
qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.
Prof. Kester has a thorough understanding of generally accepted accounting principles,
financial statements and internal control over financial reporting as well as audit committee
functions. Prof. Kester has been involved in providing valuation and other financial
consulting services to corporate clients since 1978. Prof. Kester’s financial consulting
services present a breadth and level of complexity of accounting issues that are generally
comparable to the breadth and complexity of issues that can reasonably be expected to be
raised by the registrant’s financial statements.
Ms. Robards has a thorough understanding of generally accepted accounting principles,
financial statements and internal control over financial reporting as well as audit committee
functions. Ms. Robards has been President of Robards & Company, a financial advisory
firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years
where she was responsible for evaluating and assessing the performance of companies based
on their financial results. Ms. Robards has over 30 years of experience analyzing financial
statements. She also is a member of the audit committee of one publicly held company and
a non-profit organization.
Under applicable securities laws, a person determined to be an audit committee financial
expert will not be deemed an “expert” for any purpose, including without limitation for the
purposes of Section 11 of the Securities Act of 1933, as a result of being designated or
identified as an audit committee financial expert. The designation or identification as an
audit committee financial expert does not impose on such person any duties, obligations, or
liabilities greater than the duties, obligations, and liabilities imposed on such person as a
member of the audit committee and board of directors in the absence of such designation or
identification. The designation or identification of a person as an audit committee financial
expert does not affect the duties, obligations, or liability of any other member of the audit
committee or board of directors.
Item 4 – Principal Accountant Fees and Services
The following table presents fees billed by Deloitte & Touche LLP (“D&T”) in each of the
last two fiscal years for the services rendered to the Fund:
| | | | | | | | |
| | (a) Audit Fees | (b) Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees3 |
| | Current | Previous | Current | Previous | Current | Previous | Current | Previous |
| | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year |
| Entity Name | End | End | End | End | End | End | End | End |
| BlackRock | | | | | | | | |
| MuniYield New | $29,000 | $28,000 | $5,950 | $3,500 | $9,800 | $6,100 | $0 | $0 |
| Jersey Quality Fund, | | | | | | | | |
| Inc. | | | | | | | | |
The following table presents fees billed by D&T that were required to be approved by the
registrant’s audit committee (the “Committee”) for services that relate directly to the
operations or financial reporting of the Fund and that are rendered on behalf of BlackRock
Advisors, LLC (“Investment Adviser” or “BlackRock”) and entities controlling, controlled
by, or under common control with BlackRock (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another investment
adviser) that provide ongoing services to the Fund (“Fund Service Providers”):
| | |
| | Current Fiscal Year End | Previous Fiscal Year End |
| (b) Audit-Related Fees1 | $0 | $0 |
| (c) Tax Fees2 | $0 | $0 |
| (d) All Other Fees3 | $3,030,000 | $2,950,000 |
| 1 The nature of the services includes assurance and related services reasonably related to the performance of the audit of financial statements |
| not included in Audit Fees. | | |
| 2 The nature of the services includes tax compliance, tax advice and tax planning. | |
| 3 The nature of the services includes a review of the Fund’s compliance procedures and attestation thereto. | |
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The Committee has adopted policies and procedures with regard to the pre-approval
of services. Audit, audit-related and tax compliance services provided to the registrant on
an annual basis require specific pre-approval by the Committee. The Committee also must
approve other non-audit services provided to the registrant and those non-audit services
provided to the Investment Adviser and Fund Service Providers that relate directly to the
operations and the financial reporting of the registrant. Certain of these non-audit services
that the Committee believes are a) consistent with the SEC’s auditor independence rules and
b) routine and recurring services that will not impair the independence of the independent
accountants may be approved by the Committee without consideration on a specific case-
by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months
from the date of the pre-approval, unless the Committee provides for a different period. Tax
or other non-audit services provided to the registrant which have a direct impact on the
operations or financial reporting of the registrant will only be deemed pre-approved
provided that any individual project does not exceed $10,000 attributable to the registrant or
$50,000 per project. For this purpose, multiple projects will be aggregated to determine if
they exceed the previously mentioned cost levels.
Any proposed services exceeding the pre-approved cost levels will require specific
pre-approval by the Committee, as will any other services not subject to general pre-
approval (e.g., unanticipated but permissible services). The Committee is informed of each
service approved subject to general pre-approval at the next regularly scheduled in-person
board meeting. At this meeting, an analysis of such services is presented to the Committee
for ratification. The Committee may delegate to the Committee Chairman the authority to
approve the provision of and fees for any specific engagement of permitted non-audit
services, including services exceeding pre-approved cost levels.
(e)(2) None of the services described in each of Items 4(b) through (d) were approved by
the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X.
(f) Not Applicable
(g) The aggregate non-audit fees paid to the accountant for services rendered by the
accountant to the registrant, the Investment Adviser and the Fund Service Providers were:
| | |
| | Current Fiscal Year | Previous Fiscal Year |
| Entity Name | End | End |
| BlackRock MuniYield New | | |
| Jersey Quality Fund, Inc. | $15,750 | $20,377 |
Additionally, SAS No. 70 fees for the current and previous fiscal years of $3,030,000 and
$2,950,000, respectively, were billed by D&T to the Investment Adviser.
(h) The Committee has considered and determined that the provision of non-audit services
that were rendered to the Investment Adviser, and the Fund Service Providers that were not
pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible
with maintaining the principal accountant’s independence.
Item 5 – Audit Committee of Listed Registrants
(a) The following individuals are members of the registrant’s separately-designated
standing audit committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):
Michael Castellano
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
(b) Not Applicable
Item 6 – Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to
Stockholders filed under Item 1 of this Form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since
the previous Form N-CSR filing.
Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management
Investment Companies – The board of directors has delegated the voting of proxies for the
Fund’s portfolio securities to the Investment Adviser pursuant to the Investment Adviser’s
proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies
related to Fund securities in the best interests of the Fund and its stockholders. From time to
time, a vote may present a conflict between the interests of the Fund’s stockholders, on the
one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the
Investment Adviser, on the other. In such event, provided that the Investment Adviser’s
Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight
Committee”) is aware of the real or potential conflict or material non-routine matter and if
the Oversight Committee does not reasonably believe it is able to follow its general voting
guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote
impartially, the Oversight Committee may retain an independent fiduciary to advise the
Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s
clients. If the Investment Adviser determines not to retain an independent fiduciary, or does
not desire to follow the advice of such independent fiduciary, the Oversight Committee shall
determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio
Management Group and/or the Investment Adviser’s Legal and Compliance Department
and concluding that the vote cast is in its client’s best interest notwithstanding the conflict.
A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit
99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities
during the most recent 12-month period ended June 30 is available without charge, (i) at
www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov.
Item 8 – Portfolio Managers of Closed-End Management Investment Companies – as of July 31,
2011.
(a)(1) The registrant is managed by a team of investment professionals comprised of F.
Howard Downs, Director at BlackRock, Theodore R. Jaeckel, Jr., CFA, Managing
Director at BlackRock, and Walter O’Connor, Managing Director at BlackRock.
Each is a member of BlackRock’s municipal tax-exempt management group. Each is
jointly responsible for the day-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. Downs,
Jaeckel and O’Connor have been members of the registrant’s portfolio management
team since 2008, 2006 and 2006, respectively.
| |
| Portfolio Manager | Biography |
| F. Howard Downs | Director of BlackRock since 2004; Vice President of BlackRock from 1999 |
| | to 2004. |
| Theodore R. Jaeckel, Jr. | Managing Director at BlackRock since 2006; Managing Director of Merrill |
| | Lynch Investment Managers, L.P. (“MLIM”) from 2005 to 2006; Director |
| | of MLIM from 1997 to 2005. |
| Walter O’Connor | Managing Director of BlackRock since 2006; Managing Director of MLIM |
| | from 2003 to 2006; Director of MLIM from 1998 to 2003. |
(a)(2) As of July 31, 2011:
| | | | | | |
| | (ii) Number of Other Accounts Managed | (iii) Number of Other Accounts and |
| | and Assets by Account Type | Assets for Which Advisory Fee is |
| | | | | | Performance-Based | |
| | Other | Other Pooled | | Other | Other Pooled | |
| (i) Name of | Registered | Investment | Other | Registered | Investment | Other |
| Portfolio Manager | Investment | Vehicles | Accounts | Investment | Vehicles | Accounts |
| | Companies | | | Companies | | |
| F. Howard Downs | 8 | 0 | 5 | 0 | 0 | 0 |
| | $1.53 Billion | $0 | $93.57 Million | $0 | $0 | $0 |
| Theodore R. Jaeckel, Jr. | 65 | 0 | 0 | 0 | 0 | 0 |
| | $20.42 Billion | $0 | $0 | $0 | $0 | $0 |
| Walter O’Connor | 64 | 0 | 0 | 0 | 0 | 0 |
| | $19.26 Billion | $0 | $0 | $0 | $0 | $0 |
(iv) Potential Material Conflicts of Interest
BlackRock, Inc. 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, Inc. 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, Inc. furnishes investment management and advisory services to
numerous clients in addition to the Fund, and BlackRock, Inc. 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,
Inc., 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, Inc. 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, Inc. with respect to the same securities. Moreover, BlackRock, Inc. 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 material non-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. Additional portfolio managers may in the future manage other such
accounts or funds and may be entitled to receive incentive fees.
As a fiduciary, BlackRock, Inc. owes a duty of loyalty to its clients and must treat each
client fairly. When BlackRock, Inc. purchases or sells securities for more than one
account, the trades must be allocated in a manner consistent with its fiduciary duties.
BlackRock, Inc. 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, Inc. 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 July 31, 2011:
Portfolio Manager Compensation Overview
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.
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 Fund or other accounts managed by
the portfolio managers are measured. BlackRock’s Chief Investment Officers
determine the benchmarks against which the performance of funds and other accounts
managed by each portfolio manager is compared and the period of time over which
performance is evaluated. With respect to the portfolio managers, such benchmarks
include a combination of market-based indices (e.g., Barclays Capital Municipal Bond
Index), certain customized indices and certain fund industry peer groups.
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 both a pre-tax and after-tax basis over
various time periods including 1-, 3- and 5-year periods, as applicable. With respect to the
performance of the other listed Index and Multi-Asset Funds, performance is measured on,
among other things, a pre-tax basis over various time periods including 1-, 3- and 5-year
periods, as applicable.
Distribution of Discretionary Incentive Compensation
Discretionary incentive compensation is distributed to portfolio managers in a combination
of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of
years. For some portfolio managers, discretionary incentive compensation is also
distributed in deferred cash awards that notionally track the returns of select BlackRock
investment products they manage and that vest ratably over a number of years. The
BlackRock, Inc. restricted stock units, upon vesting, will be settled in BlackRock, Inc.
common stock. Typically, the cash bonus, when combined with base salary, represents
more than 60% of total compensation for the portfolio managers. Paying a portion of
annual bonuses in 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. Providing a portion of annual bonuses in deferred cash awards that notionally track
the BlackRock investment products they manage provides direct alignment with investment
product results.
Long-Term Incentive Plan Awards — From time to time long-term incentive equity
awards are granted to certain key employees to aid in retention, align their interests with
long-term shareholder interests and motivate performance. Equity awards are generally
granted in the form of BlackRock, Inc. restricted stock units that, once vested, settle in
BlackRock, Inc. common stock. Messrs. Downs, Jaeckel and O’Connor have each received
long-term incentive awards.
Deferred Compensation Program — A portion of the compensation paid to
eligible BlackRock employees may be voluntarily deferred into an account that tracks the
performance of certain of the firm’s investment products. Each participant in the deferred
compensation program is permitted to allocate his deferred amounts among various
BlackRock investment options. Messrs. Downs, Jaeckel and O’Connor have each
participated in the deferred compensation program.
Other compensation benefits. In addition to base compensation 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 contributed to the plan
capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible
compensation. The RSP offers a range of investment options, including registered
investment companies and collective investment funds managed by the firm. BlackRock
contributions follow the investment direction set by participants for their own contributions
or, absent participant investment direction, are invested into an index 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 or a dollar value of $25,000. Each portfolio manager is eligible to
participate in these plans.
(a)(4) Beneficial Ownership of Securities – As of July 31, 2011.
| |
| Portfolio Manager | Dollar Range of Equity Securities |
| | of the Fund Beneficially Owned |
| F. Howard Downs | None |
| Theodore R. Jaeckel, Jr. | None |
| Walter O’Connor | None |
(b) Not Applicable
Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and
Affiliated Purchasers – Not Applicable due to no such purchases during the period covered
by this report.
Item 10 – Submission of Matters to a Vote of Security Holders – There have been no material
changes to these procedures.
Item 11 – Controls and Procedures
(a) – The registrant’s principal executive and principal financial officers, or persons
performing similar functions, have concluded that the registrant’s disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as
amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this
report based on the evaluation of these controls and procedures required by Rule 30a-3(b)
under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as
amended.
(b) – There were no changes in the registrant’s internal control over financial reporting (as
defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter
of the period covered by this report that have materially affected, or are reasonably likely to
materially affect, the registrant’s internal control over financial reporting.
Item 12 – Exhibits attached hereto
(a)(1) – Code of Ethics – See Item 2
(a)(2) – Certifications – Attached hereto
(a)(3) – Not Applicable
(b) – Certifications – Attached hereto
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 Jersey Quality Fund, Inc.
By: /S/ John M. Perlowski
John M. Perlowski
Chief Executive Officer (principal executive officer) of
BlackRock MuniYield New Jersey Quality Fund, Inc.
Date: October 4, 2011
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 Jersey Quality Fund, Inc.
Date: October 4, 2011
By: /S/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniYield New Jersey Quality Fund, Inc.
Date: October 4, 2011
