UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-07156
Name of Fund: BlackRock MuniYield Insured Investment Fund (MFT)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock
MuniYield Insured Investment Fund, 40 East 52nd Street, New York, NY 10022.
Registrant’s telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 07/31/2009
Date of reporting period: 07/31/2009
Item 1 – Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
Annual Report
JULY 31, 2009
BlackRock MuniHoldings California Insured Fund, Inc. (MUC)
BlackRock MuniHoldings New Jersey Insured Fund, Inc. (MUJ)
BlackRock MuniYield Insured Investment Fund (MFT)
BlackRock MuniYield Michigan Insured Fund, Inc. (MIY)
BlackRock MuniYield New Jersey Insured Fund, Inc. (MJI)
BlackRock MuniYield Pennsylvania Insured Fund (MPA)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
Table of Contents | |
Page | |
Dear Shareholder | 3 |
Annual Report: | |
Fund Summaries | 4 |
The Benefits and Risks of Leveraging | 10 |
Derivative Financial Instruments | 10 |
Financial Statements: | |
Schedules of Investments | 11 |
Statements of Assets and Liabilities | 32 |
Statements of Operations | 33 |
Statements of Changes in Net Assets | 34 |
Statements of Cash Flows | 37 |
Financial Highlights | 38 |
Notes to Financial Statements | 44 |
Report of Independent Registered Public Accounting Firm | 53 |
Important Tax Information | 55 |
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements | 56 |
Automatic Dividend Reinvestment Plan | 60 |
Officers and Directors | 61 |
Additional Information | 65 |
2 ANNUAL REPORT JULY 31, 2009
Dear Shareholder
The past 12 months reveal two distinct market backdrops — one of extreme investor pessimism and decided weakness, and another of cautious optimism
and nascent signs of recovery. The first half of the period was characterized by the former, as the global financial crisis erupted into the worst recession
in decades. Daily headlines recounted universal macroeconomic deterioration, financial sector casualties, volatile swings in global equity markets, and
unprecedented government intervention that included widespread (and globally coordinated) monetary and quantitative easing by central banks and large-
scale fiscal stimuli. Sentiment improved noticeably in March 2009, however, on the back of new program announcements by the US Treasury Department
and Federal Reserve, as well as generally stronger-than-expected economic data in a few key areas, including retail sales, business and consumer confidence,
manufacturing and housing.
In this environment, US equities contended with extraordinary volatility, posting steep declines through mid-March 2009 before going on a three-month
rally that largely negated year-to-date losses. Late in the period, investor enthusiasm waned and a correction ensued for several weeks, mostly as a result
of profit taking and portfolio rebalancing, as opposed to a change in the economic outlook. Equities rallied once again as the period drew to a close, result-
ing in positive year-to-date returns for all major indexes. The experience in international markets was similar to that in the United States, though performance
was generally more extreme both on the decline and on the upturn. Notably, emerging markets, which lagged most developed regions through the downturn,
reassumed leadership in 2009 as these areas of the globe have generally seen a stronger acceleration in economic recovery.
In fixed income markets, while the flight to quality remained a prevalent theme, relatively attractive yields and distressed valuations, alongside a more
favorable macro environment, eventually captured investor attention, leading to a sharp recovery in non-Treasury assets. This has been particularly evident
in the high yield sector, which has firmly outpaced all other taxable asset classes since the start of 2009. At the same time, the municipal bond market
enjoyed a strong return after the exceptional market volatility of 2008, buoyed by a combination of attractive valuations, robust retail investor demand and
a slowdown in forced selling. Direct aid to state and local governments via the American Recovery and Reinvestment Act of 2009 has also lent support
to municipal bonds.
Total Returns as of July 31, 2009 | 6-month | 12-month |
US equities (S&P 500 Index) | 21.18% | (19.96)% |
Small cap US equities (Russell 2000 Index) | 26.61 | (20.72) |
International equities (MSCI Europe, Australasia, Far East Index) | 30.63 | (22.60) |
US Treasury securities (Merrill Lynch 10-Year US Treasury Index) | (3.91) | 7.58 |
Taxable fixed income (Barclays Capital US Aggregate Bond Index) | 4.47 | 7.85 |
Tax-exempt fixed income (Barclays Capital Municipal Bond Index) | 4.38 | 5.11 |
High yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index) | 30.11 | 5.30 |
Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index. | ||
The market environment has clearly improved since the beginning of the year, but a great deal of uncertainty and risk remain. Through periods of market tur- | ||
bulence, as ever, BlackRock’s full resources are dedicated to the management of our clients’ assets. For additional insight and timely “food for thought,” we | ||
invite you to visit our award-winning Shareholder® magazine, now available exclusively online at www.blackrock.com/shareholdermagazine. We thank you | ||
for entrusting BlackRock with your investments, and we look forward to continuing to serve you in the months and years ahead. |
![](https://capedge.com/proxy/N-CSR/0000900092-09-001028/brmuniyield6ar0709x3x1.jpg)
Announcement to Shareholders
On June 16, 2009, BlackRock, Inc. announced that it received written notice from Barclays PLC (“Barclays”) in which Barclays’ Board of Directors had
accepted BlackRock’s offer to acquire Barclays Global Investors (“BGI”). At a special meeting held on August 6, 2009, BlackRock’s proposed purchase of
BGI was approved by an overwhelming majority of Barclays’ voting shareholders, an important step toward closing the transaction. The combination of
BlackRock and BGI will bring together market leaders in active and index strategies to create the preeminent asset management firm. The transaction is
scheduled to be completed in the fourth quarter of 2009, subject to important fund shareholder and regulatory approvals.
THIS PAGE NOT PART OF YOUR FUND REPORT 3
Fund Summary as of July 31, 2009 BlackRock MuniHoldings California Insured Fund, Inc.
Investment Objective
BlackRock MuniHoldings California Insured Fund, Inc. (MUC) (the “Fund”) seeks to provide shareholders with current income exempt from federal and
California income taxes. The Fund seeks to achieve this objective by investing primarily in a portfolio of long-term, investment-grade municipal obligations,
the interest on which, in the opinion of bond counsel to the issuer, is exempt from federal and California income taxes. No assurance can be given that the
Fund’s investment objective will be achieved. The Fund changed its fiscal year end to July 31.
Performance
For the one month ended July 31, 2009, the Fund returned 10.59% based on market price and 1.75% based on net asset value (“NAV”). For the same
period, the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average return of 7.02% based on market price and 2.00%
on a NAV basis. All returns reflect reinvestment of dividends. The performance of the Lipper category does not necessarily correlate to that of the Fund,
as the Lipper group comprises funds representing various states and not California alone. The Fund’s discount to NAV, which narrowed during the period,
accounts for the difference between performance based on price and performance based on NAV. Duration positioning was slightly longer than neutral
for the period. The Fund benefited from a relatively lower exposure to poorer-rated monoline insurers. The underlying quality of the securities covered by the
insurance wrap is sound, which helped protect valuations. Our strategy is to pursue a balanced approach to returns, continue to bolster current yield and
commit cash reserves when research uncovers appropriate opportunities. Credit fundamentals warrant monitoring in the current weak economic environ-
ment, especially in California, considering budgetary challenges. Management is alert to improve quality as opportunities arise. Low short-term rates
resulted in increased income to the Fund from leverage, which allowed for a dividend increase beginning with the July 1, 2009 distribution.
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, 2009 ($12.18)1 | 6.21% | ||||
Tax Equivalent Yield2 | 9.55% | ||||
Current Monthly Distribution per Common Share3 | $0.063 | ||||
Current Annualized Distribution per Common Share3 | $0.756 | ||||
Leverage as of July 31, 20094 | 40% | ||||
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. | |||||
Past performance does not guarantee future results. | |||||
2 Tax equivalent yield assumes the maximum federal tax rate of 35%. | |||||
3 The distribution is not constant and is subject to change. | |||||
4 Represents Auction Market Preferred Shares (“Preferred Shares”) 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 Preferred 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 10. | |||||
The table below summarizes the changes in the Fund’s market price and NAV per share: | |||||
7/31/09 | 6/30/09 | Change | High | Low | |
Market Price | $12.18 | $11.07 | 10.03% | $12.19 | $10.95 |
Net Asset Value | $13.21 | $13.05 | 1.23% | $13.33 | $13.00 |
The following unaudited charts show the sector and credit quality allocations of the Fund’s long-term investments: |
Sector Allocations | ||
7/31/09 | 6/30/09 | |
County/City/Special District/ | ||
School District | 46% | 47% |
Utilities | 24 | 24 |
Transportation | 13 | 12 |
Education | 9 | 9 |
Health | 4 | 4 |
State | 4 | 4 |
Credit Quality Allocations5 | ||
7/31/09 | 6/30/09 | |
AAA/Aaa | 37% | 43% |
AA/Aa | 29 | 23 |
A/A | 33 | 33 |
BBB/Baa | 1 | 1 |
5 Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investors | ||
Service (“Moody’s”) ratings.�� |
4 ANNUAL REPORT JULY 31, 2009
Fund Summary as of July 31, 2009 BlackRock MuniHoldings New Jersey Insured Fund, Inc.
Investment Objective
BlackRock MuniHoldings New Jersey Insured Fund, Inc. (MUJ) (the “Fund”) seeks to provide shareholders with current income exempt from federal income
tax and New Jersey personal income taxes by investing in a portfolio of long-term, investment grade municipal obligations the interest on which, in the opin-
ion of bond counsel to the issuer, is exempt from federal income tax and New Jersey personal income taxes. No assurance can be given that the Fund’s
investment objective will be achieved.
Performance
For the 12 months ended July 31, 2009, the Fund returned 9.45% based on market price and 6.13% based on NAV. For the same period, the closed-end
Lipper Single-State Insured Municipal Debt Funds category posted an average return of 5.13% based on market price and 0.69% on a NAV basis. All returns
reflect reinvestment of dividends. The performance of the Lipper category does not necessarily correlate to that of the Fund, as the Lipper group comprises
funds representing various states and not New Jersey alone. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference
between performance based on price and performance based on NAV. The Fund benefited from the declining interest rate environment during the period.
Sector allocation was also accretive to performance, as the Fund’s allocation to pre-refunded and escrowed issues outperformed. Low short-term rates
resulted in increased income to the Fund from leverage, which allowed for a dividend increase beginning with the July 1, 2009 distribution.
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, 2009 ($13.38)1 | 5.87% | ||||
Tax Equivalent Yield2 | 9.03% | ||||
Current Monthly Distribution per Common Share3 | $0.0655 | ||||
Current Annualized Distribution per Common Share3 | $0.7860 | ||||
Leverage as of July 31, 20094 | 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 is not constant and is subject to change. | |||||
4 Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributa- | |||||
ble to Preferred 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 10. | |||||
The table below summarizes the changes in the Fund’s market price and NAV per share: | |||||
7/31/09 | 7/31/08 | Change | High | Low | |
Market Price | $13.38 | $12.93 | 3.48% | $13.42 | $ 8.38 |
Net Asset Value | $14.40 | $14.35 | 0.35% | $14.69 | $11.95 |
The following unaudited charts show the sector and credit quality allocations of the Fund’s long-term investments: |
Sector Allocations | ||
7/31/09 | 7/31/08 | |
State | 35% | 34% |
County/City/Special District/ | ||
School District | 17 | 18 |
Transportation | 15 | 16 |
Education | 10 | 13 |
Health | 9 | 8 |
Housing | 7 | 4 |
Utilities | 5 | 6 |
Tobacco | 1 | 1 |
Corporate | 1 | — |
Credit Quality Allocations5 | ||
7/31/09 | 7/31/08 | |
AAA/Aaa | 41% | 43% |
AA/Aa | 20 | 36 |
A/A | 27 | 14 |
BBB/Baa | 9 | 6 |
Not Rated6 | 3 | 1 |
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, 2009 and | ||
2008, the market value of these securities was $15,862,145, repre- | ||
senting 3% and $1,972,106, representing 1%, respectively, of the | ||
Fund’s long-term investments. |
ANNUAL REPORT JULY 31, 2009 5
Fund Summary as of July 31, 2009 BlackRock MuniYield Insured Investment Fund, Inc.
Investment Objective
BlackRock MuniYield Insured Investment Fund (MFT) (the “Fund”) seeks to provide shareholders with as high a level of current income exempt from
regular federal income taxes as is consistent with its investment policies and prudent investment management. The Fund also seeks to provide shareholders
with shares the value of which is exempt from Florida intangible personal property tax. Effective September 16, 2008, BlackRock MuniYield Florida Insured
Fund was renamed BlackRock MuniYield Insured Investment Fund. No assurance can be given that the Fund’s investment objective will be achieved.
Performance
For the 12 months ended July 31, 2009, the Fund returned 7.08% based on market price and 1.94% based on NAV. For the same period, the closed-end
Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of 7.93% based on market price and 1.51% on a NAV basis. All
returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance
based on price and performance based on NAV. Sector allocation played an important role in determining how the Fund performed during the period. The
Fund was significantly overweight in pre-refunded securities in the one- to five-year maturity range. This enhanced performance as the yield curve steep-
ened. The Fund’s overweight position in water and sewer bonds, which outperformed, also contributed positively to the Fund’s performance. Low short-term
rates resulted in increased income to the Fund from leverage, which allowed for a dividend increase beginning with the July 1, 2009 distribution.
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, 2009 ($11.80)1 | 6.71% | ||||
Tax Equivalent Yield2 | 10.32% | ||||
Current Monthly Distribution per Common Share3 | $0.066 | ||||
Current Annualized Distribution per Common Share3 | $0.792 | ||||
Leverage as of July 31, 20094 | 40% | ||||
1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. | |||||
Past performance does not guarantee future results. | |||||
2 Tax equivalent yield assumes the maximum federal tax rate of 35%. | |||||
3 The distribution is not constant and is subject to change. | |||||
4 Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributa- | |||||
ble to Preferred 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 10. | |||||
The table below summarizes the changes in the Fund’s market price and NAV per share: | |||||
7/31/09 | 7/31/08 | Change | High | Low | |
Market Price | $11.80 | $11.75 | 0.43% | $11.97 | $ 6.70 |
Net Asset Value | $12.83 | $13.42 | (4.40)% | $13.68 | $10.36 |
The following unaudited charts show the sector and credit quality allocations of the Fund’s long-term investments: |
Sector Allocations | ||
7/31/09 | 7/31/08 | |
Utilities | 28% | 11% |
County/City/Special District/ | ||
School District | 22 | 33 |
Transportation | 17 | 23 |
Health | 15 | 14 |
State | 10 | 5 |
Education | 5 | 8 |
Housing | 3 | 6 |
Credit Quality Allocations5 | ||
7/31/09 | 7/31/08 | |
AAA/Aaa | 55% | 41% |
AA/Aa | 13 | 41 |
A/A | 27 | 12 |
BBB/Baa | — | 1 |
Not Rated6 | 5 | 5 |
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, 2009 and | ||
2008, the market value of these securities was $7,910,411, repre- | ||
senting 5% and $8,223,585, representing 4%, respectively, of the | ||
Fund’s long-term investments. |
6 ANNUAL REPORT JULY 31, 2009
Fund Summary as of July 31, 2009 BlackRock MuniYield Michigan Insured Fund, Inc.
Investment Objective
BlackRock MuniYield Michigan Insured Fund, Inc. (MIY) (the “Fund”) seeks to provide shareholders with as high a level of current income exempt from fed-
eral income tax and Michigan income taxes as is consistent with its investment policies and prudent investment management by investing primarily in a
portfolio of long-term municipal obligations the interest on which, in the opinion of bond counsel to the issuers, is exempt from federal income tax and
Michigan income taxes. No assurance can be given that the Fund’s investment objective will be achieved.
Performance
For the 12 months ended July 31, 2009, the Fund returned 5.95% based on market price and 4.66% based on NAV. For the same period, the closed-end
Lipper Single-State Insured Municipal Debt Funds category posted an average return of 5.13% based on market price and 0.69% on a NAV basis. All
returns reflect reinvestment of dividends. The performance of the Lipper category does not necessarily correlate to that of the Fund, as the Lipper group
comprises funds representing various states and not Michigan alone. The Fund’s discount to NAV, which narrowed during the period, accounts for the
difference between performance based on price and performance based on NAV. The Fund benefited from a declining interest rate environment during the
period. Sector allocation was accretive to performance, as the Fund’s allocation to pre-refunded and escrowed issues outperformed. Low short-term rates
resulted in increased income to the Fund from leverage, which allowed for a dividend increase beginning with the July 1, 2009 distribution.
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, 2009 ($12.25)1 | 6.51% | ||||
Tax Equivalent Yield2 | 10.02% | ||||
Current Monthly Distribution per Common Share3 | $0.0665 | ||||
Current Annualized Distribution per Common Share3 | $0.7980 | ||||
Leverage as of July 31, 20094 | 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 is not constant and is subject to change. | |||||
4 Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributa- | |||||
ble to Preferred 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 10. | |||||
The table below summarizes the changes in the Fund’s market price and NAV per share: | |||||
7/31/09 | 7/31/08 | Change | High | Low | |
Market Price | $12.25 | $12.30 | (0.41)% | $12.43 | $ 7.00 |
Net Asset Value | $13.93 | $14.16 | (1.62)% | $14.50 | $11.89 |
The following unaudited charts show the sector and credit quality allocations of the Fund’s long-term investments: |
Sector Allocations | ||
7/31/09 | 7/31/08 | |
County/City/Special District/ | ||
School District | 22% | 24% |
Health | 14 | 13 |
Utilities | 14 | 12 |
Corporate | 14 | 13 |
State | 12 | 9 |
Transportation | 11 | 12 |
Education | 10 | 15 |
Housing | 3 | 2 |
Credit Quality Allocations5 | ||
7/31/09 | 7/31/08 | |
AAA/Aaa | 32% | 35% |
AA/Aa | 22 | 47 |
A/A | 42 | 15 |
BBB/Baa | 2 | 3 |
Not Rated | 26 | — |
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, 2009, the | ||
market value of these securities was $3,021,972, representing 1% of | ||
the Fund’s long-term investments. |
ANNUAL REPORT JULY 31, 2009 7
Fund Summary as of July 31, 2009
BlackRock MuniYield New Jersey Insured Fund, Inc.
Investment Objective
BlackRock MuniYield New Jersey Insured Fund, Inc. (MJI) (the “Fund”) seeks to provide shareholders with as high a level of current income exempt from fed-
eral income tax and New Jersey personal income taxes as is consistent with its investment policies and prudent investment management by investing primarily
in a portfolio of long-term municipal obligations the interest on which, in the opinion of bond counsel to the issuers, is exempt from federal income tax and
New Jersey personal income taxes. No assurance can be given that the Fund’s investment objective will be achieved.
Performance
For the 12 months ended July 31, 2009, the Fund returned 6.22% based on market price and 4.94% based on NAV. For the same period, the closed-end
Lipper Single-State Insured Municipal Debt Funds category posted an average return of 5.13% based on market price and 0.69% on a NAV basis. All
returns reflect reinvestment of dividends. The performance of the Lipper category does not necessarily correlate to that of the Fund, as the Lipper group
comprises funds representing various states and not New Jersey alone. The Fund’s discount to NAV, which narrowed during the period, accounts for the
difference between performance based on price and performance based on NAV. The Fund benefited from a declining interest rate environment during the
period. Sector allocation was accretive to performance, as the Fund’s allocation to pre-refunded and escrowed issues outperformed. Low short-term rates
resulted in increased income to the Fund from leverage, which allowed for a dividend increase beginning with the July 1, 2009 distribution.
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, 2009 ($12.82)1 | 5.99% | |||||||
Tax Equivalent Yield2 | 9.22% | |||||||
Current Monthly Distribution per Common Share3 | $0.064 | |||||||
Current Annualized Distribution per Common Share3 | $0.768 | |||||||
Leverage as of July 31, 20094 | 36% | |||||||
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 is not constant and is subject to change. | ||||||||
4 Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributa- | ||||||||
ble to Preferred 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 10. | ||||||||
The table below summarizes the changes in the Fund’s market price and NAV per share: | ||||||||
7/31/09 | 7/31/08 | Change | High | Low | ||||
Market Price | $12.82 | $12.81 | 0.08% | $13.02 | $ 7.19 | |||
Net Asset Value | $14.07 | $14.23 | (1.12)% | $14.58 | $11.39 | |||
The following unaudited charts show the sector and credit quality allocations of the Fund’s long-term investments: | ||||||||
Sector Allocations | Credit Quality Allocations5 | |||||||
7/31/09 | 7/31/08 | 7/31/09 | 7/31/08 | |||||
State | 26% | 26% | AAA/Aaa | 32% | 33% | |||
County/City/Special District/ | AA/Aa | 22 | 46 | |||||
School District | 18 | 16 | A/A | 34 | 11 | |||
Education | 15 | 17 | BBB/Baa | 8 | 4 | |||
Utilities | 12 | 12 | Not Rated6 | 4 | 6 | |||
Transportation | 10 | 11 | 5 Using the higher of S&P’s and Moody’s ratings. | |||||
Health | 10 | 11 | 6 The investment advisor has deemed certain of these non-rated | |||||
Housing | 7 | 5 | securities to be of investment grade quality. As of July 31, 2009 | |||||
Tobacco | 1 | 1 | and 2008, the market value of these securities was $7,777,159, | |||||
representing 4% and $12,649,795, representing 6%, respectively, of | ||||||||
Corporate | 1 | 1 | the Fund’s long-term investments. |
8 ANNUAL REPORT
JULY 31, 2009
Fund Summary as of July 31, 2009 BlackRock MuniYield Pennsylvania Insured Fund
Investment Objective
BlackRock MuniYield Pennsylvania Insured Fund (MPA) (the “Fund”) seeks 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 by investing primarily in a portfolio of long-term
municipal obligations the interest on which, in the opinion of bond counsel to the issuers, is exempt from federal and Pennsylvania income taxes. No assurance
can be given that the Fund’s investment objective will be achieved.
Performance
For the 12 months ended July 31, 2009, the Fund returned 9.78% based on market price and 5.88% based on NAV. For the same period, the closed-end
Lipper Single-State Insured Municipal Debt Funds category posted an average return of 5.13% based on market price and 0.69% on a NAV basis. All
returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance
based on price and performance based on NAV. The Fund benefited primarily from its exposure to the short end of the yield curve. This had a positive
impact on performance, as exposure to pre-refunded and escrowed issues outperformed at the same time rates at the longer end of the yield curve
increased. Low short-term rates, however, resulted in increased income to the Fund from leverage, which allowed a dividend increase beginning with the
July 1, 2009 distribution.
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, 2009 ($12.87)1 | 6.11% | ||||
Tax Equivalent Yield2 | 9.40% | ||||
Current Monthly Distribution per Common Share3 | $0.0655 | ||||
Current Annualized Distribution per Common Share3 | $0.7860 | ||||
Leverage as of July 31, 20094 | 36% | ||||
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 is not constant and is subject to change. | |||||
4 Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributa- | |||||
ble to Preferred 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 10. | |||||
The table below summarizes the changes in the Fund’s market price and NAV per share: | |||||
7/31/09 | 7/31/08 | Change | High | Low | |
Market Price | $12.87 | $12.43 | 3.54% | $12.92 | $ 7.09 |
Net Asset Value | $14.28 | $14.30 | (0.14)% | $14.66 | $11.00 |
The following unaudited charts show the sector and credit quality allocations of the Fund’s long-term investments: |
Sector Allocations | ||
7/31/09 | 7/31/08 | |
County/City/Special District/ | ||
School District | 38% | 29% |
State | 15 | 13 |
Transportation | 11 | 9 |
Utilities | 11 | 14 |
Health | 9 | 8 |
Corporate | 6 | 4 |
Education | 6 | 20 |
Housing | 4 | 3 |
Credit Quality Allocations5 | ||
7/31/09 | 7/31/08 | |
AAA/Aaa | 39% | 48% |
AA/Aa | 42 | 35 |
A/A | 18 | 14 |
BBB/Baa | 1 | 3 |
5 Using the higher of S&P’s or Moody’s ratings. |
ANNUAL REPORT JULY 31, 2009 9
The Benefits and Risks of Leveraging
The Funds may utilize leverage to seek to enhance the yield and NAV of
their Common Shares. However, these objectives cannot be achieved in all
interest rate environments.
To leverage, the Funds issue Preferred Shares, which pay dividends at
prevailing short-term interest rates, and invests the proceeds in long-term
municipal bonds. In general, the concept of leveraging is based on the
premise that the cost of assets to be obtained from leverage will be based
on short-term interest rates, which normally will be lower than the income
earned by each Fund on its longer-term portfolio investments. To the extent
that the total assets of the Fund (including the assets obtained from lever-
age) are invested in higher-yielding portfolio investments, the Fund’s
Common Shareholders will benefit from the incremental yield.
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 the income based on long-term interest
rates. In this case, the dividends paid to Preferred Shareholders are signifi-
cantly lower than the income earned on the Fund’s long-term investments,
and therefore the Common Shareholders are the beneficiaries of the incre-
mental net income.
Conversely, if prevailing short-term interest rates rise above long-term inter-
est rates of 6%, the yield curve has a negative slope. In this case, the Fund
pays dividends on the higher short-term interest rates whereas the Fund’s
total portfolio earns income based on lower long-term interest rates. 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, the value of the Fund’s 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 Fund’s Preferred Shares does not fluctuate in
relation to interest rates. As a result, changes in interest rates can influence
the Fund’s NAV positively or negatively in addition to the impact on Fund
performance from leverage from Preferred Shares discussed above.
The Funds may also, from time to time, leverage their assets through the
use of tender option bond (“TOB”) programs, 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 the Funds’ NAV per share.
The use of leverage may enhance opportunities for increased returns to the
Funds and Common Shareholders, but as described above, it also creates
risks as short- or long-term interest rates fluctuate. Leverage also will gen-
erally cause greater changes in the Funds’ NAV, market price and dividend
rate than a comparable portfolio 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, the Funds’ net income will be
less than if leverage had not been used, and therefore the amount avail-
able for distribution to Common Shareholders will be reduced. The Funds
may be required to sell portfolio securities at inopportune times or at dis-
tressed values in order to comply with regulatory requirements applicable
to the use of leverage or as required by the terms of leverage instruments,
which may cause the Funds to incur losses. The use of leverage may limit
the Funds’ ability to invest in certain types of securities or use certain types
of hedging strategies, such as in the case of certain restrictions imposed
by ratings agencies that rate preferred shares issued by a Fund. The Funds
will incur expenses in connection with the use of leverage, all of which are
borne by the holders of the Common Shares and may reduce returns on
the Common Shares.
Under the Investment Company Act of 1940, each Fund is permitted to
issue Preferred Shares in an amount of up to 50% of its total managed
assets at the time of issuance. Under normal circumstances, each Fund
anticipates that the total economic leverage from Preferred Shares and
TOBs will not exceed 50% of its total managed assets at the time such
leverage is incurred. As of July 31, 2009, the Funds had economic leverage
from Preferred Shares and TOBs as a percentage of their total managed
assets as follows:
Percent of | |
Leverage | |
BlackRock MuniHoldings California Insured Fund, Inc | 40% |
BlackRock MuniHoldings New Jersey Insured Fund, Inc | 38% |
BlackRock MuniYield Insured Investment Fund | 40% |
BlackRock MuniYield Michigan Insured Fund, Inc | 39% |
BlackRock MuniYield New Jersey Insured Fund, Inc | 36% |
BlackRock MuniYield Pennsylvania Insured Fund | 36% |
Derivative Financial Instruments
The Funds may invest in various derivative instruments, including swaps, as
specified in Note 2 of the Notes to Financial Statements, which constitute
forms of economic leverage. Such 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. Such derivative instruments involve
risks, including the imperfect correlation between the value of a derivative
instrument and the underlying asset, possible default of the counterparty
to the transaction and illiquidity of the derivative instrument. The Funds’
ability to successfully use a derivative instrument depends on the invest-
ment advisor’s ability to accurately predict pertinent market movements,
which cannot be assured. The use of derivative instruments may result in
losses greater than if they had not been used, may require a Fund to sell or
purchase portfolio securities at inopportune times or for distressed values,
may limit the amount of appreciation a Fund can realize on an investment
or may cause a Fund to hold a security that it might otherwise sell. The
Funds’ investments in these instruments are discussed in detail in the
Notes to Financial Statements.
10 ANNUAL REPORT JULY 31, 2009
Schedule of Investments July 31, 2009 BlackRock MuniHoldings California Insured Fund, Inc. (MUC)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
California — 124.5% | |||
Corporate — 0.5% | |||
City of Chula Vista California, RB, San Diego Gas, | |||
Series A, Remarketed, 5.88%, 2/15/34 | $ 2,435 | $ 2,468,360 | |
County/City/Special District/School District — 55.1% | |||
Alameda County Joint Powers Authority, RB, | |||
Lease (FSA), 5.00%, 12/01/34 | 14,150 | 13,539,993 | |
Banning Unified School District, California, GO, 2006 | |||
Election, Series A (MBIA), 5.00%, 8/01/27 | 2,825 | 2,788,699 | |
Bonita Unified School District, California, GO, Election | |||
of 2004, Series B (MBIA), 5.00%, 8/01/29 | 8,350 | 8,184,586 | |
Cajon Valley Union School District, California, GO, | |||
Series B (MBIA), 5.50%, 8/01/27 | 2,925 | 3,007,046 | |
Central Unified School District, GO, Election of 2008, | |||
Series A (AGC), 5.63%, 8/01/33 | 2,600 | 2,630,732 | |
City of Garden Grove California, COP, Series A, Financing | |||
Project (AMBAC), 5.50%, 3/01/26 | 4,040 | 4,150,736 | |
City of Lodi California, COP, Series A (FSA), | |||
5.00%, 10/01/32 | 2,000 | 1,912,640 | |
City of Vista California, COP, Community Projects (MBIA), | |||
5.00%, 5/01/37 | 6,750 | 5,867,033 | |
Coachella Valley Unified School District, California, GO, | |||
Election, Series A (MBIA), 5.00%, 8/01/27 | 2,400 | 2,369,160 | |
Colton Joint Unified School District, GO, Series A (MBIA), | |||
5.38%, 8/01/26 | 2,500 | 2,527,800 | |
Corona Department of Water & Power, COP (MBIA), | |||
5.00%, 9/01/29 | 5,910 | 5,699,249 | |
Corona-Norca Unified School District, California, GO, | |||
Election of 2006, Series A (FSA), 5.00%, 8/01/31 | 5,000 | 4,889,100 | |
County of Kern California, COP, Capital Improvement | |||
Projects, Series A (AGC), 6.00%, 8/01/35 | 3,500 | 3,636,010 | |
County of San Diego California, COP, Refunding, | |||
Edgemoor Project & Regional System (AMBAC), | |||
5.00%, 2/01/29 | 1,500 | 1,435,170 | |
County of San Joaquin California, COP, County | |||
Administration Building (MBIA), 5.00%, 11/15/30 | 5,530 | 5,062,051 | |
Covina-Valley Unified School District, California, GO, | |||
Series A (FSA), 5.50%, 8/01/26 | 2,395 | 2,476,478 | |
Culver City Redevelopment Finance Authority, California, | |||
TAN, Refunding, Tax Allocation, Series A (FSA), | |||
5.60%, 11/01/25 | 3,750 | 3,832,913 | |
East Side Union High School District-Santa Clara | |||
County, California, GO, CAB, Election of 2002, Series E | |||
(Syncora), 5.12%, 8/01/28 (a) | 11,000 | 3,127,520 | |
Foothill-De Anza Community College District, California, | |||
GO, Refunding (MBIA), 5.00%, 8/01/30 | 5,000 | 4,904,450 | |
Fullerton Joint Union High School District, California, | |||
GO, Election of 2002, Series B (MBIA), 5.00%, 8/01/29 | 5,200 | 5,108,428 | |
Hartnell Community College District, California, GO, | |||
Election of 2002, Series B (FSA), 5.00%, 6/01/31 | 2,155 | 2,107,245 | |
Hemet Unified School District, California, GO, 2006 | |||
Election, Series B (AGC), 5.13%, 8/01/37 | 4,500 | 4,372,965 |
Par | |||
Municipal Bonds | (000) | Value | |
California (continued) | |||
County/City/Special District/School District (continued) | |||
La Quinta Financing Authority, TAN, Series A (AMBAC), | |||
5.13%, 9/01/34 | $ 4,665 | $ 3,978,265 | |
Lompoc Unified School District, California, GO, Election | |||
of 2002, Series C (FSA), 5.00%, 6/01/32 | 1,485 | 1,405,612 | |
Los Angeles Community Redevelopment Agency, | |||
California, RB, Bunker Hill Project, Series A (FSA), | |||
5.00%, 12/01/27 | 10,000 | 9,593,600 | |
Los Angeles County Metropolitan Transportation Authority, | |||
RB, Property A First Tier Senior, Series A (AMBAC), | |||
5.00%, 7/01/35 | 9,000 | 8,845,560 | |
Los Angeles Unified School District, California, GO: | |||
Election of 2004, Series H (FSA), 5.00%, 7/01/32 | 5,000 | 4,860,250 | |
Series D, 5.00%, 7/01/27 | 4,750 | 4,744,205 | |
Los Gatos Union School District, California, GO, Election | |||
of 2001, Series B (FSA), 5.00%, 8/01/30 | 2,735 | 2,693,072 | |
Los Rios Community College District, California, GO, | |||
Election of 2002, Series B (MBIA), 5.00%, 8/01/27 | 1,890 | 1,934,434 | |
Merced Community College District, California, GO, | |||
School Facilities Improvement District No. 1 (MBIA), | |||
5.00%, 8/01/31 | 6,365 | 6,126,694 | |
Moorpark Redevelopment Agency, California, TAN, | |||
Moorpark Redevelopment Project (AMBAC), | |||
5.13%, 10/01/31 | 4,150 | 3,458,901 | |
Morongo Unified School District, GO, Election of 2005, | |||
Series B (AGC), 5.25%, 8/01/38 | 7,000 | 6,767,460 | |
Ohlone Community College District, GO, Ohlone, Series B | |||
(FSA), 5.00%, 8/01/30 | 5,000 | 4,923,350 | |
Poway Unified School District, Special Tax (AMBAC), | |||
5.00%, 9/15/31 | 9,070 | 8,161,095 | |
Redlands Unified School District, California, GO, Election | |||
of 2008 (FSA), 5.25%, 7/01/33 | 5,000 | 5,003,300 | |
Redwoods Community College District, GO, Election | |||
of 2004 (MBIA), 5.00%, 8/01/31 | 4,630 | 4,381,832 | |
Riverside Unified School District, California, GO, Election | |||
of 2001, Series B (MBIA), 5.00%, 8/01/30 | 10,735 | 10,449,234 | |
Saddleback Valley Unified School District, California, GO | |||
(FSA), 5.00%, 8/01/29 | 4,115 | 4,057,678 | |
Salinas Union High School District, California, GO, 2002 | |||
Election, Series B (MBIA), 5.00%, 6/01/26 | 3,490 | 3,481,903 | |
San Francisco Bay Area Transit Financing Authority, | |||
Refunding RB, Series A (MBIA), 5.00%, 7/01/34 | 2,500 | 2,437,300 | |
San Francisco Community College District, California, | |||
GO, Election of 2001, Series C (FSA), 5.00%, 6/15/31 | 4,195 | 4,101,955 | |
San Jose Evergreen Community College District, | |||
California, GO, CAB, Election of 2004, Series A | |||
(MBIA) (a): | |||
5.17%, 9/01/24 | 10,410 | 4,220,526 | |
5.34%, 9/01/29 | 7,250 | 1,997,448 | |
San Jose Financing Authority, RB, Civic Center Project, | |||
Series B (AMBAC), 5.00%, 6/01/32 | 14,800 | 14,561,424 |
Portfolio Abbreviations | ||||
To simplify the listings of portfolio holdings in each Fund’s | ACA | American Capital Access Corp. | GNMA | Government National Mortgage Association |
Schedule of Investments, the names and descriptions of | AGC | Assured Guaranty Corp. | GO | General Obligation Bonds |
many of the securities have been abbreviated according | AMBAC | American Municipal Bond Assurance Corp. | HDA | Housing Development Authority |
to the following list: | AMT | Alternative Minimum Tax (subject to) | HFA | Housing Finance Agency |
BHAC | Berkshire Hathaway Assurance Corp. | IDA | Industrial Development Authority | |
CAB | Capital Appreciation Bonds | MBIA | Municipal Bond Investors Assurance | |
CIFG | CDC IXIS Financial Guaranty | (National Public Finance Guaranty Corp.) | ||
COP | Certificates of Participation | RB | Revenue Bonds | |
EDA | Economic Development Authority | S/F | Single-Family | |
EDC | Economic Development Corp. | TAN | Tax Anticipation Notes | |
FGIC | Financial Guaranty Insurance Co. | VRDN | Variable Rate Demand Notes | |
See Notes to Financial Statements. | FSA | Financial Security Assurance Inc. |
ANNUAL REPORT JULY 31, 2009 11
Schedule of Investments (continued) BlackRock MuniHoldings California Insured Fund, Inc. (MUC)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
California (continued) | |||
County/City/Special District/School District (concluded) | |||
San Juan Unified School District, California, GO, | |||
Election of 2002 (MBIA), 5.00%, 8/01/28 | $ 4,250 | $ 4,208,860 | |
San Mateo County Transportation District, California, | |||
Refunding RB, Series A (MBIA), 5.00%, 6/01/29 | 5,650 | 5,761,249 | |
Sanger Unified School District, California, GO, Election | |||
of 2006, Series A (FSA), 5.00%, 8/01/27 | 7,345 | 7,403,246 | |
Santa Clara Redevelopment Agency, California, | |||
TAN, Bayshore North Project, Series A (AMBAC), | |||
5.50%, 6/01/23 | 14,000 | 13,253,940 | |
Santa Monica-Malibu Unified School District, | |||
California, GO, Election of 2006, Series A (MBIA), | |||
5.00%, 8/01/32 | 5,000 | 4,840,700 | |
Santa Rosa High School District, California, GO, Election | |||
of 2002 (MBIA), 5.00%, 8/01/28 | 2,855 | 2,827,364 | |
Sierra Joint Community College District, California, GO, | |||
Improvement District 2, Western Nevada, Series A | |||
(MBIA), 5.00%, 8/01/28 | 1,550 | 1,534,996 | |
Tamalpais Union High School District, California, GO, | |||
Election of 2006 (MBIA), 5.00%, 8/01/28 | 4,400 | 4,402,552 | |
Tracy Area Public Facilities Financing Agency, California, | |||
Special Tax, Refunding, Community Facilities District | |||
No. 87, Series H (MBIA), 5.88%, 10/01/19 | 10,000 | 10,003,900 | |
Vista Unified School District, California, GO, Series B | |||
(MBIA), 5.00%, 8/01/28 | 2,550 | 2,488,902 | |
Walnut Valley Unified School District, California, GO, | |||
Election of 2007, Measure S, Series A (FSA), | |||
5.00%, 2/01/33 | 2,000 | 1,935,560 | |
Washington Unified School District-Yolo County, | |||
California, GO, CAB, Election of 2004, Series A | |||
(MBIA), 5.07%, 8/01/29 (a) | 6,075 | 1,661,027 | |
West Contra Costa Unified School District, California, GO, | |||
Election of 2002: | |||
Series B (FSA), 5.00%, 8/01/32 | 6,690 | 6,502,948 | |
Series C (MBIA), 5.07%, 8/01/29 (a) | 5,825 | 1,482,637 | |
West Contra Costa Unified School District, California, GO, | |||
Election of 2005: | |||
Series A (FSA), 5.00%, 8/01/26 | 2,595 | 2,620,431 | |
Series B (BHAC), 5.63%, 8/01/35 | 3,500 | 3,690,715 | |
Westminster Redevelopment Agency, California, TAN, | |||
Subordinate, Commercial Redevelopment Project | |||
No. 1 (AGC), 6.25%, 11/01/39 | 4,300 | 4,465,980 | |
Yorba Linda Redevelopment Agency, California, TAN, | |||
Subordinate Lien, Redevelopment Project, Series B | |||
(AMBAC), 5.00%, 9/01/32 | 3,145 | 2,604,406 | |
297,504,515 | |||
Education — 7.7% | |||
California Educational Facilities Authority, RB, California | |||
Institute of Technology, 5.00%, 11/01/39 | 2,200 | 2,222,704 | |
California State Public Works Board, RB, University | |||
California, Institute Project, Series C (AMBAC), | |||
5.00%, 4/01/30 | 5,000 | 4,583,450 | |
California State University, RB, Systemwide, Series A: | |||
(AMBAC), 5.00%, 11/01/30 | 6,000 | 5,727,480 | |
(FSA), 5.00%, 11/01/29 | 5,000 | 4,993,300 | |
(FSA), 5.00%, 11/01/39 | 8,320 | 7,969,312 | |
Snowline Joint Unified School District, COP, Refinancing | |||
Program (AGC), 5.75%, 9/01/38 | 5,635 | 5,729,555 | |
University of California, RB, General, Series A (AMBAC), | |||
5.00%, 5/15/27 | 10,500 | 10,563,945 | |
41,789,746 |
Par | ||
Municipal Bonds | (000) | Value |
California (continued) | ||
Health — 6.8% | ||
ABAG Finance Authority for Nonprofit Corps, RB, Sharp | ||
Healthcare, 6.25%, 8/01/39 | $ 5,000 | $ 4,986,550 |
California Health Facilities Financing Authority, | ||
California, RB, Catholic Healthcare West, Series A, | ||
6.00%, 7/01/34 | 3,700 | 3,597,325 |
California Statewide Communities Development | ||
Authority, RB: | ||
Adventist, Series B, Remarketed (AGC), 5.00%, | ||
3/01/37 | 7,500 | 6,881,025 |
Health Facilities, Memorial Health Services, Series A, | ||
6.00%, 10/1/2023 | 4,915 | 5,019,690 |
Kaiser Permanente, Series A, 5.00%, 4/01/31 | 900 | 813,816 |
Kaiser, Series C, Remarketed, 5.25%, 8/01/31 | 5,000 | 4,672,400 |
LA Orthopedic Hospital Foundation (AMBAC), | ||
5.50%, 6/01/19 | 1,090 | 1,074,391 |
Sutter Health, Series C, Remarketed (FSA), | ||
5.05%, 8/15/38 | 10,000 | 9,475,500 |
36,520,697 | ||
Housing — 0.1% | ||
California Housing Finance Agency, RB, Class II | ||
(MBIA), AMT: | ||
S/F Mortgage, Series C-2, 5.63%, 8/01/20 | 335 | 333,834 |
Series A-1, 6.00%, 8/01/20 | 170 | 170,127 |
503,961 | ||
State — 6.0% | ||
California Community College Financing Authority, | ||
California, RB, Grossmont, Palomar, Shasta, Series A | ||
(MBIA), 5.63%, 4/01/26 | 2,180 | 2,185,428 |
California State Public Works Board, RB, Department | ||
Education, Riverside Campus Project, Series B, | ||
6.50%, 4/01/34 | 3,500 | 3,697,575 |
California State University, RB, Systemwide, Series C | ||
(MBIA), 5.00%, 11/01/28 | 16,215 | 15,764,547 |
State of California, GO, Various Purpose, | ||
6.50%, 4/01/33 | 10,000 | 10,811,200 |
32,458,750 | ||
Transportation — 16.4% | ||
City of Fresno California, RB, Series B (FSA), AMT, | ||
5.50%, 7/01/20 | 4,455 | 4,418,736 |
City of Long Beach California, RB, Series B, Remarketed | ||
(MBIA), AMT, 5.20%, 5/15/27 | 18,000 | 17,194,140 |
County of Orange California, RB, Series B, | ||
5.75%, 7/01/34 | 6,345 | 6,448,233 |
County of Sacramento California, RB, Senior, Series B, | ||
5.75%, 7/01/39 | 2,650 | 2,570,792 |
Port of Oakland, RB (MBIA), AMT: | ||
Series K, 5.75%, 11/01/29 | 19,660 | 18,366,372 |
Series L, 5.38%, 11/01/27 | 25,350 | 23,081,175 |
San Francisco City & County Airports Commission, | ||
Refunding RB, AMT: | ||
Second Series A-3, 6.75%, 5/01/19 | 5,030 | 5,271,943 |
Second Series 34E (FSA), 5.75%, 5/01/24 | 5,000 | 5,088,900 |
Second Series, Issue 24A (FSA), 5.50%, 5/01/24 | 6,430 | 6,431,029 |
88,871,320 |
See Notes to Financial Statements.
12 ANNUAL REPORT JULY 31, 2009
Schedule of Investments (continued) BlackRock MuniHoldings California Insured Fund, Inc. (MUC)
(Percentages shown are based on Net Assets)
Par | ||
Municipal Bonds | (000) | Value |
California (concluded) | ||
Utilities — 31.9% | ||
Chino Basin Regional Financing Authority, California, | ||
RB, Inland Empire Utility Agency, Series A (AMBAC), | ||
5.00%, 11/01/33 | $ 3,675 | $ 3,544,611 |
City of Escondido California, COP, Series A (MBIA), | ||
5.75%, 9/01/24 | 465 | 469,873 |
City of Napa California, RB (AMBAC), 5.00%, 5/01/35 | 9,100 | 8,842,561 |
City of Santa Clara California, RB, Sub-Series A (MBIA), | ||
5.00%, 7/01/28 | 6,050 | 5,841,578 |
East Bay Municipal Utility District, RB, Sub-Series A | ||
(MBIA), 5.00%, 6/01/35 | 11,910 | 11,874,866 |
East Bay Municipal Utility District, Refunding RB, | ||
Sub-Series A (AMBAC): | ||
5.00%, 6/01/33 | 6,545 | 6,544,542 |
5.00%, 6/01/37 | 14,515 | 14,363,318 |
Los Angeles Department of Water & Power, RB, System | ||
(AMBAC): | ||
Sub-Series A-1, 5.00%, 7/01/36 | 4,385 | 4,258,493 |
Sub-Series A-2, 5.00%, 7/01/35 | 2,000 | 1,943,320 |
Madera Public Financing Authority, California, RB (MBIA), | ||
5.00%, 3/01/36 | 2,000 | 1,824,700 |
Metropolitan Water District of Southern California, RB: | ||
Authority, Series B-1 (MBIA), 5.00%, 10/01/33 | 9,000 | 9,046,440 |
Series A (FSA), 5.00%, 7/01/35 | 3,550 | 3,564,271 |
Oxnard Financing Authority, RB (MBIA): | ||
5.00%, 6/01/31 | 10,000 | 9,740,100 |
Redwood Trunk Sewer & Headworks, Series A, | ||
5.25%, 6/01/34 | 10,000 | 9,546,900 |
Sacramento City Financing Authority, California, | ||
Refunding RB (MBIA), 5.00%, 12/01/29 | 8,775 | 8,774,386 |
Sacramento Municipal Utility District, RB, Cosumnes | ||
Project (MBIA), 5.13%, 7/01/29 | 36,760 | 35,708,664 |
Sacramento Regional County Sanitation District, RB | ||
(MBIA), 5.00%, 12/01/36 | 4,500 | 4,312,170 |
San Diego County Water Authority, COP, Series A (MBIA), | ||
5.00%, 5/01/32 | 10,000 | 9,812,700 |
San Francisco City & County Public Utilities | ||
Commission, RB, Series A (MBIA), 5.00%, 11/01/32 | 13,500 | 13,031,145 |
Stockton Public Financing Authority, California, RB, | ||
Water System Capital Improvement Projects, Series A | ||
(MBIA), 5.00%, 10/01/31 | 3,200 | 2,904,864 |
Turlock Public Financing Authority, California, RB, | ||
Series A (MBIA), 5.00%, 9/15/33 | 6,655 | 6,419,679 |
172,369,181 | ||
Total Municipal Bonds in California | 672,486,530 | |
Puerto Rico — 1.9% | ||
County/City/Special District/School District — 1.9% | ||
Puerto Rico Sales Tax Financing Corp., RB, First | ||
Sub-Series A, 6.50%, 8/01/44 | 10,000 | 10,471,500 |
Total Municipal Bonds in Puerto Rico | 10,471,500 | |
Total Municipal Bonds — 126.4% | 682,958,030 |
Municipal Bonds Transferred to | Par | ||
Tender Option Bond Trusts (b) | (000) | Value | |
County/City/Special District/School District — 16.9% | |||
Contra Costa Community College District, California, GO, | |||
Election 2002 (MBIA), 5.00%, 8/01/28 | $ 7,800 | $ 7,803,432 | |
Chaffey Community College District, GO, Election 2002, | |||
Series B (MBIA), 5.00%, 6/01/30 | 9,905 | 9,753,002 | |
Los Angeles Community College District, California, GO: | |||
Election 2003, Series E (FSA), 5.00%, 8/01/31 | 11,216 | 10,796,015 | |
Election 2008, Series A, 6.00%, 8/01/33 | 9,596 | 10,325,918 | |
Peralta Community College District, California, GO (FSA): | |||
5.00%, 8/01/32 | 6,980 | 6,784,839 | |
Election 2000, Series D, 5.00%, 8/01/35 | 15,490 | 14,859,247 | |
Riverside Community College District, GO, Election 2004, | |||
Series C (MBIA), 5.00%, 8/01/32 | 8,910 | 8,660,876 | |
San Diego Community College District, California, GO, | |||
Election of 2002 (FSA), 5.00%, 5/01/30 | 12,549 | 12,356,954 | |
Vista Unified School District, California, GO, Series A | |||
(FSA), 5.00%, 8/01/25 | 10,016 | 10,201,546 | |
91,541,829 | |||
Education — 7.2% | |||
Poway Unified School District, GO, Election 2002, | |||
Improvement District No. 02, Series 1B (FSA), | |||
5.00%, 8/01/30 | 10,000 | 9,846,700 | |
University of California, RB, Limited Project, Series B | |||
(FSA), 5.00%, 5/15/33 | 17,400 | 17,042,952 | |
University of California, RB, Series O, 5.75%, 5/15/34 | 11,190 | 12,020,746 | |
38,910,398 | |||
Transportation — 4.3% | |||
San Francisco Bay Area Transit Financing Authority, | |||
Refunding RB, Series A (MBIA), 5.00%, 7/01/30 | 23,100 | 23,009,910 | |
Utilities — 5.6% | |||
Los Angeles Department of Water & Power, RB, Power | |||
System, Sub-Series A1 (FSA), 5.00%, 7/01/31 | 4,993 | 4,959,386 | |
Rancho Water District Financing Authority, California, RB, | |||
Refunding, Series A (FSA), 5.00%, 8/01/34 | 5,008 | 4,882,646 | |
San Diego County Water Authority, COP, Series A (FSA): | |||
5.00%, 5/01/31 | 4,000 | 3,957,840 | |
Series 2008, 5.00%, 5/01/33 | 16,740 | 16,396,830 | |
30,196,702 | |||
Total Municipal Bonds Transferred to | |||
Tender Option Bond Trusts — 34.0% | 183,658,839 | ||
Total Long-Term Investments | |||
(Cost — $903,186,292) — 160.4% | 866,616,869 | ||
Short-Term Securities | Shares | ||
CMA California Municipal Money Fund, | |||
0.04% (c)(d) | 20,500,814 | 20,500,814 | |
Total Short-Term Securities | |||
(Cost — $20,500,814) — 3.8% | 20,500,814 | ||
Total Investments (Cost — $923,687,106*) — 164.2% | 887,117,683 | ||
Other Assets Less Liabilities — 2.3% | 12,374,564 | ||
Liability for Trust Certificates, Including Interest | |||
Expense and Fees Payable — (19.5)% | (105,328,702) | ||
Preferred Shares, at Redemption Value — (47.0)% | (254,019,184) | ||
Net Assets Applicable to Common Shares — 100.0% | $540,144,361 |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 13
Schedule of Investments (concluded) BlackRock MuniHoldings California Insured Fund, Inc. (MUC)
* The cost and unrealized appreciation (depreciation) of investments as of July 31, | |||
2009, as computed for federal income tax purposes, were as follows: | |||
Aggregate cost | $819,027,206 | ||
Gross unrealized appreciation | $ 5,289,659 | ||
Gross unrealized depreciation | (42,402,086) | ||
Net unrealized depreciation | $ (37,112,427) | ||
(a) Represents a zero-coupon bond. Rate shown reflects the current yield as of | |||
report date. | |||
(b) Securities represent bonds transferred to a tender option bond trust in exchange for | |||
which the Fund acquired residual interest certificates. These securities serve as col- | |||
lateral in a financing transaction. See Note 1 of the Notes to Financial Statements | |||
for details of municipal bonds transferred to tender option bond trusts. | |||
(c) Investments in companies considered to be an affiliate of the Fund, for purposes of | |||
Section 2(a)(3) of the Investment Company Act of 1940, were as follows: | |||
Net | |||
Affiliate | Activity | Income | |
CMA California Municipal Money Fund | (23,099,435) | $1,031 | |
(d) Represents the current yield as of report date. | |||
• Financial Accounting Standards Board Statement of Financial Accounting Standards | |||
No. 157, “Fair Value Measurements” clarifies the definition of fair value, establishes a | |||
framework for measuring fair values and requires additional disclosures about the | |||
use of fair value measurements. Various inputs are used in determining the fair value | |||
of investments, which are as follows: | |||
• | Level 1 — price quotations in active markets/exchanges for identical securities | ||
• | 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 inputs or methodology used for valuing securities are not necessarily an | |||
indication of the risk associated with 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, 2009 in determining | |||
the fair valuation of the Fund’s investments: | |||
Valuation | Investments in | ||
Inputs | Securities | ||
Assets | |||
Level 1 — Short-Term Securities | $ 20,500,814 | ||
Level 2 — Long-Term Investments1 | 866,616,869 | ||
Level 3 | — | ||
Total | $ 887,117,683 | ||
1 See above Schedule of Investments for values in each sector. |
See Notes to Financial Statements.
14 ANNUAL REPORT JULY 31, 2009
Schedule of Investments July 31, 2009 BlackRock MuniHoldings New Jersey Insured Fund, Inc. (MUJ)
(Percentages shown are based on Net Assets)
Par | ||
Municipal Bonds | (000) | Value |
New Jersey — 142.2% | ||
Corporate — 0.8% | ||
New Jersey EDA, RB, Disposal, Waste Management | ||
New Jersey, Series A, AMT, 5.30%, 6/01/15 | $ 2,500 | $ 2,496,650 |
County/City/Special District/School District — 26.8% | ||
Camden County Improvement Authority, RB (FSA), | ||
5.50%, 9/01/10 (a) | 1,540 | 1,623,760 |
City of Perth Amboy, New Jersey, GO, CAB (FSA) (b): | ||
5.47%, 7/01/32 | 4,605 | 3,872,667 |
5.46%, 7/01/33 | 1,395 | 1,161,435 |
4.99%, 7/01/37 | 1,470 | 1,193,772 |
County of Middlesex, New Jersey, COP (MBIA): | ||
5.50%, 8/01/16 | 1,375 | 1,478,084 |
5.25%, 6/15/23 | 1,550 | 1,551,860 |
East Orange Board of Education, COP (FSA), | ||
5.50%, 8/01/12 | 7,895 | 8,384,332 |
Essex County Improvement Authority, RB, Guaranteed, | ||
County Correctional Facilities Project (FGIC), | ||
6.00%, 10/01/10 (a) | 4,000 | 4,250,200 |
Essex County Improvement Authority, RB, Guaranteed | ||
Lease, County Correctional, Series A (FGIC), | ||
5.00%, 10/01/13 (a) | 4,400 | 5,050,408 |
Hopatcong Boro New Jersey, GO, Refunding, Sewer | ||
(AMBAC), 4.50%, 8/01/33 | 2,690 | 2,624,418 |
Hudson County Improvement Authority, RB, County, | ||
Guaranteed, Harrison Parking Facilities Project, | ||
Series C (AGC), 5.38%, 1/01/44 | 3,600 | 3,688,560 |
Lafayette Yard Community Development Corp., | ||
New Jersey, RB, Hotel, Conference Center Project, | ||
Trenton Guaranteed (MBIA), 6.00%, 4/01/10 (a) | 5,250 | 5,486,565 |
Middlesex County Improvement Authority, RB, | ||
Guaranteed, Senior Citizens Housing Project, AMT | ||
(AMBAC), 5.50%, 9/01/30 | 500 | 470,855 |
Monmouth County Improvement Authority, RB, | ||
Governmental Loan (AMBAC): | ||
5.35%, 12/01/10 (a) | 695 | 739,153 |
5.38%, 12/01/10 (a) | 535 | 569,165 |
5.35%, 12/01/17 | 845 | 886,675 |
5.38%, 12/01/18 | 935 | 981,572 |
Morristown Parking Authority, RB, Guaranteed (MBIA): | ||
5.00%, 8/01/30 | 1,830 | 1,878,531 |
5.00%, 8/01/33 | 3,000 | 3,043,440 |
New Jersey State Transit Corp., COP, Subordinate, | ||
Federal Transit Admin Grants, Series A-FS (FSA), | ||
5.00%, 9/15/21 | 2,000 | 2,057,320 |
Newark Housing Authority, Refunding RB, Additional, | ||
Newark Redevelopment Project (MBIA), | ||
4.38%, 1/01/37 | 620 | 530,856 |
North Bergen Township Board of Education, COP | ||
(FSA) (a): | ||
6.00%, 12/15/10 | 1,000 | 1,083,970 |
6.25%, 12/15/10 | 3,260 | 3,544,858 |
Paterson Public School District, New Jersey, COP | ||
(MBIA) (a): | ||
6.13%, 11/01/09 | 1,980 | 2,028,668 |
6.25%, 11/01/09 | 2,000 | 2,049,800 |
Salem County Improvement Authority, RB, Finlaw State | ||
Office Building (FSA), 5.38%, 8/15/28 | 500 | 528,190 |
South Jersey Port Corp., Refunding RB: | ||
4.50%, 1/01/15 | 3,750 | 3,960,038 |
4.50%, 1/01/16 | 1,920 | 2,010,278 |
Municipal Bonds | (000) | Value | |
New Jersey (continued) | |||
County/City/Special District/School District (concluded) | |||
Township of West Deptford New Jersey, GO (FGIC), | |||
5.63%, 9/01/10 (a) | $ 8,580 | $ 9,058,249 | |
Trenton Parking Authority, RB, Parking Bonds (FGIC), | |||
6.10%, 4/01/10 (a) | 6,000 | 6,223,740 | |
82,011,419 | |||
Education — 16.1% | |||
New Jersey EDA, RB, International Center For Public | |||
Health Project, University of Medicine & Dentistry | |||
(AMBAC), 6.00%, 6/01/32 | 5,000 | 4,544,350 | |
New Jersey Educational Facilities Authority, RB: | |||
Montclair State University, Series A (AMBAC) | |||
5.00%, 7/01/21 | 1,200 | 1,236,360 | |
Montclair State University, Series A (AMBAC) | |||
5.00%, 7/01/22 | 2,880 | 2,944,915 | |
Rowan University, Series C (FGIC), | |||
5.25%, 7/01/11 (a) | 240 | 263,218 | |
Rowan University, Series C (FGIC), | |||
5.25%, 7/01/11 (a) | 285 | 312,571 | |
Rowan University, Series C (FGIC), | |||
5.25%, 7/01/11 (a) | 265 | 290,636 | |
Rowan University, Series C (MBIA), | |||
5.00%, 7/01/14 (a) | 3,260 | 3,714,118 | |
Rowan University, Series C (MBIA), | |||
5.13%, 7/01/14 (a) | 3,615 | 4,139,609 | |
Rowan University, Series C (MBIA), 5.25%, 7/01/17 | 2,135 | 2,279,902 | |
Rowan University, Series C (MBIA), 5.25%, 7/01/18 | 2,535 | 2,702,107 | |
Rowan University, Series C (MBIA), 5.25%, 7/01/19 | 2,370 | 2,486,841 | |
New Jersey Educational Facilities Authority, | |||
Refunding RB: | |||
College of New Jersey, Series D (FSA), | |||
5.00%, 7/01/35 | 9,540 | 9,718,303 | |
Montclair State University, Series J (MBIA), | |||
4.25%, 7/01/30 | 3,775 | 3,268,773 | |
Ramapo College, Series I (AMBAC), | |||
4.25%, 7/01/31 | 1,250 | 1,074,038 | |
Ramapo College, Series I (AMBAC), | |||
4.25%, 7/01/36 | 900 | 739,737 | |
Stevens Institute Technology, Series A, | |||
5.00%, 7/01/27 | 2,800 | 2,553,768 | |
Stevens Institute Technology, Series A, | |||
5.00%, 7/01/34 | 900 | 768,861 | |
University of Medicine & Dentistry of New Jersey, | |||
New Jersey: | |||
COP (MBIA), 5.00%, 6/15/29 | 2,000 | 1,825,760 | |
RB, Series A (AMBAC), 5.50%, 12/01/27 | 4,740 | 4,413,461 | |
49,277,328 | |||
Health — 13.1% | |||
New Jersey Health Care Facilities Financing Authority, RB: | |||
Atlantic City Medical, 5.75%, 7/01/12 (a) | 1,525 | 1,715,320 | |
Atlantic City Medical, 6.25%, 7/01/12 (a) | 530 | 603,697 | |
Atlantic City Medical, 6.25%, 7/01/17 | 925 | 974,432 | |
Atlantic City Medical, 5.75%, 7/01/25 | 1,975 | 1,998,088 | |
Greystone Park Psychiatric Hospital (AMBAC), | |||
5.00%, 9/15/23 | 10,775 | 10,752,803 | |
Meridian Health, Series II (AGC), 5.00%, 7/01/38 | 7,400 | 7,299,434 | |
Meridian Health System Obligation Group (FSA), | |||
5.38%, 7/01/24 | 1,000 | 1,002,300 | |
Society of The Valley Hospital (AMBAC), | |||
5.38%, 7/01/25 | 2,820 | 2,523,533 | |
Somerset Medical Center, 5.50%, 7/01/33 | 2,135 | 1,167,269 | |
South Jersey Hospital, 6.00%, 7/01/12 (a) | 5,440 | 6,191,209 | |
Virtua Health (AGC), 5.50%, 7/01/38 | 1,000 | 998,510 |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 15
Schedule of Investments (continued) BlackRock MuniHoldings New Jersey Insured Fund, Inc. (MUJ)
(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, Series AHS Hospital Corp., Series A | ||
(AMBAC), 6.00%, 7/01/13 (c) | $ 4,000 | $ 4,675,480 |
39,902,075 | ||
Housing — 7.2% | ||
New Jersey State Housing & Mortgage Finance | ||
Agency, RB: | ||
Capital Fund Program, Series A (FSA), | ||
4.70%, 11/01/25 | 10,840 | 10,717,942 |
Home Buyer, Series U (MBIA), AMT, | ||
5.60%, 10/01/12 | 700 | 701,722 |
Home Buyer, Series U (MBIA), AMT, | ||
5.65%, 10/01/13 | 2,075 | 2,080,312 |
Home Buyer, Series U (MBIA), AMT, | ||
5.75%, 4/01/18 | 2,325 | 2,328,023 |
Home Buyer, Series U (MBIA), AMT, | ||
5.85%, 4/01/29 | 610 | 610,287 |
S/F Housing, Series T, AMT, 4.70%, 10/01/37 | 800 | 689,312 |
Series AA, 6.50%, 10/01/38 | 3,370 | 3,584,838 |
Newark Housing Authority, RB, South Ward Police | ||
Facility (AGC): | ||
5.75%, 12/01/30 | 850 | 857,837 |
6.75%, 12/01/38 | 500 | 534,075 |
22,104,348 | ||
State — 51.7% | ||
Garden State Preservation Trust, RB (FSA): | ||
2005 Series A, 5.80%, 11/01/21 | 1,960 | 2,233,537 |
2005 Series A, 5.80%, 11/01/23 | 2,730 | 3,081,678 |
CAB, Series B, 5.12%, 11/01/23 (d) | 9,000 | 4,638,510 |
CAB, Series B, 5.20%, 11/01/25 (d) | 10,000 | 4,568,100 |
Garden State Preservation Trust, Refunding RB, | ||
Series C (FSA): | ||
5.25%, 11/01/20 | 5,000 | 5,855,900 |
5.25%, 11/01/21 | 7,705 | 8,989,963 |
New Jersey EDA, RB: | ||
Cigarette Tax, 5.63%, 6/15/19 | 2,700 | 2,507,301 |
Cigarette Tax (Radian), 5.75%, 6/15/29 | 2,000 | 1,663,800 |
Cigarette Tax (Radian), 5.50%, 6/15/31 | 585 | 466,461 |
Cigarette Tax (Radian), 5.75%, 6/15/34 | 1,180 | 950,903 |
Liberty State Park Project, Series C (FSA), | ||
5.00%, 3/01/22 | 2,670 | 2,810,228 |
Motor Vehicle Surcharge, Series A (MBIA), | ||
5.25%, 7/01/26 | 7,500 | 7,799,175 |
Motor Vehicle Surcharge, Series A (MBIA), | ||
5.25%, 7/01/33 | 11,105 | 10,795,059 |
Motor Vehicle Surcharge, Series A (MBIA), | ||
5.00%, 7/01/34 | 2,000 | 1,932,740 |
School Facilities Construction, Series L (FSA), | ||
5.00%, 3/01/30 | 9,000 | 9,166,230 |
School Facilities Construction, Series O, | ||
5.25%, 3/01/23 | 4,420 | 4,601,794 |
School Facilities Construction, Series U (AMBAC), | ||
5.00%, 9/01/37 | 2,500 | 2,422,900 |
School Facilities Construction, Series Z (AGC), | ||
6.00%, 12/15/34 | 2,800 | 3,051,692 |
State Office Buildings Projects (AMBAC), | ||
6.00%, 6/15/10 (a) | 3,000 | 3,147,030 |
State Office Buildings Projects (AMBAC), | ||
6.25%, 6/15/10 (a) | 4,620 | 4,856,498 |
Par | |||
Municipal Bonds | (000) | Value | |
New Jersey (continued) | |||
State (concluded) | |||
New Jersey EDA, Refunding RB, School Facilities | |||
Construction, Series N-1 (MBIA), 5.50%, 9/01/27 | $ 1,000 | $ 1,057,790 | |
New Jersey Educational Facilities Authority, RB, Series A: | |||
Capital Improvement Fund, (FSA), | |||
5.75%, 9/01/10 (a) | 9,420 | 9,946,107 | |
Higher Education Capital Improvement, | |||
(AMBAC), 5.13%, 9/01/12 (a) | 5,500 | 6,188,380 | |
New Jersey Sports & Exposition Authority, RB, Series A | |||
(MBIA), 6.00%, 3/01/13 | 2,400 | 2,464,848 | |
New Jersey Sports & Exposition Authority, Refunding | |||
RB (MBIA): | |||
5.50%, 3/01/21 | 5,890 | 6,410,853 | |
5.50%, 3/01/22 | 3,000 | 3,241,320 | |
New Jersey Transportation Trust Fund Authority, | |||
New Jersey, RB, Transportation System: | |||
CAB, Series C (AMBAC), 5.05%, 12/15/35 (d) | 1,400 | 241,248 | |
CAB, Series C (AMBAC), 5.05%, 12/15/36 (d) | 5,500 | 888,965 | |
CAB, Series C (FSA), 4.72%, 12/15/32 (d) | 4,050 | 947,255 | |
Series A, 6.00%, 6/15/10 (a) | 7,500 | 7,867,575 | |
Series A (AGC), 5.63%, 12/15/28 | 2,000 | 2,129,460 | |
Series A (FSA), 5.25%, 12/15/20 | 10,750 | 11,919,923 | |
Series B (MBIA), 5.50%, 12/15/21 | 9,165 | 9,993,058 | |
Series D (FSA), 5.00%, 6/15/19 | 7,800 | 8,341,086 | |
State of New Jersey, COP, Equipment Lease Purchase, | |||
Series A, 5.25%, 6/15/27 | 1,080 | 1,088,208 | |
158,265,575 | |||
Tobacco — 1.9% | |||
Tobacco Settlement Financing Corp., New Jersey, RB, | |||
7.00%, 6/01/13 (a) | 4,755 | 5,769,146 | |
Transportation — 20.4% | |||
Delaware River Port Authority Pennsylvania | |||
& New Jersey, RB (FSA): | |||
5.50%, 1/01/12 | 5,000 | 5,080,350 | |
5.63%, 1/01/13 | 6,000 | 6,097,740 | |
5.75%, 1/01/15 | 500 | 508,550 | |
6.00%, 1/01/18 | 4,865 | 4,956,121 | |
6.00%, 1/01/19 | 5,525 | 5,570,747 | |
Delaware River Port Authority, RB, Port District Project, | |||
Series B (FSA), 5.63%, 1/01/26 | 2,425 | 2,430,068 | |
New Jersey State Turnpike Authority, RB: | |||
Balance, Series C-2005 (MBIA), 6.50%, 1/01/16 | 910 | 1,088,169 | |
Growth & Income Securities, Series B (AMBAC), | |||
6.14%, 1/01/35 (b) | 7,615 | 5,465,286 | |
Series C (MBIA), 6.50%, 1/01/16 (c) | 4,355 | 5,044,266 | |
Series C-2005 (MBIA), 6.50%, 1/01/16 (c) | 255 | 320,800 | |
New Jersey Transportation Trust Fund Authority, | |||
New Jersey, RB, Transportation System: | |||
Series A (AMBAC), 5.00%, 12/15/32 | 1,425 | 1,429,760 | |
Series C, 5.50%, 6/15/13 (a) | 780 | 904,114 | |
Port Authority of New York & New Jersey, RB, AMT: | |||
Consolidated, 152nd, 5.75%, 11/01/30 | 5,175 | 5,347,949 | |
Special Project, JFK International Air Terminal, 6 | |||
(MBIA), 6.25%, 12/01/11 | 13,500 | 13,891,095 | |
Special Project, JFK International Air Terminal, 6 | |||
(MBIA), 6.25%, 12/01/15 | 1,500 | 1,524,090 | |
Special Project, JFK International Air Terminal, 6 | |||
(MBIA), 5.75%, 12/01/25 | 3,000 | 2,662,110 | |
62,321,215 |
See Notes to Financial Statements.
16 ANNUAL REPORT JULY 31, 2009
Schedule of Investments (continued) BlackRock MuniHoldings New Jersey Insured Fund, Inc. (MUJ)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
New Jersey (concluded) | |||
Utilities — 4.2% | |||
Atlantic Highlands Highland Regional Sewage Authority, | |||
Refunding RB (MBIA), 5.50%, 1/01/20 | $ 1,875 | $ 1,958,269 | |
Essex County Utilities Authority, Refunding RB (AGC), | |||
4.13%, 4/01/22 | 2,000 | 1,948,820 | |
New Jersey EDA, RB, Series A, New Jersey, American | |||
Water (AMBAC), AMT, 5.25%, 11/01/32 | 3,000 | 2,582,010 | |
North Hudson Sewerage Authority, Refunding RB, | |||
Series A (MBIA), 5.13%, 8/01/20 | 4,335 | 4,203,910 | |
Rahway Valley Sewerage Authority, RB, CAB, Series A | |||
(MBIA), 4.79%, 9/01/28 (d) | 6,600 | 2,248,092 | |
12,941,101 | |||
Total Municipal Bonds in New Jersey | 435,088,857 | ||
Puerto Rico — 9.2% | |||
Health — 1.2% | |||
Puerto Rico Industrial Tourist Educational Medical | |||
& Environmental Control Facilities Financing Authority, | |||
RB, Series A: | |||
Hospital Auxilio Mutuo Obligation Group (MBIA), | |||
6.25%, 7/01/24 | 1,780 | 1,780,356 | |
Hospital De La Concepcion, Series A, | |||
6.50%, 11/15/20 | 1,750 | 1,793,838 | |
3,574,194 | |||
Housing — 2.1% | |||
Puerto Rico HFA, RB, Subordinate, Capital Fund | |||
Modernization, 5.13%, 12/01/27 | 6,285 | 6,291,914 | |
State — 0.8% | |||
Puerto Rico Infrastructure Financing Authority, RB, CAB, | |||
Series A (AMBAC), 4.36%, 7/01/37 (d) | 4,000 | 454,760 | |
Puerto Rico Public Buildings Authority, Refunding RB, | |||
Government Facilities, Series M-3 (MBIA), | |||
6.00%, 7/01/27 | 2,125 | 2,101,901 | |
2,556,661 | |||
Transportation — 1.7% | |||
Puerto Rico Highway & Transportation Authority, | |||
Refunding RB, Series CC (AGC), 5.50%, 7/01/31 | 5,000 | 5,228,050 | |
Utilities — 3.4% | |||
Puerto Rico Aqueduct & Sewer Authority, RB, Senior Lien, | |||
Series A (AGC), 5.13%, 7/01/47 | 6,870 | 6,591,834 | |
Puerto Rico Electric Power Authority, RB, Series RR | |||
(CIFG), 5.00%, 7/01/28 | 4,100 | 3,779,093 | |
10,370,927 | |||
Total Municipal Bonds in Puerto Rico | 28,021,746 | ||
Total Municipal Bonds — 151.4% | 463,110,603 |
Municipal Bonds Transferred to | Par | |||
Tender Option Bond Trusts (e) | (000) | Value | ||
New Jersey — 7.1% | ||||
Housing — 1.6% | ||||
New Jersey State Housing & Mortgage Finance | ||||
Agency, RB, Capital Fund Program, Series A (FSA), | ||||
5.00%, 5/01/27 | $ 4,790 | $ 5,030,698 | ||
State — 3.6% | ||||
Garden State Preservation Trust, RB, 2005 Series A | ||||
(FSA), 5.75%, 11/01/28 | 9,160 | 10,846,356 | ||
Transportation — 1.9% | ||||
Port Authority of New York & New Jersey, Refunding RB, | ||||
Consolidated, 152nd Series, AMT, 5.25%, 11/01/35 | 5,998 | 5,871,870 | ||
Total Municipal Bonds Transferred to | ||||
Tender Option Bond Trusts — 7.1% | 21,748,924 | |||
Total Long-Term Investments | ||||
(Cost — $480,546,184) — 158.5% | 484,859,527 | |||
Short-Term Securities | Shares | |||
CMA New Jersey Municipal Money Fund, | ||||
0.07% (f)(g) | 3,311,943 | 3,311,943 | ||
Total Short-Term Securities | ||||
(Cost — $3,311,943) — 1.1% | 3,311,943 | |||
Total Investments (Cost — $483,858,127*) — 159.6% | 488,171,470 | |||
Other Assets Less Liabilities — 1.2% | 3,698,613 | |||
Liability for Trust Certificates, Including Interest | ||||
Expense and Fees Payable — (4.3)% | (13,300,999) | |||
Preferred Shares, at Redemption Value — (56.5)% | (172,712,796) | |||
Net Assets Applicable to Common Shares — 100.0% | $305,856,288 | |||
* The cost and unrealized appreciation (depreciation) of investments as of July 31, | ||||
2009, as computed for federal income tax purposes, were as follows: | ||||
Aggregate cost | $471,147,026 | |||
Gross unrealized appreciation | $ 17,665,823 | |||
Gross unrealized depreciation | (13,904,309) | |||
Net unrealized appreciation | $ 3,761,514 | |||
(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) 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) Security is collateralized by Municipal or US Treasury Obligations. | ||||
(d) Represents a zero-coupon bond. Rate shown reflects the current yield as of | ||||
report date. | ||||
(e) Securities represent bonds transferred to a tender option bond trust in exchange for | ||||
which the Fund acquired residual interest certificates. These securities serve as col- | ||||
lateral in a financing transaction. See Note 1 of the Notes to Financial Statements | ||||
for details of municipal bonds transferred to tender option bond trusts. | ||||
(f) Investments in companies considered to be an affiliate of the Fund, for purposes of | ||||
Section 2(a)(3) of the Investment Company Act of 1940, were as follows: | ||||
Affiliate | Net Activity | Income | ||
CMA New Jersey Municipal Money Fund | (6,438,963) | $61,733 | ||
(g) Represents the current yield as of report date. |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 17
Schedule of Investments (concluded) BlackRock MuniHoldings New Jersey Insured Fund, Inc. (MUJ)
• | Effective August 1, 2008, the Fund adopted Financial Accounting Standards Board | ||
Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” | |||
(“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for | |||
measuring fair values and requires additional disclosures about the use of fair value | |||
measurements. Various inputs are used in determining the fair value of investments, | |||
which are as follows: | |||
• | Level 1 — price quotations in active markets/exchanges for identical securities | ||
• | 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 inputs or methodology used for valuing securities are not necessarily an | |||
indication of the risk associated with 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, 2009 in determining | |||
the fair valuation of the Fund’s investments: | |||
Valuation | Investments in | ||
Inputs | Securities | ||
Assets | |||
Level 1 — Short-Term Securities | $ 3,311,943 | ||
Level 2 — Long-Term Investments1 | 484,859,527 | ||
Level 3 | — | ||
Total | $ 488,171,470 | ||
1 See above Schedule of Investments for values in each sector. |
See Notes to Financial Statements.
18 ANNUAL REPORT JULY 31, 2009
Schedule of Investments July 31, 2009 BlackRock MuniYield Insured Investment Fund (MFT)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
California — 2.2% | |||
Transportation — 1.2% | |||
County of Sacramento California, RB, Senior, Series A | �� | ||
(AGC), 5.50%, 7/01/41 | $ 1,400 | $ 1,349,026 | |
Utilities — 1.0% | |||
San Diego Public Facilities Financing Authority, RB, | |||
Series B (AGC), 5.38%, 8/01/34 | 1,020 | 1,040,961 | |
Total Municipal Bonds in California | 2,389,987 | ||
Colorado — 1.3% | |||
Health — 1.3% | |||
Colorado Health Facilities Authority, RB, Hospital, | |||
NCMC Inc. Project, Series B (FSA), 6.00%, 5/15/26 | 1,300 | 1,351,558 | |
Total Municipal Bonds in Colorado | 1,351,558 | ||
Florida — 74.9% | |||
County/City/Special District/School District — 24.7% | |||
City of Jacksonville Florida, Refunding RB | |||
& Improvement (MBIA), 5.25%, 10/01/32 | 1,455 | 1,452,948 | |
City of Orlando Florida, RB, Senior, 6th Central Contract | |||
Payments, Series A (AGC), 5.25%, 11/01/38 | 2,000 | 1,961,720 | |
County of Lee Florida, RB (AMBAC), 5.25%, 10/01/23 | 2,285 | 2,300,218 | |
County of Miami-Dade Florida, RB, CAB, | |||
Sub-Series A (MBIA) (a): | |||
5.19%, 10/01/31 | 4,375 | 932,006 | |
5.20%, 10/01/33 | 5,735 | 1,049,333 | |
County of Orange Florida, Refunding RB: | |||
(AMBAC), 5.00%, 10/01/29 | 2,190 | 2,189,847 | |
Series A (MBIA), 5.13%, 1/01/23 | 1,000 | 1,017,650 | |
County of Osceola Florida, RB, Series A (MBIA), | |||
5.50%, 10/01/27 | 1,100 | 1,111,990 | |
County of Palm Beach Florida, RB (MBIA), | |||
7.20%, 6/01/15 | 1,500 | 1,807,755 | |
Jacksonville Economic Development Commission, RB, | |||
Metropolitan Parking Solutions Project (ACA), AMT, | |||
5.50%, 10/01/30 | 1,140 | 875,098 | |
Miami-Dade County IDA, RB, BAC Funding Corp. Project, | |||
Series A (AMBAC), 5.38%, 10/01/30 | 1,655 | 1,664,185 | |
Palm Beach County School Board, Florida, COP, | |||
Series D (FSA), 5.25%, 8/01/21 | 2,000 | 2,095,380 | |
Santa Rosa County School Board, COP, Series 2 | |||
(MBIA), 5.25%, 2/01/26 | 2,000 | 2,038,560 | |
Village Center Community Development District | |||
Recreational Revenue, RB, Series A (MBIA): | |||
5.38%, 11/01/34 | 1,640 | 1,385,669 | |
5.13%, 11/01/36 | 1,000 | 805,740 | |
Village Center Community Development District Utility | |||
Revenue, RB (MBIA): | |||
5.25%, 10/01/23 | 1,335 | 1,242,645 | |
5.13%, 10/01/28 | 3,030 | 2,798,296 | |
26,729,040 | |||
Education — 7.3% | |||
Broward County Educational Facilities Authority, RB, | |||
Educational Facilities, Nova Southeastern (AGC), | |||
5.00%, 4/01/31 | 1,720 | 1,647,451 | |
Orange County Educational Facilities Authority, RB, | |||
Rollins College Project (AMBAC), 5.50%, 12/01/32 | 4,765 | 4,577,164 | |
Volusia County IDA, RB, Student Housing, Stetson | |||
University Project, Series A (CIFG): | |||
5.00%, 6/01/25 | 1,000 | 908,130 | |
5.00%, 6/01/35 | 1,000 | 805,300 | |
7,938,045 |
Par | |||
Municipal Bonds | (000) | Value | |
Florida (concluded) | |||
Health — 3.7% | |||
Jacksonville Economic Development Commission, RB, | |||
Mayo Clinic, Series B (MBIA), 5.50%, 11/15/36 | $ 750 | $ 755,085 | |
Jacksonville Health Facilities Authority, RB, Baptist | |||
Medical Center (FSA), 5.00%, 8/15/37 | 200 | 191,006 | |
Orange County Health Facilities Authority, RB, Hospital, | |||
Orlando Regional Healthcare, 6.00%, 12/01/12 (b) | 1,835 | 2,129,774 | |
South Lake County Hospital District, RB, South Lake | |||
Hospital Inc., 5.80%, 10/01/34 | 1,000 | 911,440 | |
3,987,305 | |||
Housing — 2.3% | |||
Florida HFA, RB, Housing, Brittany Rosemont Apartments, | |||
Series C-1 (AMBAC), AMT, 6.75%, 8/01/14 | 780 | 781,271 | |
Florida Housing Finance Corp., RB, Homeowner | |||
Mortgage (FSA), AMT: | |||
Series 4, 6.25%, 7/01/22 | 245 | 253,007 | |
Series 11, 5.95%, 1/01/32 | 1,505 | 1,507,152 | |
2,541,430 | |||
State — 6.1% | |||
Florida State Board of Education, RB, Series A (FGIC), | |||
6.00%, 7/01/10 (b) | 6,190 | 6,569,075 | |
Transportation — 18.2% | |||
County of Lee Florida, RB, Series A (FSA), AMT, | |||
6.00%, 10/01/29 | 1,000 | 1,004,530 | |
County of Miami-Dade Florida, RB, Series A, AMT: | |||
(FSA), 5.00%, 10/01/33 | 5,555 | 4,749,914 | |
Miami International Airport (FSA), 5.25%, 10/01/41 | 1,200 | 1,036,032 | |
Miami International Airport (FSA), 5.50%, 10/01/41 | 2,400 | 2,154,888 | |
Miami International Airport (MBIA), | |||
6.00%, 10/01/24 | 2,750 | 2,770,955 | |
Hillsborough County Aviation Authority, Florida, RB, | |||
Series C, AMT (AGC), 5.75%, 10/01/26 | 1,000 | 1,014,130 | |
Jacksonville Port Authority, RB, AMT: | |||
(AGC), 6.00%, 11/01/38 | 700 | 681,128 | |
(MBIA), 5.63%, 11/01/26 | 1,225 | 1,200,390 | |
Miami-Dade County Expressway Authority, Florida, RB, | |||
Series B (MBIA), 5.25%, 7/01/27 | 1,000 | 1,008,130 | |
Orlando & Orange County Expressway Authority, RB, | |||
Series B (AMBAC), 5.00%, 7/01/35 | 4,365 | 4,163,686 | |
19,783,783 | |||
Utilities — 12.6% | |||
City of Boynton Beach Florida, Refunding RB (FGIC), | |||
6.25%, 11/01/20 (c) | 700 | 858,984 | |
City of Daytona Beach Florida, Refunding RB, Series B | |||
(MBIA), 5.00%, 11/15/27 | 950 | 838,546 | |
City of Lakeland Florida, Refunding RB, Series A (MBIA), | |||
5.00%, 10/01/28 | 2,000 | 1,999,860 | |
City of Miami Beach Florida, RB, Water and Sewer | |||
Revenue (AMBAC), 5.75%, 9/01/25 | 2,000 | 2,045,760 | |
City of Panama City Florida, RB, Series B (MBIA), | |||
5.25%, 10/01/22 | 1,500 | 1,517,460 | |
City of Port Saint Lucie Florida, RB (MBIA), | |||
5.25%, 9/01/24 | 1,055 | 1,064,305 | |
County of Polk Florida, RB (MBIA), 5.25%, 10/01/22 | 1,000 | 1,009,600 | |
County of Saint Johns Florida, RB (FSA), | |||
5.00%, 10/01/31 | 2,425 | 2,405,576 | |
Emerald Coast Utilities Authority, RB, System (MBIA), | |||
5.25%, 1/01/36 | 1,000 | 949,340 | |
Saint Lucie West Services District, RB (MBIA), | |||
5.25%, 10/01/34 | 1,000 | 957,670 | |
13,647,101 | |||
Total Municipal Bonds in Florida | 81,195,779 |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 19
Schedule of Investments (continued) BlackRock MuniYield Insured Investment Fund (MFT)
(Percentages shown are based on Net Assets)
Par | ||
Municipal Bonds | (000) | Value |
Georgia — 0.9% | ||
Utilities — 0.9% | ||
County of Fulton Georgia, RB (MBIA), 5.25%, 1/01/35 $ | 1,000 | $ 1,003,470 |
Total Municipal Bonds in Georgia | 1,003,470 | |
Illinois — 4.6% | ||
Education — 0.8% | ||
Chicago Board of Education, Illinois, GO, Chicago School | ||
Reform Board, Series A (MBIA), 5.50%, 12/01/26 | 825 | 903,631 |
Transportation — 1.5% | ||
Chicago Transit Authority, RB, Federal Transit | ||
Administration Section 5309, Series A (AGC), | ||
6.00%, 6/01/26 | 1,400 | 1,574,412 |
Utilities — 2.3% | ||
City of Chicago Illinois, Refunding RB, Second Lien | ||
(MBIA), 5.50%, 1/01/30 | 895 | 923,917 |
Illinois Municipal Electric Agency, RB, Series A (MBIA), | ||
5.25%, 2/01/28 | 1,565 | 1,583,373 |
2,507,290 | ||
Total Municipal Bonds in Illinois | 4,985,333 | |
Indiana — 0.9% | ||
Utilities — 0.9% | ||
Indianapolis Local Public Improvement Bond Bank, RB, | ||
Waterworks Project, Series A (AGC), 5.50%, 1/01/38 | 960 | 949,066 |
Total Municipal Bonds in Indiana | 949,066 | |
Iowa — 1.1% | ||
Health — 1.1% | ||
Iowa Finance Authority, RB, Iowa Health System (AGC), | ||
5.25%, 2/15/29 | 1,190 | 1,171,412 |
Total Municipal Bonds in Iowa | 1,171,412 | |
Kentucky -0.9% | ||
Utilities — 0.9% | ||
Kentucky Municipal Power Agency, RB, Prairie State | ||
Project, Series A (BHAC), 5.25%, 9/01/42 | 1,000 | 1,007,160 |
Total Municipal Bonds in Kentucky | 1,007,160 | |
Louisiana — 1.9% | ||
State — 1.4% | ||
Louisiana State Citizens Property Insurance Corp., RB, | ||
Series C-3, Remarketed (AGC), 6.13%, 6/01/25 | 1,405 | 1,536,480 |
Transportation — 0.5% | ||
New Orleans Aviation Board, Louisiana, Refunding RB, | ||
Restructuring Garbs (AGC): | ||
Series A-1, 6.00%, 1/01/23 | 375 | 401,130 |
Series A-2, 6.00%, 1/01/23 | 160 | 171,149 |
572,279 | ||
Total Municipal Bonds in Louisiana | 2,108,759 |
Par | ||
Municipal Bonds | (000) | Value |
Michigan — 14.7% | ||
Health — 1.3% | ||
Royal Oak Hospital Finance Authority, Michigan, RB, | ||
William Beaumont Hospital, 8.25%, 9/01/39 | $ 1,265 | $ 1,427,009 |
Utilities — 13.4% | ||
City of Detroit Michigan, RB, Second Lien: | ||
Series B (MBIA), 5.50%, 7/01/29 | 1,640 | 1,591,669 |
Series B, Remarketed (FSA), 6.25%, 7/01/36 | 1,800 | 1,892,196 |
Series B, Remarketed (FSA), 7.00%, 7/01/36 | 200 | 222,360 |
Series E, Remarketed (BHAC), 5.75%, 7/01/31 | 2,270 | 2,344,978 |
City of Detroit Michigan, RB, Senior Lien, Series B, | ||
Remarketed: | ||
(BHAC), 5.50%, 7/01/35 | 3,750 | 3,794,588 |
(FSA), 7.50%, 7/01/33 | 475 | 549,993 |
City of Detroit Michigan, RB, Second Lien, Series A, | ||
Remarketed (BHAC), 5.50%, 7/01/36 | 2,265 | 2,271,206 |
City of Detroit Michigan, Refunding RB, Senior Lien, | ||
Series C-1, Remarketed (FSA), 7.00%, 7/01/27 | 1,650 | 1,874,334 |
14,541,324 | ||
Total Municipal Bonds in Michigan | 15,968,333 | |
Minnesota — 3.0% | ||
Health — 3.0% | ||
City of Minneapolis Minnesota, RB, Fairview Health | ||
Services, Series B (AGC), 6.50%, 11/15/38 | 3,000 | 3,267,990 |
Total Municipal Bonds in Minnesota | 3,267,990 | |
New Jersey — 2.3% | ||
Health — 1.3% | ||
New Jersey Health Care Facilities Financing Authority, | ||
RB, Virtua Health (AGC), 5.50%, 7/01/38 | 1,400 | 1,397,914 |
State — 1.0% | ||
New Jersey EDA, RB, School Facilities Construction, | ||
Series Z (AGC), 6.00%, 12/15/34 | 1,000 | 1,089,890 |
Total Municipal Bonds in New Jersey | 2,487,804 | |
New York — 5.9% | ||
County/City/Special District/School District — 2.9% | ||
New York City Transitional Finance Authority, RB, | ||
Fiscal 2009: | ||
Series S-3, 5.25%, 1/15/39 | 1,000 | 998,480 |
Series S-4 (AGC), 5.50%, 1/15/29 | 2,000 | 2,108,480 |
3,106,960 | ||
State — 3.0% | ||
New York State Dormitory Authority, RB, Education, | ||
Series B, 5.25%, 3/15/38 | 3,250 | 3,306,290 |
Total Municipal Bonds in New York | 6,413,250 | |
Puerto Rico — 1.4% | ||
State — 1.4% | ||
Puerto Rico Sales Tax Financing Corp., RB, First | ||
Sub-Series A, 6.38%, 8/01/39 | 1,425 | 1,477,768 |
Total Municipal Bonds in Puerto Rico | 1,477,768 |
See Notes to Financial Statements.
20 ANNUAL REPORT JULY 31, 2009
Schedule of Investments (continued) BlackRock MuniYield Insured Investment Fund (MFT)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
Texas — 12.4% | |||
County/City/Special District/School District — 1.2% | |||
City of Dallas Texas, Refunding RB, Improvement | |||
(AGC), 5.25%, 8/15/38 | $ 850 | $ 847,467 | |
Lubbock Copper Texas Independent School District, GO, | |||
School Building (AGC), 5.75%, 2/15/42 | 425 | 436,602 | |
1,284,069 | |||
Health — 1.6% | |||
Harris County Health Facilities Development Corp., | |||
Refunding RB, Memorial Hermann Healthcare System, | |||
Series B, 7.25%, 12/01/35 | 500 | 540,035 | |
Tarrant County Cultural Education Facilities Finance | |||
Corp., Refunding RB, Christus Health, Series A (AGC), | |||
6.50%, 7/01/37 | 1,100 | 1,162,557 | |
1,702,592 | |||
Transportation — 2.8% | |||
North Texas Tollway Authority, Refunding RB, | |||
System (AGC): | |||
1st, Series A, 5.75%, 1/01/40 | 1,500 | 1,554,555 | |
First Tier, Series K-1, 5.75%, 1/01/38 | 1,400 | 1,459,864 | |
3,014,419 | |||
Utilities — 6.8% | |||
City of Houston Texas, Refunding RB, Series A, | |||
First Lien (AGC): (AGC), 5.38%, 11/15/38 | 1,000 | 1,017,820 | |
Combined, 6.00%, 11/15/35 | 2,700 | 2,966,193 | |
Combined (AGC), 6.00%, 11/15/36 | 2,055 | 2,252,896 | |
Lower Colorado River Authority, Refunding RB (AGC), | |||
5.50%, 5/15/36 | 1,155 | 1,175,894 | |
7,412,803 | |||
Total Municipal Bonds in Texas | 13,413,883 | ||
Virginia — 1.1% | |||
State — 1.1% | |||
Virginia Public School Authority, Virginia, RB, School | |||
Financing, 6.50%, 12/01/35 | 1,100 | 1,229,602 | |
Total Municipal Bonds in Virginia | 1,229,602 | ||
Total Municipal Bonds — 129.5% | 140,421,154 | ||
Municipal Bonds Transferred to | |||
Tender Option Bond Trusts (d) | |||
Florida — 18.1% | |||
Health — 11.2% | |||
Miami-Dade County, Florida, Health Facilities Authority, | |||
Refunding RB, Miami Children’s Hospital, Series A | |||
(AMBAC), 5.63%, 8/15/11 (b) | 6,960 | 7,664,422 | |
South Broward Hospital District, Florida, RB, Hospital | |||
(MBIA), 5.63%, 5/01/12 (b) | 4,000 | 4,498,560 | |
12,162,982 |
Municipal Bonds Transferred to | Par | ||
Tender Option Bond Trusts (d) | (000) | Value | |
Florida (concluded) | |||
County/City/Special District/School District — 1.2% | |||
City of Jacksonville, Florida, RB, Better Jacksonville | |||
(MBIA), 5.00%, 10/01/27 | $ 1,320 | $ 1,334,743 | |
Housing — 2.4% | |||
Lee County HFA, RB, Multi-County Program, Series A-2 | |||
(GNMA), AMT, 6.00%, 9/01/40 | 1,560 | 1,677,031 | |
Manatee County HFA, RB, Series A (GNMA), AMT, | |||
5.90%, 9/01/40 | 911 | 916,466 | |
2,593,497 | |||
Transportation — 2.1% | |||
Hillsborough County Aviation Authority, Florida, RB, | |||
Series A (AGC), AMT, 5.50%, 10/01/38 | 2,499 | 2,264,353 | |
Utilities — 1.2% | |||
Jacksonville Electric Authority, RB, Issue Three, | |||
Series Two, River Power Park, 5.00%, 10/01/37 | 1,290 | 1,237,265 | |
19,592,841 | |||
District of Columbia — 0.7% | |||
Utilities — 0.7% | |||
District of Columbia Water & Sewer Authority, Refunding | |||
RB, Series A, 6.00%, 10/01/35 | 750 | 811,556 | |
Nevada — 3.9 % | |||
County/City/Special District/School District — 3.9% | |||
Clark County Water Reclamation District, GO: | |||
Limited Tax, 6.00%, 7/01/38 | 2,010 | 2,142,660 | |
Series B, 5.50%, 7/01/29 | 1,994 | 2,106,669 | |
4,249,329 | |||
New York — 1.0% | |||
Utilities — 1.0% | |||
New York City Municipal Water Finance Authority, RB, | |||
Series FF-2, 5.50%, 6/15/40 | 1,095 | 1,150,377 | |
Kentucky — 1.0% | |||
State — 1.0% | |||
Kentucky State Property & Buildings Commission, | |||
Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/27 | 1,003 | 1,062,633 | |
Texas — 2.5% | |||
Utilities — 2.5% | |||
City of San Antonio, Texas, Refunding RB, Series A, | |||
5.25%, 2/01/31 | 2,609 | 2,684,131 | |
Total Municipal Bonds Transferred to | |||
Tender Option Bond Trusts — 27.2% | 29,550,866 | ||
Total Long-Term Investments | |||
(Cost — $170,823,823) — 156.7% | 169,972,020 |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 21
Schedule of Investments (concluded) BlackRock MuniYield Insured Investment Fund (MFT)
(Percentages shown are based on Net Assets)
Par | |||
Short-Term Securities | (000) | Value | |
Pennsylvania — 1.7% | |||
City of Philadelphia, Pennsylvania, GO, | |||
Multi-Mode, Refunding, VRDN, Series B (FSA), | |||
2.50%, 8/07/09 (e) | $ 1,800 | $ 1,800,000 | |
Shares | |||
Money Market Funds — 2.1% | |||
FFI Institutional Tax-Exempt Fund, 0.42% (f)(g) | 2,301,550 | 2,301,550 | |
Total Short-Term Securities | |||
(Cost — $4,101,550) — 3.8% | 4,101,550 | ||
Total Investments (Cost — $174,925,373*) — 160.5% | 174,073,570 | ||
Other Assets Less Liabilities — 5.8% | 6,313,233 | ||
Liability for Trust Certificates, Including Interest | |||
Expense and Fees Payable — (14.2)% | (15,422,054) | ||
Preferred Shares, at Redemption Value — (52.1)% | (56,530,690) | ||
Net Assets Applicable to Common Shares — 100.0% | $108,434,059 | ||
* The cost and unrealized appreciation (depreciation) of investments as of July 31, | |||
2009, as computed for federal income tax purposes, were as follows: | |||
Aggregate cost | $159,569,681 | ||
Gross unrealized appreciation | $ 5,237,772 | ||
Gross unrealized depreciation | (6,109,820) | ||
Net unrealized depreciation | $ (872,048) | ||
(a) Represents a zero-coupon bond. Rate shown reflects the current yield 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) Security is collateralized by Municipal or US Treasury Obligations. | |||
(d) Securities represent bonds transferred to a tender option bond trust in exchange for | |||
which the Fund acquired residual interest certificates. These securities serve as col- | |||
lateral 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 may have a maturity of more than one year at time of issuance, but has | |||
variable rate and demand features that qualify it as a short-term security. The rate | |||
shown is as of report date and maturity shown is the date the principal owed can | |||
be recovered through demand. | |||
(f) Investments in companies considered to be an affiliate of the Fund, for purposes of | |||
Section 2(a)(3) of the Investment Company Act of 1940, were as follows: | |||
Net | |||
Affiliate | Activity | Income | |
CMA Florida Municipal Money Fund | (12,412,044) | $37,055 | |
FFI Institutional Tax-Exempt Fund | 2,301,550 | $ 4,811 | |
(g) Represents the current yield as of report date. |
• | Effective August 1, 2008, the Fund adopted Financial Accounting Standards Board | ||
Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” | |||
(“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for | |||
measuring fair values and requires additional disclosures about the use of fair value | |||
measurements. Various inputs are used in determining the fair value of investments, | |||
which are as follows: | |||
• | Level 1 — price quotations in active markets/exchanges for identical securities | ||
• | 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 inputs or methodology used for valuing securities are not necessarily an indica- | |||
tion of the risk associated with 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, 2009 in determining | |||
the fair valuation of the Fund's investments: | |||
Valuation | Investments in | ||
Inputs | Securities | ||
Assets | |||
Level 1 — Short-Term Securities | $ 2,301,550 | ||
Level 2: | |||
Long-Term Investments1 | 169,972,020 | ||
Short-Term Securities | 1,800,000 | ||
Total Level 2 | 171,772,020 | ||
Level 3 | — | ||
Total | $ 174,073,570 | ||
1 See above Schedule of Investments for values in each sector. |
See Notes to Financial Statements.
22 ANNUAL REPORT JULY 31, 2009
Schedule of Investments July 31, 2009 BlackRock MuniYield Michigan Insured Fund, Inc. (MIY)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
Michigan — 142.3% | |||
Corporate — 22.0% | |||
Delta County EDC, Refunding RB, MeadWestvaco — | |||
Escanaba, Series B, AMT, 6.45%, 4/15/12 (a) | $ 1,500 | $ 1,709,850 | |
Dickinson County EDC, Michigan, Refunding RB, | |||
International Paper Co. Project, Series A, | |||
5.75%, 6/01/16 | 3,900 | 3,809,403 | |
Michigan Strategic Fund, Refunding RB, College, Detroit, | |||
Fund, Pollution, Series AA (MBIA), 6.95%, 5/01/11 | 6,000 | 6,378,840 | |
Michigan Strategic Fund, Refunding RB, Detroit | |||
Edison Co., Series A (MBIA), AMT, 5.55%, 9/01/29 | 10,250 | 9,030,250 | |
Monroe County EDC, Michigan, Refunding RB, College, | |||
Detroit Edison Co., Series AA (MBIA), 6.95%, 9/01/22 | 15,000 | 16,874,400 | |
Saint Clair County EDC, Michigan, Refunding RB, Detroit | |||
Edison, Series AA (AMBAC), 6.40%, 8/01/24 | 17,800 | 18,018,050 | |
55,820,793 | |||
County/City/Special District/School District — 30.3% | |||
Adrian City School District, Michigan, GO (FSA), | |||
5.00%, 5/01/14 (a) | 3,600 | 4,139,280 | |
Birmingham City School District, Michigan, GO, School | |||
Building & Site (FSA), 5.00%, 11/01/33 | 1,000 | 1,002,670 | |
City of Oak Park Michigan, GO, Street Improvement | |||
(MBIA), 5.00%, 5/01/30 | 500 | 490,465 | |
County of Wayne Michigan, GO, Building Authority, | |||
Capital Improvement, Series A (MBIA), | |||
5.25%, 6/01/16 | 1,000 | 1,003,020 | |
Detroit City School District, Michigan, GO, School | |||
Building & Site Improvement: | |||
Series A (FGIC), 5.38%, 5/01/13 (a) | 2,300 | 2,635,547 | |
Series A, Refunding (FSA), 5.00%, 5/01/21 | 3,000 | 2,843,070 | |
Series B (FGIC), 5.00%, 5/01/28 | 3,100 | 2,712,469 | |
Eaton Rapids Public Schools, Michigan, GO, School | |||
Building & Site (FSA): | |||
5.25%, 5/01/14 | 1,675 | 1,772,853 | |
5.25%, 5/01/20 | 1,325 | 1,413,523 | |
Frankenmuth School District, Michigan, GO (FGIC), | |||
5.75%, 5/01/10 (a) | 1,000 | 1,040,280 | |
Gibraltar School District, Michigan, GO, School Building | |||
& Site: | |||
(FGIC), 5.00%, 5/01/14 (a) | 2,940 | 3,380,412 | |
(MBIA), 5.00%, 5/01/28 | 710 | 718,321 | |
Grand Blanc Community Schools, Michigan, GO (MBIA), | |||
5.63%, 5/01/20 | 1,100 | 1,163,789 | |
Grand Rapids Building Authority, Michigan, RB, Series A | |||
(AMBAC), 5.50%, 10/01/12 (a) | 1,035 | 1,180,148 | |
Gull Lake Community School District, Michigan, GO, | |||
School Building & Site (FSA), 5.00%, 5/01/14 (a) | 5,625 | 6,467,625 | |
Harper Woods School District, Michigan, GO, School | |||
Building & Site: | |||
(FGIC), 5.00%, 5/01/14 (a) | 4,345 | 4,995,881 | |
(MBIA), 5.00%, 5/01/34 | 430 | 423,365 | |
Hartland Consolidated School District, Michigan, GO | |||
(FGIC), 6.00%, 5/01/10 (a) | 6,825 | 7,112,674 | |
Jenison Public Schools, Michigan, GO, Building & Site | |||
(MBIA), 5.50%, 5/01/19 | 1,575 | 1,665,421 | |
Lansing Building Authority, Michigan, GO, Series A | |||
(MBIA), 5.38%, 6/01/13 (a) | 1,510 | 1,738,720 | |
Montrose Township School District, Michigan, GO | |||
(MBIA), 6.20%, 5/01/17 | 1,000 | 1,185,100 | |
Orchard View Schools, Michigan, GO, School Building | |||
& Site (MBIA), 5.00%, 11/01/13 (a) | 5,320 | 6,110,499 |
Par | ||
Municipal Bonds | (000) | Value |
Michigan (continued) | ||
County/City/Special District/School District (concluded) | ||
Pennfield School District, Michigan, GO, School Building | ||
& Site (FGIC) (a): | ||
5.00%, 5/01/14 | $ 765 | $ 875,458 |
Refunded Balance, 5.00%, 5/01/14 | 605 | 692,356 |
Reed City Public Schools, Michigan, GO, School Building | ||
& Site (FSA), 5.00%, 5/01/14 (a) | 1,425 | 1,638,465 |
South Haven Public Schools, Michigan, GO (FSA), | ||
5.00%, 5/01/13 (a) | 1,350 | 1,532,210 |
Southfield Library Building Authority, Michigan, GO | ||
(MBIA), 5.50%, 5/01/10 (a) | 1,300 | 1,349,933 |
Southfield Public Schools, Michigan, GO, School | ||
Building & Site, Series B (FSA), 5.00%, 5/01/14 (a) | 3,500 | 4,005,365 |
Sparta Area Schools, Michigan, GO, School Building | ||
& Site (FGIC), 5.00%, 5/01/14 (a) | 1,325 | 1,523,485 |
Thornapple Kellogg School District, Michigan, | ||
GO, Refunding, School Building & Site (MBIA), | ||
5.00%, 5/01/32 | 2,500 | 2,493,075 |
Waverly Community School, GO (FGIC), | ||
5.50%, 5/01/10 (a) | 1,100 | 1,141,316 |
Wayne Charter County Michigan, GO, Airport Hotel, | ||
Detroit Metropolitan Airport, Series A (MBIA), | ||
5.00%, 12/01/30 | 1,750 | 1,638,683 |
West Bloomfield School District, Michigan, GO, | ||
Refunding (MBIA): | ||
5.50%, 5/01/17 | 1,710 | 1,874,605 |
5.50%, 5/01/18 | 1,225 | 1,308,643 |
Zeeland Public Schools, Michigan, GO, School Building | ||
& Site (MBIA), 5.00%, 5/01/29 | 1,600 | 1,615,360 |
76,884,086 | ||
Education — 7.4% | ||
Eastern Michigan University, Michigan, RB, General, | ||
Series B (FGIC) (a): | ||
5.60%, 6/01/10 | 1,500 | 1,563,990 |
5.63%, 6/01/10 | 1,310 | 1,366,160 |
Eastern Michigan University, Michigan, Refunding RB, | ||
General (AMBAC): | ||
6.00%, 6/01/10 (a) | 590 | 623,364 |
6.00%, 6/01/20 | 435 | 449,220 |
Grand Valley State University, Michigan, RB (MBIA), | ||
5.50%, 2/01/18 | 2,070 | 2,246,757 |
Harper Creek Community School District, Michigan, GO, | ||
Refunding (FSA), 5.00%, 5/01/22 | 1,125 | 1,164,667 |
Michigan Higher Education Facilities Authority, Michigan, | ||
RB, Limited Obligation, Hillsdale College Project, | ||
5.00%, 3/01/35 | 1,875 | 1,655,756 |
Michigan Higher Education Facilities Authority, Michigan, | ||
Refunding RB, Limited Obligation, Creative Studies (a): | ||
5.85%, 6/01/12 | 1,235 | 1,392,635 |
5.90%, 6/01/12 | 1,145 | 1,292,739 |
Michigan Higher Education Student Loan Authority, | ||
Michigan, RB, Student Loan (AMBAC), AMT: | ||
Series XVII-B, 5.40%, 6/01/18 | 2,500 | 2,448,300 |
Series XVII-Q, 5.00%, 3/01/31 | 3,000 | 2,493,720 |
Saginaw Valley State University, Michigan, Refunding RB, | ||
General (MBIA), 5.00%, 7/01/24 | 2,100 | 2,131,899 |
18,829,207 |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 23
Schedule of Investments (continued) BlackRock MuniYield Michigan Insured Fund, Inc. (MIY)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
Michigan (continued) | |||
Health — 22.6% | |||
County of Dickinson Michigan, Refunding RB (ACA), | |||
5.80%, 11/01/24 | $ 3,100 | $ 2,783,738 | |
Flint Hospital Building Authority, Michigan, Refunding | |||
RB, Hurley Medical Center (ACA): | |||
6.00%, 7/01/20 | 1,305 | 1,086,347 | |
Series A, 5.38%, 7/01/20 | 615 | 482,603 | |
Kent Hospital Finance Authority, Michigan, RB, Spectrum | |||
Health, Series A (MBIA), 5.50%, 7/15/11 (a) | 3,000 | 3,297,480 | |
Kent Hospital Finance Authority, Michigan, Refunding | |||
RB, Butterworth, Series A (MBIA), 7.25%, 1/15/13 | 2,685 | 2,926,838 | |
Michigan State Hospital Finance Authority, Michigan, | |||
RB, Ascension Health Credit, Series A (MBIA), | |||
6.25%, 11/15/09 (a) | 2,500 | 2,566,900 | |
Michigan State Hospital Finance Authority, Michigan, RB | |||
Hospital, MidMichigan Obligation Group, Series A | |||
(AMBAC), 5.50%, 4/15/18 | 2,530 | 2,568,456 | |
Michigan State Hospital Finance Authority, Michigan, RB, | |||
McLaren Health Care: | |||
5.75%, 5/15/38 | 4,500 | 4,229,235 | |
Series C, 5.00%, 8/01/35 | 1,000 | 849,430 | |
Michigan State Hospital Finance Authority, Michigan, | |||
RB, MidMichigan Obligation Group, Series A, | |||
5.00%, 4/15/36 | 1,750 | 1,483,475 | |
Michigan State Hospital Finance Authority, Michigan, | |||
Refunding RB: | |||
Henry Ford Health System, Series A, | |||
5.25%, 11/15/46 | 2,500 | 1,899,475 | |
Hospital, Crittenton, Series A, 5.63%, 3/01/27 | 2,235 | 2,078,103 | |
Hospital, Oakwood Obligation Group, Series A, | |||
5.00%, 7/15/25 | 4,100 | 3,394,964 | |
Hospital, Oakwood Obligation Group, Series A, | |||
5.00%, 7/15/37 | 630 | 455,326 | |
Hospital, Saint John Hospital, Series A (AMBAC), | |||
6.00%, 5/15/13 (b) | 2,475 | 2,487,697 | |
Hospital, Sparrow Obligated, 5.00%, 11/15/31 | 3,100 | 2,636,984 | |
Trinity Health Credit, Series C, 5.38%, 12/01/23 | 1,000 | 1,005,820 | |
Trinity Health Credit, Series C, 5.38%, 12/01/30 | 3,755 | 3,673,103 | |
Trinity Health Credit, Series D, 5.00%, 8/15/34 | 3,100 | 2,930,771 | |
Trinity Health, Series A, 6.00%, 12/01/20 | 2,200 | 2,257,926 | |
Trinity Health, Series A, 6.25%, 12/01/28 | 930 | 995,016 | |
Trinity Health, Series A, 6.50%, 12/01/33 | 1,000 | 1,072,900 | |
Trinity Health, Series A (AMBAC), 6.00%, 12/01/27 | 6,400 | 6,528,896 | |
Royal Oak Hospital Finance Authority, Michigan, RB, | |||
William Beaumont Hospital, 8.25%, 9/01/39 | 1,000 | 1,128,070 | |
Saginaw Hospital Finance Authority, Michigan, | |||
Refunding RB, Covenant Medical Center, Series E | |||
(MBIA), 5.63%, 7/01/13 | 2,500 | 2,528,275 | |
57,347,828 | |||
Housing — 4.6% | |||
Michigan State HDA, RB, College Program (GNMA), AMT: | |||
Deaconess Tower, 5.25%, 2/20/48 | 1,000 | 933,440 | |
Williams Pavilion, 4.75%, 4/20/37 | 3,990 | 3,509,963 | |
Michigan State HDA, RB, Non Ace, Series A: | |||
6.00%, 10/01/45 | 6,990 | 7,008,873 | |
(MBIA), AMT, 5.30%, 10/01/37 | 200 | 189,904 | |
11,642,180 |
Par | ||
Municipal Bonds | (000) | Value |
Michigan (concluded) | ||
State — 16.5% | ||
Michigan Municipal Bond Authority, Michigan, RB, | ||
Local Government Loan Program, Group A (AMBAC), | ||
5.50%, 11/01/20 | $ 1,065 | $ 1,076,481 |
Michigan Municipal Bond Authority, Michigan, RB, Local | ||
Government, Charter County Wayne, Series B (AGC): | ||
5.00%, 11/01/14 | 2,400 | 2,620,464 |
5.00%, 11/01/15 | 1,500 | 1,633,155 |
5.00%, 11/01/16 | 500 | 541,305 |
5.38%, 11/01/24 | 125 | 129,730 |
Michigan State Building Authority, Refunding RB, | ||
Facilities Program: | ||
Series I, 6.25%, 10/15/38 | 3,900 | 4,172,649 |
Series I (FSA), 5.50%, 10/15/10 | 7,250 | 7,613,080 |
Series I (FSA), 5.50%, 10/15/11 | 15,030 | 16,297,630 |
Series I (MBIA), 5.50%, 10/15/18 | 2,500 | 2,573,625 |
Series II (MBIA), 5.00%, 10/15/29 | 3,500 | 3,370,465 |
State of Michigan, COP (AMBAC), | ||
5.52%, 6/01/22 (b)(c) | 3,000 | 1,725,210 |
41,753,794 | ||
Transportation — 16.4% | ||
Wayne Charter County Michigan, RB, Detroit | ||
Metropolitan Wayne County, Series A (MBIA), AMT, | ||
5.38%, 12/01/15 | 10,660 | 10,656,376 |
Wayne County Airport Authority, RB, Detroit Metropolitan | ||
Wayne County Airport (MBIA), AMT: | ||
5.25%, 12/01/25 | 7,525 | 6,565,638 |
5.25%, 12/01/26 | 6,300 | 5,434,758 |
5.00%, 12/01/34 | 9,160 | 6,843,619 |
Wayne County Airport Authority, Refunding RB | ||
(AGC), AMT: | ||
5.75%, 12/01/25 | 4,000 | 3,796,720 |
5.75%, 12/01/26 | 1,000 | 941,390 |
5.38%, 12/01/32 | 8,700 | 7,375,425 |
41,613,926 | ||
Utilities — 22.5% | ||
City of Detroit Michigan, RB, Second Lien, Series B: | ||
(MBIA), 5.00%, 7/01/13 (a) | 1,550 | 1,750,539 |
(MBIA), 5.00%, 7/01/34 | 2,420 | 2,078,369 |
Remarketed (FSA), 7.00%, 7/01/36 | 3,000 | 3,335,400 |
City of Detroit Michigan, RB, Senior Lien, Series A: | ||
(FGIC), 5.88%, 1/01/10 (a) | 1,250 | 1,290,238 |
(FGIC), 5.75%, 7/01/11 (a) | 7,250 | 7,923,597 |
(FSA), 5.00%, 7/01/25 | 4,000 | 3,922,400 |
(MBIA), 5.00%, 7/01/13 (a) | 3,750 | 4,235,175 |
(MBIA), 5.00%, 7/01/34 | 6,900 | 5,925,927 |
City of Detroit Michigan, RB, Series B (MBIA), | ||
5.25%, 7/01/13 (a) | 11,790 | 13,426,924 |
City of Detroit Michigan, Refunding RB: | ||
(FGIC), 6.25%, 7/01/12 (b) | 860 | 929,127 |
Second Lien, Series C (FSA), 5.00%, 7/01/29 | 10,570 | 10,283,659 |
City of Muskegon Heights Michigan, RB, Series A | ||
(MBIA), 5.63%, 11/01/10 (a) | 1,830 | 1,945,491 |
57,046,846 | ||
Total Municipal Bonds in Michigan | 360,938,660 |
See Notes to Financial Statements.
24 ANNUAL REPORT JULY 31, 2009
Schedule of Investments (concluded) BlackRock MuniYield Michigan Insured Fund, Inc. (MIY)
(Percentages shown are based on Net Assets)
Par | ||
Municipal Bonds | (000) | Value |
Puerto Rico — 4.5% | ||
Housing — 0.8% | ||
Puerto Rico HFA, RB, Subordinate, Capital Fund | ||
Modernization, 5.13%, 12/01/27 | $ 2,000 | $ 2,002,200 |
State — 2.1% | ||
Puerto Rico Public Buildings Authority, Refunding RB, | ||
Government Facilities, Series M-3 (MBIA), | ||
6.00%, 7/01/27 | 2,100 | 2,077,173 |
Puerto Rico Sales Tax Financing Corp., RB, CAB, Series A | ||
(MBIA) (c): | ||
5.19%, 8/01/43 | 12,500 | 1,385,250 |
4.99%, 8/01/46 | 20,000 | 1,811,000 |
5,273,423 | ||
Transportation — 1.6% | ||
Puerto Rico Highway & Transportation Authority, | ||
Refunding RB, Series CC (AGC), 5.50%, 7/01/31 | 4,000 | 4,182,440 |
Total Municipal Bonds in Puerto Rico | 11,458,063 | |
Total Municipal Bonds — 146.8% | 372,396,723 | |
Municipal Bonds Transferred to | ||
Tender Option Bond Trusts (d) | ||
County/City/Special District/School District — 4.5% | ||
Lakewood Public Schools, Michigan, GO, School Building | ||
(FSA), 5.00%, 5/01/37 | 6,775 | 6,749,860 |
Portage Public Schools, Michigan, GO, School Building | ||
(FSA), 5.00%, 5/01/31 | 4,650 | 4,682,410 |
11,432,270 | ||
Education — 7.6% | ||
Saginaw Valley State University, Michigan, Refunding RB | ||
(FSA), 5.00%, 7/01/31 | 7,500 | 7,515,750 |
Wayne State University, Refunding RB (FSA), | ||
5.00%, 11/15/35 | 12,210 | 11,827,217 |
19,342,967 | ||
Total Municipal Bonds Transferred to | ||
Tender Option Bond Trusts — 12.1% | 30,775,237 | |
Total Long-Term Investments | ||
(Cost — $406,461,911) — 158.9% | 403,171,960 | |
Short-Term Securities | Shares | |
CMA Michigan Municipal Money Fund, | ||
0.04% (e)(f) | 7,530,323 | 7,530,323 |
Total Short-Term Securities | ||
(Cost — $7,530,323) — 3.0% | 7,530,323 | |
Total Investments (Cost — $413,992,234*) — 161.9% | 410,702,283 | |
Other Assets Less Liabilities — 1.5% | 3,831,892 | |
Liability for Trust Certificates, Including Interest | ||
Expense and Fees Payable — (6.4)% | (16,238,270) | |
Preferred Shares, at Redemption Value — (57.0)% | (144,665,717) | |
Net Assets Applicable to Common Shares — 100.0% | $253,630,188 |
* The cost and unrealized appreciation (depreciation) of investments as of July 31, | ||||
2009, as computed for federal income tax purposes, were as follows: | ||||
Aggregate cost | $398,160,053 | |||
Gross unrealized appreciation | $ 15,680,195 | |||
Gross unrealized depreciation | (19,327,965) | |||
Net unrealized depreciation | $ (3,647,770) | |||
(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 tender option bond trust in exchange for | ||||
which the Fund acquired residual interest certificates. These securities serve as col- | ||||
lateral 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) Investments in companies considered to be an affiliate of the Fund, for purposes of | ||||
Section 2(a)(3) of the Investment Company Act of 1940, were as follows: | ||||
Net | ||||
Affiliate | Activity | Income | ||
CMA Michigan Municipal Money Fund | 2,962,790 | $66,508 | ||
(f) Represents the current yield as of report date. | ||||
• Effective August 1, 2008, the Fund adopted Financial Accounting Standards Board | ||||
Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” | ||||
(“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for | ||||
measuring fair values and requires additional disclosures about the use of fair value | ||||
measurements. Various inputs are used in determining the fair value of investments, | ||||
which are as follows: | ||||
• | Level 1 — price quotations in active markets/exchanges for identical securities | |||
• | 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 inputs or methodology used for valuing securities are not necessarily an indica- | ||||
tion of the risk associated with 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, 2009 in determining | ||||
the fair valuation of the Fund’s investments: | ||||
Valuation | Investments in | |||
Inputs | Securities | |||
Assets | ||||
Level 1 — Short-Term Securities | $ 7,530,323 | |||
Level 2 — Long-Term Investments1 | 403,171,960 | |||
Level 3 | — | |||
Total | $ 410,702,283 | |||
1 See above Schedule of Investments for values in each sector. |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 25
Schedule of Investments July 31, 2009 BlackRock MuniYield New Jersey Insured Fund, Inc. (MJI)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
New Jersey — 136.7% | |||
Corporate — 1.6% | |||
Gloucester County Improvement Authority, Refunding | |||
RB, Waste Management Inc. Project, Series A, | |||
6.85%, 12/01/29 | $ 2,000 | $ 2,019,600 | |
County/City/Special District/School District — 27.5% | |||
City of Perth Amboy New Jersey, GO, CAB (FSA), | |||
5.49%, 7/01/35 (a) | 1,250 | 1,027,288 | |
County of Hudson New Jersey, COP, Refunding (MBIA), | |||
6.25%, 12/01/16 | 1,000 | 1,112,960 | |
County of Middlesex New Jersey, COP (MBIA), | |||
5.00%, 8/01/22 | 3,000 | 3,000,570 | |
Essex County Improvement Authority, Refunding RB, | |||
County Guaranteed (MBIA), AMT, 4.75%, 11/01/32 | 1,000 | 817,290 | |
Hopatcong Boro New Jersey, GO, Refunding, Sewer | |||
(AMBAC), 4.50%, 8/01/33 | 750 | 731,715 | |
Hudson County Improvement Authority, RB, County | |||
Guaranteed: | |||
CAB, Series A-1 (MBIA), 4.49%, 12/15/32 (b) | 1,000 | 233,890 | |
Harrison Parking Facilities Project, Series C (AGC), | |||
5.38%, 1/01/44 | 1,400 | 1,434,440 | |
Hudson County Improvement Authority, Refunding | |||
RB, Hudson County Lease Project (MBIA), | |||
5.38%, 10/01/24 | 7,500 | 7,550,400 | |
Jackson Township School District, New Jersey, GO | |||
(FGIC), 5.00%, 4/15/12 (c) | 5,200 | 5,767,060 | |
Monmouth County Improvement Authority, RB, | |||
Governmental Loan (AMBAC): | |||
5.00%, 12/01/11 (c) | 980 | 1,075,981 | |
5.00%, 12/01/11 (c) | 975 | 1,070,491 | |
5.20%, 12/01/14 | 240 | 246,396 | |
5.25%, 12/01/15 | 765 | 782,457 | |
5.00%, 12/01/17 | 605 | 640,507 | |
5.00%, 12/01/18 | 545 | 573,814 | |
5.00%, 12/01/19 | 560 | 601,462 | |
Morristown Parking Authority, RB, Guaranteed (MBIA), | |||
4.50%, 8/01/37 | 1,355 | 1,270,949 | |
New Jersey State Transit Corp., COP, Subordinate, | |||
Federal Transit Admin Grants, Series A-FS (FSA), | |||
5.00%, 9/15/21 | 1,000 | 1,028,660 | |
Newark Housing Authority, Refunding RB, Additional, | |||
Newark Redevelopment Project (MBIA), | |||
4.38%, 1/01/37 | 3,600 | 3,082,392 | |
Salem County Improvement Authority, RB, Finlaw State | |||
Office Building (FSA): | |||
5.38%, 8/15/28 | 1,250 | 1,320,475 | |
5.25%, 8/15/38 | 700 | 716,569 | |
34,085,766 | |||
Education — 21.5% | |||
New Jersey Educational Facilities Authority, RB, | |||
Montclair State University, Series A (AMBAC), | |||
5.00%, 7/01/21 | 1,600 | 1,648,480 | |
New Jersey Educational Facilities Authority, Refunding RB: | |||
College of New Jersey, Series D (FSA), | |||
5.00%, 7/01/35 | 3,725 | 3,794,620 | |
Montclair State University, Series J (MBIA), | |||
4.25%, 7/1/30 | 2,895 | 2,506,781 | |
Ramapo College, Series I (AMBAC), 4.25%, 7/01/31 | 1,250 | 1,074,038 | |
Ramapo College, Series I (AMBAC), 4.25%, 7/01/36 | 3,890 | 3,197,308 | |
Rowan University, Series B (AGC), 5.00%, 7/01/26 | 2,575 | 2,746,547 | |
Stevens Institute Technology, Series A, | |||
5.00%, 7/01/34 | 1,500 | 1,281,435 |
Par | |||
Municipal Bonds | (000) | Value | |
New Jersey (continued) | |||
Education (concluded) | |||
New Jersey Educational Facilities Authority, RB: | |||
Rowan University, Series C (MBIA), | |||
5.00%, 7/01/14 (c) | $ 1,185 | $ 1,350,071 | |
William Paterson University, Series E (Syncora | |||
Guarantee Inc.), 5.00%, 7/1/21 | 1,725 | 1,747,563 | |
New Jersey State Higher Education Assistance Authority, | |||
RB, Series A (AMBAC), AMT, 5.30%, 6/01/17 | 3,565 | 3,579,117 | |
University of Medicine & Dentistry of New Jersey, | |||
New Jersey, RB, Series A (AMBAC): | |||
5.50%, 12/01/18 | 570 | 567,897 | |
5.50%, 12/01/19 | 1,145 | 1,135,130 | |
5.50%, 12/01/20 | 1,130 | 1,113,999 | |
5.50%, 12/01/21�� | 865 | 845,261 | |
26,588,247 | |||
Health — 11.5% | |||
New Jersey Health Care Facilities Financing Authority, | |||
RB, Meridian Health System Obligation Group (FSA), | |||
5.25%, 7/01/19 | 2,250 | 2,260,080 | |
New Jersey Health Care Facilities Financing Authority, | |||
RB, Meridian Health, Series I (AGC), 5.00%, 7/01/38 | 750 | 739,807 | |
New Jersey Health Care Facilities Financing Authority, RB: | |||
Atlantic City Medical, 5.75%, 7/01/12 (c) | 525 | 590,520 | |
Atlantic City Medical, 6.25%, 7/01/12 (c) | 290 | 330,324 | |
Atlantic City Medical, 6.25%, 7/01/17 | 325 | 342,368 | |
Atlantic City Medical, 5.75%, 7/01/25 | 790 | 799,235 | |
Meridian Health, Series II (AGC), 5.00%, 7/01/38 | 3,000 | 2,959,230 | |
Somerset Medical Center, 5.50%, 7/01/33 | 1,125 | 615,071 | |
South Jersey Hospital, 6.00%, 7/01/12 (c) | 4,000 | 4,552,360 | |
Virtua Health (AGC), 5.50%, 7/01/38 | 1,000 | 998,510 | |
14,187,505 | |||
Housing — 8.3% | |||
New Jersey State Housing & Mortgage Finance | |||
Agency, RB: | |||
Capital Fund Program, Series A (FSA), | |||
4.70%, 11/01/25 | 4,325 | 4,276,301 | |
Home Buyer, Series CC, AMT (MBIA), | |||
5.80%, 10/01/20 | 2,640 | 2,730,737 | |
S/F Housing, Series T, AMT, 4.70%, 10/01/37 | 500 | 430,820 | |
Series A, AMT (FGIC), 4.90%, 11/01/35 | 820 | 730,448 | |
Series AA, 6.50%, 10/01/38 | 1,350 | 1,436,063 | |
Newark Housing Authority, RB, South Ward Police | |||
Facility (AGC): | |||
5.75%, 12/01/30 | 400 | 403,688 | |
6.75%, 12/01/38 | 250 | 267,038 | |
10,275,095 | |||
State — 36.1% | |||
Garden State Preservation Trust, RB (FSA): | |||
2005 Series A, 5.80%, 11/01/22 | 2,605 | 2,953,992 | |
CAB, Series B, 5.12%, 11/01/23 (b) | 6,925 | 3,569,076 | |
New Jersey EDA, RB, CAB, Motor Vehicle Surcharge | |||
(MBIA), 4.95%, 7/01/21 (b) | 2,325 | 1,314,973 | |
New Jersey EDA, RB, Cigarette Tax: | |||
5.63%, 6/15/19 | 1,060 | 984,348 | |
(Radian), 5.75%, 6/15/29 | 785 | 653,041 | |
(Radian), 5.50%, 6/15/31 | 225 | 179,408 | |
(Radian), 5.75%, 6/15/34 | 465 | 374,720 |
See Notes to Financial Statements.
26 ANNUAL REPORT JULY 31, 2009
Schedule of Investments (continued) BlackRock MuniYield New Jersey Insured Fund, Inc. (MJI)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
New Jersey (continued) | |||
State (concluded) | |||
New Jersey EDA, RB, Motor Vehicle Surcharge RB, | |||
Series A (MBIA): | |||
5.00%, 7/01/29 | $ 3,900 | $ 3,813,264 | |
5.25%, 7/01/33 | 8,500 | 8,262,765 | |
5.00%, 7/01/34 | 1,765 | 1,705,643 | |
New Jersey EDA, RB, School Facilities Construction, | |||
Series Z (AGC), 6.00%, 12/15/34 | 1,200 | 1,307,868 | |
New Jersey EDA, RB, School Facilities, Series U | |||
(AMBAC), 5.00%, 9/01/37 | 1,000 | 969,160 | |
New Jersey EDA, Refunding RB, School Facilities | |||
Construction, Series K (MBIA), 5.25%, 12/15/17 | 750 | 815,197 | |
New Jersey Sports & Exposition Authority, Refunding | |||
RB (MBIA): | |||
5.50%, 3/01/21 | 1,540 | 1,676,182 | |
5.50%, 3/01/22 | 1,000 | 1,080,440 | |
New Jersey Transportation Trust Fund Authority, New | |||
Jersey, RB, CAB, Transportation System, Series C (b): | |||
(AMBAC), 5.05%, 12/15/35 | 2,760 | 475,603 | |
(FSA), 4.84%, 12/15/32 | 4,750 | 1,110,977 | |
New Jersey Transportation Trust Fund Authority, | |||
New Jersey, RB, Transportation System: | |||
Series A (AGC), 5.63%, 12/15/28 | 780 | 830,489 | |
Series A (FSA), 5.25%, 12/15/20 | 4,250 | 4,712,528 | |
Series B (MBIA), 5.50%, 12/15/21 | 3,600 | 3,925,260 | |
Series D (FSA), 5.00%, 6/15/19 | 3,240 | 3,464,759 | |
State of New Jersey, COP, Equipment Lease Purchase, | |||
Series A, 5.25%, 6/15/27 | 500 | 503,800 | |
44,683,493 | |||
Tobacco — 1.7% | |||
Tobacco Settlement Financing Corp., New Jersey, RB, | |||
7.00%, 6/01/13 (c) | 1,715 | 2,080,775 | |
Transportation — 13.1% | |||
Delaware River Port Authority Pennsylvania & New Jersey, | |||
RB (FSA), 6.00%, 1/01/18 | 5,000 | 5,093,650 | |
New Jersey State Turnpike Authority, RB, Growth | |||
& Income Securities, Series B (AMBAC), | |||
6.14%, 1/01/35 (b) | 3,005 | 2,156,689 | |
New Jersey Transportation Trust Fund Authority, New | |||
Jersey, RB, Transportation System, Series A (AMBAC), | |||
5.00%, 12/15/32 | 730 | 732,438 | |
Port Authority of New York & New Jersey, RB, | |||
Consolidated: | |||
93rd Series, 6.13%, 6/01/94 | 1,000 | 1,089,310 | |
138th (FSA), AMT, 4.75%, 12/01/34 | 1,000 | 921,510 | |
146th (FSA), AMT, 4.25%, 12/01/32 | 5,000 | 4,101,750 | |
152nd, AMT, 5.75%, 11/01/30 | 2,000 | 2,066,840 | |
16,162,187 | |||
Utilities — 15.4% | |||
Essex County Utilities Authority, Refunding RB (AGC), | |||
4.13%, 4/01/22 | 1,000 | 974,410 | |
Jersey City Sewage Authority, Refunding RB (AMBAC), | |||
6.25%, 1/01/14 | 3,750 | 4,133,287 | |
New Jersey EDA, RB, NJ American Water Co. Inc. Project, | |||
Series A (FGIC), AMT, 6.88%, 11/01/34 | 5,070 | 5,070,862 |
Par | |||
Municipal Bonds | (000) | Value | |
New Jersey (concluded) | |||
Utilities (concluded) | |||
New Jersey EDA, RB, Series A, New Jersey, American | |||
Water (AMBAC), AMT, 5.25%, 11/01/32 | $ 1,000 | $ 860,670 | |
New Jersey EDA, RB, United Water NJ Inc., Series B, | |||
Remarketed (AMBAC), 4.50%, 11/01/25 | 1,000 | 1,021,180 | |
North Hudson Sewerage Authority, Refunding RB, | |||
Series A (MBIA), 5.13%, 8/01/20 | 1,710 | 1,658,290 | |
Rahway Valley Sewerage Authority, RB, CAB, Series A | |||
(MBIA) (b): | |||
4.74%, 9/01/26 | 4,100 | 1,618,926 | |
4.39%, 9/01/33 | 2,350 | 563,530 | |
Union County Utilities Authority, RB, Senior Lease, | |||
Ogden Martin, Series A (AMBAC), AMT: | |||
5.38%, 6/01/17 | 1,590 | 1,581,255 | |
5.38%, 6/01/18 | 1,670 | 1,629,670 | |
19,112,080 | |||
Total Municipal Bonds in New Jersey | 169,194,748 | ||
Puerto Rico — 10.9% | |||
Education — 2.1% | |||
Puerto Rico Industrial Tourist Educational Medical | |||
& Environmental Control Facilities Financing Authority, | |||
RB, University Plaza Project, Series A (MBIA), | |||
5.00%, 7/01/33 | 3,000 | 2,570,610 | |
Health — 3.4% | |||
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 | 4,241,395 | |
Housing — 0.8% | |||
Puerto Rico HFA, RB, Subordinate, Capital Fund | |||
Modernization, 5.13%, 12/01/27 | 1,000 | 1,001,100 | |
State — 1.3% | |||
Puerto Rico Infrastructure Financing Authority, RB, CAB, | |||
Series A (b): | |||
(AMBAC), 4.36%, 7/01/37 | 2,250 | 255,803 | |
(FGIC), 4.49%, 7/01/30 | 2,750 | 541,695 | |
Puerto Rico Public Buildings Authority, Refunding | |||
RB, Government Facilities, Series M-3 (MBIA), | |||
6.00%, 7/01/27 | 850 | 840,761 | |
1,638,259 | |||
Transportation — 1.0% | |||
Puerto Rico Highway & Transportation Authority, | |||
Refunding RB, Series CC (AGC), 5.50%, 7/01/31 | 1,185 | 1,239,048 | |
Utilities — 2.3% | |||
Puerto Rico Aqueduct & Sewer Authority, RB, Senior | |||
Lien, Series A (AGC), 5.13%, 7/01/47 | 2,000 | 1,919,020 | |
Puerto Rico Electric Power Authority, RB, Series RR | |||
(CIFG), 5.00%, 7/01/28 | 1,000 | 921,730 | |
2,840,750 | |||
Total Municipal Bonds in Puerto Rico | 13,531,162 | ||
Total Municipal Bonds — 147.6% | 182,725,910 |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 27
Schedule of Investments (concluded) BlackRock MuniYield New Jersey Insured Fund, Inc. (MJI)
(Percentages shown are based on Net Assets)
Municipal Bonds Transferred to | Par | ||
Tender Option Bond Trusts (d) | (000) | Value | |
Housing — 1.7% | |||
New Jersey State Housing & Mortgage Finance | |||
Agency, RB, Capital Fund Program, Series A (FSA), | |||
5.00%, 5/01/27 | $ 1,980 | $ 2,079,495 | |
State — 3.2% | |||
Garden State Preservation Trust, RB, 2005 Series A | |||
(FSA), 5.75%, 11/01/28 | 3,300 | 3,907,530 | |
Transportation — 1.4% | |||
Port Authority of New York & New Jersey, Refunding RB, | |||
Consolidated, 152nd Series, AMT, 5.25%, 11/01/35 | 1,829 | 1,790,921 | |
Total Municipal Bonds Transferred to | |||
Tender Option Bond Trusts — 6.3% | 7,777,946 | ||
Total Long-Term Investments | |||
(Cost — $192,938,671) — 153.9% | 190,503,856 | ||
Short-Term Securities | Shares | ||
CMA New Jersey Municipal Money Fund, | |||
0.07% (e)(f) | 1,325,347 | 1,325,347 | |
Total Short-Term Securities | |||
(Cost — $1,325,347) — 1.1% | 1,325,347 | ||
Total Investments (Cost — $194,264,018*) — 155.0% | 191,829,203 | ||
Other Assets Less Liabilities — 0.9% | 1,157,665 | ||
Liability for Trust Certificates, Including Interest | |||
Expense and Fees Payable — (3.8)% | (4,698,491) | ||
Preferred Shares, at Redemption Value — (52.1)% | (64,481,933) | ||
Net Assets Applicable to Common Shares — 100.0% | $123,806,444 | ||
* The cost and unrealized appreciation (depreciation) of investments as of July 31, | |||
2009, as computed for federal income tax purposes, were as follows: | |||
Aggregate cost | $189,563,718 | ||
Gross unrealized appreciation | $ 6,646,058 | ||
Gross unrealized depreciation | (9,064,942) | ||
Net unrealized depreciation | $ (2,418,884) | ||
(a) Represents a step-up bond that pays an initial coupon rate for the first period and | |||
then 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 tender option bond trust in exchange for | |||
which the Fund acquired residual interest certificates. These securities serve as col- | |||
lateral 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) Investments in companies considered to be an affiliate of the Fund, for purposes of | |||
Section 2(a)(3) of the Investment Company Act of 1940, were as follows: | |||
Net | |||
Affiliate | Activity | Income | |
CMA New Jersey Municipal Money Fund | 526,646 | $27,855 | |
(f) Represents the current yield as of report date. |
• | Effective August 1, 2008, the Fund adopted Financial Accounting Standards Board | ||
Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” | |||
(“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework | |||
for measuring fair values and requires additional disclosures about the use of fair | |||
value measurements. Various inputs are used in determining the fair value of invest- | |||
ments, which are as follows: | |||
• | Level 1 — price quotations in active markets/exchanges for identical securities | ||
• | 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 inputs or methodology used for valuing securities are not necessarily an indica- | |||
tion of the risk associated with 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, 2009 in determining | |||
the fair valuation of the Fund’s investments: | |||
Valuation | Investments in | ||
Inputs | Securities | ||
Assets | |||
Level 1 — Short-Term Securities | $ 1,325,347 | ||
Level 2 — Long-Term Investments1 | 190,503,856 | ||
Level 3 | — | ||
Total | $ 191,829,203 | ||
1 See above Schedule of Investments for values in each sector. |
See Notes to Financial Statements.
28 ANNUAL REPORT JULY 31, 2009
Schedule of Investments July 31, 2009 BlackRock MuniYield Pennsylvania Insured Fund (MPA)
(Percentages shown are based on Net Assets)
Par | ||
Municipal Bonds | (000) | Value |
Pennsylvania — 119.6% | ||
Corporate — 5.0% | ||
Delaware County IDA, Pennsylvania, RB, Water Facilities, | ||
Aqua Pennsylvania Inc. Project, Series B (MBIA), AMT, | ||
5.00%, 11/01/36 | $ 2,520 | $ 2,208,024 |
Northumberland County IDA, Refunding RB, | ||
Aqua Pennsylvania Inc. Project (MBIA), AMT, | ||
5.05%, 10/01/39 | 6,000 | 4,921,680 |
Pennsylvania Economic Development Financing | ||
Authority, RB, Waste Management Inc. Project, | ||
Series A, AMT, 5.10%, 10/01/27 | 1,200 | 1,050,096 |
8,179,800 | ||
County/City/Special District/School District — 42.7% | ||
Chambersburg Area School District, GO (MBIA): | ||
5.25%, 3/01/26 | 2,115 | 2,154,550 |
5.25%, 3/01/27 | 2,500 | 2,534,950 |
City of Philadelphia Pennsylvania, GO, Refunding, | ||
Series A (FSA), 5.25%, 12/15/32 | 7,000 | 6,779,780 |
Connellsville Area School District, GO, Series B | ||
(FSA), 5.00%, 11/15/37 | 1,000 | 982,090 |
Delaware Valley Regional Financial Authority, RB, | ||
Series A (AMBAC), 5.50%, 8/01/28 | 2,230 | 2,354,479 |
East Stroudsburg Area School District, GO, Series A | ||
(MBIA), 7.75%, 9/01/27 | 2,000 | 2,386,880 |
Erie County Conventional Center Authority, RB (MBIA), | ||
5.00%, 1/15/36 | 8,850 | 8,486,530 |
Marple Newtown School District, GO (FSA) | ||
5.00%, 6/01/31 | 3,500 | 3,540,460 |
North Allegheny School District, GO, Series C (FSA), | ||
5.25%, 5/01/27 | 2,175 | 2,257,085 |
Northeastern York School District, GO, Series B (MBIA), | ||
5.00%, 4/01/32 | 1,585 | 1,570,038 |
Philadelphia Authority for Industrial Development, RB, | ||
Series B (FSA), 5.50%, 10/01/11 (a) | 2,000 | 2,217,920 |
Philadelphia Redevelopment Authority, RB, | ||
Neighborhood Transformation, Series A (MBIA), | ||
5.50%, 4/15/22 | 1,750 | 1,769,722 |
Philadelphia Redevelopment Authority, RB, Qualified | ||
Redevelopment Neighborhood, Series B (MBIA), AMT, | ||
5.00%, 4/15/27 | 4,645 | 4,184,402 |
Philadelphia School District, GO: | ||
Series B (FGIC), 5.63%, 8/01/12 (a) | 10,000 | 11,377,200 |
Series E, 6.00%, 9/01/38 | 4,800 | 5,028,912 |
Reading School District, GO (FSA), 5.00%, 1/15/29 | 6,000 | 6,079,080 |
Scranton School District, Pennsylvania, GO Series A | ||
(FSA), 5.00%, 7/15/38 | 3,500 | 3,431,680 |
Shaler Area School District, Pennsylvania, GO, CAB | ||
(Syncora), 4.79%, 9/01/30 (b) | 6,145 | 1,798,703 |
York City School District, Pennsylvania, GO, Series A | ||
(Syncora), 5.25%, 6/01/22 | 1,040 | 1,076,078 |
70,010,539 | ||
Education — 9.0% | ||
Gettysburg Municipal Authority, RB (MBIA), | ||
5.00%, 8/15/23 | 4,000 | 3,960,160 |
Pennsylvania Higher Educational Facilities Authority, RB, | ||
Series AE (MBIA), 4.75%, 6/15/32 | 8,845 | 8,545,154 |
University of Pittsburgh, Pennsylvania, RB, Capital | ||
Project, Series B, 5.00%, 9/15/28 | 2,200 | 2,278,078 |
14,783,392 |
Par | ||
Municipal Bonds | (000) | Value |
Pennsylvania (continued) | ||
Health — 11.2% | ||
Allegheny County Hospital Development Authority, | ||
RB, Health Center, UPMC Health, Series B (MBIA), | ||
6.00%, 7/01/26 | $ 2,000 | $ 2,148,040 |
County of Lehigh Pennsylvania, RB, Lehigh Valley Health | ||
Network, Series A (FSA), 5.00%, 7/01/33 | 7,995 | 7,609,241 |
Monroe County Hospital Authority, Pennsylvania, RB, | ||
Hospital, Pocono Medical Center, 5.13%, 1/01/37 | 1,265 | 1,038,110 |
Montgomery County IDA, Pennsylvania, RB, | ||
ACTS Retirement, Life Community, Series A-1, | ||
6.25%, 11/15/29 | 235 | 236,746 |
Pennsylvania Higher Educational Facilities Authority, RB, | ||
UPMC Health System, Series A, 6.00%, 1/15/22 | 3,000 | 3,073,260 |
Philadelphia Hospitals & Higher Education Facilities | ||
Authority, RB, Presbyterian Medical Center, | ||
6.65%, 12/01/19 (c) | 3,000 | 3,713,610 |
Sayre Health Care Facilities Authority, RB, Guthrie Health, | ||
Series A, 5.88%, 12/01/31 | 590 | 566,235 |
18,385,242 | ||
Housing — 6.6% | ||
Pennsylvania HFA, RB, Series 96, Series A, AMT, | ||
4.70%, 10/01/37 | 3,000 | 2,566,260 |
Pennsylvania Housing Finance Agency, RB, S/F, | ||
Series 72A (MBIA), AMT, 5.25%, 4/01/21 | 5,000 | 5,014,750 |
Philadelphia Housing Authority, RB, Series A (FSA), | ||
5.50%, 12/01/18 | 3,000 | 3,164,280 |
10,745,290 | ||
State — 12.6% | ||
Commonwealth of Pennsylvania, GO, First Series, | ||
5.00%, 3/15/29 | 1,900 | 2,002,277 |
Pennsylvania Turnpike Commission, RB, Remarketed | ||
Series C of 2003 Pennsylvania Turnpike (MBIA), | ||
5.00%, 12/01/32 | 13,600 | 13,679,696 |
State Public School Building Authority, Pennsylvania, | ||
RB, CAB, Corry Area School District (FSA)(b): | ||
4.85%, 12/15/22 | 1,980 | 1,039,243 |
4.87%, 12/15/23 | 1,980 | 965,389 |
4.89%, 12/15/24 | 1,980 | 901,553 |
4.92%, 12/15/25 | 1,980 | 845,440 |
State Public School Building Authority, Pennsylvania, | ||
RB, Harrisburg School District Project, Series A (AGC), | ||
5.00%, 11/15/33 | 1,200 | 1,193,232 |
20,626,830 | ||
Transportation — 15.8% | ||
City of Philadelphia Pennsylvania, RB, Series A (FSA), | ||
AMT, 5.00%, 6/15/37 | 7,500 | 6,303,825 |
Pennsylvania Turnpike Commission, RB, Series A: | ||
(AMBAC), 5.50%, 12/01/31 | 7,800 | 7,947,108 |
(AMBAC), 5.25%, 12/01/32 | 350 | 355,008 |
Sub-Series B (FSA), 5.25%, 6/01/39 | 3,500 | 3,513,090 |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 29
Schedule of Investments (continued) BlackRock MuniYield Pennsylvania Insured Fund (MPA)
(Percentages shown are based on Net Assets)
Par | ||
Municipal Bonds | (000) | Value |
Pennsylvania (continued) | ||
Transportation (concluded) | ||
Philadelphia Authority for Industrial Development, | ||
RB, Philadelphia Airport System Project, Series A | ||
(MBIA), AMT: | ||
5.50%, 7/01/17 | $ 4,000 | $ 4,031,360 |
5.50%, 7/01/18 | 3,655 | 3,660,665 |
25,811,056 | ||
Utilities — 16.7% | ||
Allegheny County Sanitation Authority, Refunding RB, | ||
Series A (MBIA), 5.00%, 12/01/30 | 5,000 | 4,797,000 |
City of Philadelphia Pennsylvania, RB, 1998 General | ||
Ordinance, 4th Series (FSA), 5.00%, 8/01/32 | 4,500 | 4,409,640 |
City of Philadelphia Pennsylvania, RB, Series A, | ||
5.25%, 1/01/36 | 700 | 678,580 |
Delaware County IDA, Pennsylvania, RB, Pennsylvania | ||
Suburban Water Co. Project, Series A (AMBAC), AMT, | ||
5.15%, 9/01/32 | 5,500 | 5,041,520 |
Montgomery County IDA, Pennsylvania, RB, Aqua | ||
Pennsylvania Inc. Project, Series A, AMT, | ||
5.25%, 7/01/42 | 1,800 | 1,495,476 |
Northampton Boro Municipal Authority, RB, Balance | ||
(MBIA), 5.00%, 5/15/34 | 935 | 924,453 |
Pennsylvania IDA, Pennsylvania, RB, Economic | ||
Development (AMBAC), 5.50%, 7/01/20 | 7,000 | 7,326,760 |
Reading Area Water Authority, Pennsylvania, RB (FSA), | ||
5.00%, 12/01/27 | 2,680 | 2,762,115 |
27,435,544 | ||
Total Municipal Bonds in Pennsylvania | 195,977,693 | |
Guam — 1.4% | ||
Transportation — 1.4% | ||
Guam International Airport Authority, RB, General, | ||
Series C (MBIA), AMT, 5%, 10/01/23 | 2,500 | 2,328,950 |
Total Municipal Bonds in Guam | 2,328,950 | |
Total Municipal Bonds — 121.0% | 198,306,643 | |
Municipal Bonds Transferred to | ||
Tender Option Bond Trusts (d) | ||
Pennsylvania — 33.7% | ||
Corporate — 4.5% | ||
East Stroudsburg Area School District, GO, Refunding | ||
(FSA), 5.00%, 9/01/25 | 7,000 | 7,352,310 |
County/City/Special District/School District — 15.4% | ||
Commonwealth of Pennsylvania, GO, First Series, | ||
5.00%, 3/15/28 | 5,203 | 5,525,719 |
Pennsylvania State Public School Building Authority, | ||
Refunding RB, School District of Philadelphia Project, | ||
Series B (FSA), 5.00%, 6/01/26 | 19,025 | 19,696,754 |
25,222,473 |
Municipal Bonds Transferred to | Par | |||
Tender Option Bond Trusts (d) | (000) | Value | ||
Pennsylvania (concluded) | ||||
Health — 3.3% | ||||
Geisinger Authority, RB, Series A: | ||||
5.13%, 6/01/34 | $ 2,500 | $ 2,439,775 | ||
5.25%, 6/01/39 | 3,000 | 2,955,300 | ||
5,395,075 | ||||
State — 10.5% | ||||
State Public School Building Authority, Pennsylvania, | ||||
RB, Lease, Philadelphia School District Project (FSA), | ||||
5.25%, 6/01/13 (a) | 15,000 | 17,202,300 | ||
Total Municipal Bonds Transferred to | ||||
Tender Option Bond Trusts — 33.7% | 55,172,158 | |||
Total Long-Term Investments | ||||
(Cost — $256,172,784) — 154.7% | 253,478,801 | |||
Short-Term Securities | Shares | |||
CMA Pennsylvania Municipal Money Fund, | ||||
0.04% (e)(f) | 1,555,231 | 1,555,231 | ||
Total Short-Term Securities | ||||
(Cost — $1,555,231) — 0.9% | 1,555,231 | |||
Total Investments (Cost — $257,728,015*) — 155.6% | 255,034,032 | |||
Other Assets Less Liabilities — 1.2% | 2,016,649 | |||
Liability for Trust Certificates, Including Interest | ||||
Expense and Fees Payable — (16.3)% | (26,776,546) | |||
Preferred Shares, at Redemption Value — (40.5)% | (66,355,910) | |||
Net Assets Applicable to Common Shares — 100.0% | $163,918,225 | |||
* The cost and unrealized appreciation (depreciation) of investments as of July 31, | ||||
2009, as computed for federal income tax purposes, were as follows: | ||||
Aggregate cost | $232,133,367 | |||
Gross unrealized appreciation | $ 9,779,404 | |||
Gross unrealized depreciation | (13,607,107) | |||
Net unrealized depreciation | $ (3,827,703) | |||
(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) Represents a zero-coupon bond. Rate shown reflects the current yield as of | ||||
report date. | ||||
(c) Security is collateralized by Municipal or US Treasury Obligations. | ||||
(d) Securities represent bonds transferred to a tender option bond trust in exchange for | ||||
which the Fund acquired residual interest certificates. These securities serve as col- | ||||
lateral 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) Investments in companies considered to be an affiliate of the Fund, for purposes of | ||||
Section 2(a)(3) of the Investment Company Act of 1940, were as follows: | ||||
Net | ||||
Affiliate | Activity | Income | ||
CMA Pennsylvania Municipal Money Fund | (10,505,931) | $94,725 | ||
(f) Represents the current yield as of report date. |
See Notes to Financial Statements.
30 ANNUAL REPORT JULY 31, 2009
Schedule of Investments (concluded) BlackRock MuniYield Pennsylvania Insured Fund (MPA)
• | Effective August 1, 2008, the Fund adopted Financial Accounting Standards Board | ||
Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” | |||
(“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for | |||
measuring fair values and requires additional disclosures about the use of fair value | |||
measurements. Various inputs are used in determining the fair value of investments, | |||
which are as follows: | |||
• | Level 1 — price quotations in active markets/exchanges for identical securities | ||
• | 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 inputs or methodology used for valuing securities are not necessarily an indica- | |||
tion of the risk associated with 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, 2009 in determining | |||
the fair valuation of the Fund’s investments: | |||
Valuation | Investments in | ||
Inputs | Securities | ||
Assets | |||
Level 1 — Short-Term Securities | $ 1,555,231 | ||
Level 2 — Long-Term Investments1 | 253,478,801 | ||
Level 3 | — | ||
Total | $ 255,034,032 | ||
1 See above Schedule of Investments for values in each sector. |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 31
Statements of Assets and Liabilities | ||||||
BlackRock | BlackRock | BlackRock | BlackRock | BlackRock | BlackRock | |
MuniHoldings | MuniHoldings | MuniYield | MuniYield | MuniYield | MuniYield | |
California | New Jersey | Insured | Michigan | New Jersey | Pennsylvania | |
Insured | Insured | Investment | Insured | Insured | Insured | |
Fund, Inc. | Fund, Inc. | Fund | Fund, Inc. | Fund, Inc. | Fund | |
July 31, 2009 | (MUC) | (MUJ) | (MFT) | (MIY) | (MJI) | (MPA) |
Assets | ||||||
Investments at value — unaffiliated1 | $866,616,869 | $484,859,527 | $171,772,020 | $403,171,960 | $190,503,856 | $253,478,801 |
Investments at value — affiliated2 | 20,500,814 | 3,311,943 | 2,301,550 | 7,530,323 | 1,325,347 | 1,555,231 |
Cash | 22,496 | 70,352 | 70,553 | 44,512 | 42,575 | 76,050 |
Interest receivable | 12,636,147 | 5,280,848 | 2,430,425 | 5,207,763 | 1,785,802 | 2,855,325 |
Investments sold receivable | 2,754,591 | — | 6,988,707 | — | — | 3,434,694 |
Income receivable — affiliated | 243 | — | — | — | — | — |
Prepaid expenses | 61,416 | 44,172 | 18,213 | 37,357 | 19,705 | 26,360 |
Other assets | 55,443 | — | — | — | — | — |
Total assets | 902,648,019 | 493,566,842 | 183,581,468 | 415,991,915 | 193,677,285 | 261,426,461 |
Accrued Liabilities | ||||||
Investments purchased payable | — | — | 2,518,834 | — | — | 3,470,982 |
Income dividends payable — Common Shares | 2,575,091 | 1,391,575 | 557,820 | 1,210,719 | 563,334 | 751,977 |
Investment advisory fees payable | 373,169 | 224,774 | 80,323 | 183,873 | 85,046 | 113,324 |
Interest expense and fees payable | 125,798 | 38,069 | 46,117 | 48,270 | 14,122 | 48,178 |
Officer’s and Directors’ fees payable | 57,341 | 735 | 241 | 563 | 212 | 363 |
Other affiliates payable | 5,546 | 3,356 | 1,148 | 2,796 | 1,271 | 1,752 |
Other accrued expenses payable | 144,625 | 76,319 | 36,299 | 59,789 | 40,554 | 37,382 |
Total accrued liabilities | 3,281,570 | 1,734,828 | 3,240,782 | 1,506,010 | 704,539 | 4,423,958 |
Other Liabilities | ||||||
Trust certificates3 | 105,202,904 | 13,262,930 | 15,375,937 | 16,190,000 | 4,684,369 | 26,728,368 |
Total Liabilities | 108,484,474 | 14,997,758 | 18,616,719 | 17,696,010 | 5,388,908 | 31,152,326 |
Preferred Shares at Redemption Value | ||||||
$25,000 per share liquidation preference, plus | ||||||
unpaid dividends4,5 | 254,019,184 | 172,712,796 | 56,530,690 | 144,665,717 | 64,481,933 | 66,355,910 |
Net Assets Applicable to Common Shareholders | $540,144,361 | $305,856,288 | $108,434,059 | $253,630,188 | $123,806,444 | $163,918,225 |
Net Assets Applicable to Common Shareholders Consist of | ||||||
Paid-in capital6,7 | $585,680,722 | $298,669,716 | $117,826,735 | $263,576,016 | $124,136,774 | $170,023,959 |
Undistributed net investment income | 5,609,840 | 4,051,114 | 1,298,200 | 3,834,385 | 2,480,404 | 2,028,015 |
Accumulated net realized loss | (14,576,778) | (1,177,885) | (9,839,073) | (10,490,262) | (375,919) | (5,439,766) |
Net unrealized appreciation/depreciation | (36,569,423) | 4,313,343 | (851,803) | (3,289,951) | (2,434,815) | (2,693,983) |
Net Assets Applicable to Common Shareholders | $540,144,361 | $305,856,288 | $108,434,059 | $253,630,188 | $123,806,444 | $163,918,225 |
Net asset value per Common Share | $ 13.21 | $ 14.40 | $ 12.83 | $ 13.93 | $ 14.07 | $ 14.28 |
1 Investments at cost — unaffiliated | $903,186,292 | $480,546,184 | $172,623,823 | $406,461,911 | $192,938,671 | $256,172,784 |
2 Investments at cost — affiliated | $ 20,500,814 | $ 3,311,943 | $ 2,301,550 | $ 7,530,323 | $ 1,325,347 | $ 1,555,231 |
3 Represents short-term floating rate certificates | ||||||
issued by tender option bond trusts. | ||||||
4 Preferred Shares outstanding: | ||||||
Par value $0.05 per share | — | — | 2,261 | 4,909 | 1,965 | 2,654 |
Par value $0.10 per share | 10,160 | 6,908 | — | 877 | 614 | — |
5 Preferred Shares authorized | 15,600 | 8,120 | 1 million | 6,600 | 2,940 | 1 million |
6 Common Shares outstanding, $0.10 par value | 40,874,458 | 21,245,413 | 8,451,814 | 18,206,301 | 8,802,099 | 11,480,567 |
7 Common Shares authorized | 200 million | 200 million | unlimited | 200 million | 200 million | unlimited |
See Notes to Financial Statements.
32 ANNUAL REPORT JULY 31, 2009
Statements of Operations | |||||||||
BlackRock | BlackRock | BlackRock | BlackRock | BlackRock | |||||
MuniHoldings | MuniYield | MuniYield | MuniYield | MuniYield | |||||
BlackRock MuniHoldings | New Jersey | Insured | Michigan | New Jersey | Pennsylvania | ||||
California Insured Fund, Inc. (MUC) | Insured | Investment | Insured | Insured | Insured | ||||
Period | Fund, Inc. | Fund | Fund, Inc. | Fund, Inc. | Fund | ||||
July 1, 2009 | Year Ended | (MUJ) | (MFT) | (MIY) | (MJI) | (MPA) | |||
to July 31, | June 30, | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||
2009 | 2009 | July 31, 2009 | July 31, 2009 | July 31, 2009 | July 31, 2009 | July 31, 2009 | |||
Investment Income | |||||||||
Interest | $ 3,723,856 | $ 44,109,948 | $ 24,264,636 | $ 9,318,521 | $ 21,205,581 | $ 9,847,119 | $ 12,486,562 | ||
Income — affiliated | 1,277 | 172,350 | 61,733 | 41,866 | 66,508 | 27,855 | 94,725 | ||
Total income | 3,725,133 | 44,282,298 | 24,326,369 | 9,360,387 | 21,272,089 | 9,874,974 | 12,581,287 | ||
Expenses | |||||||||
Investment advisory | 445,040 | 4,986,639 | 2,693,614 | 895,620 | 2,069,216 | 955,597 | 1,268,740 | ||
Professional | 69,131 | 135,692 | 98,584 | 74,390 | 79,723 | 63,210 | 65,066 | ||
Commissions for Preferred Shares | 34,093 | 571,754 | 336,778 | 118,445 | 274,029 | 126,278 | 145,404 | ||
Accounting services | 25,562 | 243,543 | 134,653 | 51,270 | 100,254 | 53,502 | 57,230 | ||
Printing | 18,076 | 46,301 | 42,146 | 15,680 | 36,835 | 19,341 | 21,672 | ||
Officer and Directors | 11,070 | 66,439 | 39,990 | 14,128 | 33,073 | 15,710 | 20,789 | ||
Transfer agent | 7,719 | 69,294 | 57,715 | 34,602 | 56,881 | 32,858 | 40,440 | ||
Custodian | 3,607 | 39,554 | 25,483 | 11,916 | 22,067 | 11,613 | 14,407 | ||
Registration | 1,260 | 13,938 | 9,166 | 9,583 | 9,166 | 9,166 | 9,166 | ||
Miscellaneous | 7,463 | 120,322 | 83,522 | 52,786 | 64,834 | 46,687 | 50,810 | ||
Total expenses excluding interest | |||||||||
expense and fees | 623,021 | 6,293,476 | 3,521,651 | 1,278,420 | 2,746,078 | 1,333,962 | 1,693,724 | ||
Interest expense and fees1 | 62,864 | 2,005,279 | 319,947 | 187,191 | 388,951 | 113,530 | 290,588 | ||
Total expenses | 685,885 | 8,298,755 | 3,841,598 | 1,465,611 | 3,135,029 | 1,447,492 | 1,984,312 | ||
Less fees waived by advisor | (71,871) | (974,988) | (278,498) | (26,098) | (52,549) | (11,321) | (36,820) | ||
Total expenses after fees waived | 614,014 | 7,323,767 | 3,563,100 | 1,439,513 | 3,082,480 | 1,436,171 | 1,947,492 | ||
Net investment income | 3,111,119 | 36,958,531 | 20,763,269 | 7,920,874 | 18,189,609 | 8,438,803 | 10,633,795 | ||
Realized and Unrealized Gain (Loss) | |||||||||
Net realized gain (loss) from: | |||||||||
Investments | 97,759 | (7,708,517) | 1,281,894 | (6,860,292) | (964,623) | 369,858 | (3,285,490) | ||
Financial futures contracts and | |||||||||
forward interest rate swaps | 236,178 | — | — | — | — | — | (1,039,288) | ||
333,937 | (7,708,517) | 1,281,894 | (6,860,292) | (964,623) | 369,858 | (4,324,778) | |||
Net change in unrealized | |||||||||
appreciation/depreciation on: | |||||||||
Investments | 6,201,772 | (29,433,520) | (3,750,895) | 919,422 | (6,206,801) | (2,778,653) | 2,407,228 | ||
Financial futures contracts and | |||||||||
forward interest rate swaps | (74,560) | 74,560 | — | — | — | — | 227,038 | ||
6,127,212 | (29,358,960) | (3,750,895) | 919,422 | (6,206,801) | (2,778,653) | 2,634,266 | |||
Total realized and unrealized gain (loss) | 6,461,149 | (37,067,477) | (2,469,001) | (5,940,870) | (7,171,424) | (2,408,795) | (1,690,512) | ||
Dividends and Distributions to Preferred Shareholders From | |||||||||
Net investment income | (108,541) | (5,987,846) | (3,341,606) | (1,287,734) | (2,941,361) | (1,331,483) | (1,555,575) | ||
Net realized gain | — | — | — | — | — | (95,182) | — | ||
Total dividends and distributions to | |||||||||
Preferred Shareholders | (108,541) | (5,987,846) | (3,341,606) | (1,287,734) | (2,941,361) | (1,426,665) | (1,555,575) | ||
Net Increase (Decrease) in Net Assets | |||||||||
Applicable to Common Shareholders | |||||||||
Resulting from Operations | $ 9,463,727 | $ (6,096,792) | $ 14,952,662 | $ 692,270 | $ 8,076,824 | $ 4,603,343 | $ 7,387,708 | ||
1 Related to tender option bond trusts. |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 33
Statements of Changes in Net Assets | BlackRock MuniHoldings California Insured Fund, Inc. (MUC) | ||
Period | |||
July 1, 2009 | Year Ended | ||
to July 31, | June 30, | ||
Increase (Decrease) in Net Assets: | 2009 | 2009 | 2008 |
Operations | |||
Net investment income | $ 3,111,119 | $ 36,958,531 | $ 39,376,787 |
Net realized gain (loss) | 333,937 | (7,708,517) | 7,928,113 |
Net change in unrealized appreciation/depreciation | 6,127,212 | (29,358,960) | (32,808,030) |
Dividends to Preferred Shareholders from net investment income | (108,541) | (5,987,846) | (13,165,738) |
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations | 9,463,727 | (6,096,792) | 1,331,132 |
Dividends to Common Shareholders From | |||
Net investment income | (2,575,091) | (26,404,900) | (27,627,211) |
Net Assets Applicable to Common Shareholders | |||
Total increase (decrease) in net assets applicable to Common Shareholders | 6,888,636 | (32,501,692) | (26,296,079) |
Beginning of period | 533,255,725 | 565,757,417 | 592,053,496 |
End of period | $540,144,361 | $533,255,725 | $565,757,417 |
Undistributed net investment income | $ 5,609,840 | $ 5,182,353 | $ 592,505 |
BlackRock MuniHoldings New Jersey Insured Fund, Inc. (MUJ) | ||
Year Ended | ||
July 31, | ||
Increase (Decrease) in Net Assets: | 2009 | 2008 |
Operations | ||
Net investment income | $ 20,763,269 | $ 19,736,589 |
Net realized gain (loss) | 1,281,894 | (1,469,777) |
Net change in unrealized appreciation/depreciation | (3,750,895) | (8,375,097) |
Dividends to Preferred Shareholders from net investment income | (3,341,606) | (6,691,973) |
Net increase in net assets applicable to Common Shareholders resulting from operations | 14,952,662 | 3,199,742 |
Dividends to Common Shareholders From | ||
Net investment income | (14,043,218) | (14,021,973) |
Net Assets Applicable to Common Shareholders | ||
Total increase (decrease) in net assets applicable to Common Shareholders | 909,444 | (10,822,231) |
Beginning of year | 304,946,844 | 315,769,075 |
End of year | $305,856,288 | $304,946,844 |
Undistributed net investment income | $ 4,051,114 | $ 747,397 |
See Notes to Financial Statements.
34 ANNUAL REPORT JULY 31, 2009
Statements of Changes in Net Assets | BlackRock MuniYield Insured Investment Fund (MFT) | ||
Period | |||
November 1, | |||
Year Ended | 2007 | Year Ended | |
July 31, | to July 31, | October 31, | |
Increase (Decrease) in Net Assets: | 2009 | 2008 | 2007 |
Operations | |||
Net investment income | $ 7,920,874 | $ 5,967,801 | $ 8,056,928 |
Net realized gain (loss) | (6,860,292) | (372,939) | 176,914 |
Net change in unrealized appreciation/depreciation | 919,422 | (7,756,323) | (4,348,589) |
Dividends to Preferred Shareholders from net investment income | (1,287,734) | (1,872,136) | (2,631,621) |
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations | 692,270 | (4,033,597) | 1,253,632 |
Dividends to Common Shareholders From | |||
Net investment income | (5,707,468) | (4,090,678) | (5,721,878) |
Net Assets Applicable to Common Shareholders | |||
Total decrease in net assets applicable to Common Shareholders | (5,015,198) | (8,124,275) | (4,468,246) |
Beginning of period | 113,449,257 | 121,573,532 | 126,041,778 |
End of period | $108,434,059 | $113,449,257 | $121,573,532 |
Undistributed net investment income | $ 1,298,200 | $ 373,391 | $ 339,357 |
BlackRock MuniYield Michigan Insured Fund, Inc. (MIY) | |||
Period | |||
November 1, | |||
Year Ended | 2007 | Year Ended | |
July 31, | to July 31, | October 31, | |
Increase (Decrease) in Net Assets: | 2009 | 2008 | 2007 |
Operations | |||
Net investment income | $ 18,189,609 | $ 12,731,272 | $ 19,208,577 |
Net realized gain (loss) | (964,623) | (1,246,561) | 1,570,157 |
Net change in unrealized appreciation/depreciation | (6,206,801) | (13,574,409) | (9,721,365) |
Dividends to Preferred Shareholders from net investment income | (2,941,361) | (4,212,108) | (5,850,606) |
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations | 8,076,824 | (6,301,806) | 5,206,763 |
Dividends to Common Shareholders From | |||
Net investment income | (12,252,841) | (9,485,483) | (12,962,886) |
Net Assets Applicable to Common Shareholders | |||
Total decrease in net assets applicable to Common Shareholders | (4,176,017) | (15,787,289) | (7,756,123) |
Beginning of period | 257,806,205 | 273,593,494 | 281,349,617 |
End of period | $253,630,188 | $257,806,205 | $273,593,494 |
Undistributed net investment income | $ 3,834,385 | $ 825,729 | $ 1,796,256 |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 35
Statements of Changes in Net Assets | BlackRock MuniYield New Jersey Insured Fund, Inc. (MJI) | ||
Period | |||
November 1, | |||
Year Ended | 2007 | Year Ended | |
July 31, | to July 31, | October 31, | |
Increase (Decrease) in Net Assets: | 2009 | 2008 | 2007 |
Operations | |||
Net investment income | $ 8,438,803 | $ 6,056,221 | $ 8,403,981 |
Net realized gain (loss) | 369,858 | (17,732) | 588,462 |
Net change in unrealized appreciation/depreciation | (2,778,653) | (6,708,329) | (4,321,927) |
Dividends and distributions to Preferred Shareholders from: | |||
Net investment income | (1,331,483) | (1,835,167) | (2,420,847) |
Net realized gain | (95,182) | (42,392) | (23,780) |
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations | 4,603,343 | (2,547,399) | 2,225,889 |
Dividends and Distributions to Common Shareholders From | |||
Net investment income | (5,879,803) | (4,289,500) | (5,747,771) |
Net realized gain | (150,243) | (103,918) | (70,742) |
Decrease in net assets resulting from dividends and distributions to Common Shareholders | (6,030,046) | (4,393,418) | (5,818,513) |
Net Assets Applicable to Common Shareholders | |||
Total decrease in net assets applicable to Common Shareholders | (1,426,703) | (6,940,817) | (3,592,624) |
Beginning of period | 125,233,147 | 132,173,964 | 135,766,588 |
End of period | $123,806,444 | $125,233,147 | $132,173,964 |
Undistributed net investment income | $ 2,480,404 | $ 1,253,004 | $ 1,307,514 |
BlackRock MuniYield Pennsylvania Insured Fund (MPA) | |||
Period | |||
November 1, | |||
Year Ended | 2007 | Year Ended | |
July 31, | to July 31, | October 31, | |
Increase (Decrease) in Net Assets: | 2009 | 2008 | 2007 |
Operations | |||
Net investment income | $ 10,633,795 | $ 8,207,974 | $ 11,615,514 |
Net realized gain (loss) | (4,324,778) | (312,302) | 2,337,245 |
Net change in unrealized appreciation/depreciation | 2,634,266 | (13,306,589) | (6,999,004) |
Dividends to Preferred Shareholders from net investment income | (1,555,575) | (2,559,463) | (3,638,710) |
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations | 7,387,708 | (7,970,380) | 3,315,045 |
Dividends to Common Shareholders From | |||
Net investment income | (7,588,655) | (5,717,322) | (7,910,111) |
Net Assets Applicable to Common Shareholders | |||
Total decrease in net assets applicable to Common Shareholders | (200,947) | (13,687,702) | (4,595,066) |
Beginning of period | 164,119,172 | 177,806,874 | 182,401,940 |
End of period | $163,918,225 | $164,119,172 | $177,806,874 |
Undistributed net investment income | $ 2,028,015 | $ 559,654 | $ 677,381 |
See Notes to Financial Statements.
36 ANNUAL REPORT JULY 31, 2009
Statements of Cash Flows | BlackRock MuniHoldings California Insured Fund, Inc. (MUC) | ||
Period | |||
July 1, 2009 | Year Ended | ||
to July 31, | June 30, | ||
2009 | 20091 | ||
Cash Provided by Operating Activities | |||
Net increase (decrease) in net assets resulting from operations, excluding dividends to Preferred Shareholders | $ 9,572,268 | $ (108,946) | |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities: | |||
(Increase) decrease in collateral on financial futures contracts | 400,000 | (400,000) | |
(Increase) decrease in interest receivable | (253,030) | 1,327,741 | |
(Increase) decrease in income receivable — affiliated | 460 | (520) | |
(Increase) decrease in margin variation receivable | 37,500 | (37,500) | |
Increase in prepaid expenses and other assets | (31,723) | (1,191) | |
Increase in other assets | (11,157) | (29,628) | |
(Decrease) increase in investment advisory fees payable | 27,425 | (53,298) | |
Decrease in interest expense and fees payable | (301,506) | (14,149) | |
(Decrease) increase in other affiliates payable | 986 | (3,071) | |
(Decrease) increase in other accrued expenses payable | 34,286 | (66,047) | |
Increase in Officer’s and Directors’ fees payable | 11,555 | 27,756 | |
Net realized and unrealized gain (loss) | (6,224,971) | 37,142,037 | |
Amortization of premium and discount on investments | 272,784 | 1,936,309 | |
Proceeds from sales of long-term investments | 9,493,317 | 225,130,966 | |
Purchases of long-term investments | (20,265,112) | (162,724,235) | |
Net (purchases) proceeds of short-term securities | 43,299,435 | (32,992,873) | |
Net cash provided by operating activities | 36,062,517 | 69,133,351 | |
Cash Used for Financing Activities | |||
Cash receipts from trust certificates | — | 33,369,587 | |
Cash payments for trust certificates | — | (70,511,683) | |
Payments of redemptions of Preferred Shares | (33,375,000) | — | |
Cash dividends paid to Common Shareholders | (2,575,091) | (25,996,155) | |
Cash dividends paid to Preferred Shareholders | (107,511) | (6,056,925) | |
Cash used for financing activities | (36,057,602) | (69,195,176) | |
Cash | |||
Net increase (decrease) in cash | 4,915 | (61,825) | |
Cash at beginning of period | 17,581 | 79,406 | |
Cash at end of period | $ 22,496 | $ 17,581 | |
Cash Flow Information | |||
Cash paid during the period for interest | $ 364,370 | $ 2,019,428 | |
1 Amounts have been reclassified to conform with current period presentation. | |||
A Statement of Cash Flows is presented when a Fund had a significant amount of borrowing during the period, based on the average borrowing outstanding in relation to average | |||
total assets. |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 37
Financial Highlights | BlackRock MuniHoldings California Insured Fund, Inc. (MUC) | |||||||
Period | ||||||||
July 1, 2009 | ||||||||
to July 31, | Year Ended June 30, | |||||||
2009 | 2009 | 2008 | 2007 | 2006 | 2005 | |||
Per Share Operating Performance | ||||||||
Net asset value, beginning of period | $ 13.05 | $ 13.84 | $ 14.48 | $ 14.44 | $ 15.40 | $ 14.73 | ||
Net investment income1 | 0.08 | 0.90 | 0.96 | 1.01 | 1.05 | 1.07 | ||
Net realized and unrealized gain (loss) | 0.14 | (0.89) | (0.60) | 0.07 | (0.85) | 0.69 | ||
Dividends to Preferred Shareholders from net investment income | (0.00)2 | (0.15) | (0.32) | (0.31) | (0.25) | (0.14) | ||
Net increase (decrease) from investment operations | 0.22 | (0.14) | 0.04 | 0.77 | (0.05) | 1.62 | ||
Dividends to Common Shareholders from net investment income | (0.06) | (0.65) | (0.68) | (0.73) | (0.91) | (0.95) | ||
Net asset value, end of period | $ 13.21 | $ 13.05 | $ 13.84 | $ 14.48 | $ 14.44 | $ 15.40 | ||
Market price, end of period | $ 12.18 | $ 11.07 | $ 12.24 | $ 13.92 | $ 13.94 | $ 14.97 | ||
Total Investment Return3 | ||||||||
Based on net asset value | 1.75%4 | 0.21% | 0.64% | 5.46% | (0.29)% | 11.56% | ||
Based on market price | 10.59%4 | (3.88)% | (7.41)% | 5.02% | (0.98)% | 19.56% | ||
Ratios to Average Net Assets Applicable to Common Shares | ||||||||
Total expenses5 | 1.34%6,7 | 1.59% | 1.58% | 1.66% | 1.41% | 1.22% | ||
Total expenses after fees waived5 | 1.19%6,7 | 1.40% | 1.50% | 1.60% | 1.35% | 1.16% | ||
Total expenses after fees waived and excluding interest expense and fees5,8 | 1.06%6,7 | 1.02% | 1.14% | 1.12% | 1.10% | 1.11% | ||
Net investment income5 | 6.59%6,7 | 7.08% | 6.72% | 6.81% | 7.01% | 6.99% | ||
Dividends to Preferred Shareholders | 0.23%6 | 1.15% | 2.22% | 2.11% | 1.68% | 0.93% | ||
Net investment income to Common Shareholders | 6.36%6,7 | 5.93% | 4.50% | 4.70% | 5.33% | 6.06% | ||
Supplemental Data | ||||||||
Net assets applicable to Common Shareholders, end of period (000) | $ 540,144 | $ 533,256 | $ 565,757 | $ 592,053 | $ 589,404 | $ 626,109 | ||
Preferred Shares outstanding at $25,000 liquidation preference, | ||||||||
end of period (000) | $ 254,000 | $ 287,375 | $ 287,375 | $ 390,000 | $ 390,000 | $ 390,000 | ||
Portfolio turnover | 1% | 19% | 43% | 35% | 34% | 47% | ||
Asset coverage per Preferred Share at $25,000 liquidation preference, | ||||||||
end of period | $ 78,166 | $ 71,392 | $ 74,2259 | $ 62,9659 | $ 62,7959 | $ 65,1409 | ||
1 Based on average 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. Total investment | ||||||||
returns exclude effects of sales charges. | ||||||||
4 Aggregate total investment return. | ||||||||
5 Do not reflect the effect of dividends to Preferred 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 and 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 tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option | ||||||||
bond trusts. | ||||||||
9 Amounts have been recalculated to conform with current period presentation. |
See Notes to Financial Statements.
38 ANNUAL REPORT JULY 31, 2009
Financial Highlights | BlackRock MuniHoldings New Jersey Insured Fund, Inc. (MUJ) | |||||
Year Ended July 31, | ||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||
Per Share Operating Performance | ||||||
Net asset value, beginning of year | $ 14.35 | $ 14.86 | $ 14.91 | $ 15.62 | $ 15.03 | |
Net investment income1 | 0.98 | 0.93 | 1.03 | 1.03 | 1.04 | |
Net realized and unrealized gain (loss) | (0.11) | (0.47) | (0.03) | (0.61) | 0.66 | |
Dividends to Preferred Shareholders from net investment income | (0.16) | (0.31) | (0.31) | (0.26) | (0.16) | |
Net increase from investment operations. | 0.71 | 0.15 | 0.69 | 0.16 | 1.54 | |
Dividends to Common Shareholders from net investment income | (0.66) | (0.66) | (0.74) | (0.87) | (0.95) | |
Net asset value, end of year | $ 14.40 | $ 14.35 | $ 14.86 | $ 14.91 | $ 15.62 | |
Market price, end of year | $ 13.38 | $ 12.93 | $ 14.40 | $ 14.98 | $ 15.89 | |
Total Investment Return2 | ||||||
Based on net asset value | 6.13% | 1.35% | 4.71% | 1.09% | 10.63% | |
Based on market price | 9.45% | (5.76)% | 0.99% | (0.16)% | 19.37% | |
Ratios to Average Net Assets Applicable to Common Shares | ||||||
Total expenses3 | 1.30% | 1.30% | 1.45% | 1.45% | 1.31% | |
Total expenses after fees waived3 | 1.21% | 1.23% | 1.40% | 1.39% | 1.25% | |
Total expenses after fees waived and excluding interest expense and fees3,4 | 1.10% | 1.15% | 1.17% | 1.15% | 1.14% | |
Net investment income3 | 7.04% | 6.22% | 6.77% | 6.80% | 6.69% | |
Dividends to Preferred Shareholders | 1.13% | 2.11% | 2.03% | 1.72% | 1.02% | |
Net investment income to Common Shareholders | 5.91% | 4.11% | 4.74% | 5.08% | 5.67% | |
Supplemental Data | ||||||
Net assets applicable to Common Shareholders, end of year (000) | $ 305,856 | $ 304,947 | $ 315,769 | $ 315,649 | $ 328,853 | |
Preferred Shares outstanding at $25,000 liquidation preference, end of year (000) | $ 172,700 | $ 176,700 | $ 203,000 | $ 203,000 | $ 203,000 | |
Portfolio turnover | 9% | 12% | 17% | 16% | 29% | |
Asset coverage, end of year per $1,000 | $ 2,7715 | $ 2,7265 | $ 2,5565 | $ 2,5555 | $ 2,620 | |
1 Based on average 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. Total investment | ||||||
returns exclude effects of sales charges. | ||||||
3 Do not reflect the effect of dividends to Preferred Shareholders. | ||||||
4 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option | ||||||
bond trusts. | ||||||
5 Asset coverage per Preferred Share at $25,000 liquidation preference for the years ended 2009, 2008, 2007 and 2006 were $69,278, $68,152, $63,898 and $63,884, respectively. |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 39
Financial Highlights | BlackRock MuniYield Insured Investment Fund (MFT) | ||||||
Period | |||||||
Year Ended November 1, 2007 | |||||||
July 31, | to July 31, | Year Ended October 31, | |||||
2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||
Per Share Operating Performance | |||||||
Net asset value, beginning of period | $ 13.42 | $ 14.38 | $ 14.91 | $ 14.72 | $ 15.22 | $ 15.04 | |
Net investment income1 | 0.94 | 0.71 | 0.95 | 0.97 | 0.98 | 0.98 | |
Net realized and unrealized gain (loss) | (0.70) | (0.97) | (0.49) | 0.24 | (0.38) | 0.20 | |
Dividends to Preferred Shareholders from net investment income | (0.15) | (0.22) | (0.31) | (0.27) | (0.17) | (0.07) | |
Net increase from investment operations | 0.09 | (0.48) | 0.15 | 0.94 | 0.43 | 1.11 | |
Dividends to Common Shareholders from net investment income | (0.68) | (0.48) | (0.68) | (0.75) | (0.90) | (0.93) | |
Capital charges resulting from issuance of Preferred Shares | — | — | — | — | (0.03) | — | |
Net asset value, end of period | $ 12.83 | $ 13.42 | $ 14.38 | $ 14.91 | $ 14.72 | $ 15.22 | |
Market price, end of period | $ 11.80 | $ 11.75 | $ 12.74 | $ 14.21 | $ 14.18 | $ 14.98 | |
Total Investment Return2 | |||||||
Based on net asset value | 1.94% | (2.97)%3 | 1.39% | 6.87% | 2.72% | 7.98% | |
Based on market price | 7.08% | (4.11)%3 | (5.75)% | 5.73% | 0.54% | 12.73% | |
Ratios to Average Net Assets Applicable to Common Shares | |||||||
Total expenses4 | 1.40% | 1.51%5 | 1.54% | 1.46% | 1.38% | 1.28% | |
Total expenses after fees waived4 | 1.37% | 1.49%5 | 1.52% | 1.45% | 1.38% | 1.27% | |
Total expenses after fees waived and excluding interest expense and fees4,6 | 1.19% | 1.18%5 | 1.20% | 1.17% | 1.20% | 1.09% | |
Net investment income4 | 7.54% | 6.60%5 | 6.53% | 6.58% | 6.50% | 6.54% | |
Dividends to Preferred Shareholders | 1.23% | 2.07%5 | 2.13% | 1.87% | 1.13% | 0.48% | |
Net investment income to Common Shareholders | 6.31% | 4.53%5 | 4.40% | 4.71% | 5.37% | 6.06% | |
Supplemental Data | |||||||
Net assets applicable to Common Shareholders, end of period (000) | $ 108,434 | $ 113,449 | $ 121,574 | $ 126,042 | $ 124,422 | $ 128,455 | |
Preferred Shares outstanding at $25,000 liquidation preference, | |||||||
end of period (000) | $ 56,525 | $ 62,250 | $ 72,000 | $ 72,000 | $ 72,000 | $ 60,000 | |
Portfolio turnover. | 43% | 21% | 26% | 34% | 52% | 28% | |
Asset coverage per Preferred Shares at $25,000 liquidation preference, | |||||||
end of period | $ 72,961 | $ 70,5697 | $ 67,2207 | $ 68,7697 | $ 68,2127 | $ 78,5287 | |
1 Based on average 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. Total investment | |||||||
returns exclude effects of sales charges. | |||||||
3 Aggregate total investment return. | |||||||
4 Do not reflect the effect of dividends to Preferred Shareholders. | |||||||
5 Annualized. | |||||||
6 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option | |||||||
bond trusts. | |||||||
7 Amounts have been recalculated to conform with current year presentation. |
See Notes to Financial Statements.
40 ANNUAL REPORT JULY 31, 2009
Financial Highlights | BlackRock MuniYield Michigan Insured Fund, Inc. (MIY) | ||||||
Period | |||||||
Year Ended November 1, 2007 | |||||||
July 31, | to July 31, | Year Ended October 31, | |||||
2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||
Per Share Operating Performance | |||||||
Net asset value, beginning of period | $ 14.16 | $ 15.03 | $ 15.45 | $ 15.32 | $ 15.96 | $ 15.94 | |
Net investment income1 | 1.00 | 0.70 | 1.06 | 1.04 | 1.08 | 1.06 | |
Net realized and unrealized gain (loss) | (0.40) | (0.82) | (0.45) | 0.22 | (0.54) | 0.03 | |
Dividends to Preferred Shareholders from net investment income | (0.16) | (0.23) | (0.32) | (0.29) | (0.18) | (0.07) | |
Net increase (decrease) from investment operations | 0.44 | (0.35) | 0.29 | 0.97 | 0.36 | 1.02 | |
Dividends to Common Shareholders from net investment income | (0.67) | (0.52) | (0.71) | (0.84) | (0.98) | (1.00) | |
Capital charges with respect to the issuance of Preferred Shares | — | — | — | — | (0.02) | — | |
Net asset value, end of period | $ 13.93 | $ 14.16 | $ 15.03 | $ 15.45 | $ 15.32 | $ 15.96 | |
Market price, end of period | $ 12.25 | $ 12.30 | $ 13.40 | $ 14.67 | $ 15.31 | $ 15.37 | |
Total Investment Return2 | |||||||
Based on net asset value | 4.66% | (2.02)%3 | 2.30% | 6.64% | 2.24% | 7.04% | |
Based on market price | 5.95% | (4.54)%3 | (3.95)% | 1.32% | 6.10% | 11.85% | |
Ratios to Average Net Assets Applicable to Common Shares | |||||||
Total expenses4 | 1.27% | 1.42%5 | 1.55% | 1.62% | 1.42% | 1.22% | |
Total expenses after fees waived4 | 1.25% | 1.40%5 | 1.55% | 1.61% | 1.42% | 1.19% | |
Total expenses after fees waived and excluding interest expense and fees4,6 | 1.09% | 1.13%5 | 1.12% | 1.11% | 1.10% | 1.00% | |
Net investment income4 | 7.37% | 6.19%5 | 6.95% | 6.84% | 6.84% | 6.69% | |
Dividends to Preferred Shareholders | 1.19% | 2.05%5 | 2.12% | 1.87% | 1.13% | 0.46% | |
Net investment income to Common Shareholders | 6.18% | 4.14%5 | 4.83% | 4.97% | 5.71% | 6.23% | |
Supplemental Data | |||||||
Net assets applicable to Common Shareholders, end of period (000) | $ 253,630 | $ 257,806 | $ 273,593 | $ 281,350 | $ 278,250 | $ 289,695 | |
Preferred Shares outstanding at $25,000 liquidation preference, | |||||||
end of period (000) | $ 144,650 | $ 144,650 | $ 165,000 | $ 165,000 | $ 165,000 | $ 140,000 | |
Portfolio turnover | 9% | 21% | 10% | 15% | 25% | 32% | |
Asset coverage, end of period per $1,000 | $ 2,7537 | $ 2,7827 | $ 2,6587 | $ 2,7057 | $ 2,686 | $ 3,069 | |
1 Based on average 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. Total investment | |||||||
returns exclude effects of sales charges. | |||||||
3 Aggregate total investment return. | |||||||
4 Do not reflect the effect of dividends to Preferred Shareholders. | |||||||
5 Annualized. | |||||||
6 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option | |||||||
bond trusts. | |||||||
7 Asset coverage per Preferred Share at $25,000 liquidation preference for the periods ended 2009, 2008, 2007 and 2006 were $68,838, $69,563, $66,461 and $67,638, | |||||||
respectively. |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 41
Financial Highlights | BlackRock MuniYield New Jersey Insured Fund, Inc. (MJI) | ||||||
Period | |||||||
Year Ended November 1, 2007 | |||||||
July 31, | to July 31, | Year Ended October 31, | |||||
2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||
Per Share Operating Performance | |||||||
Net asset value, beginning of period | $ 14.23 | $ 15.02 | $ 15.42 | $ 15.07 | $ 15.46 | $ 15.25 | |
Net investment income1 | 0.96 | 0.69 | 0.96 | 0.97 | 0.96 | 1.03 | |
Net realized and unrealized gain (loss) | (0.27) | (0.76) | (0.42) | 0.36 | (0.27) | 0.21 | |
Dividends and distributions to Preferred Shareholders from: | |||||||
Net investment income | (0.15) | (0.21) | (0.28) | (0.25) | (0.16) | (0.06) | |
Net realized gain | (0.01) | (0.01) | (0.00)2 | — | — | — | |
Net increase (decrease) from investment operations | 0.53 | (0.29) | 0.26 | 1.08 | 0.53 | 1.18 | |
Dividends and distributions to Common Shareholders from: | |||||||
Net investment income | (0.67) | (0.49) | (0.65) | (0.73) | (0.92) | (0.94) | |
Net realized gain | (0.02) | (0.01) | (0.01) | — | — | — | |
Total dividends and distributions to Common Shareholders | (0.69) | (0.50) | (0.66) | (0.73) | (0.92) | (0.94) | |
Capital charges with respect to the issuance of Preferred Shares | — | — | — | — | 0.003 | (0.03) | |
Net asset value, end of period | $ 14.07 | $ 14.23 | $ 15.02 | $ 15.42 | $ 15.07 | $ 15.46 | |
Market price, end of period | $ 12.82 | $ 12.81 | $ 13.70 | $ 14.96 | $ 14.65 | $ 15.16 | |
Total Investment Return4 | |||||||
Based on net asset value | 4.94% | (1.67)%5 | 2.00% | 7.50% | 3.49% | 7.99% | |
Based on market price | 6.22% | (2.95)%5 | (4.10)% | 7.28% | 2.60% | 12.23% | |
Ratios to Average Net Assets Applicable to Common Shares | |||||||
Total expenses6 | 1.22% | 1.24%7 | 1.37% | 1.59% | 1.52% | 1.35% | |
Total expenses after fees waived6 | 1.21% | 1.24%7 | 1.37% | 1.59% | 1.52% | 1.33% | |
Total expenses after fees waived and excluding interest expense and fees6,8 | 1.11% | 1.18%7 | 1.17% | 1.15% | 1.16% | 1.06% | |
Net investment income6 | 7.10% | 6.18%7 | 6.30% | 6.46% | 6.21% | 6.79% | |
Dividends to Preferred Shareholders | 1.12% | 1.87%7 | 1.81% | 1.63% | 1.03% | 0.42% | |
Net investment income to Common Shareholders | 5.98% | 4.31%7 | 4.49% | 4.83% | 5.18% | 6.37% | |
Supplemental Data | |||||||
Net assets applicable to Common Shareholders, end of period (000) | $ 123,806 | $ 125,233 | $ 132,174 | $ 135,767 | $ 132,622 | $ 135,370 | |
Preferred Shares outstanding at $25,000 liquidation preference, | |||||||
end of period (000) | $ 64,475 | $ 65,700 | $ 73,500 | $ 73,500 | $ 73,500 | $ 73,500 | |
Portfolio turnover | 8% | 13% | 23% | 11% | 29% | 16% | |
Asset coverage per Preferred Share at $25,000 liquidation preference, | |||||||
end of period | $ 73,008 | $ 72,6669 | $ 69,9659 | $ 71,1859 | $ 70,1109 | $ 71,0509 | |
1 Based on average shares outstanding. | |||||||
2 Amount is less than ($0.01) per share. | |||||||
3 Amount is less than $0.01 per share. | |||||||
4 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. Total investment | |||||||
returns exclude effects of sales charges. | |||||||
5 Aggregate total investment return. | |||||||
6 Do not reflect the effect of dividends to Preferred Shareholders. | |||||||
7 Annualized. | |||||||
8 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option | |||||||
bond trusts. | |||||||
9 Amounts have been recalculated to conform with current year presentation. |
See Notes to Financial Statements.
42 ANNUAL REPORT JULY 31, 2009
Financial Highlights | BlackRock MuniYield Pennsylvania Insured Fund (MPA) | ||||||
Period | |||||||
Year Ended November 1, 2007 | |||||||
July 31, | to July 31, | Year Ended October 31, | |||||
2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||
Per Share Operating Performance | |||||||
Net asset value, beginning of period | $ 14.30 | $ 15.49 | $ 15.89 | $ 15.57 | $ 16.04 | $ 15.56 | |
Net investment income1 | 0.93 | 0.71 | 1.01 | 1.01 | 1.05 | 1.08 | |
Net realized and unrealized gain (loss) | (0.15) | (1.18) | (0.40) | 0.36 | (0.35) | 0.48 | |
Dividends to Preferred Shareholders from net investment income | (0.14) | (0.22) | (0.32) | (0.27) | (0.19) | (0.08) | |
Net increase (decrease) from investment operations | 0.64 | (0.69) | 0.29 | 1.10 | 0.51 | 1.48 | |
Dividends to Common Shareholders from net investment income | (0.66) | (0.50) | (0.69) | (0.78) | (0.96) | (1.00) | |
Capital charges with respect to the issuance of Preferred Shares | — | — | — | (0.00)2 | (0.02) | — | |
Net asset value, end of period | $ 14.28 | $ 14.30 | $ 15.49 | $ 15.89 | $ 15.57 | $ 16.04 | |
Market price, end of period | $ 12.87 | $ 12.43 | $ 13.67 | $ 14.60 | $ 14.91 | $ 15.61 | |
Total Investment Return3 | |||||||
Based on net asset value | 5.88% | (4.18)%4 | 2.19% | 7.52% | 3.16% | 10.15% | |
Based on market price | 9.78% | (5.62)%4 | (1.85)% | 3.16% | 1.51% | 12.63% | |
Ratios to Average Net Assets Applicable to Common Shares | |||||||
Total expenses5 | 1.27% | 1.50%6 | 1.72% | 1.70% | 1.70% | 1.33% | |
Total expenses after fees waived5 | 1.25% | 1.48%6 | 1.72% | 1.69% | 1.69% | 1.32% | |
Total expenses after fees waived and excluding interest expense and fees5,7 | 1.06% | 1.13%6 | 1.13% | 1.13% | 1.13% | 1.05% | |
Net investment income5 | 6.82% | 6.18%6 | 6.44% | 6.49% | 6.56% | 6.89% | |
Dividends to Preferred Shareholders | 1.00% | 1.93%6 | 2.02% | 1.76% | 1.17% | 0.51% | |
Net investment income to Common Shareholders | 5.82% | 4.25%6 | 4.42% | 4.73% | 5.39% | 6.38% | |
Supplemental Data | |||||||
Net assets applicable to Common Shareholders, end of period (000) | $ 163,918 | $ 164,119 | $ 177,807 | $ 182,402 | $ 178,771 | $ 183,877 | |
Preferred Shares outstanding at $25,000 liquidation preference, | |||||||
end of period (000) | $ 66,350 | $ 77,400 | $ 102,000 | $ 102,000 | $ 102,000 | $ 88,000 | |
Portfolio turnover | 18% | 24% | 35% | 25% | 42% | 41% | |
Asset coverage per Preferred Share at $25,000 liquidation preference, | |||||||
end of period | $ 86,765 | $ 78,0188 | $ 68,5858 | $ 69,7178 | $ 68,8278 | $ 77,2418 | |
1 Based on average 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. Total investment | |||||||
returns exclude effects of sales charges. | |||||||
4 Aggregate total investment return. | |||||||
5 Do not reflect the effect of dividends to Preferred Shareholders. | |||||||
6 Annualized. | |||||||
7 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option | |||||||
bond trusts. | |||||||
8 Amounts have been recalculated to conform with current year presentation. |
See Notes to Financial Statements.
ANNUAL REPORT JULY 31, 2009 43
Notes to Financial Statements
1. Organization and Significant Accounting Policies:
BlackRock MuniHoldings California Insured Fund, Inc. (“MuniHoldings
California Insured”), BlackRock MuniHoldings New Jersey Insured Fund,
Inc. (“MuniHoldings New Jersey Insured), BlackRock MuniYield Insured
Investment Fund (formerly MuniYield BlackRock Florida Insured Fund)
(“MuniYield Insured Investment”), BlackRock MuniYield Michigan Insured
Fund, Inc. (“MuniYield Michigan Insured”), BlackRock MuniYield New Jersey
Insured Fund, Inc. (“MuniYield New Jersey Insured”) and BlackRock
MuniYield Pennsylvania Insured Fund (“MuniYield Pennsylvania Insured”)
(collectively, the “Funds” or individually, as the “Fund”) are registered
under the Investment Company Act of 1940, as amended (the “1940
Act”), as non-diversified, closed-end management investment companies.
MuniHoldings California Insured, MuniHoldings New Jersey Insured,
MuniYield Michigan Insured and MuniYield New Jersey Insured are organ-
ized as Maryland corporations. MuniYield Insured Investment and MuniYield
Pennsylvania Insured 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, which may
require the use of management accruals and estimates. Actual results may
differ from these estimates. The Boards of Directors and the Boards of
Trustees of the Funds are referred to throughout this report as the “Board
of Directors” or the “Board.” MuniHoldings California Insured’s year end
changed to July 31. The Funds determine and make available for publica-
tion the net asset value of their Common Shares on a daily basis.
The following is a summary of significant accounting policies followed by
the Funds:
Valuation of Investments: 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 selected under the
supervision of each Fund’s Board. In determining the value of a particular
investment, pricing services may use certain information with respect to
transactions in such investments, quotations from dealers, pricing matrixes,
market transactions in comparable investments and information with
respect to various relationships between investments. Swap agreements
are valued by utilizing quotes received daily by each Fund’s pricing service
or through brokers, which are derived using daily swap curves and trades
of underlying securities. Financial futures contracts traded on exchanges
are valued at their last sale price. Short-term securities with maturities less
than 60 days may be valued at amortized cost, which approximates fair
value. Investments in open-end investment companies are valued at net
asset value each business day.
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, the investment will be valued by a
method approved by each Fund’s Board as reflecting fair value (“Fair Value
Assets”). When determining the price for Fair Value Assets, the investment
advisor and/or sub-advisor seeks to determine the price that each Fund
might reasonably expect to receive from the current sale of that asset in
an arm’s-length transaction. Fair value determinations shall be based upon
all available factors that the 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.
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 only 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 purchaser is not entitled to any of the interest
earned prior to settlement. When purchasing a security on a delayed-
delivery basis, the Funds assume the rights and risks of ownership of the
security, including the risk of price and yield fluctuations. In the event of
default by the counterparty, the Fund’s maximum amount of loss is the
unrealized gain of the commitment.
Municipal Bonds Transferred to Tender Option Bond Trusts: The Funds
leverage their assets through the use of tender option bond trusts (“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 con-
tributed 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 the Fund (1) to cause the holders of a propor-
tional share of the floating rate certificates to tender their certificates at
par, and (2) to transfer, within seven days, a corresponding share of the
municipal bonds from the TOB to the Fund. The TOB may also be termi-
nated without the consent of the 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 security, a substantial
downgrade in credit quality of the municipal security, the inability of the
TOB to obtain quarterly or annual renewal of the liquidity support agree-
ment, 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.
The cash received by the TOB from the sale of the short-term floating rate
certificates, less transaction expenses, is paid to each 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,
therefore the municipal bonds deposited into a TOB are presented in the
Funds’ Schedules of Investments and the proceeds from the issuance of
the short-term floating rate certificates are shown as trust certificates in
the Statements of Assets and Liabilities.
Interest income from the underlying security is recorded by the Funds on
an accrual basis. Interest expense incurred on the secured borrowing and
44 ANNUAL REPORT JULY 31, 2009
Notes to Financial Statements (continued)
other expenses related to remarketing, administration and trustee services
to a TOB are reported as expenses of the Funds. The 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, 2009, the aggregate value of the underlying munici-
pal bonds transferred to TOBs, the related liability for trust certificates
and the range of interest rates on the liability for the trust certificates were
as follows:
Underlying | Liability | |||
Municipal Bonds | For Trust | Range of | ||
Transferred to TOBs | Certificates | Interest Rates | ||
MuniHoldings California | ||||
Insured | $183,658,839 | $105,202,904 | 0.23% – 0.58% | |
MuniHoldings New Jersey | ||||
Insured | $ 21,748,924 | $ 13,262,930 | 0.41% – 1.56% | |
MuniYield Insured | ||||
Investment | $ 29,550,866 | $ 15,375,937 | 0.25% – 1.92% | |
MuniYield Michigan | ||||
Insured | $ 30,775,237 | $ 16,190,000 | 1.32% – 1.69% | |
MuniYield New Jersey | ||||
Insured | $ 7,777,946 | $ 4,684,369 | 0.41% – 1.56% | |
MuniYield Pennsylvania | ||||
Insured | $ 55,172,158 | $ 26,728,368 | 0.25% – 1.48% | |
For the period ended July 31, 2009, the Funds’ average trust certificates | ||||
outstanding and the daily weighted average interest rate were as follows: | ||||
Average Trust | Daily Weighted | |||
Certificates | Average | |||
Outstanding | Interest Rate | |||
MuniHoldings California Insured | $ 105,202,903 | 0.66%* | ||
MuniHoldings New Jersey Insured | $ 17,351,442 | 1.83% | ||
MuniYield Insured Investment | $ 11,779,382 | 1.58% | ||
MuniYield Michigan Insured | $ 21,561,808 | 1.79% | ||
MuniYield New Jersey Insured | $ 6,190,739 | 1.82% | ||
MuniYield Pennsylvania Insured | $ 20,628,722 | 1.40% | ||
* Annualized. |
Financial transactions executed through TOBs generally will underperform
the market for fixed rate municipal bonds in a rising interest rate environ-
ment, but tend to outperform the market for fixed rate bonds when interest
rates decline or remain relatively stable. Should short-term interest rates
rise, the Funds’ investments in TOBs likely will adversely affect each Fund’s
investment income and distributions to shareholders. Also, fluctuations in
the market value of municipal securities deposited into the TOB may
adversely affect the Funds’ net asset value per share.
Zero-Coupon Bonds: Each Fund may invest in zero-coupon bonds, which
are normally issued at a significant discount from face value and do not
provide periodic interest payments. Zero-coupon bonds may experience
greater volatility in market value than similar maturity debt obligations
which provide regular interest payments.
Segregation and Collateralization: In cases in which the 1940 Act and
the interpretive positions of the Securities and Exchange Commission
(“SEC”) require that each Fund either receive collateral or segregate assets
in connection with certain investments (e.g., financial futures contracts and
swaps) each Fund will, consistent with SEC rules and/or certain interpretive
letters issued by the SEC, segregate collateral or designate on its books and
records cash or other 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 has requirements to deliver/
deposit securities as collateral for certain investments (e.g., financial futures
contracts and swaps). As part of these agreements, when the value of these
investments achieves a previously agreed upon value (minimum transfer
amount), each party may be required to deliver additional collateral.
Investment Transactions and Investment Income: For financial reporting
purposes, investment transactions are recorded on the dates the trans-
actions are entered into (the trade dates). Realized gains and losses on
security transactions are determined on the identified cost basis. Dividend
income is recorded on the ex-dividend dates. Interest income is recognized
on the accrual method. Each Fund amortizes all premiums and discounts
on debt securities.
Dividends and Distributions: Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on
the ex-dividend dates. Dividends and distributions to Preferred 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 applicable to regulated 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 statutes of
limitations on the Funds’ US federal tax returns remain open for the
period ended July 31, 2009 and the four years ended June 30, 2009
for MuniHoldings California Insured, the four years ended July 31, 2009 for
MuniHoldings New Jersey Insured and the periods ended July 31, 2009,
2008 and October 31, 2007 and 2006 for MuniYield Insured Investment,
MuniYield Michigan Insured, MuniYield New Jersey Insured and MuniYield
Pennsylvania Insured. The statutes of limitations on the Funds’ state and
local tax returns may remain open for an additional year depending upon
the jurisdiction.
Recent Accounting Pronouncement: In June 2009, Statement of Financial
Accounting Standards No. 166, “Accounting for Transfers of Financial Assets
— an amendment of FASB Statement No. 140” (“FAS 166”), was issued.
FAS 166 is intended to improve the relevance, representational faithfulness
and comparability of the information that a reporting entity provides in its
financial statements about a transfer of financial assets; the effects of a
transfer on its financial position, financial performance, and cash flows;
and a transferor’s continuing involvement, if any, in transferred financial
assets. FAS 166 is effective for financial statements issued for fiscal years
and interim periods beginning after November 15, 2009. Earlier application
is prohibited. The recognition and measurement provisions of FAS 166
must be applied to transfers occurring on or after the effective date.
Additionally, the disclosure provisions of FAS 166 should be applied to
transfers that occurred both before and after the effective date of FAS 166.
The impact of FAS 166 on the Funds’ financial statement disclosures, if
any, is currently being assessed.
ANNUAL REPORT JULY 31, 2009 45
Notes to Financial Statements (continued)
Deferred Compensation and BlackRock Closed-End Share Equivalent
Investment Plan: Under the deferred compensation plan approved by each
Fund’s Board, non-interested 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 other certain BlackRock Closed-End Funds
selected by the Independent Directors. This has approximately the same
economic effect for the Independent Directors as if the Independent
Directors had invested the deferred amounts directly in other certain
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 other
certain BlackRock Closed-End Funds selected by the Independent Directors
in order to match their deferred compensation obligations. Investments
to cover the Funds’ deferred compensation liability, if any, are included in
other assets on the Statements of Assets and Liabilities. Dividends and
distributions from the BlackRock Closed-End Fund investments under the
plan are included in income — affiliated on 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.
2. Derivative Financial Instruments:
The Funds may engage in various portfolio investment strategies both to
increase the return of the Funds and to economically hedge, or protect,
their exposure to interest rate movements and movements in the securities
markets. Losses may arise if the value of the contract decreases due to an
unfavorable change in the price of the underlying security or if the counter-
party does not perform under the contract. The Funds may mitigate these
losses through master netting agreements included within an International
Swap and Derivatives Association, Inc. (“ISDA”) Master Agreement between
the Funds and their counterparties. The ISDA Master Agreement allows
each Fund to offset with its counterparty each Fund’s certain derivative
financial instruments’ payables and/or receivables with collateral held. To
the extent amounts due to the Funds from their counterparties are not fully
collateralized contractually or otherwise, the Funds bear the risk of loss
from counterparty non-performance. See Note 1 “Segregation and
Collateralization” for information with respect to collateral practices.
The Funds are subject to interest rate risk in the normal course of pursuing
their investment objectives by investing in various derivative financial instru-
ments, as described below.
Financial Futures Contracts — The Funds may purchase or sell financial
futures contracts and options on financial futures contracts to gain expo-
sure to, or economically hedge against, changes in the value of interest
rates (interest rate risk). Financial futures contracts are contracts for
delayed delivery of securities at a specific future date and at a specific
price or yield. Pursuant to the contract, the Funds agree to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value
of the contract. Such receipts or payments are known as margin variation
and are recognized by the Funds as unrealized gains or losses. 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 transactions
involves the risk of an imperfect correlation in the movements in the price
of futures contracts, interest rates and the underlying assets. Financial
futures transactions involve minimal counterparty risk since financial
futures contracts are guaranteed against default by the exchange on
which they trade. Counterparty risk is also minimized by the daily
margin variation.
Swaps — The Funds may enter into swap agreements, in which a Fund
and a counterparty agree to make periodic net payments on a specified
notional amount. These periodic payments received or made by the Funds
are recorded in the accompanying Statements of Operations as realized
gains or losses, respectively. Swaps are marked-to market daily and changes
in value are recorded as unrealized appreciation (depreciation). When the
swap is terminated, the Funds will record a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction
and the Funds’ basis in the contract, if any. Swap transactions involve, to
varying degrees, elements of interest rate, credit and market risk in excess
of the amounts recognized on the Statements of Assets and Liabilities.
Such risks involve the possibility that there will be no liquid market for these
agreements, that the counterparty to the agreements may default on its obli-
gation to perform or disagree as to the meaning of the contractual terms in
the agreements, and that there may be unfavorable changes in interest rates
and/or market values associated with these transactions.
•Forward Interest Rate Swaps: The Funds may enter into forward interest
rate swaps to manage duration, the yield curve or interest rate risk by
economically hedging the value of the fixed rate bonds which may
decrease when interest rates rise (interest rate risk). In a forward inter-
est rate swap, each Fund and the counterparty agree to make periodic
net payments on a specified notional contract amount, commencing on
a specified future effective date, unless terminated earlier. The Funds
generally intend to close each forward interest rate swap before the
effective date specified in the agreement and therefore avoid entering
into the interest rate swap underlying each forward interest rate swap.
The Funds’ maximum risk of loss due to counterparty default is the
amount of unrealized gain on the contract.
Derivatives Not Accounted for as Hedging Instruments under Financial | ||
Accounting Standards Board Statement of Financial Accounting Standards | ||
No. 133, “Accounting for Derivative Instruments and Hedging Activities”: | ||
The Effect of Derivative Instruments on the Statements of Operations | ||
Period Ended July 31, 2009* | ||
Net Realized Gain (Loss) From | ||
Derivatives Recognized in Income | ||
MuniHoldings | MuniYield | |
California | Pennsylvania | |
Insured | Insured | |
Interest rate contracts: | ||
Financial futures contracts | $ 236,178 | $ (107,788) |
Forward interest rate swaps | — | (931,500) |
Total | $ 236,178 | $(1,039,288) |
46 ANNUAL REPORT JULY 31, 2009
Notes to Financial Statements (continued) | ||
Net Change in Unrealized Appreciation/Depreciation on | ||
Derivatives Recognized in Income | ||
MuniHoldings | MuniYield | |
California | Pennsylvania | |
Insured | Insured | |
Interest rate contracts: | ||
Financial futures contracts | $ (74,560) | — |
Forward interest rate swaps | — | $ 227,038 |
* As of July 31, 2009, there were no financial futures contracts or forward interest rate | ||
swaps outstanding. During the period ended July 31, 2009, the Funds had limited | ||
activity in these transactions. | ||
The Effect of Derivative Instruments on the Statement of Operations | ||
Year Ended June 30, 2009 | ||
Net Change in Unrealized Appreciation on | ||
Derivatives Recognized in Income | ||
MuniHoldings | ||
California | ||
Insured | ||
Interest rate contracts: | ||
Financial futures contracts | $ 74,560 |
3. Investment Advisory Agreement and Other Transactions
with Affiliates:
The PNC Financial Services Group, Inc. (“PNC”) and Bank of America
Corporation (“BAC”) are the largest stockholders of BlackRock, Inc.
(“BlackRock”). BAC became a stockholder of BlackRock following its
acquisition of Merrill Lynch & Co., (“Merrill Lynch”) on January 1, 2009.
Prior to that date, both PNC and Merrill Lynch were considered affiliates
of the Funds under the 1940 Act. Subsequent to the acquisition, PNC
remains an affiliate, but due to the restructuring of Merrill Lynch’s owner-
ship interest of BlackRock, BAC is not deemed to be an affiliate under
the 1940 Act.
Each Fund has entered into an Investment Advisory Agreement with
BlackRock Advisors, LLC (the “Manager”), the Funds’ investment advisor,
an indirect, wholly owned subsidiary of BlackRock, to provide investment
advisory and administration services.
The Manager is responsible for the management of each Fund’s portfolio
and provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of each Fund. For such services,
each Fund pays the Manager a monthly fee at an annual rate of 0.50%,
except MuniHoldings California Insured and MuniHoldings New Jersey
Insured, which is 0.55%, of each Fund’s average daily net assets. Average
daily net assets is the average daily value of each Fund’s total assets
minus the sum of its accrued liabilities.
The Manager has agreed to waive its advisory fees by the amount of
investment advisory fees each Fund pays to the Manager indirectly through
its investment in affiliated money market funds, which are included in fees
waived by advisor in the Statements of Operations. For the period ended
July 31, 2009, the amounts waived were as follows:
Fees Waived | ||
by Manager | ||
MuniHoldings California Insured | $ 10,543 | |
MuniHoldings New Jersey Insured | $ 21,925 | |
MuniYield Insured Investment | $ 26,098 | |
MuniYield Michigan Insured | $ 52,549 | |
MuniYield New Jersey Insured | $ 11,321 | |
MuniYield Pennsylvania Insured | $ 36,820 | |
For the prior year, MuniHoldings California Insured’s waiver was $92,956. | ||
In addition, the Manager has agreed to waive its advisory fee on the | ||
proceeds of Preferred Shares and TOBs that exceed 35% of MuniHoldings | ||
California Insured and MuniHoldings New Jersey Insured’s average daily | ||
net assets. These amounts are included in fees waived by advisor in the | ||
Statements of Operations. For the period ended July 31, 2009, the | ||
amounts waived were as follows: | ||
Fees Waived | ||
by Manager | ||
MuniHoldings California Insured | $ 61,328 | |
MuniHoldings New Jersey Insured | $ 256,573 | |
For the prior year, MuniHoldings California Insured’s waiver was $882,032. | ||
The Manager has entered into a separate sub-advisory agreement with | ||
BlackRock Investment Management, LLC (“BIM”), an affiliate of the | ||
Manager, under which the Manager pays BIM for services it provides, | ||
a monthly fee that is a percentage of the investment advisory fee paid | ||
by each Fund to the Manager. | ||
For the period ended July 31, 2009, the Funds reimbursed the Manager for | ||
certain accounting services in the following amounts, which are included in | ||
accounting services on the Statements of Operations. | ||
Accounting | ||
Services | ||
MuniHoldings California Insured | $ 986 | |
MuniHoldings New Jersey Insured | $ 9,703 | |
MuniYield Insured Investment | $ 3,431 | |
MuniYield Michigan Insured | $ 8,108 | |
MuniYield New Jersey Insured | $ 3,862 | |
MuniYield Pennsylvania Insured | $ 4,691 | |
For the prior year, MuniHoldings California Insured’s reimbursement was | ||
$17,117. | ||
Certain officers and/or trustees or directors of the Funds are officers | ||
and/or directors of BlackRock or its affiliates. The Funds reimburse the | ||
Manager for compensation paid to the Funds’ Chief Compliance Officer. | ||
4. Investments: | ||
Purchases and sales of investments, excluding short-term securities, for the | ||
current period were as follows: | ||
Purchases | Sales | |
MuniHoldings California Insured | $ 20,265,112 | $ 12,247,908 |
MuniHoldings New Jersey Insured | $ 41,367,236 | $ 54,167,904 |
MuniYield Insured Investment | $ 73,903,476 | $ 82,355,709 |
MuniYield Michigan Insured | $ 36,963,423 | $ 66,772,008 |
MuniYield New Jersey Insured | $ 15,308,274 | $ 21,243,957 |
MuniYield Pennsylvania Insured | $ 44,339,004 | $ 53,377,384 |
ANNUAL REPORT JULY 31, 2009 47
Notes to Financial Statements (continued) | ||||||
5. Income Tax Information: | ||||||
Reclassifications: Accounting principles generally accepted in the United States of America require that certain components of net assets be adjusted to | ||||||
reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The | ||||||
following permanent differences as of July 31, 2009 attributable to amortization methods on fixed income securities, the tax classification of distributions | ||||||
received from a regulated investment company, the expiration of capital loss carryforwards and the book tax difference on the sale of residual interests in | ||||||
tender option bond trusts were reclassified to the following accounts: | ||||||
MuniHoldings | MuniYield | MuniYield | MuniYield | MuniYield | ||
New Jersey | Insured | Michigan | New Jersey | Pennsylvania | ||
Insured | Investment | Insured | Insured | Insured | ||
Paid-in capital | $(22,843,109) | $ (89,052) | $ (346,359) | — | $ (212,525) | |
Undistributed net investment income | $ (74,728) | $ (863) | $ 13,249 | $ (117) | $ (21,204) | |
Accumulated net realized loss | $ 22,917,837 | $ 89,915 | $ 333,110 | $ 117 | $ 233,729 | |
The tax character of distributions paid during the fiscal years ended October 31, 2007, and the fiscal periods ended June 30, 2008, July 31, 2008, June | ||||||
30, 2009 and July 31, 2009 were as follows: | ||||||
MuniHoldings | MuniHoldings | MuniYield | MuniYield | MuniYield | MuniYield | |
California | New Jersey | Insured | Michigan | New Jersey | Pennsylvania | |
Insured | Insured | Investment | Insured | Insured | Insured | |
Tax-exempt income | ||||||
7/31/2009 | — | $ 17,384,824 | $ 6,878,717 | $15,194,202 | $ 7,211,286 | $ 9,144,230 |
7/01/2009 – 7/31/2009 | $ 2,683,632 | — | — | — | — | — |
6/30/2009 | 32,392,746 | — | — | — | — | — |
7/31/2008 | — | 20,713,946 | — | — | — | — |
11/01/2007 – 7/31/2008 | — | — | 5,962,814 | 13,697,591 | 6,108,209 | 8,276,785 |
6/30/2008 | 40,337,041 | — | — | — | — | — |
10/31/2007 | — | — | 8,353,499 | 18,813,492 | 8,168,618 | 11,548,821 |
Ordinary income | ||||||
7/31/2009 | — | — | $ 116,485 | — | — | — |
11/01/2007 – 7/31/2008 | — | — | — | — | $ 16,458 | — |
6/30/2008 | $ 455,908 | — | — | — | — | — |
10/31/2007 | — | — | — | — | 53,500 | — |
Long-term capital gains | ||||||
7/31/2009 | — | — | — | — | $ 245,425 | — |
11/01/2007 – 7/31/2008 | — | — | — | — | 146,310 | — |
10/31/2007 | — | — | — | — | 41,022 | — |
Total distributions | ||||||
7/31/2009 | — | $ 17,384,824 | $ 6,995,202 | $15,194,202 | $ 7,456,711 | $ 9,144,230 |
7/01/2009 – 7/31/2009 | $ 2,683,632 | — | — | — | — | — |
6/30/2009 | $32,392,746 | — | — | — | — | — |
7/31/2008 | — | $ 20,713,946 | — | — | — | — |
11/01/2007 – 7/31/2008 | — | — | $ 5,962,814 | $13,697,591 | $ 6,270,977 | $ 8,276,785 |
6/30/2008 | $40,792,949 | — | — | — | — | — |
10/31/2007 | — | — | $ 8,353,499 | $18,813,492 | $ 8,263,140 | $11,548,821 |
As of July 31, 2009 the tax components of accumulated earnings (losses) were as follows: | ||||||
MuniHoldings | MuniHoldings | MuniYield | MuniYield | MuniYield | MuniYield | |
California | New Jersey | Insured | Michigan | New Jersey | Pennsylvania | |
Insured | Insured | Investment | Insured | Insured | Insured | |
Undistributed tax-exempt income | $ 5,715,700 | $ 3,798,258 | $ 1,303,879 | $ 3,810,686 | $ 2,080,054 | $ 1,625,921 |
Undistributed ordinary income | — | — | — | — | 22,478 | — |
Undistributed long-term capital gains | — | — | — | — | 302,264 | — |
Capital loss carryforward | (13,961,368) | (270,405) | (3,735,263) | (8,798,818) | — | (2,948,179) |
Net unrealized gains (losses)* | (37,290,693) | 3,658,719 | (6,961,292) | (4,957,696) | (2,735,126) | (4,783,476) |
Total | $(45,536,361) | $ 7,186,572 | $ (9,392,676) | $ (9,945,828) | $ (330,330) | $ (6,105,734) |
* 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, the difference between book and tax for premiums and discounts on fixed income securities, the deferral of post-October capital losses for tax purposes, the deferral | ||||||
of compensation to directors, and the tax treatment of residual interests in tender option bond trusts. |
48 ANNUAL REPORT JULY 31, 2009
Notes to Financial Statements (continued) | |||||
As of July 31, 2009, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates: | |||||
MuniHoldings | MuniHoldings | MuniYield | MuniYield | MuniYield | |
California | New Jersey | Insured | Michigan | Pennsylvania | |
Expires | Insured | Insured | Investment | Insured | Insured |
2010 | — | — | — | $ 1,124,652 | — |
2011 | $ 3,107,367 | $ 235,894 | — | — | — |
2012 | — | — | $ 2,081,725 | 3,953,220 | — |
2016 | 2,097,897 | — | 659,619 | 1,689,814 | — |
2017 | 8,756,104 | 34,511 | 993,919 | 2,031,132 | $ 2,948,179 |
Total | $13,961,368 | $ 270,405 | $ 3,735,263 | $ 8,798,818 | $ 2,948,179 |
6. Concentration, Market and Credit Risk:
Each Fund invests a substantial amount of its 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 reduces the
risk of loss due to issuer default. 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 (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 econ-
omy; overall market changes; local, regional or global political, social or
economic instability; and currency and interest rate and price fluctuations.
Similar to credit risk, the Funds may be exposed to counterparty risk, or
the risk that an entity with which the Funds have unsettled or open trans-
actions may default. Financial assets, which potentially expose the Funds
to credit and counterparty risks, consist principally of investments and cash
due from counterparties. The extent of the Funds’ exposure to credit and
counterparty risks with respect to these financial assets is approximated
by their value recorded in the Funds’ Statements of Assets and Liabilities.
7. Capital Share Transactions:
Common Shares
MuniYield Insured Investment and MuniYield Pennsylvania Insured 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 of $0.05 per share. The Funds’ Board is
authorized, however, to classify and reclassify any unissued shares of capi-
tal shares without approval of the holders of Common Shares.
MuniHoldings California Insured, MuniHoldings New Jersey Insured,
MuniYield Michigan Insured and MuniYield New Jersey Insured are author-
ized to issue 200 million shares, including Preferred Shares, par value
$0.10 per share or $0.05 per share, all of which were initially classified as
Common Shares. The Funds’ Board is authorized, however, to classify and
reclassify any unissued shares of capital shares without approval of holders
of Common Shares.
Common Shares
For MuniHoldings California Insured, shares issued and outstanding during
the period July 1, 2009 to July 31, 2009 and the years ended June 30,
2009 and June 30, 2008 remained constant.
For MuniHoldings New Jersey Insured, shares issued and outstanding dur-
ing the years ended July 31, 2009 and July 31, 2008 remained constant.
For MuniYield Insured Investment, MuniYield Michigan Insured, MuniYield
New Jersey Insured and MuniYield Pennsylvania Insured, shares issued and
outstanding during the year ended July 31, 2009, the period November 1,
2007 to July 31, 2008 and the year ended October 31, 2007 remained
constant.
Preferred Shares
The Preferred Shares 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 unpaid dividends whether or not declared.
The Preferred Shares are also subject to mandatory redemption at their
liquidation preference per share plus any accumulated or unpaid divi-
dends, 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 Supplementary or Certificate of Designation, as applicable
(“Governing Instrument”) are not satisfied.
From time to time in the future, the Fund that has issued Preferred Shares
may affect repurchases of such shares at prices below its liquidation pref-
erences as agreed upon by the Fund and seller. The Fund also may
redeem its respective Preferred Shares from time to time as provided in
the applicable Governing Instrument. The Fund intends to affect 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.
ANNUAL REPORT JULY 31, 2009 49
Notes to Financial Statements (continued)
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, 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 sepa-
rately 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 funda-
mental investment restrictions or (c) change its business so as to cease
to be an investment company.
The Funds had the following series of Preferred Shares outstanding,
effective yields and reset frequency as of July 31, 2009:
Reset | ||||
Preferred | Effective Frequency | |||
Series | Shares | Yield | Days | |
MuniHoldings | ||||
California Insured | A | 1,2511 | 0.52% | 7 |
B | 2,5271 | 0.52% | 7 | |
C | 2,0841 | 0.58% | 7 | |
D | 1,9281 | 0.58% | 7 | |
E | 2,3701 | 0.58% | 7 | |
MuniHoldings | ||||
New Jersey Insured | A | 1,1571 | 0.52% | 7 |
B | 1,1571 | 0.58% | 7 | |
C | 2,0421 | 0.58% | 7 | |
D | 1,5991 | 0.58% | 7 | |
E | 9531 | 0.52% | 7 | |
MuniYield Insured Investment | A | 1,8841 | 0.52% | 7 |
B | 3772 | 1.63% | 7 | |
MuniYield Michigan Insured | A | 1,7531 | 0.58% | 7 |
B | 1,7531 | 0.52% | 7 | |
C | 1,4031 | 0.58% | 7 | |
D | 8772 | 1.57% | 7 | |
MuniYield New Jersey Insured | A | 1,9651 | 0.52% | 7 |
B | 6142 | 1.63% | 7 | |
MuniYield Pennsylvania Insured | A | 1,0411 | 0.52% | 7 |
B | 1,2491 | 0.58% | 7 | |
C | 3642 | 1.63% | 7 | |
1 The maximum applicable rate on this series of Preferred Shares is the higher | ||||
of 110% of the AA commercial paper rate or 110% of 90% of the 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 Preferred Shares is the higher | ||||
of 110% plus or times (i) the Telerate/BAA LIBOR or (ii) 90% of the Kenny S&P | ||||
30-day High Grade Index rate divided by 1.00 minus the marginal tax rate. |
Dividends on 7-day Preferred Shares are cumulative at a rate which is
reset every 7 days based on the results of an auction. If the Preferred
Shares fail to clear the auction on an auction date, the affected Fund is
required to pay the maximum applicable rate on the Preferred Shares to
holders of such shares for successive dividend periods until such time as
the shares is successfully auctioned. The maximum applicable rate on the
Preferred Shares is footnoted as applicable on the above chart. The low,
high and average dividend rates on the Preferred Shares for each Fund | ||||
for the period ended July 31, 2009 were as follows: | ||||
Series | Low | High | Average | |
MuniHoldings | ||||
California Insured | A | 0.43% | 0.52% | 0.45% |
B | 0.35% | 0.52% | 0.45% | |
C | 0.35% | 0.58% | 0.46% | |
D | 0.38% | 0.58% | 0.46% | |
E | 0.40% | 0.58% | 0.46% | |
MuniHoldings | ||||
New Jersey Insured | A | 0.43% | 10.21% | 1.81% |
B | 0.35% | 12.26% | 1.89% | |
C | 0.40% | 11.35% | 1.84% | |
D | 0.38% | 12.57% | 1.85% | |
E | 0.35% | 11.73% | 1.85% | |
MuniYield Insured Investment | A | 0.43% | 10.21% | 1.86% |
B | 1.45% | 12.52% | 2.77% | |
MuniYield Michigan Insured | A | 0.40% | 11.35% | 1.84% |
B | 0.35% | 11.73% | 1.87% | |
C | 0.38% | 12.57% | 1.85% | |
D | 1.49% | 10.38% | 2.79% | |
MuniYield New Jersey Insured | A | 0.35% | 11.73% | 1.90% |
B | 1.42% | 12.25% | 2.81% | |
MuniYield Pennsylvania Insured | A | 0.43% | 10.21% | 1.86% |
B | 0.40% | 11.35% | 1.84% | |
C | 1.42% | 12.25% | 2.80% |
Since February 13, 2008, the Preferred Shares of each Fund failed to
clear any of their auctions. As a result, the Preferred Share dividend rates
were reset to the maximum applicable rate, which ranged from 0.35% to
12.57%. A failed auction is not an event of default for the Funds but it has
a negative impact on the liquidity of the Preferred Shares. A failed auction
occurs when there are more sellers of a fund’s auction rate Preferred
Shares than buyers. It is impossible to predict how long this imbalance
will last. A successful auction for each Fund’s Preferred Shares may not
occur for some time, if ever, and even if liquidity does resume, Preferred
Shareholders may not have the ability to sell the Preferred Shares at their
liquidation preference.
The Funds may not declare dividends or make other distributions on
Common Shares or purchase any such shares if, at the time of the
declaration, distribution or purchase, asset coverage with respect to
the outstanding Preferred Shares is less than 200%.
Prior to December 22, 2008, the Funds paid commissions to certain
broker-dealers at the end of each auction at an annual rate of 0.25%,
calculated on the aggregate principal amount. As of December 2008,
commissions paid to broker-dealers on Preferred Shares that experienced
a failed auction were reduced to 0.15% on the aggregate principal
amount. The Funds will pay commissions of 0.25% on the aggregate
principal amount of all shares that successfully clear their auctions.
Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly owned
subsidiary of Merrill Lynch, earned commissions for the period August 1,
2008 to December 31, 2008 (after which time Merrill Lynch was no
longer considered an affiliate) as follows:
50 ANNUAL REPORT JULY 31, 2009
Notes to Financial Statements (continued) | ||||
Commissions | ||||
MuniHoldings New Jersey Insured | $ 231,521 | |||
MuniYield Insured Investment | $ 95,353 | |||
MuniYield Michigan Insured | $ 174,537 | |||
MuniYield New Jersey Insured | $ 93,868 | |||
MuniYield Pennsylvania Insured | $ 124,097 | |||
During the period ended July 31, 2009, certain Funds announced the fol- | ||||
lowing redemptions of Preferred Shares 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 | |
MuniHoldings | ||||
California Insured | A | 7/07/2009 | 164 | $4,100,000 |
B | 7/06/2009 | 332 | $8,300,000 | |
C | 7/06/2009 | 274 | $6,850,000 | |
D | 7/09/2009 | 253 | $6,325,000 | |
E | 7/08/2009 | 312 | $7,800,000 | |
MuniHoldings | ||||
New Jersey Insured | A | 7/07/2009 | 27 | $ 675,000 |
B | 7/06/2009 | 27 | $ 675,000 | |
C | 7/08/2009 | 47 | $1,175,000 | |
D | 7/09/2009 | 37 | $ 925,000 | |
E | 7/06/2009 | 22 | $ 550,000 | |
MuniYield Insured Investment | A | 7/14/2009 | 191 | $4,775,000 |
B | 7/09/2009 | 38 | $ 950,000 | |
MuniYield New Jersey Insured | A | 7/06/2009 | 37 | $ 925,000 |
B | 7/06/2009 | 12 | $ 300,000 | |
MuniYield Pennsylvania Insured | A | 7/14/2009 | 173 | $4,325,000 |
B | 7/08/2009 | 208 | $5,200,000 | |
C | 7/06/2009 | 61 | $1,525,000 | |
Shares issued and outstanding during the year ended July 31, 2009 for | ||||
MuniYield Michigan Insured remained constant. | ||||
During the year ended July 31, 2008, the Funds announced the following | ||||
redemptions of Preferred Shares 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 | |
MuniHoldings | ||||
New Jersey Insured | A | 6/24/2008 | 176 | $ 4,400,000 |
B | 6/27/2008 | 176 | $ 4,400,000 | |
C | 6/25/2008 | 311 | $ 7,775,000 | |
D | 6/26/2008 | 244 | $ 6,100,000 | |
E | 6/23/2008 | 145 | $ 3,625,000 | |
MuniYield Insured Investment | A | 6/24/2008 | 325 | $ 8,125,000 |
B | 6/26/2008 | 65 | $ 1,625,000 | |
MuniYield Michigan Insured | A | 6/25/2008 | 247 | $ 6,175,000 |
B | 6/23/2008 | 247 | $ 6,175,000 | |
C | 6/26/2008 | 197 | $ 4,925,000 | |
D | 6/24/2008 | 123 | $ 3,075,000 | |
MuniYield New Jersey Insured | A | 6/23/2008 | 238 | $ 5,950,000 |
B | 6/27/2008 | 74 | $ 1,850,000 | |
MuniYield Pennsylvania Insured | A | 6/24/2008 | 386 | $ 9,650,000 |
B | 6/25/2008 | 463 | $11,575,000 | |
C | 6/27/2008 | 135 | $ 3,375,000 |
Shares issued and outstanding during the prior year for MuniHoldings | ||||
California Insured remained constant. | ||||
During the year ended June 30, 2008, MuniHoldings California Insured | ||||
announced the following redemptions of Preferred Shares 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 | |
MuniHoldings | ||||
California Insured | A | 6/24/2008 | 505 | $12,625,000 |
B | 6/23/2008 | 1,021 | $25,525,000 | |
C | 6/27/2008 | 842 | $21,050,000 | |
D | 6/26/2008 | 779 | $19,475,000 | |
E | 6/25/2008 | 958 | $23,950,000 | |
The Funds financed the Preferred Shares redemptions with cash received | ||||
from TOB transactions. | ||||
8. Restatement Information: | ||||
Subsequent to the initial issuance of MuniYield Michigan Insured’s October | ||||
31, 2006 financial statements and MuniHoldings New Jersey Insured’s | ||||
July 31, 2006 financial statements, it was determined that the criteria for | ||||
sale accounting in Financial Accounting Standards No. 140 “Accounting | ||||
for Transfers and Servicing of Financial Assets and Extinguishments of | ||||
Liabilities” had not been met for certain transfers of municipal bonds and | ||||
that these transfers should have been accounted for as secured borrowings | ||||
rather than as sales. As a result, certain financial highlights for each of the | ||||
two years in the period ended October 31, 2005 (for MuniYield Michigan | ||||
Insured) and for the year ended July 31, 2005 (for MuniHoldings New | ||||
Jersey Insured) have been restated to give effect to recording the transfers | ||||
of the municipal bonds as secured borrowings, including recording interest | ||||
on the bonds as interest income and interest on the secured borrowings | ||||
as interest expense. | ||||
Financial Highlights for MuniHoldings New Jersey Insured | ||||
Year Ended July 31, 2005 | ||||
2005 | ||||
Previously | ||||
Reported | Restated | |||
Total expenses3 | 1.20% | 1.31% | ||
Total expenses after fees waived3 | 1.14% | 1.25% | ||
Portfolio turnover | 29.61% | 29% | ||
3 Do not reflect the effect of dividends to Preferred Shareholders. | ||||
Financial Highlights for MuniYield Michigan Insured | ||||
Years Ended October 31, 2005 and 2004 | ||||
2005 | 2004 | |||
Previously | Previously | Previously | Previously | |
Reported | Restated | Reported | Restated | |
Total expenses4 | 1.10% | 1.42% | 1.02% | 1.22% |
Total expenses | ||||
after fees waived4 | 1.10% | 1.42% | 1.00% | 1.19% |
Portfolio turnover | 30.16% | 25% | 36.63% | 32% |
4 Do not reflect the effect of dividends to Preferred Shareholders. |
ANNUAL REPORT JULY 31, 2009 51
Notes to Financial Statements (concluded) | ||
9. Subsequent Events: | ||
Each Fund paid a net investment income dividend on September 1, 2009 | ||
to Common Shareholders of record on August 14, 2009 as follows: | ||
Common Dividend Per Share | ||
MuniHoldings California Insured | $0.0630 | |
MuniHoldings New Jersey Insured | $0.0655 | |
MuniYield Insured Investment | $0.0660 | |
MuniYield Michigan Insured | $0.0665 | |
MuniYield New Jersey Insured | $0.0640 | |
MuniYield Pennsylvania Insured | $0.0655 | |
The dividends declared on Preferred Shares for the period August 1, 2009 | ||
to August 31, 2009 were as follows: | ||
Dividend | ||
Series | Declared | |
MuniHoldings | ||
California Insured | A | $13,144 |
B | $26,118 | |
C | $21,155 | |
D | $20,374 | |
E | $25,258 | |
MuniHoldings | ||
New Jersey Insured | A | $12,156 |
B | $11,745 | |
C | $21,763 | |
D | $16,898 | |
E | $ 9,850 | |
MuniYield Insured Investment | A | $19,795 |
B | $11,859 | |
MuniYield Michigan Insured | A | $18,683 |
B | $18,118 | |
C | $14,826 | |
D | $27,541 | |
MuniYield New Jersey Insured | A | $19,086 |
B | $20,309 | |
MuniYield Pennsylvania Insured | A | $10,938 |
B | $13,311 | |
C | $11,315 | |
Management’s evaluation of the impact of all subsequent events on the | ||
Fund’s financial statements was completed through September 28, 2009, | ||
the date the financial statements were issued. |
52 ANNUAL REPORT JULY 31, 2009
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of BlackRock
MuniHoldings California Insured Fund, Inc., BlackRock
MuniHoldings New Jersey Insured Fund, Inc., BlackRock
MuniYield Michigan Insured Fund, Inc. and BlackRock
MuniYield New Jersey Insured Fund, Inc. and the Shareholders
and Board of Trustees of BlackRock MuniYield Insured
Investment Fund and BlackRock MuniYield Pennsylvania
Insured Fund (collectively, the “Funds”):
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of BlackRock MuniHoldings
California Insured Fund, Inc., as of July 31, 2009, and the related state-
ments of operations and cash flows for the period July 1, 2009 to July 31,
2009 and for the year ended June 30, 2009, the statements of changes in
net assets for the period July 1, 2009 to July 31, 2009 and for each of the
two years in the period ended June 30, 2009, and the financial highlights
for the period July 1, 2009 to July 31, 2009 and for each of the five years
in the period ended June 30, 2009. We have also audited the accompany-
ing statement of assets and liabilities, including the schedule of invest-
ments, of BlackRock MuniHoldings New Jersey Insured Fund, Inc. as of
July 31, 2009, and the related statement 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 four
years in the period then ended. We have also audited the accompanying
statements of assets and liabilities, including the schedules of investments,
of BlackRock MuniYield Insured Investment Fund (formerly BlackRock
MuniYield Florida Insured Fund), BlackRock MuniYield New Jersey Insured
Fund, Inc. and BlackRock MuniYield Pennsylvania Insured Fund, as of July
31, 2009, and the related statements of operations for the year then
ended, the statements of changes in net assets for the year ended July 31,
2009, the period November 1, 2007 to July 31, 2008, and the year ended
October 31, 2007, and the financial highlights for the year ended July 31,
2009, the period November 1, 2007 to July 31, 2008, and for each of the
four years in the period ended October 31, 2007. We have also audited the
accompanying statement of assets and liabilities, including the schedule of
investments, of BlackRock MuniYield Michigan Insured Fund, Inc., as of July
31, 2009, and the related statement of operations for the year then ended,
the statements of changes in net assets for the year ended July 31, 2009,
the period November 1, 2007 to July 31, 2008, and the year ended
October 31, 2007, and the financial highlights for the year ended July 31,
2009, the period November 1, 2007 to July 31, 2008 and for each of the
two years in the period ended October 31, 2007. These financial state-
ments and financial highlights are the responsibility of the Funds’ manage-
ment. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial high-
lights of BlackRock MuniHoldings New Jersey Insured Fund, Inc. for the year
ended July 31, 2005 (before the restatement described in Note 8) were
audited by other auditors whose report, dated September 12, 2005,
expressed a qualified opinion on those financial highlights because of the
errors described in Note 8. The financial highlights of BlackRock MuniYield
Michigan Insured Fund, Inc. for each of the two years in the period ended
October 31, 2005 (before the restatement described in Note 8) were
audited by other auditors whose report, dated December 9, 2005,
expressed a qualified opinion on those financial highlights because of the
errors described in Note 8.
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, audits of their internal controls over financial report-
ing. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds’ internal control over financial reporting. Accord-
ingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the finan-
cial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. Our procedures included confirmation of securities
owned as of July 31, 2009, by correspondence with the custodians 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, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
BlackRock MuniHoldings California Insured Fund, Inc. as of July 31, 2009,
the results of its operations and its cash flows for the period July 1, 2009
to July 31, 2009 and the year ended June 30, 2009, the changes in its net
assets for the period July 1, 2009 to July 31, 2009 and for each of the two
years in the period ended June 30, 2009, and the financial highlights for
the period July 1, 2009 to July 31, 2009 and for each of the five years in
the period ended June 30, 2009, in conformity with accounting principles
generally accepted in the United States of America. Additionally, in our
opinion, the financial statements and financial highlights referred to above
present fairly, in all material respects, the financial position of BlackRock
MuniHoldings New Jersey Insured Fund, Inc. as of July 31, 2009, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the four years in the period then ended, in conformity
with accounting principles generally accepted in the United States of
America. Additionally, in our opinion, the financial statements and financial
highlights referred to above present fairly, in all material respects, the finan-
cial position of BlackRock MuniYield Insured Investment Fund, BlackRock
MuniYield New Jersey Insured Fund, Inc. and BlackRock MuniYield
Pennsylvania Insured Fund as of July 31, 2009, the results of their opera-
tions for the year then ended, the changes in their net assets for the year
ended July 31, 2009, the period November 1, 2007 to July 31, 2008, and
the year ended October 31, 2007, and the financial highlights for the year
ended July 31, 2009, the period November 1, 2007 to July 31, 2008,
and for each of the four years in the period ended October 31, 2007, in
conformity with accounting principles generally accepted in the United
States of America. Additionally, in our opinion, the financial statements
and financial highlights referred to above present fairly, in all material
respects, the financial position of BlackRock MuniYield Michigan Insured
Fund, Inc. as of July 31, 2009, the results of its operations for the year
then ended, the changes in its net assets for the year ended July 31, 2009,
the period November 1, 2007 to July 31, 2008, and the year ended
ANNUAL REPORT JULY 31, 2009 53
Report of Independent Registered Public Accounting Firm (concluded)
October 31, 2007, and the financial highlights for the year ended July 31,
2009, the period November 1, 2007 to July 31, 2008 and for each of the
two years in the period ended October 31, 2007, in conformity with
accounting principles generally accepted in the United States of America.
We also have audited the adjustments, applied by management, to restate
certain financial highlights of BlackRock MuniHoldings New Jersey Insured
Fund, Inc. (the “New Jersey Insured Fund”) for the year ended July 31,
2005, to correct the errors described in Note 8 and the adjustments,
applied by management, to restate certain financial highlights of BlackRock
MuniYield Michigan Insured Fund, Inc. (the “Michigan Insured Fund”) for
each of the two years in the period ended October 31, 2005, to correct the
errors described in Note 8. These adjustments are the responsibility of the
New Jersey Insured Fund’s and the Michigan Insured Fund’s management.
The audit procedures that we performed with respect to the adjustments
included such tests as we considered necessary in the circumstances and
were designed to obtain reasonable assurance about whether the adjust-
ments are appropriate and have been properly applied, in all material
respects, to the restated information in New Jersey Insured Fund’s financial
highlights for the year ended July 31, 2005 and in Michigan Insured Fund’s
financial highlights for each of the two years in the period ended October
31, 2005. We did not perform any audit procedures designed to assess
whether any additional adjustments or disclosures to New Jersey Insured
Fund’s financial highlights for the year ended July 31, 2005 or to Michigan
Insured Fund’s financial highlights for each of the two years in the period
ended October 31, 2005 might be necessary in order for such financial
highlights to be presented in conformity with accounting principles gener-
ally accepted in the United States of America. In our opinion, the adjust-
ments to the financial highlights of New Jersey Insured Fund for the year
ended July 31, 2005 and the adjustments to the financial highlights of
Michigan Insured Fund for each of the two years in the period ended
October 31, 2005, for the restatements described in Note 8 are appropri-
ate and have been properly applied, in all material respects. However, we
were not engaged to audit, review, or apply any procedures to New Jersey
Insured Fund’s or Michigan Insured Fund’s financial highlights other than
with respect to the adjustments described in Note 8 and, accordingly, we
do not express an opinion or any other form of assurance on the New
Jersey Insured Fund’s financial highlights for the year ended July 31, 2005
or the Michigan Insured Fund’s financial highlights for each of the two years
in the period ended October 31, 2005.
Deloitte & Touche LLP
Princeton, New Jersey
September 28, 2009
54 ANNUAL REPORT JULY 31, 2009
Important Tax Information | ||||||
All of the net investment income distributions paid by BlackRock MuniHoldings California Insured Fund, Inc., BlackRock MuniHoldings New Jersey Insured | ||||||
Fund, Inc., BlackRock MuniYield Michigan Insured Fund, Inc., and BlackRock MuniYield Pennsylvania Insured Fund during the taxable period ended July 31, | ||||||
2009 qualify as tax-exempt interest dividends for federal income tax purposes. | ||||||
The following table summarizes the taxable per share distributions paid by BlackRock MuniYield Insured Investment Fund and BlackRock MuniYield New | ||||||
Jersey Insured Fund, Inc. during the taxable year ended July 31, 2009. | ||||||
BlackRock MuniYield | BlackRock MuniYield | |||||
Insured Investment Fund | New Jersey Insured Fund, Inc. | |||||
Payable Date | Ordinary Income | Payable Date | Long-Term Gains | |||
Common Shareholders | 12/31/08 | $ 0.008295 | 12/31/08 | $ 0.017069 | ||
Preferred Shareholders: | ||||||
Series A | 12/9/08 | $ 10.11 | 12/1/08 | $ 12.76 | ||
12/16/08 | $ 5.12 | 12/8/08 | $ 11.75 | |||
— | — | 12/22/08 | $ 9.30 | |||
— | — | 12/29/08 | $ 1.17 | |||
Series B | 12/11/08 | $ 16.86 | 12/5/08 | $ 20.22 | ||
12/18/08 | $ 0.68 | 12/12/08 | $ 17.55 | |||
— | — | 12/19/08 | $ 2.41 | |||
All of the other net investment income distributions paid by the Funds qualify as tax-exempt interest dividends for federal income tax purposes. |
ANNUAL REPORT JULY 31, 2009 55
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements
The Board of Directors (each, a “Board” and, collectively, the “Boards,”
the members of which are referred to as “Board Members”) of each of
BlackRock MuniHoldings California Insured Fund, Inc. (“MUC”), BlackRock
MuniHoldings New Jersey Insured Fund, Inc. (“MUJ”), BlackRock MuniYield
Insured Investment Fund (“MFT”), BlackRock MuniYield Michigan Insured
Fund, Inc. (“MIY”), BlackRock MuniYield New Jersey Insured Fund, Inc.
(“MJI”) and BlackRock MuniYield Pennsylvania Insured Fund (“MPA” and,
together with MUC, MUJ, MFT, MIY and MJI, each a “Fund” and, collectively,
the “Funds”) met on April 14, 2009 and May 28 – 29, 2009 to consider
the approval of its respective Fund’s investment advisory agreement (each,
an “Advisory Agreement”) with BlackRock Advisors, LLC (the “Manager”), the
Fund’s investment advisor. Each Board also considered the approval of
the sub-advisory agreement (each, a “Sub-Advisory Agreement”) between
its respective Fund, the Manager and BlackRock Investment Management,
LLC (the “Sub-Advisor”). 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.” Unless otherwise
indicated, references to actions taken by the “Board” or the “Boards” shall
mean each Board acting independently with respect to its respective Fund.
Activities and Composition of the Boards
Each Board consists of twelve individuals, ten of whom are not “interested
persons” as defined in the Investment Company Act of 1940, as amended
(the “1940 Act”) (the “Independent Board Members”). The Board Members
of each Fund are responsible for the oversight of the operations of such
Fund 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 each 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 has one interested Board Member) and is
chaired by an Independent Board Member. In addition, each Board has
established an Ad Hoc Committee on Auction Market Preferred Shares.
The Agreements
Pursuant to the 1940 Act, each Board is required to consider the continua-
tion of the Agreements on an annual basis. In connection with this process,
each Board assessed, among other things, the nature, scope and quality of
the services provided to its respective Fund by the personnel of BlackRock
and its affiliates, including investment management, administrative services,
shareholder services, oversight of fund accounting and custody, marketing
services and assistance in meeting legal and regulatory requirements.
Throughout the year, the Boards, acting directly and through their commit-
tees, considers at each of their meetings factors that are relevant to their
annual consideration of the renewal of the Agreements, including the
services and support provided by BlackRock to the Funds and their share-
holders. Among the matters the Boards considered were: (a) investment
performance for one-, three- and five-year periods, as applicable, against
peer funds, and applicable benchmarks, if any, as well as senior manage-
ment and portfolio managers’ analysis of the reasons for any underperfor-
mance against its peers; (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) the Funds’ operating expenses; (d) the
resources devoted to, and compliance reports relating to, the Funds’ invest-
ment objectives, policies and restrictions; (e) the Funds’ compliance with
their Code of Ethics and compliance policies and procedures; (f) the
nature, cost and character of non-investment management services pro-
vided by BlackRock and its affiliates; (g) BlackRock’s and other service
providers’ internal controls; (h) BlackRock’s implementation of the proxy
voting policies approved by the Boards; (i) execution quality of portfolio
transactions; (j) BlackRock’s implementation of the Funds’ valuation and
liquidity procedures; and (k) periodic updates on BlackRock’s business.
Board Considerations in Approving the Agreements
The Approval Process: Prior to the April 14, 2009 meeting, each Board
requested and received materials specifically relating to the Agreements.
Each Board is engaged in an ongoing process with BlackRock to continu-
ously review the nature and scope of the information provided to better
assist their deliberations. The materials provided in connection with
the April meeting included (a) information independently compiled and
prepared by Lipper, Inc. (“Lipper”) on Fund fees and expenses, and the
investment performance of each Fund as compared with a peer group
of funds as determined by Lipper and a customized peer group selected
by BlackRock (collectively, “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 advisory fees
charged to other clients, such as institutional and open-end funds, under
similar investment mandates, as well as the performance of such other
clients; (d) the impact of economies of scale; (e) a summary of aggregate
amounts paid by each Fund to BlackRock; and (f) an internal comparison
of management fees classified by Lipper, if applicable.
At an in-person meeting held on April 14, 2009, each Board reviewed
materials relating to its consideration of the Agreements. As a result of the
discussions that occurred during the April 14, 2009 meeting, the Boards
presented BlackRock with questions and requests for additional informa-
tion and BlackRock responded to these requests with additional written
information in advance of the May 28 – 29, 2009 Board meeting.
At an in-person meeting held on May 28 – 29, 2009, each Fund’s Board,
including the Independent Board Members, unanimously approved the
continuation of the Advisory Agreement between the Manager and such
Fund and the Sub-Advisory Agreement between such Fund, the Manager
56 ANNUAL REPORT JULY 31, 2009
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)
and the Sub-Advisor, each for a one-year term ending June 30, 2010. The
Boards considered all factors they believed relevant with respect to the
Funds, including, among other factors: (a) the nature, extent and quality
of the services provided by BlackRock; (b) the investment performance of
the Funds and BlackRock portfolio management; (c) the advisory fee and
the cost of the services and profits to be realized by BlackRock and certain
affiliates from the relationship with the Funds; (d) economies of scale; and
(e) other factors.
Each Board also considered other matters it deemed important to the
approval process, such as services related to the valuation and pricing of
its respective Fund’s portfolio holdings, direct and indirect benefits to
BlackRock and its affiliates from their relationship with such Fund and
advice from independent legal counsel with respect to the review process
and materials submitted for the Board’s review. The Boards noted the will-
ingness of BlackRock personnel to engage in open, candid discussions
with the Boards. The Boards did not identify any particular information as
controlling, and each Board Member may have attributed different weights
to the various items considered.
A. Nature, Extent and Quality of the Services: Each Board, including its
Independent Board Members, reviewed the nature, extent and quality of
services provided by BlackRock, including the investment advisory services
and the resulting performance of its respective Fund. Throughout the year,
each Board compared its respective Fund’s performance to the perform-
ance of a comparable group of closed-end funds, and the performance of
at least one 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 respective Fund’s portfolio management team
discussing such Fund’s performance and such Fund’s investment objective,
strategies and outlook.
Each Board considered, among other factors, the number, education
and experience of BlackRock’s investment personnel generally and its
respective Fund’s portfolio management team, investments by portfolio
managers in the funds they manage, BlackRock’s portfolio trading capa-
bilities, BlackRock’s use of technology, BlackRock’s commitment to com-
pliance and BlackRock’s approach to training and retaining portfolio
managers and other research, advisory and management personnel.
Each Board also reviewed a general description of BlackRock’s compen-
sation structure with respect to its respective Fund’s portfolio management
team and BlackRock’s ability to attract and retain high-quality talent.
In addition to advisory services, each Board considered the quality of
the administrative and non-investment advisory services provided to its
respective Fund. 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 nec-
essary 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 statement of additional information in connection with the initial public
offering and periodic shareholder reports; (ii) preparing communications
with analysts to support secondary market trading of the Funds; (iii) assist-
ing with daily accounting and pricing; (iv) preparing periodic filings with
regulators and stock exchanges; (v) overseeing and coordinating the
activities of other service providers; (vi) organizing Board meetings and
preparing the materials for such Board meetings; (vii) providing legal and
compliance support; and (viii) performing other administrative functions
necessary for the operation of the Funds, such as tax reporting, fulfilling
regulatory filing requirements, and call center services. The Boards reviewed
the structure and duties of BlackRock’s fund administration, accounting,
legal and compliance departments and considered BlackRock’s policies and
procedures for assuring compliance with applicable laws and regulations.
B. The Investment Performance of the Funds and BlackRock: Each Board,
including its Independent Board Members, also reviewed and considered
the performance history of its respective Fund. In preparation for the April 14,
2009 meeting, the Boards were provided with reports, independently pre-
pared by Lipper, which included a comprehensive analysis of each Fund’s
performance. The Boards also reviewed a narrative and statistical analysis
of the Lipper data that was prepared by BlackRock, which analyzed various
factors that affect Lipper’s rankings. In connection with its review, each
Board received and reviewed information regarding the investment per-
formance of its respective Fund as compared to a representative group
of similar funds as determined by Lipper and to all funds in such Fund’s
applicable Lipper category and customized peer group selected by
BlackRock. Each Board was provided with a description of the method-
ology used by Lipper to select peer funds. Each Board regularly reviews
the performance of its respective Fund throughout the year.
The Board of MUC noted that in general MUC performed better than its
Peers in that MUC’s performance was at or above the median of its cus-
tomized Lipper peer group composite in two of the one-, three- and five-
year periods reported.
The Boards of MUJ, MIY and MPA noted that in general MUJ, MIY and MPA
performed better than their Peers in that each of MUJ, MIY and MPA’s per-
formance was at or above the median of its customized Lipper peer group
composite in each of the one-, three- and five-year periods reported.
The Board of MFT noted that MFT performed below the median of its
customized Lipper peer group composite in the one-, three- and five-year
periods reported. The Board of MFT and BlackRock reviewed the reasons
for MFT’s underperformance during these periods compared with its Peers.
The Board of MFT was informed that, among other things, overweight posi-
tions in the hospital and housing sectors and poor performance of some
insured and AMT bonds negatively impacted MFT’s performance.
The Board of MJI noted that MJI performed below the median of its cus-
tomized Lipper peer group composite in the three- and five-year periods
ANNUAL REPORT JULY 31, 2009 57
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)
reported and MJI performed above the median of its customized Lipper
peer group composite in the one-year period reported. The Board and
BlackRock reviewed the reasons for MJI’s underperformance during these
periods compared with its Peers. The Board was informed that, among
other things, performance was influenced primarily by the spread widening
of zero coupon issues that took place last year.
For MFT and MJI, the Board of each respective Fund and BlackRock dis-
cussed BlackRock’s commitment to providing the resources necessary to
assist the portfolio managers and to improve MFT and MJI’s performance.
C. Consideration of the Advisory Fees and the Cost of the Services
and Profits to be Realized by BlackRock and its Affiliates from their
Relationship with the Funds: Each Board, including its Independent
Board Members, reviewed its respective Fund’s contractual advisory fee
rates compared with the other funds in its respective Lipper category.
Each Board also compared its respective Fund’s total expenses, as well
as actual management fees, to those of other comparable funds. Each
Board considered the services provided and the fees charged by BlackRock
to other types of clients with similar investment mandates, including sepa-
rately 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 prof-
itability with respect to the Funds and other funds the Boards currently
oversee for the year ended December 31, 2008 compared to available
aggregate profitability data provided for the year ended December 31,
2007. The Boards reviewed BlackRock’s profitability with respect to other
fund complexes managed by the Manager and/or its affiliates. The Boards
reviewed BlackRock’s assumptions and methodology of allocating expenses
in the profitability analysis, noting the inherent limitations in allocating
costs among various advisory products. The Boards recognized that prof-
itability may be affected by numerous factors including, among other
things, fee waivers by the Manager, the types of funds managed, expense
allocations and business mix, and therefore comparability of profitability
is somewhat limited.
The Boards noted that, in general, individual fund or product line prof-
itability of other advisors is not publicly available. Nevertheless, to the
extent such information is available, the Boards considered BlackRock’s
overall operating margin compared to the operating margin for leading
investment management firms whose operations include advising closed-
end funds, among other product types. The comparison indicated that
operating margins for BlackRock with respect to its registered funds are
consistent with margins earned by similarly situated publicly traded com-
petitors. In addition, the Boards considered, among other things, certain
third-party data comparing BlackRock’s operating margin with that of other
publicly-traded asset management firms, which concluded 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 and distribution of the Funds and the other funds
advised by BlackRock and its affiliates. As part of their analysis, the Boards
reviewed BlackRock’s methodology in allocating its costs to the manage-
ment of the Funds. The Boards also considered whether BlackRock has the
financial resources necessary to attract and retain high quality investment
management personnel to perform its obligations under the Agreements
and to continue to provide the high quality of services that is expected
by the Boards.
Each Board noted that its respective Fund paid contractual management
fees, which do not take into account any expense reimbursement or fee
waivers, lower than or equal to the median contractual management fees
paid by such Fund’s Peers.
D. Economies of Scale: Each Board, including its Independent Board
Members, considered the extent to which economies of scale might be
realized as the assets of its respective Fund increase and whether there
should be changes in the advisory fee rate or structure in order to enable
such Fund to participate in these economies of scale, for example through
the use of breakpoints in the advisory fee based upon the assets of such
Fund. The Boards considered that the funds in the BlackRock fund complex
share some common resources and, as a result, an increase in the overall
size of the complex could permit each fund to incur lower expenses than
it would otherwise as a stand-alone entity. 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 noted that most closed-end fund complexes do not have fund
level breakpoints because closed-end funds generally do not experience
substantial growth after the initial public offering and each fund is man-
aged independently consistent with its own investment objectives. The
Boards noted that only one closed-end fund in the Fund Complex has
breakpoints in its fee structure. Information provided by Lipper also
revealed that only one closed-end fund complex used a complex-level
breakpoint structure.
E. Other Factors: The Boards also took into account other ancillary or
“fall-out” benefits that BlackRock or its affiliates and significant share-
holders may derive from their relationship with the Funds, both tangible
and intangible, such as BlackRock’s ability to leverage its investment pro-
fessionals who manage other portfolios, an increase in BlackRock’s profile
in the investment advisory community, and the engagement of BlackRock’s
affiliates as service providers to the Funds, including for administrative
and distribution services. The Boards also noted that BlackRock may use
third-party research obtained by soft dollars generated by certain mutual
fund transactions to assist itself in managing all or a number of its other
client accounts.
In connection with their consideration of the Agreements, the Boards also
received information regarding BlackRock’s brokerage and soft dollar prac-
58 ANNUAL REPORT JULY 31, 2009
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)
tices. The Boards received reports from BlackRock, which included informa-
tion on brokerage commissions and trade execution practices throughout
the year.
Conclusion
Each Board, including its Independent Board Members, unanimously
approved the continuation of the Advisory Agreement between its respec-
tive Fund and the Manager for a one-year term ending June 30, 2010
and the Sub-Advisory Agreement between such Fund, the Manager and
Sub-Advisor for a one-year term ending June 30, 2010. Based upon its
evaluation of all these factors in their totality, each Board, including its
Independent Board Members, was satisfied that the terms of the Agree-
ments were fair and reasonable and in the best interest of its respective
Fund and its shareholders. In arriving at a decision to approve the
Agreements, each Board did not identify any single factor or group of
factors as all-important or controlling, but considered all factors together,
and different Board Members may have attributed different weights to the
various factors considered. The Independent Board Members were also
assisted by the advice of independent legal counsel in making this deter-
mination. The contractual fee arrangements for each Fund reflects the
results of several years of review by such Fund’s Board Members and pred-
ecessor Board Members, and discussions between such Board Members
(and predecessor Board Members) and BlackRock. Certain aspects of the
arrangements may be the subject of more attention in some years than in
others, and the Board Members’ conclusions may be based in part on their
consideration of these arrangements in prior years.
ANNUAL REPORT JULY 31, 2009 59
Automatic Dividend Reinvestment Plan
How the Plan Works — The Funds offer a Dividend Reinvestment Plan
(“The Plan”) under which income and capital gains dividends paid by
a Fund are automatically reinvested in additional Common Shares of
the Fund. The Plan is administered on behalf of the shareholders by The
BNY Mellon Shareowner Services for BlackRock MuniHoldings California
Insured Fund, Inc., BlackRock MuniHoldings New Jersey Insured Fund,
Inc., BlackRock MuniYield Insured Investment Fund, BlackRock MuniYield
Michigan Insured Fund, Inc. and BlackRock MuniYield New Jersey Insured
Fund, Inc., and Computershare Trust Company, N.A. for BlackRock MuniYield
Pennsylvania Insured Fund (individually, the “Plan Agent” or together, the
“Plan Agents”). Under the Plan, whenever a Fund declares a dividend,
participants in the Plan will receive the equivalent in shares of Common
Shares of the Fund. The Plan Agents will acquire the shares for the partici-
pant’s account either (i) through receipt of additional unissued but author-
ized shares of the Funds (“newly issued shares”) or (ii) by purchase of
outstanding Common Shares on the open market on the New York Stock
Exchange or NYSE Amex, as applicable or elsewhere. If, on the dividend
payment date, the Fund’s net asset value per share is equal to or less than
the market price per share plus estimated brokerage commissions (a con-
dition often referred to as a “market premium”), the Plan Agents will invest
the dividend amount in newly issued shares. If the Fund’s net asset value
per share is greater than the market price per share (a condition often
referred to as a “market discount”), the Plan Agents will invest the dividend
amount by purchasing on the open market additional shares. If the Plan
Agents are unable to invest the full dividend amount in open market pur-
chases, or if the market discount shifts to a market premium during the
purchase period, the Plan Agents will invest any uninvested portion in newly
issued shares. The shares acquired are credited to each shareholder’s
account. The amount credited is determined by dividing the dollar amount
of the dividend by either (i) when the shares are newly issued, the net
asset value per share on the date the shares are issued or (ii) when shares
are purchased in the open market, the average purchase price per share.
Participation in the Plan — Participation in the Plan is automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
Common Shares of the Funds unless the shareholder specifically elects not
to participate in the Plan. Shareholders who elect not to participate will
receive all dividend distributions in cash. Shareholders who do not wish
to participate in the Plan must advise their Plan Agent in writing (at the
address set forth below) that they elect not to participate in the Plan.
Participation in the Plan is completely voluntary and may be terminated
or resumed at any time without penalty by writing to the Plan Agent.
Benefits of the Plan — The Plan provides an easy, convenient way for
shareholders to make additional, regular investments in the Funds. The
Plan promotes a long-term strategy of investing at a lower cost. All shares
acquired pursuant to the Plan receive voting rights. In addition, if the mar-
ket price plus commissions of a Funds’ shares is above the net asset
value, participants in the Plan will receive shares of the Funds for less
than they could otherwise purchase them and with a cash value greater
than the value of any cash distribution they would have received. However,
there may not be enough shares available in the market to make distribu-
tions in shares at prices below the net asset value. Also, since the Funds
do not redeem shares, the price on resale may be more or less than the
net asset value.
Plan Fees — There are no enrollment fees or brokerage fees for participat-
ing in the Plan. The Plan Agents’ service fees for handling the reinvestment
of distributions are paid for by the Funds. However, brokerage commissions
may be incurred when the Funds purchase shares on the open market and
shareholders will pay a pro rata share of any such commissions.
Tax Implications — The automatic reinvestment of dividends and distribu-
tions will not relieve participants of any federal, state or local income tax
that may be payable (or required to be withheld) on such dividends.
Therefore, income and capital gains may still be realized even though
shareholders do not receive cash. If, when the Funds’ shares are trading at
a market premium, the Funds issue shares pursuant to the Plan that have
a greater fair market value than the amount of cash reinvested, it is possi-
ble that all or a portion of the discount from the market value (which may
not exceed 5% of the fair market value of the Funds’ shares) could be
viewed as a taxable distribution. If the discount is viewed as a taxable
distribution, it is also possible that the taxable character of this discount
would be allocable to all the shareholders, including shareholders who do
not participate in the Plan. Thus, shareholders who do not participate in the
Plan might be required to report as ordinary income a portion of their dis-
tributions equal to their allocable share of the discount.
Contact Information — All correspondence concerning the Plan, includ-
ing any questions about the Plan, should be directed to the Plan Agent
at the following addresses: Shareholders of BlackRock MuniHoldings
California Insured Fund, Inc., BlackRock MuniHoldings New Jersey Insured
Fund, Inc., BlackRock MuniYield Insured Investment Fund, BlackRock
MuniYield Michigan Insured Fund, Inc. and BlackRock MuniYield New
Jersey Insured Fund, Inc. should contact The BNY Mellon Shareowner
Services, P.O. Box 358035, Pittsburgh, PA 15252-8035, Telephone:
(866) 216-0242 and shareholders of BlackRock MunYield Pennsylvania
Insured Fund should contact 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 Plan Agent at
250 Royall Street, Canton, MA 02021.
60 ANNUAL REPORT JULY 31, 2009
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 |
Non-Interested Directors1 | |||||
Richard E. Cavanagh | Chairman | Since | Trustee, Aircraft Finance Trust since 1999; Director, The Guardian Life Insurance | 104 Funds | Arch Chemical |
40 East 52nd Street | of the Board | 2007 | Company of America since 1998; Trustee, Educational Testing Service from 1997 | 101 Portfolios | (chemical and allied |
New York, NY 10022 | and Director | to 2009 and Chairman from 2005 to 2009; Senior Advisor, The Fremont Group | products) | ||
1946 | since 2008 and Director thereof since 1996; Adjunct Lecturer, Harvard University | ||||
since 2007; President and Chief Executive Officer of The Conference Board, Inc. | |||||
(global business research organization) from 1995 to 2007. | |||||
Karen P. Robards | Vice Chair of | Since | Partner of Robards & Company, LLC (financial advisory firm) since 1987; | 104 Funds | AtriCure, Inc. |
40 East 52nd Street | the Board, | 2007 | Co-founder and Director of the Cooke Center for Learning and Development, | 101 Portfolios | (medical devices); |
New York, NY 10022 | Chair of | (a not-for-profit organization) since 1987; Director of Enable Medical Corp. | Care Investment | ||
1950 | the Audit | from 1996 to 2005. | Trust, Inc. (health | ||
Committee | care real estate | ||||
and Director | investment trust) | ||||
G. Nicholas Beckwith, III | Director | Since | Chairman and Chief Executive Officer, Arch Street Management, LLC (Beckwith | 104 Funds | None |
40 East 52nd Street | 2007 | Family Foundation) and various Beckwith property companies since 2005; | 101 Portfolios | ||
New York, NY 10022 | Chairman of the Board of Directors, University of Pittsburgh Medical Center | ||||
1945 | since 2002; Board of Directors, Shady Side Hospital Foundation since 1977; | ||||
Board of Directors, Beckwith Institute for Innovation In Patient Care since 1991; | |||||
Member, Advisory Council on Biology and Medicine, Brown University since | |||||
2002; Trustee, Claude Worthington Benedum Foundation (charitable foundation) | |||||
since 1989; Board of Trustees, Chatham University since 1981; Board of Trustees, | |||||
University of Pittsburgh since 2002; Emeritus Trustee, Shady Side Academy since | |||||
1977; Chairman and Manager, Penn West Industrial Trucks LLC (sales, rental and | |||||
servicing of material handling equipment) from 2005 to 2007; Chairman, President | |||||
and Chief Executive Officer, Beckwith Machinery Company (sales, rental and servicing | |||||
of construction and equipment) from 1985 to 2005; Member of the Board of Directors, | |||||
National Retail Properties (REIT) from 2006 to 2007. | |||||
Kent Dixon | Director and | Since | Consultant/Investor since 1988. | 104 Funds | None |
40 East 52nd Street | Member of | 2007 | 101 Portfolios | ||
New York, NY 10022 | the Audit | ||||
1937 | Committee | ||||
Frank J. Fabozzi | Director and | Since | Consultant/Editor of The Journal of Portfolio Management since 2006; Professor | 104 Funds | None |
40 East 52nd Street | Member of | 2007 | in the Practice of Finance and Becton Fellow, Yale University, School of Manage- | 101 Portfolios | |
New York, NY 10022 | the Audit | ment, since 2006; Adjunct Professor of Finance and Becton Fellow, Yale University | |||
1948 | Committee | from 1994 to 2006. | |||
Kathleen F. Feldstein | Director | Since | President of Economics Studies, Inc. (private economic consulting firm) since | 104 Funds | The McClatchy |
40 East 52nd Street | 2007 | 1987; Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee | 101 Portfolios | Company | |
New York, NY 10022 | Emeritus thereof since 2008; Member of the Board of Partners Community | (publishing) | |||
1941 | Healthcare, Inc. since 2005; Member of the Corporation of Partners HealthCare | ||||
since 1995; Trustee, Museum of Fine Arts, Boston since 1992; Member of the | |||||
Visiting Committee to the Harvard University Art Museum since 2003. | |||||
James T. Flynn | Director and | Since | Chief Financial Officer of JP Morgan & Co., Inc. from 1990 to 1995. | 104 Funds | None |
40 East 52nd Street | Member of | 2007 | 101 Portfolios | ||
New York, NY 10022 | the Audit | ||||
1939 | Committee | ||||
Jerrold B. Harris | Director | Since | Trustee, Ursinus College since 2000; Director, Troemner LLC (scientific equipment) | 104 Funds | BlackRock Kelso |
40 East 52nd Street | 2007 | since 2000. | 101 Portfolios | Capital Corp. | |
New York, NY 10022 | |||||
1942 |
ANNUAL REPORT JULY 31, 2009 61
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 |
Non-Interested Directors1 (concluded) | |||||
R. Glenn Hubbard | Director | Since | Dean, Columbia Business School since 2004; Columbia faculty member since | 104 Funds | ADP (data and |
40 East 52nd Street | 2007 | 1988; Co-Director, Columbia Business School’s Entrepreneurship Program | 101 Portfolios | information services), | |
New York, NY 10022 | from 1997 to 2004; Visiting Professor, John F. Kennedy School of Government | KKR Financial | |||
1958 | at Harvard University and the Harvard Business School since 1985 and at the | Corporation (finance), | |||
University of Chicago since 1994; Chairman, U.S. Council of Economic Advisers | Metropolitan Life | ||||
under the President of the United States from 2001 to 2003. | Insurance Company | ||||
(insurance) | |||||
W. Carl Kester | Director | Since | George Fisher Baker Jr. Professor of Business Administration, Harvard Business | 104 Funds | None |
40 East 52nd Street | and Member | 2007 | School; Deputy Dean for Academic Affairs, since 2006; Unit Head, Finance, | 101 Portfolios | |
New York, NY 10022 | of the Audit | Harvard Business School, from 2005 to 2006; Senior Associate Dean and | |||
1951 | Committee | Chairman of the MBA Program of Harvard Business School, from 1999 to 2005; | |||
Member of the faculty of Harvard Business School since 1981; Independent | |||||
Consultant since 1978. | |||||
1 Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. | |||||
2 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 | |||||
directors as joining the Funds’ board in 2007, each director first became a member of the board of directors of other legacy MLIM or legacy BlackRock | |||||
Funds as follows: G. Nicholas Beckwith, III, 1999; Richard E. Cavanagh, 1994; Kent Dixon, 1988; 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 | |||||
Richard S. Davis | President4 | Since | Managing Director, BlackRock, Inc. since 2005; Chief Executive Officer, State Street | 173 Funds | None |
40 East 52nd Street | and | 2007 | Research & Management Company from 2000 to 2005; Chairman of the Board | 283 Portfolios | |
New York, NY 10022 | Director | of Trustees, State Street Research Mutual Funds from 2000 to 2005; Chairman, | |||
1945 | SSR Realty from 2000 to 2004. | ||||
Henry Gabbay | Director | Since | Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, | 173 Funds | None |
40 East 52nd Street | 2007 | Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC | 283 Portfolios | ||
New York, NY 10022 | from 1998 to 2007; President of BlackRock Funds and BlackRock Bond | ||||
1947 | Allocation Target Shares from 2005 to 2007; Treasurer of certain closed-end | ||||
funds in the BlackRock fund complex from 1989 to 2006. | |||||
3 Mr. Davis is an “interested person,” as defined in the Investment Company Act of 1940, 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 PNC Securities. Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. | |||||
4 Fund President for BlackRock MuniYield Insured Investment Fund and BlackRock MuniYield Pennsylvania Insured Fund. |
62 ANNUAL REPORT JULY 31, 2009
Officers and Directors (continued) | |||
Position(s) | |||
Name, Address | Held with | Length of | |
and Year of Birth | Funds | Time Served | Principal Occupation(s) During Past 5 Years |
Fund Officers1 | |||
Donald C. Burke | President2 | Since | Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill Lynch Investment Managers, LP. (“MLIM”) |
40 East 52nd Street | and Chief | 2007 | and Fund Asset Management LP. (“FAM”) in 2006, First Vice President thereof from 1997 to 2005. Treasurer thereof from |
New York, NY 10022 | Executive | 1999 to 2006 and Vice President thereof from 1990 to 1997. | |
1960 | Officer | ||
Anne F. Ackerley | Vice | Since | Managing Director of BlackRock, Inc. since 2000; Vice President of the BlackRock-advised funds from 2007 to 2009; |
40 East 52nd Street | President | 2007 | Chief Operating Officer of BlackRock’s Account Management Group (AMG) since 2009; Chief Operating Officer of |
New York, NY 10022 | BlackRock’s U.S. Retail Group from 2006 to 2009; Head of BlackRock’s Mutual Fund Group from 2000 to 2006. | ||
1962 | |||
Neal J. Andrews | Chief | Since | Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund |
40 East 52nd Street | Financial | 2007 | Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006. |
New York, NY 10022 | Officer | ||
1966 | |||
Jay M. Fife | Treasurer | Since | Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Assistant Treasurer of the Merrill Lynch |
40 East 52nd Street | 2007 | Investment Managers, L.P. (“MLIM”) and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of | |
New York, NY 10022 | MLIM Fund Services Group from 2001 to 2006. | ||
1970 | |||
Brian P. Kindelan | Chief | Since | Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel |
40 East 52nd Street | Compliance | 2007 | of BlackRock, Inc. since 2005; Director and Senior Counsel of BlackRock Advisors, Inc. from 2001 to 2004. |
New York, NY 10022 | Officer | ||
1959 | |||
Howard B. Surloff | Secretary | Since | Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at BlackRock, Inc. since 2006; General |
40 East 52nd Street | 2007 | Counsel (U.S.) of Goldman Sachs Asset Management, L.P. from 1993 to 2006. | |
New York, NY 10022 | |||
1965 | |||
1 Officers of the Funds serve at the pleasure of the Board of Directors. | |||
2 Fund President for BlackRock MuniHoldings California Insured Fund, Inc., BlackRock MuniHoldings New Jersey Insured Fund, Inc, BlackRock | |||
MuniYield Michigan Insured Fund, Inc. and BlackRock MuniYield New Jersey Insured Fund, Inc. | |||
Further information about the Funds’ Officers and Directors is available in the Funds’ Statement of Additional Information, which can be obtained | |||
without charge by calling (800) 441-7762 |
ANNUAL REPORT JULY 31, 2009 63
Officers and Directors (concluded) | ||||||
Custodians | Transfer Agent | Accounting Agent | Investment Advisor | Legal Counsel | Independent | Address of the Funds |
State Street Bank | Common Shares | State Street Bank | BlackRock Advisors, LLC | Skadden, Arps, Slate, | Registered Public | 100 Bellevue Parkway |
and Trust Company1 | Computershare Trust | and Trust Company | WIlmington, DE 19809 | Meagher & Flom LLP | Accounting Firm | Wilmington, DE 19809 |
Boston, MA 02101 | Company, N.A.1 | Princeton, NJ 08540 | New York, NY 10036 | Deloitte & Touche LLP | ||
Providence, RI 02940 | Princeton, NJ 08540 | |||||
The Bank of | BNY Mellon | Auction Agent | Sub-Advisor | |||
New York Mellon2 | Shareowner Services2 | Preferred Shares | BlackRock Investment | |||
New York, NY 10286 | Jersey City, NJ 07310 | BNY Mellon | Management, LLC | |||
Shareowner Services | Plainsboro, NJ 08536 | |||||
Jersey City, NJ 07310 |
Effective July 31, 2009, Donald C. Burke, President for BlackRock Muniholdings California Insured Fund, Inc., BlackRock
MuniHoldings New Jersey Insured Fund, Inc., BlackRock MuniYield Michigan Insured Fund, Inc. and BlackRock MuniYield
New Jersey Insured Fund, Inc. and Chief Executive Officer of the Funds retired. The Funds’ Boards of Directors wish
Mr. Burke well in his retirement.
Effective August 1, 2009, Anne F. Ackerley became President for BlackRock Muniholdings California Insured Fund, Inc.,
BlackRock MuniHoldings New Jersey Insured Fund, Inc., BlackRock MuniYield Michigan Insured Fund, Inc. and BlackRock
MuniYield New Jersey Insured Fund, Inc. and Chief Executive Officer of the Funds, and Brendan Kyne became Vice President
of the Funds.
1 For BlackRock MuniYield Pennsylvania Insured Fund.
2 For BlackRock MuniHoldings California Insured Fund, Inc., BlackRock MuniHoldings New Jersey Insured Fund, Inc., BlackRock MuniYield Insured Investment Fund, BlackRock MuniYield
Michigan Insured Fund, Inc., and BlackRock MuniYield New Jersey Insured Fund, Inc.
64 ANNUAL REPORT JULY 31, 2009
Additional Information
General Information
The Funds do not make available copies of their Statements of Additional
Information because the Funds’ shares are not continuously offered, which
means that the Statement of Additional Information of each Fund has not
been updated after completion of the respective Fund’s offerings and the
information contained in each Fund’s Statement of Additional Information
may have become outdated.
Other than the revisions discussed in the Board Approvals on page 66,
during the period, there were no material changes in the Funds’ investment
objectives or policies or to the Funds’ charters or by-laws that were not
approved by their 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 for 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 into 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 it 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 other-
wise. If you do not want the mailing of these documents to be combined
with those for other members of your household, please contact the Funds
at (800) 441-7762.
Availability of Quarterly Schedule of Investments
Each Fund files its complete schedule of portfolio holdings witht 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 the operation of the Public Reference
Room may be obtained by calling (202) 551-8090. 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 available
(1) without charge, upon request, by calling toll-free (800) 441-7762;
(2) at www.blackrock.com; and (3) on the Securities and Exchange
Commission’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
www.blackrock.com or by calling (800) 441-7762 and (2) on the
Securities and Exchange Commission’s website at http://www.sec.gov.
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.
Fund Certification
The Funds are listed for trading on the New York Stock Exchange (“NYSE”)
and have filed with the NYSE their annual chief executive officer certifica-
tion regarding compliance with the NYSE’s listing standards. The Funds filed
with the Securities and Exchange Commission (“SEC”) the certification of
its chief executive officer and chief financial officer required by section 302
of the Sarbanes-Oxley Act.
ANNUAL REPORT JULY 31, 2009 65
Additional Information (continued)
Board Approvals
On September 12, 2008, the Board of Directors of the Funds voted unani-
mously to change certain investment guidelines of the Funds. Under normal
market conditions, the Funds are required to invest at least 80% of their
total assets in municipal bonds either (i) insured under an insurance policy
purchased by the Funds or (ii) insured under an insurance policy obtained
by the issuer of the municipal bond or any other party. Historically, the
Funds have had an additional non-fundamental invest-ment policy limiting
its purchase of insured municipal bonds to those bonds insured by insur-
ance providers with claims-paying abilities rated AAA or Aaa at the time
of investment.
Following the onset of the credit and liquidity crises currently troubling
the financial markets, the applicable rating agencies lowered the claims-
paying ability rating of most of the municipal bond insurance providers
below the highest rating category. As a result, the Manager recommended,
and the Board approved, an amended policy with respect to the pur-
chase of insured municipal bonds that such bonds must be insured by
insurance providers or other entities with claims-paying abilities rated
at least investment grade. This investment grade restriction is measured
at the time of investment, and the Funds will not be required to dispose
of municipal bonds they hold in the event of subsequent downgrades.
The approved changes do not alter the Funds’ investment objectives.
In addition, on September 12, 2008, the Board of Directors of BlackRock
MuniYield Florida Insured Fund voted unanimously to change a non-
fundamental investment policy of the Fund, and to rename the Fund
“BlackRock MuniYield Insured Investment Fund.” The Fund’s previous non-
fundamental investment policy required the Fund, under normal market
conditions, to invest at least 80% of its assets in Florida municipal bonds
insured by insurers with claims-paying abilities rated AAA at time of invest-
ment. Due to the repeal of the Florida Intangible Personal Property Tax as of
January 2007, the Board has approved an amended policy allowing the
Fund flexibility to invest in municipal obligations regardless of geographic
location, as well as revising the policy with respect to the claims-paying
ability rating adopted by the Fund. The Fund's new investment policy is,
under normal market conditions, to invest at least 80% of its assets in
municipal bonds insured by insurers or other entities with claims-paying
abilities rated at least investment grade at time of investment. The
approved changes will not alter the Fund’s investment objective.
Under current market conditions, the Manager anticipates that it will gradu-
ally reposition the BlackRock MuniYield Insured Investment Fund’s portfolio
over time and that during such period, the Fund may continue to hold a
substantial portion of its assets in Florida municipal bonds. At this time, it
is uncertain how long the repositioning may take, and the Fund will con-
tinue to be subject to risks associated with investing a significant portion of
its assets in Florida municipal bonds until the repositioning is complete.
The Manager and the Board believe the amended policies will allow the
Manager to better manage the Funds’ portfolios in the best interests of the
Funds’ shareholders and to better meet the Funds' investment objectives.
Effective September 13, 2008, following approval by the Funds’ Board
and the applicable ratings agencies, the Board amended the terms of the
Funds’ Statement of Preferences/Articles of Incorporation in order to allow
the Funds to enter into TOB transactions, the proceeds of which were used
to redeem a portion of the Funds’ Preferred Shares. Accordingly, the defini-
tion of Inverse Floaters was amended to incorporate the Funds’ permissible
ratio of floating rate instruments into inverse floating rate instruments.
Additionally, conforming changes and certain formula modifications con-
cerning inverse floaters were made to the definitions of Moody’s Discount
Factor and S&P Discount Factor, as applicable, to integrate the Funds’
investments in TOBs into applicable calculations.
66 ANNUAL REPORT JULY 31, 2009
Additional Information (concluded) | ||||||||
Section 19 Notices | ||||||||
These amounts and sources of distributions reported are only estimates | changes based on the tax regulations. The Funds will send you a Form | |||||||
and are not being provided for tax reporting purposes. The actual amounts | 1099-DIV each calendar year that will tell you how to report these distribu- | |||||||
and sources of the amounts for tax reporting purposes will depend upon | tions for federal income tax purposes. | |||||||
each Fund’s investment experience during the year and may be subject to | ||||||||
Total Fiscal Year-to-Date | Percentage of Fiscal Year-to-Date | |||||||
Cumulative Distributions by Character | Cumulative Distributions by Character | |||||||
Net | Net Realized | Total Per | Net | Net Realized | Total Per | |||
Investment | Capital | Return of | Common | Investment | Capital | Return of | Common | |
Income | Gains | Capital | Share | Income | Gains | Capital | Share | |
MuniYield Insured Investment | $0.675295 | — | — | $0.675295 | 100% | 0% | 0% | 100% |
MuniYield New Jersey Insured | $0.668000 | $0.017069 | — | $0.685069 | 98% | 2% | 0% | 100% |
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 informa-
tion 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.
ANNUAL REPORT JULY 31, 2009 67
![](https://capedge.com/proxy/N-CSR/0000900092-09-001028/brmuniyield6ar0709x68x1.jpg)
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 affect the yield to Common Shareholders. Statements and other information
herein are as dated and are subject to change.
![](https://capedge.com/proxy/N-CSR/0000900092-09-001028/brmuniyield6ar0709x68x2.jpg)
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 and principal accounting officer, 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 or trustees, as
applicable (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:
Kent Dixon
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
Robert S. Salomon, Jr. (retired effective December 31, 2008)
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.
Item 4 – Principal Accountant Fees and Services | ||||||||
(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 Insured | $28,800 | $27,900 | $3,500 | $3,500 | $6,100 | $6,100 | $1,028 | $1,049 |
Investment Fund |
1 The nature of the services include 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 include tax compliance, tax advice and tax planning.
3 The nature of the services include a review of compliance procedures and attestation thereto.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The registrant’s audit committee (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 registrant’s affiliated
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 operation 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 for all of the registrants the
Committee oversees. 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 one or more of its members 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 audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) Affiliates’ Aggregate Non-Audit Fees:
Current Fiscal Year | Previous Fiscal Year | |
Entity Name | End | End |
BlackRock MuniYield Insured | $418,128 | $415,649 |
Investment Fund |
(h) The registrant’s audit committee has considered and determined that the provision of
non-audit services that were rendered to the registrant’s investment adviser (not including
any non-affiliated sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by the registrant’s investment adviser), and any entity
controlling, controlled by, or under common control with the investment adviser that
provides ongoing services to the registrant 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.
Regulation S-X Rule 2-01(c)(7)(ii) – $407,500, 0%
Item 5 – Audit Committee of Listed Registrants – 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)):
Kent Dixon
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
Robert S. Salomon, Jr. (retired effective December 31, 2008)
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 securities to the Fund’s investment adviser (“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,
2009.
(a)(1) The registrant (or “Fund”) is managed by a team of investment professionals
comprised of Robert Sneeden, 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. Sneeden, Jaeckel and O’Connor have been members of the registrant’s
portfolio management team since 2002, 2006 and 2006, respectively.
Portfolio Manager | Biography | |||||
Theodore R. Jaeckel, Jr. | Managing Director at BlackRock, Inc. 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, Inc. since 2006; Managing Director of | |||||
MLIM from 2003 to 2006; Director of MLIM from 1998 to 2003. | ||||||
Robert Sneeden | Director of BlackRock, Inc. since 2006; Vice President of MLIM from | |||||
1998 to 2006. | ||||||
(a)(2) As of July 31, 2009: | ||||||
(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 | |||||
Walter O’Connor | 76 | 0 | 0 | 0 | 0 | 0 |
$17.8 Billion | $0 | $0 | $0 | $0 | $0 | |
Theodore R. Jaeckel, | 76 | 0 | 0 | 0 | 0 | 0 |
$17.8 Billion | $0 | $0 | $0 | $0 | $0 | |
Robert Sneeden | 13 | 0 | 0 | 0 | 0 | 0 |
$1.73 Billion | $0 | $0 | $0 | $0 | $0 | |
(iv) Potential Material Conflicts of Interest |
BlackRock and its affiliates (collectively, herein “BlackRock”) has built a professional
working environment, firm-wide compliance culture and compliance procedures and
systems designed to protect against potential incentives that may favor one account over
another. BlackRock has adopted policies and procedures that address the allocation of
investment opportunities, execution of portfolio transactions, personal trading by employees
and other potential conflicts of interest that are designed to ensure that all client accounts are
treated equitably over time. Nevertheless, BlackRock furnishes investment management and
advisory services to numerous clients in addition to the Fund, and BlackRock may,
consistent with applicable law, make investment recommendations to other clients or
accounts (including accounts which are hedge funds or have performance or higher fees
paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of
such fees), which may be the same as or different from those made to the Fund. In addition,
BlackRock, its affiliates and significant shareholders and any officer, director, stockholder
or employee may or may not have an interest in the securities whose purchase and sale
BlackRock recommends to the Fund. BlackRock, or any of its affiliates or significant
shareholders, or any officer, director, stockholder, employee or any member of their
families may take different actions than those recommended to the Fund by BlackRock with
respect to the same securities. Moreover, BlackRock may refrain from rendering any advice
or services concerning securities of companies of which any of BlackRock’s (or its
affiliates’ or significant shareholders’) officers, directors or employees are directors or
officers, or companies as to which BlackRock 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. Each portfolio manager
also may manage accounts whose investment strategies may at times be opposed to the
strategy utilized for a fund. In this connection, it should be noted that a portfolio manager
may currently manage certain accounts that are subject to performance fees. In addition, a
portfolio manager may assist in managing certain hedge funds and may be entitled to
receive a portion of any incentive fees earned on such funds and a portion of such incentive
fees may be voluntarily or involuntarily deferred. 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 owes a duty of loyalty to its clients and must treat each client
fairly. When BlackRock purchases or sells securities for more than one account, the trades
must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to
allocate investments in a fair and equitable manner among client accounts, with no account
receiving preferential treatment. To this end, BlackRock has adopted a policy that is
intended to ensure that investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve reasonable efficiency in client
transactions and provide BlackRock with sufficient flexibility to allocate investments in a
manner that is consistent with the particular investment discipline and client base.
(a)(3) As of July 31, 2009:
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 such as its Long-Term Retention and Incentive Plan.
Base compensation. Generally, portfolio managers receive base compensation based on
their seniority and/or their position with the firm. Senior portfolio managers who perform
additional management functions within the portfolio management group or within
BlackRock may receive additional compensation for serving in these other capacities.
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 seniority, role within the portfolio management team,
teamwork and contribution to the overall performance of these portfolios and BlackRock.
In most cases, including for the portfolio managers of the Fund, 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 for the
Fund include a combination of market-based indices (e.g. Barclays Capital Municipal Bond
Index), certain customized indices and certain fund industry peer groups.
BlackRock’s Chief Investment Officers make a subjective determination with respect to the
portfolio managers’ compensation based on the performance of the funds and other accounts
managed by each portfolio manager relative to the various benchmarks noted above.
Performance is measured on both a pre-tax and after-tax basis over various time periods
including 1, 3, 5 and 10-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. The BlackRock, Inc. restricted stock units, if properly vested, 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.
Long-Term Retention and Incentive Plan (“LTIP”) — The LTIP is a long-term
incentive plan that seeks to reward certain key employees. Beginning in 2006, awards are
granted under the LTIP in the form of BlackRock, Inc. restricted stock units that, if properly
vested and subject to the attainment of certain performance goals, will be settled in
BlackRock, Inc. common stock. Messrs. O’Connor and Jaeckel have each received awards
under the LTIP.
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 the various
investment options. Messrs. O’Connor, Jaeckel and Sneeden 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 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 6% of eligible pay contributed to the plan capped at $4,000 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
managed by the firm. BlackRock contributions follow the investment direction set by
participants for their own contributions or, absent employee investment direction, are
invested into a balanced portfolio. The ESPP allows for investment in BlackRock 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 – July 31, 2009.
Portfolio Manager | Dollar Range of Equity Securities |
Beneficially Owned | |
Walter O’Connor | None |
Theodore R. Jaeckel, Jr. | None |
Robert Sneeden | None |
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 – The registrant’s Nominating and
Governance Committee will consider nominees to the board of directors recommended by
shareholders when a vacancy becomes available. Shareholders who wish to recommend a
nominee should send nominations that include biographical information and set forth the
qualifications of the proposed nominee to the registrant’s Secretary. There have been no
material changes to these procedures.
Item 11 – Controls and Procedures
11(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 13(a)-15(b) under the Securities Exchange Act of 1934, as amended.
11(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
12(a)(1) – Code of Ethics – See Item 2
12(a)(2) – Certifications – Attached hereto
12(a)(3) – Not Applicable
12(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 Insured Investment Fund
By: /s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer of
BlackRock MuniYield Insured Investment Fund
Date: September 22, 2009
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/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
BlackRock MuniYield Insured Investment Fund
Date: September 22, 2009
By: /s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniYield Insured Investment Fund
Date: September 22, 2009