UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number 811-21346
Name of Fund: Muni New York Intermediate Duration Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President,
Muni New York Intermediate Duration Fund, Inc., 800 Scudders Mill
Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011,
Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 05/31/04
Date of reporting period: 06/01/03 - 11/30/03
Item 1 - Attach shareholder report
(BULL LOGO)
Merrill Lynch Investment Managers
www.mlim.ml.com
Muni New York
Intermediate Duration
Fund, Inc.
Semi-Annual Report
November 30, 2003
Muni New York Intermediate Duration Fund, Inc. seeks to provide
shareholders with high current income exempt from Federal income
taxes and New York State and New York City personal income taxes by
investing primarily in a portfolio of municipal obligations, the
interest on which, in the opinion of bond counsel to the issuer, is
exempt from Federal income taxes and New York State and New York
City personal income taxes.
This report, including the financial information herein, is
transmitted to shareholders of Muni New York Intermediate Duration
Fund, Inc. for their information. It is not a prospectus. The Fund
has leveraged its Common Stock and intends to remain leveraged by
issuing Preferred Stock to provide the Common Stock shareholders
with a potentially higher rate of return. Leverage creates risks for
Common Stock shareholders, including the likelihood of greater
volatility of net asset value and market price of shares of the
Common Stock, and the risk that fluctuations in the short-term
dividend rates of the Preferred Stock may affect the yield to Common
Stock shareholders. Past performance results shown in this report
should not be considered a representation of future performance.
Statements and other information herein are as dated and are subject
to change.
Muni New York Intermediate Duration Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Muni New York Intermediate Duration Fund, Inc.
The Benefits and Risks of Leveraging
Muni New York Intermediate Duration Fund, Inc. utilizes leveraging
to seek to enhance the yield and net asset value of its Common
Stock. However, these objectives cannot be achieved in all interest
rate environments. To leverage, the Fund issues Preferred Stock,
which pays dividends at prevailing short-term interest rates, and
invests the proceeds in long-term municipal bonds. The interest
earned on these investments, net of dividends to Preferred Stock, is
paid to Common Stock shareholders in the form of dividends, and the
value of these portfolio holdings is reflected in the per share net
asset value of the Fund's Common Stock. However, in order to benefit
Common Stock shareholders, the yield curve must be positively
sloped; that is, short-term interest rates must be lower than long-
term interest rates. At the same time, a period of generally
declining interest rates will benefit Common Stock shareholders. If
either of these conditions change, then the risks of leveraging will
begin to outweigh the benefits.
To illustrate these concepts, assume a fund's Common Stock
capitalization of $100 million and the issuance of Preferred
Stock 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 approximately 3% and
long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Stock based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Stock (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Stock does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Stock may
also decline.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse floaters"). In
general, income on inverse floaters will decrease when short-term
interest rates increase and increase when short-term interest rates
decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than
if the Fund did not invest in such securities. As of November 30,
2003, none of the Fund's net assets were invested in inverse
floaters.
Swap Agreements
The Fund may also invest in swap agreements, which are over-the-
counter contracts in which one party agrees to make periodic
payments based on the change in market value of a specified bond,
basket of bonds, or index in return for periodic payments based on a
fixed or variable interest rate or the change in market value of a
different bond, basket of bonds or index. Swap agreements may be
used to obtain exposure to a bond or market without owning or taking
physical custody of securities.
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
A Letter From the President
Dear Shareholder
As 2003 closes, it seems appropriate to reflect on what has been a
meaningful year in many respects. We saw all-out war begin and end
in Iraq, equity market uncertainty turned to strength and sub par
gross domestic product growth of 1.4% in the first quarter of 2003
grew to an extraordinary 8.2% in the third quarter. Amid the good
news, fixed income investments, which had become the asset class of
choice during the preceding three-year equity market decline, faced
new challenges.
During 2003, municipal bond yields rose and fell in reaction to
geopolitical events, equity market performance, economic activity
and employment figures. By the end of November, long-term municipal
revenue bond yields were slightly lower than they were one year
earlier, at 5.09% as measured by the Bond Buyer Revenue Bond Index.
With many state deficits at record levels, municipalities issued
nearly $400 billion in new long-term tax-exempt bonds during the
12-month period ended November 30, 2003. The availability of bonds,
together with attractive yield ratios relative to U.S. Treasury
issues, made municipal bonds a popular fixed income investment
alternative.
Throughout the year, our portfolio managers continued to work
diligently to deliver on our commitment to provide superior
performance within reasonable expectations for risk and return. This
included striving to outperform our peers and the market indexes.
With that said, remember that the advice and guidance of a skilled
financial advisor often can mean the difference between successful
and unsuccessful investing. A financial professional can help you
choose those investments that will best serve you as you plan for
your financial future.
We thank you for trusting Merrill Lynch Investment Managers with
your investment assets, and we look forward to serving you in the
months and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
A Discussion With Your Fund's Portfolio Managers
We are pleased to provide you with this first semi-annual report for
Muni New York Intermediate Duration Fund, Inc. The Fund seeks to
provide investors with high current income exempt from Federal
income tax and New York State and City personal income taxes.
Describe the market environment relative to municipal bonds during
the period.
At the end of November 2003, long-term tax-exempt bond yields were
88% - 91% of comparable U.S. Treasury issues, slightly exceeding
their recent historical average of 85% - 88%. These yield ratios
made tax-exempt municipal securities an attractive investment
alternative.
Supported by generally stronger economic activity, long-term U.S.
Treasury bond yields moved higher in recent months. During the third
quarter of 2003, gross domestic product grew at an astounding 8.2%.
This represented the nation's fastest economic growth in 20 years,
and significantly exceeded the 1.4% rate of growth registered in the
first quarter of the year. The strong economy helped boost the
performance of the U.S. stock market, which also served to put
additional upward pressure on interest rates. As of November 30,
2003, long-term U.S. Treasury bond yields stood at 5.13%,
approximately 75 basis points (.75%) higher than six months earlier.
As yields on taxable bonds rose during the period, so did those of
tax-exempt municipal bonds. Long-term municipal revenue bond yields,
as measured by the Bond Buyer Revenue Bond Index, stood at 5.09% at
the end of November 2003, an increase of more than 25 basis points
since the end of May. Aaa-rated bonds (the highest rated) with
30-year maturities saw their yields increase almost 40 basis points
during the same period, according to Municipal Market Data. With tax-
exempt money market rates at or below 1% and low nominal municipal
bond yields, investors increasingly moved further out on the
municipal yield curve to generate the desired level of tax-exempt
income. This maturity extension helped support the strong demand for
and performance of tax-exempt products in recent months.
An improvement in supply/demand dynamics has also contributed to the
municipal bond market's outperformance of the U.S. Treasury market.
While new bond issuance was very heavy over the 12 months ended
November 30, 2003, supply has more recently declined. During the
past six-months, just over $200 billion in new municipal bonds was
issued, a decline of 2.5% compared to the same period a year
earlier. More recently, new municipal bond issuance slowed further
as tax-exempt bond yields rose, making borrowing more expensive.
Approximately $90 billion in long-term tax-exempt bonds was issued
in the last three months, a decline of nearly 15% versus the same
three months of 2002. New-issue supply is expected to remain
manageable and should help support the tax-exempt bond market's
favorable balance between supply and demand. This positive technical
position should allow municipal bonds to continue to outperform
their taxable counterparts in the coming months.
How did developments in the State of New York influence the Fund?
Economic uncertainties in 2003 made it difficult for the state to
maintain budgetary balance. The economy put pressure on New York's
revenue receipts, particularly personal income taxes. The state
closed budget gaps in the current fiscal year and will continue to
address structural balance over the next few years.
Municipal bonds related to the state's finances came under pressure,
widening yield spreads for these securities versus similarly rated
national issues. This proved to be an opportunity as the budget
process was resolved and New York bonds resumed trading at their
traditional spreads.
Immediately following the Fund's inception, we attempted to use the
volatility of contracting and widening New York credit spreads to
uncover values in the municipal marketplace when making our initial
purchases. Whereas price volatility can prove to be a management
problem for more-seasoned portfolios, it actually created
opportunities for us to purchase securities at more attractive
levels, on a relative spread basis, than would normally be the case.
How has the Fund performed since its inception in light of the
existing market conditions?
Since the Fund's inception (August 1, 2003) through November 30,
2003, the Common Stock of Muni New York Intermediate Duration Fund,
Inc. had net annualized yields of 4.81% and 4.75%, based on a period-
end per share net asset value of $14.93 and a per share market price
of $15.12, respectively, and $.240 per share income dividends. Over
the same period, the total investment return on the Fund's Common
Stock was +5.46%, based on a change in per share net asset value
from $14.33 to $14.93, and assuming reinvestment of $.180 per share
ordinary income dividends.
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
The average yield for the Fund's Auction Market Preferred Stock from
August 1, 2003 to November 30, 2003 was .79%.
For a description of the Fund's total investment return based on a
change in the per share market value of the Fund's Common Stock (as
measured by the trading price of the Fund's shares on the New York
Stock Exchange), and assuming reinvestment of dividends, please
refer to the Financial Highlights section of the Financial
Statements included in this report. As a closed-end fund, the Fund's
shares may trade in the secondary market at a premium or discount to
the Fund's net asset value. As a result, total investment returns
based on changes in the market value of the Fund's Common Stock can
vary significantly from total investment return based on changes in
the Fund's net asset value.
Throughout the period, the Fund was positioned to be less responsive
to interest rate changes than the average longer-maturity closed-end
New York municipal bond fund. Although this strategy contributed to
a lower total return in a period generally characterized by falling
interest rates, we believe it effectively positions the Fund for
relative outperformance when interest rates eventually rise. In
fact, our forecast is for rising long-term interest rates in the
months ahead.
What changes were made to the portfolio during the period?
Since the Fund's launch, we focused on investing the seed money
raised during the initial offering period. During this ramp-up
phase, our purchases were concentrated on bonds that we believed
could deliver a desirable yield while keeping within the Fund's
intermediate-term duration parameters. In general, new purchases
were made with an eye toward maintaining a diversified portfolio and
avoiding excessive risk.
Since its inception, the Fund's borrowing costs generally remained
in the .75% - 1.25% range. These attractive funding levels, in
combination with a steep tax-exempt yield curve, generated a
significant income benefit to the Fund's Common Stock shareholders.
Further declines in the Fund's borrowing costs would require
significant easing of monetary policy by the Federal Reserve Board.
While such action is not expected, neither is an imminent increase
in short-term interest rates. We expect short-term borrowing costs
to remain near current attractive levels for the coming months.
However, should the spread between short-term and long-term interest
rates narrow, the benefits of leverage will decline and, as a
result, reduce the yield on the Fund's Common Stock. At the end of
the period, the Fund's leverage amount was 33.08% of total assets.
(For a more complete explanation of the benefits and risks of
leveraging, see page 2 of this report to shareholders.)
How would you characterize the portfolio's position at the close of
the period?
We believe the current low level of long-term interest rates should
not persist as the economy continues to improve and widening Federal
and state deficits require increased borrowing. Against this
backdrop, the Fund ended the period in a defensive market stance.
This positioning should cushion the portfolio from the negative
price impact associated with higher interest rates, although it also
would cause the Fund to react more slowly when interest rates
decline. Having said that, we maintain our view for higher interest
rates ahead and believe this should benefit Fund performance.
Walter C. O'Connor
Co-Portfolio Manager
Robert D. Sneeden
Co-Portfolio Manager
December 8, 2003
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Schedule of Investments (In Thousands)
S&P Moody's Face
Ratings Ratings Amount Municipal Bonds Value
New York--130.0%
AAA Aaa $ 1,000 Albany, New York, Municipal Water Finance Authority, Second
Resolution Revenue Bonds, Series B, 5.25% due 12/01/2023 (c) $ 1,064
NR* Aaa 1,155 Erie County, New York, GO, Public Improvement, Series A, 6%
due 7/01/2012 (a) 1,344
NR* NR* 2,000 Erie County, New York, IDA, Life Care Community Revenue Bonds
(Episcopal Church Home), Series A, 5.875% due 2/01/2018 2,028
AAA Aaa 3,835 Erie County, New York, IDA, School Facility Revenue Bonds (City of
Buffalo Project), 5.75% due 5/01/2024 (b) 4,253
BBB A3 2,000 Hempstead Town, New York, IDA, Resource Recovery Revenue Refunding
Bonds (American Refinery--Fuel Co. Project), 5% due 12/01/2010 2,123
AAA Aaa 1,590 New York City, New York, City Health and Hospital Corporation,
Revenue Refunding Bonds (Health System), Series A, 5.25% due
2/15/2012 (a) 1,780
NR* Aa3 1,615 New York City, New York, City Housing Development Corporation,
Presidential Revenue Bonds (The Animal Medical Center), Series A,
5.50% due 12/01/2033 1,676
BBB- NR* 1,415 New York City, New York, City IDA, Civic Facility Revenue Bonds
(PSCH Inc. Project), 6.20% due 7/01/2020 1,479
NR* NR* 1,000 New York City, New York, City IDA Revenue Bonds (Visy Paper Inc.
Project), AMT, 7.95% due 1/01/2028 1,032
New York City, New York, City IDA, Special Facilities Revenue
Bonds, AMT:
CCC Caa2 1,500 (1990 American Airlines Inc. Project), 5.40% due 7/01/2020 984
BB+ Ba2 1,000 (British Airways PLC Project), 7.625% due 12/01/2032 983
CCC+ NR* 1,000 (Continental Airlines Inc. Project), 8.375% due 11/01/2016 978
B- Caa1 730 (Northwest Airlines Inc.), 6% due 6/01/2027 556
AA Aa2 1,000 New York City, New York, City Municipal Water Finance Authority,
Water and Sewer System Revenue Refunding Bonds, Series A, 5.25% due
6/15/2011 1,129
New York City, New York, GO, Refunding:
A A2 1,000 Series F, 5.25% due 8/01/2009 1,110
AAA Aaa 2,000 Series G, 5.50% due 8/01/2012 (d) 2,282
A A2 3,000 New York City, New York, GO, Series J, 5.50% due 6/01/2021 3,216
AA+ Aa2 3,000 New York City, New York, Transitional Finance Authority Revenue
Bonds, Future Tax Secured, Series C, 5.50% due 5/01/2025 3,266
A NR* 500 New York City, New York, Trust for Cultural Resources Revenue
Bonds (Museum of American Folk Art), 6.125% due 7/01/2030 550
New York State Dormitory Authority Revenue Bonds:
NR* A3 1,500 (North Shore Long Island Jewish Group), 5% due 5/01/2013 1,591
NR* Baa1 1,735 (Winthrop S. Nassau University), 5.50% due 7/01/2011 1,885
Portfolio Abbreviations
To simplify the listings of Muni New York Intermediate Duration
Fund, Inc.'s portfolio holdings in the Schedule of Investments, we
have abbreviated the names of many of the securities according to
the list at right.
AMT Alternative Minimum Tax (subject to)
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Schedule of Investments (continued) (In Thousands)
S&P Moody's Face
Ratings Ratings Amount Municipal Bonds Value
New York (concluded)
New York State Dormitory Authority, Revenue Refunding Bonds:
AAA Aaa $ 1,000 (City University), Fourth General Resolution Series A, 5.25%
due 7/01/2011 (c) $ 1,134
NR* A3 1,360 (Lenox Hill Hospital Obligation Group), 5.25% due 7/01/2010 1,490
NR* A3 1,305 (Lenox Hill Hospital Obligation Group), 5.75% due 7/01/2017 1,404
AAA Aaa 400 (Mental Health Services Facilities Improvement), Series G,
5.25% due 2/15/2011 (a) 442
BB Ba1 1,000 (Mount Sinai Health), Series A, 6.50% due 7/01/2015 1,020
BB Ba1 1,000 (Mount Sinai Health), Series A, 6.625% due 7/01/2018 1,026
AAA Aaa 5,000 (North Shore University Hospital), 5.20% due 11/01/2017 (c) 5,454
AAA Aaa 2,500 Series B, 5.25% due 11/15/2026 (a) 2,786
AA- A3 1,000 (State University Educational Facilities), Series A, 5.50%
due 5/15/2013 1,137
AAA Aaa 1,000 New York State Environmental Facilities Corporation, State Clean
Water and Drinking Revolving Funds Revenue Bonds, Series G, 5.25%
due 10/15/2014 1,104
AA A2 2,100 New York State, GO, Refunding, Series C, 5% due 4/15/2014 2,297
AA- NR* 2,355 New York State, HFA, Service Contract Revenue Refunding Bonds,
Series K, 5% due 9/15/2009 2,625
AAA Aaa 3,500 New York State Local Government Assistance Corporation, Revenue
Refunding Bonds, Sub-Lien, Series A-1, 5% due 4/01/2012 (b) 3,888
New York State Thruway Authority, Highway and Bridge Trust Fund
Revenue Bonds, Series C:
AAA Aaa 2,500 5.25% due 4/01/2015 (e) 2,745
AA- A1 1,575 5% due 4/01/2018 1,639
AAA Aaa 1,000 New York State Thruway Authority, Highway and Bridge Trust Fund,
Revenue Refunding Bonds, Series B, 5.25% due 4/01/2014 (e) 1,103
AA- A3 3,000 New York State Urban Development Corporation, Correctional and Youth
Facilities Services Revenue Refunding Bonds, Series A, 5% due 1/01/2017 3,276
AAA Aaa 1,000 Niagara Falls, New York, Public Water Authority, Water and Sewer
System Revenue Bonds, Series A, 5.50% due 7/15/2026 (c) 1,076
AA NR* 2,000 Saratoga County, New York, IDA, Civic Facility Revenue Bonds (The
Saratoga Hospital Project) Series B-1 5.75% due 12/01/2023 (f) 2,170
Saratoga County, New York, IDA, Civic Facility Revenue Refunding
Bonds (The Saratoga Hospital Project), Series A (f):
AA NR* 365 4.375% due 12/01/2013 384
AA NR* 380 4.50% due 12/01/2014 400
AA NR* 395 4.50% due 12/01/2015 412
NR* NR* 1,500 Suffolk County, New York, IDA, IDR, Refunding (Nissequogue Cogen
Partners Facility), AMT, 4.875% due 1/01/2008 1,553
Tobacco Settlement Financing Corporation of New York, Asset-Backed
Revenue Bonds Series A-1:
AA- NR* 1,000 5.25% due 6/01/2013 1,056
AA- NR* 1,000 5.25% due 6/01/2016 1,051
AA- NR* 1,000 Tobacco Settlement Financing Corporation of New York, Revenue Bonds
Series C-1, 5.50% due 6/01/2022 1,058
Tompkins County, New York, IDA, Community Care Revenue Refunding
Bonds (Kendal at Ithaca), Series A-2:
BBB NR* 250 5.75% due 7/01/2018 259
BBB NR* 1,000 6% due 7/01/2024 1,041
NR* NR* 1,165 Westchester County, New York, IDA, Civic Facility Revenue Bonds
(Special Needs Facilities Pooled Program), Series E-1, 5.50% due
7/01/2007 1,169
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Schedule of Investments (concluded) (In Thousands)
S&P Moody's Face
Ratings Ratings Amount Municipal Bonds Value
Guam--1.7%
AAA Aaa $ 1,000 Guam International Airport Authority, General Revenue Refunding
Bonds, AMT, Series C, 5.25% due 10/01/2022 (c) $ 1,051
Puerto Rico--13.8%
Children's Trust Fund Project of Puerto Rico, Tobacco Settlement
Revenue Refunding Bonds:
BBB Baa2 750 5% due 5/15/2011 755
BBB Baa2 995 5.375% due 5/15/2033 948
BBB Baa2 500 5.625% due 5/15/2043 465
A- Baa1 4,000 Puerto Rico Commonwealth, Public Improvement Refunding Bonds, GO,
Series C, 5% due 7/01/2018 4,354
BBB+ Baa3 2,000 Puerto Rico Public Finance Corporation Revenue Bonds, Commonwealth
Appropriation, Series E, 5.70% due 8/01/2025 2,114
Virgin Islands--0.8%
BBB- Baa3 500 Virgin Islands Government Refinery Facilities Revenue Refunding
Bonds (Hovensa Coker Project), AMT, 6.50% due 7/01/2021 520
Total Municipal Bonds (Cost--$88,618)--146.3% 91,715
Shares
Held Short-Term Securities
1,900 CMA New York Municipal Money Fund (g) 1,900
Total Short-Term Securities (Cost--$1,900)--3.0% 1,900
Total Investments (Cost--$90,518)--149.3% 93,615
Unrealized Depreciation on Forward Interest Rate Swaps**--(0.1%) (77)
Other Assets Less Liabilities--0.3% 179
Preferred Stock, at Redemption Value--(49.5%) (31,007)
---------
Net Assets Applicable to Common Stock--100.0% $ 62,710
=========
(a)AMBAC Insured.
(b)FSA Insured.
(c)MBIA Insured.
(d)XL Capital Insured.
(e)FGIC Insured.
(f)Radian Insured.
(g)Investments in companies considered to be an affiliate of the
Fund (such companies are defined as "Affiliated Companies" in
Section 2(a)(3) of the Investment Company Act of 1940) are as
follows:
(in Thousands)
Net Dividend
Affiliate Activity Income
CMA New York Municipal
Money Fund 1,900 $6
*Not Rated.
**Forward interest rate swaps entered into as of November 30, 2003
were as follows:
(in Thousands)
Notional Unrealized
Amount Depreciation
Receive a variable rate equal to
3-Month USD LIBOR and pay a
fixed rate equal to 4.892%
Broker, J.P. Morgan Chase Bank
Expires January 2014 $13,000 $ (77)
See Notes to Financial Statements.
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Statement of Net Assets
As of November 30, 2003
Assets
Investments, at value (identified cost--$90,517,512) $ 93,615,481
Cash 34,950
Receivables:
Interest $ 1,308,175
Dividends from affiliates 30 1,308,205
---------------
Prepaid expenses 2,077
---------------
Total assets 94,960,713
---------------
Liabilities
Due to broker on forward interest rate swaps 77,012
Payables:
Securities purchased 1,052,880
Offering costs 76,092
Investment adviser 17,442
Other affiliates 636
Dividends to Common Stock shareholders 3 1,147,053
---------------
Accrued expenses 20,189
---------------
Total liabilities 1,244,254
---------------
Preferred Stock
Preferred Stock, at redemption value, par value $.10 per share
(1,240 Series F7 Shares of AMPS* issued and outstanding at $25,000
per share liquidation preference) 31,006,535
---------------
Net Assets Applicable to Common Stock
Net assets applicable to Common Stock $ 62,709,924
===============
Analysis of Net Assets Applicable to Common Stock
Common Stock, par value $.10 per share (4,200,845 shares issued
and outstanding) $ 420,085
Paid-in capital in excess of par 59,192,418
Undistributed investment income--net $ 187,196
Accumulated realized capital losses on investments--net (110,732)
Unrealized appreciation on investments--net 3,020,957
---------------
Total accumulated earnings--net 3,097,421
---------------
Total--Equivalent to $14.93 net asset value per share of Common Stock
(market price--$15.12) $ 62,709,924
===============
*Auction Market Preferred Stock.
See Notes to Financial Statements.
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Statement of Operations
For the Period August 1, 2003++ to November 30, 2003
Investment Income
Interest $ 1,132,467
Dividends from affiliates 6,048
---------------
Total income 1,138,515
---------------
Expenses
Investment advisory fees $ 157,207
Commission fees 22,076
Accounting services 16,534
Transfer agent fees 9,746
Directors' fees and expenses 9,229
Professional fees 5,343
Printing and shareholder reports 3,891
Custodian fees 2,947
Pricing fees 1,227
Other 7,215
---------------
Total expenses before waiver 235,415
Waiver of expenses (109,101)
---------------
Total expenses after waiver 126,314
---------------
Investment income--net 1,012,201
---------------
Realized & Unrealized Gain (Loss) on Investments--Net
Realized loss on investments--net (110,732)
Unrealized appreciation on investments--net 3,020,957
---------------
Total realized and unrealized gain on investments--net 2,910,225
---------------
Dividends to Preferred Stock Shareholders
Investment income--net (81,592)
---------------
Net Increase in Net Assets Resulting from Operations $ 3,840,834
===============
++Commencement of operations.
See Notes to Financial Statements.
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Statement of Changes in Net Assets
For the Period
August 1, 2003++
to November 30,
Increase (Decrease) in Net Assets: 2003
Operations
Investment income--net $ 1,012,201
Realized loss on investments--net (110,732)
Unrealized appreciation on investments--net 3,020,957
Dividends to Preferred Stock shareholders (81,592)
---------------
Net increase in net assets resulting from operations 3,840,834
---------------
Dividends to Common Stock Shareholders
Investment income--net (743,413)
---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (743,413)
---------------
Stock Transactions
Net proceeds from issuance of Common Stock 59,806,875
Offering costs resulting from the issuance of Common Stock (125,250)
Offering and underwriting costs resulting from the issuance of Preferred Stock (447,508)
Value of shares issued to Common Stock shareholders in reinvestment of dividends 278,383
---------------
Net increase in net assets derived from stock transactions 59,512,500
---------------
Net Assets Applicable to Common Stock
Total increase in net assets applicable to Common Stock 62,609,921
Beginning of period 100,003
---------------
End of period* $ 62,709,924
===============
*Undistributed investment income--net $ 187,196
===============
++Commencement of operations.
See Notes to Financial Statements.
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Financial Highlights
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. August 1, 2003++
to November 30,
Increase (Decrease) in Net Asset Value: 2003
Per Share Operating Performance
Net asset value, beginning of period $ 14.33
---------------
Investment income--net .24
Realized and unrealized gain (loss) on investments--net .70
Dividends to Preferred Stock shareholders from investment income--net (.02)
---------------
Total from investment operations .92
---------------
Less dividends to Common Stock shareholders from investment income--net (.18)
---------------
Capital charge resulting from issuance of Common Stock (.03)
---------------
Capital charge and underwriting costs resulting from issuance of Preferred Stock (.11)
---------------
Net asset value, end of period $ 14.93
===============
Market price per share, end of period $ 15.12
===============
Total Investment Return**
Based on market price per share 2.03%+++
===============
Based on net asset value per share 5.46%+++
===============
Ratios Based on Average Net Assets of Common Stock
Total expenses, net of waiver*** .66%*
===============
Total expenses*** 1.23%*
===============
Total investment income--net*** 5.28%*
===============
Amount of dividends to Preferred Stock shareholders .43%*
===============
Investment income--net, to Common Stock shareholders 4.85%*
===============
Ratios Based on Average Net Assets of Common & Preferred Stock***++++
Total expenses, net of waiver .45%*
===============
Total expenses .84%*
===============
Total investment income--net 3.62%*
===============
Ratios Based on Average Net Assets of Preferred Stock++++
Dividends to Preferred Stock shareholders .93%*
===============
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Financial Highlights (concluded)
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. August 1, 2003++
to November 30,
Increase (Decrease) in Net Asset Value: 2003
Supplemental Data
Net assets applicable to Common Stock, end of period (in thousands) $ 62,710
===============
Preferred Stock outstanding, end of period (in thousands) $ 31,000
===============
Portfolio turnover 12.34%
===============
Leverage
Asset coverage per $1,000 $ 3,023
===============
Dividends Per Share on Preferred Stock Outstanding++++
Series F7--Investment income--net $ 66
===============
*Annualized.
**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
the effects of sales charges. If applicable, the Fund's Investment
Adviser voluntarily waived a portion of its management fee. Without
such waiver, the Fund's performance would have been lower.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Commencement of operations.
++++The Fund's Preferred Stock was issued on August 20, 2003.
+++Aggregate total investment return.
See Notes to Financial Statements.
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Notes to Financial Statements
1. Significant Accounting Policies:
Muni New York Intermediate Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as a non-
diversified, closed-end management investment company. Prior to
commencement of operations on August 1, 2003, the Fund had no
operations other than those relating to organizational matters and
the sale of 6,981 shares of Common Stock on July 17, 2003 to Fund
Asset Management, L.P. ("FAM") for $100,003. The Fund's 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. These
unaudited financial statements reflect all adjustments, which are,
in the opinion of management, necessary to a fair statement of the
results for the interim period presented. All such adjustments are
of a normal, recurring nature. The Fund determines and makes
available for publication the net asset value of its Common Stock on
a weekly basis. The Fund's Common Stock is listed on the New York
Stock Exchange under the symbol MNE. The following is a summary of
significant accounting policies followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the last available
bid price in the over-the-counter market or on the basis of yield
equivalents as obtained by the Fund's pricing service from one or
more dealers that make markets in the securities. Financial futures
contracts and options thereon, which are traded on exchanges, are
valued at their closing prices as of the close of such exchanges.
Options written or purchased are valued at the last sale price in
the case of exchange-traded options. In the case of options traded
in the over-the-counter market, valuation is the last asked price
(options written) or the last bid price (options purchased). Swap
agreements are valued by quoted fair values received daily by the
Fund from the counterparty. Short-term investments with a remaining
maturity of sixty days or less are valued at amortized cost, which
approximates market value. Securities and assets for which market
quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of
Directors of the Fund, including valuations furnished by a pricing
service retained by the Fund, which may utilize a matrix system for
valuations. The procedures of the pricing service and its valuations
are reviewed by the officers of the Fund under the general
supervision of the Board of Directors.
(b) Derivative financial instruments--The Fund may engage in various
portfolio investment strategies both to increase the return of the
Fund and to hedge, or protect, its exposure to interest rate
movements and movements in the securities markets. Losses may arise
due to changes in the value of the contract or if the counterparty
does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts.
Futures contracts are contracts for delayed delivery of securities
at a specific future date and at a specific price or yield. Upon
entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund
agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Fund
as unrealized gains or losses. When the contract is closed, the Fund
records 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.
* Options--The Fund may write covered call options and purchase call
and put options. When the Fund writes an option, an amount equal to
the premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current market value of the option
written. When a security is purchased or sold through an exercise of
an option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Notes to Financial Statements (continued)
Written and purchased options are non-income producing investments.
* Forward interest rate swaps--The Fund may enter into forward
interest rate swaps. In a forward interest rate swap, the 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. When the agreement is closed, the
Fund records a realized gain or loss in an amount equal to the value
of the agreement.
(c) Income taxes--It is the 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.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions 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 basis. The Fund amortizes all premiums and
discounts on debt securities.
(e) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect, wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of .55% of
the Fund's average daily net assets, including proceeds from the
issuance of Preferred Stock.
FAM has contractually agreed to waive a portion of its fee during
the first seven years of the Fund's operations ending July 31, 2010,
as follows:
Fee Waiver
(As a Percentage
of Average Daily
Net Assets)
Years 1 through 5 .15%
Year 6 .10%
Year 7 .05%
Year 8 and thereafter .00%
For the period August 1, 2003 to November 30, 2003, FAM earned fees
of $157,207, of which $109,101 was waived.
During the period August 1, 2003 to November 30, 2003, Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), an affiliate
of FAM, received underwriting fees of $310,000 in connection with
the issuance of the Fund's Preferred Stock.
For the period August 1, 2003 to November 30, 2003, the Fund
reimbursed FAM $595 for certain accounting services.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the period August 1, 2003 to November 30, 2003 were $97,126,952
and $8,540,704, respectively.
Net realized gains (losses) for the period August 1, 2003 to
November 30, 2003 and net unrealized gain (losses) as of November
30, 2003 were as follows:
Realized Unrealized
Gains (Losses) Gains (Losses)
Long-term investments $ 180,268 $ 3,097,969
Forward interest rate swaps (291,000) (77,012)
------------- -------------
Total $ (110,732) $ 3,020,957
============= =============
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Notes to Financial Statements (concluded)
As of November 30, 2003, net unrealized appreciation for Federal
income tax purposes aggregated $3,103,888, all of which related to
appreciated securities. The aggregate cost of investments at
November 30, 2003 for Federal income tax purposes was $90,511,593.
4. Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of stock,
including Preferred Stock, par value $.10 per share, all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of stock
without approval of holders of Common Stock.
Common Stock
Shares issued and outstanding during the period August 1, 2003 to
November 30, 2003 increased by 4,175,000 from shares sold and 18,864
from reinvestment of dividends.
Preferred Stock
Auction Market Preferred Stock are redeemable shares of Preferred
Stock of the Fund, with a par value of $.10 per share and
liquidation preference of $25,000 per shares, plus accrued and
unpaid dividends, that entitle their holders to receive cash
dividends at an annual rate that may vary for the successive
dividend periods. The yield in effect at November 30, 2003 was
Series F7, 1.10%.
Shares issued and outstanding during the period August 1, 2003 to
November 30, 2003 increased by 1,240 from issuance of Preferred
Stock.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from .25 to .375 calculated
on the proceeds of each auction. For the period ended November 30,
2003, MLPF&S earned $18,141 as commissions.
5. Subsequent Event:
The Fund paid a tax-exempt income dividend to holders of Common
Stock in the amount of $.060000 per share on December 30, 2003 to
shareholders of record on December 17, 2003.
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Quality Profile
The quality ratings of securities in the Fund as of November 30,
2003 were as follows:
Percent of
Total
S&P Rating/Moody's Rating Investments
AAA/Aaa 33.7%
AA/Aa 25.2
A/A 16.9
BBB/Baa 10.1
BB/Ba 3.2
B/B 0.6
CCC/Caa 2.1
NR (Not Rated) 8.2
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Officers and Directors
Terry K. Glenn, President and Director
Donald W. Burton, Director
M. Colyer Crum, Director
Laurie Simon Hodrick, Director
David H. Walsh, Director
Fred G. Weiss, Director
Kenneth A. Jacob, Senior Vice President
John M. Loffredo, Senior Vice President
Donald C. Burke, Vice President and Treasurer
Brian D. Stewart, Secretary
Custodian
State Street Bank and Trust
P.O. Box 351
Boston, MA 02101
Transfer Agents
Common Stock:
EquiServe
P.O. Box 43010
Providence, RI 02940-3010
Preferred Stock:
The Bank of New York
100 Church Street
New York, NY 10286
NYSE Symbol
MNE
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Electronic Delivery
The Fund is now offering electronic delivery of communications to
its shareholders. In order to receive this service, you must
register your account and provide us with e-mail information.
To sign up for this service, simply access this website
http://www.icsdelivery.com/live and follow the instructions.
When you visit this site, you will obtain a personal identification
number (PIN). You will need this PIN should you wish to update your
e-mail address, choose to discontinue this service and/or make any
other changes to the service. This service is not available for
certain retirement accounts at this time.
MUNI NEW YORK INTERMEDIATE DURATION FUND, INC.
NOVEMBER 30, 2003
Item 2 - Did registrant adopt a code of ethics, as of the end of the
period covered by this report, that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by
the registrant or a third party? If not, why not? Briefly describe
any amendments or waivers that occurred during the period. State
here if code of ethics/amendments/waivers are on website and give
website address-. State here if fund will send code of ethics to
shareholders without charge upon request--N/A (annual requirement
only)
Item 3 - Did the registrant's board of directors determine that the
registrant either: (i) has at least one audit committee financial
expert serving on its audit committee; or (ii) does not have an
audit committee financial expert serving on its audit committee? If
yes, disclose name of financial expert and whether he/she is
"independent," (fund may, but is not required, to disclose name/
independence of more than one financial expert) If no, explain why
not. - N/A (annual requirement only)
Item 4 - Disclose annually only (not answered until December 15,
2003)
(a) Audit Fees - Disclose aggregate fees billed for each of the last
two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements
for those fiscal years. N/A.
(b) Audit-Related Fees - Disclose aggregate fees billed in each of
the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance
of the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item. Registrants shall
describe the nature of the services comprising the fees disclosed
under this category. N/A.
(c) Tax Fees - Disclose aggregate fees billed in each of the last
two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the
fees disclosed under this category. N/A.
(d) All Other Fees - Disclose aggregate fees billed in each of the
last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs
(a) through (c) of this Item. Registrants shall describe the nature
of the services comprising the fees disclosed under this category.
N/A.
(e)(1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation
S-X. N/A.
(e)(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the
audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X. N/A.
(f) If greater than 50%, disclose the percentage of hours expended
on the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal
accountant's full-time, permanent employees. N/A.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant for each of the
last two fiscal years of the registrant. N/A.
(h) Disclose whether the registrant's audit committee has considered
whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another 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. N/A.
Item 5 - If the registrant is a listed issuer as defined in Rule
10A-3 under the Exchange Act, state whether or not the registrant
has a separately-designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. If the
registrant has such a committee, however designated, identify each
committee member. If the entire board of directors is acting as the
registrant's audit committee in Section 3(a)(58)(B) of the Exchange
Act, so state.
If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act regarding an exemption from the listing
standards for audit committees. N/A
(Listed issuers must be in compliance with the new listing rules by
the earlier of their first annual shareholders meeting after January
2004, or October 31, 2004 (annual requirement))
Item 6 - Reserved
Item 7 - For closed-end funds that contain voting securities in
their portfolio, describe the policies and procedures that it uses
to determine how to vote proxies relating to those portfolio
securities.
Proxy Voting Policies and Procedures
Each Fund's Board of Directors/Trustees has delegated to Merrill
Lynch Investment Managers, L.P. and/or Fund Asset Management, L.P.
(the "Investment Adviser") authority to vote all proxies relating to
the Fund's portfolio securities. The Investment Adviser has adopted
policies and procedures ("Proxy Voting Procedures") with respect to
the voting of proxies related to the portfolio securities held in
the account of one or more of its clients, including a Fund.
Pursuant to these Proxy Voting Procedures, the Investment Adviser's
primary objective when voting proxies is to make proxy voting
decisions solely in the best interests of each Fund and its
shareholders, and to act in a manner that the Investment Adviser
believes is most likely to enhance the economic value of the
securities held by the Fund. The Proxy Voting Procedures are
designed to ensure that that the Investment Adviser considers the
interests of its clients, including the Funds, and not the interests
of the Investment Adviser, when voting proxies and that real (or
perceived) material conflicts that may arise between the Investment
Adviser's interest and those of the Investment Adviser's clients are
properly addressed and resolved.
In order to implement the Proxy Voting Procedures, the Investment
Adviser has formed a Proxy Voting Committee (the "Committee"). The
Committee is comprised of the Investment Adviser's Chief Investment
Officer (the "CIO"), one or more other senior investment
professionals appointed by the CIO, portfolio managers and
investment analysts appointed by the CIO and any other personnel the
CIO deems appropriate. The Committee will also include two non-
voting representatives from the Investment Adviser's Legal
department appointed by the Investment Adviser's General Counsel.
The Committee's membership shall be limited to full-time employees
of the Investment Adviser. No person with any investment banking,
trading, retail brokerage or research responsibilities for the
Investment Adviser's affiliates may serve as a member of the
Committee or participate in its decision making (except to the
extent such person is asked by the Committee to present information
to the Committee, on the same basis as other interested
knowledgeable parties not affiliated with the Investment Adviser
might be asked to do so). The Committee determines how to vote the
proxies of all clients, including a Fund, that have delegated proxy
voting authority to the Investment Adviser and seeks to ensure that
all votes are consistent with the best interests of those clients
and are free from unwarranted and inappropriate influences. The
Committee establishes general proxy voting policies for the
Investment Adviser and is responsible for determining how those
policies are applied to specific proxy votes, in light of each
issuer's unique structure, management, strategic options and, in
certain circumstances, probable economic and other anticipated
consequences of alternate actions. In so doing, the Committee may
determine to vote a particular proxy in a manner contrary to its
generally stated policies. In addition, the Committee will be
responsible for ensuring that all reporting and recordkeeping
requirements related to proxy voting are fulfilled.
The Committee may determine that the subject matter of a recurring
proxy issue is not suitable for general voting policies and requires
a case-by-case determination. In such cases, the Committee may
elect not to adopt a specific voting policy applicable to that
issue. The Investment Adviser believes that certain proxy voting
issues require investment analysis - such as approval of mergers and
other significant corporate transactions - akin to investment
decisions, and are, therefore, not suitable for general guidelines.
The Committee may elect to adopt a common position for the
Investment Adviser on certain proxy votes that are akin to
investment decisions, or determine to permit the portfolio manager
to make individual decisions on how best to maximize economic value
for a Fund (similar to normal buy/sell investment decisions made by
such portfolio managers). While it is expected that the Investment
Adviser will generally seek to vote proxies over which the
Investment Adviser exercises voting authority in a uniform manner
for all the Investment Adviser's clients, the Committee, in
conjunction with a Fund's portfolio manager, may determine that the
Fund's specific circumstances require that its proxies be voted
differently.
To assist the Investment Adviser in voting proxies, the Committee
has retained Institutional Shareholder Services ("ISS"). ISS is an
independent adviser that specializes in providing a variety of
fiduciary-level proxy-related services to institutional investment
managers, plan sponsors, custodians, consultants, and other
institutional investors. The services provided to the Investment
Adviser by ISS include in-depth research, voting recommendations
(although the Investment Adviser is not obligated to follow such
recommendations), vote execution, and recordkeeping. ISS will also
assist the Fund in fulfilling its reporting and recordkeeping
obligations under the Investment Company Act.
The Investment Adviser's Proxy Voting Procedures also address
special circumstances that can arise in connection with proxy
voting. For instance, under the Proxy Voting Procedures, the
Investment Adviser generally will not seek to vote proxies related
to portfolio securities that are on loan, although it may do so
under certain circumstances. In addition, the Investment Adviser
will vote proxies related to securities of foreign issuers only on a
best efforts basis and may elect not to vote at all in certain
countries where the Committee determines that the costs associated
with voting generally outweigh the benefits. The Committee may at
any time override these general policies if it determines that such
action is in the best interests of a Fund.
From time to time, the Investment Adviser may be required to vote
proxies in respect of an issuer where an affiliate of the Investment
Adviser (each, an "Affiliate"), or a money management or other
client of the Investment Adviser (each, a "Client") is involved.
The Proxy Voting Procedures and the Investment Adviser's adherence
to those procedures are designed to address such conflicts of
interest. The Committee intends to strictly adhere to the Proxy
Voting Procedures in all proxy matters, including matters involving
Affiliates and Clients. If, however, an issue representing a non-
routine matter that is material to an Affiliate or a widely known
Client is involved such that the Committee does not reasonably
believe it is able to follow its guidelines (or if the particular
proxy matter is not addressed by the guidelines) and vote
impartially, the Committee may, in its discretion for the purposes
of ensuring that an independent determination is reached, retain an
independent fiduciary to advise the Committee on how to vote or to
cast votes on behalf of the Investment Adviser's clients.
In the event that the Committee determines not to retain an
independent fiduciary, or it does not follow the advice of such an
independent fiduciary, the powers of the Committee shall pass to a
subcommittee, appointed by the CIO (with advice from the Secretary
of the Committee), consisting solely of Committee members selected
by the CIO. The CIO shall appoint to the subcommittee, where
appropriate, only persons whose job responsibilities do not include
contact with the Client and whose job evaluations would not be
affected by the Investment Adviser's relationship with the Client
(or failure to retain such relationship). The subcommittee shall
determine whether and how to vote all proxies on behalf of the
Investment Adviser's clients or, if the proxy matter is, in their
judgment, akin to an investment decision, to defer to the applicable
portfolio managers, provided that, if the subcommittee determines to
alter the Investment Adviser's normal voting guidelines or, on
matters where the Investment Adviser's policy is case-by-case, does
not follow the voting recommendation of any proxy voting service or
other independent fiduciary that may be retained to provide research
or advice to the Investment Adviser on that matter, no proxies
relating to the Client may be voted unless the Secretary, or in the
Secretary's absence, the Assistant Secretary of the Committee
concurs that the subcommittee's determination is consistent with the
Investment Adviser's fiduciary duties
In addition to the general principles outlined above, the Investment
Adviser has adopted voting guidelines with respect to certain
recurring proxy issues that are not expected to involve unusual
circumstances. These policies are guidelines only, and the
Investment Adviser may elect to vote differently from the
recommendation set forth in a voting guideline if the Committee
determines that it is in a Fund's best interest to do so. In
addition, the guidelines may be reviewed at any time upon the
request of a Committee member and may be amended or deleted upon the
vote of a majority of Committee members present at a Committee
meeting at which there is a quorum.
The Investment Adviser has adopted specific voting guidelines with
respect to the following proxy issues:
* Proposals related to the composition of the Board of Directors of
issuers other than investment companies. As a general matter, the
Committee believes that a company's Board of Directors (rather than
shareholders) is most likely to have access to important, nonpublic
information regarding a company's business and prospects, and is
therefore best-positioned to set corporate policy and oversee
management. The Committee, therefore, believes that the foundation
of good corporate governance is the election of qualified,
independent corporate directors who are likely to diligently
represent the interests of shareholders and oversee management of
the corporation in a manner that will seek to maximize shareholder
value over time. In individual cases, the Committee may look at a
nominee's history of representing shareholder interests as a
director of other companies or other factors, to the extent the
Committee deems relevant.
* Proposals related to the selection of an issuer's independent
auditors. As a general matter, the Committee believes that
corporate auditors have a responsibility to represent the interests
of shareholders and provide an independent view on the propriety of
financial reporting decisions of corporate management. While the
Committee will generally defer to a corporation's choice of auditor,
in individual cases, the Committee may look at an auditors' history
of representing shareholder interests as auditor of other companies,
to the extent the Committee deems relevant.
* Proposals related to management compensation and employee
benefits. As a general matter, the Committee favors disclosure of
an issuer's compensation and benefit policies and opposes excessive
compensation, but believes that compensation matters are normally
best determined by an issuer's board of directors, rather than
shareholders. Proposals to "micro-manage" an issuer's compensation
practices or to set arbitrary restrictions on compensation or
benefits will, therefore, generally not be supported.
* Proposals related to requests, principally from management, for
approval of amendments that would alter an issuer's capital
structure. As a general matter, the Committee will support requests
that enhance the rights of common shareholders and oppose requests
that appear to be unreasonably dilutive.
* Proposals related to requests for approval of amendments to an
issuer's charter or by-laws. As a general matter, the Committee
opposes poison pill provisions.
* Routine proposals related to requests regarding the formalities of
corporate meetings.
* Proposals related to proxy issues associated solely with holdings
of investment company shares. As with other types of companies, the
Committee believes that a fund's Board of Directors (rather than its
shareholders) is best-positioned to set fund policy and oversee
management. However, the Committee opposes granting Boards of
Directors authority over certain matters, such as changes to a
fund's investment objective, that the Investment Company Act
envisions will be approved directly by shareholders.
* Proposals related to limiting corporate conduct in some manner
that relates to the shareholder's environmental or social concerns.
The Committee generally believes that annual shareholder meetings
are inappropriate forums for discussion of larger social issues, and
opposes shareholder resolutions "micromanaging" corporate conduct or
requesting release of information that would not help a shareholder
evaluate an investment in the corporation as an economic matter.
While the Committee is generally supportive of proposals to require
corporate disclosure of matters that seem relevant and material to
the economic interests of shareholders, the Committee is generally
not supportive of proposals to require disclosure of corporate
matters for other purposes.
Item 8--Reserved
Item 9(a) - The registrant's certifying officers have reasonably
designed such disclosure controls and procedures to ensure material
information relating to the registrant is made known to us by others
particularly during the period in which this report is being
prepared. The registrant's certifying officers have determined that
the registrant's disclosure controls and procedures are effective
based on our evaluation of these controls and procedures as of a
date within 90 days prior to the filing date of this report.
Item 9(b)--There were no significant changes in the registrant's
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Item 10 - Exhibits
10(a) - Attach code of ethics or amendments/waivers, unless code of
ethics or amendments/waivers is on website or offered to
shareholders upon request without charge. N/A.
10(b) - Attach certifications pursuant to Section 302 of the
Sarbanes-Oxley Act. 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.
Muni New York Intermediate Duration Fund, Inc.
By: _/s/ Terry K. Glenn_______
Terry K. Glenn,
President of
Muni New York Intermediate Duration Fund, Inc.
Date: January 21, 2004
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/ Terry K. Glenn________
Terry K. Glenn,
President of
Muni New York Intermediate Duration Fund, Inc.
Date: January 21, 2004
By: _/s/ Donald C. Burke________
Donald C. Burke,
Chief Financial Officer of
Muni New York Intermediate Duration Fund, Inc.
Date: January 21, 2004
Attached hereto as a furnished exhibit are the certifications
pursuant to Section 906 of the Sarbanes-Oxley Act.