UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-6500
Name of Fund: MuniYield New York Insured Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President, MuniYield New
York Insured 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: 04/30/03
Date of reporting period: 11/01/02 - 04/30/03
Item 1 - Attach shareholder report
[LOGO] Merrill Lynch Investment Managers
Semi-Annual Report
April 30, 2003
MuniYield
New York
Insured
Fund, Inc.
www.mlim.ml.com
MUNIYIELD NEW YORK INSURED FUND, INC.
The Benefits and
Risks of Leveraging
MuniYield New York Insured 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 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 strong,
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 these securities.
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.
MuniYield New York Insured Fund, Inc., April 30, 2003
DEAR SHAREHOLDER
For the six months ended April 30, 2003, the Common Stock of MuniYield New York
Insured Fund, Inc. had a net annualized yield of 5.51%, based on a period-end
per share net asset value of $15.13 and $.413 per share income dividends. Over
the same period, the total investment return on the Fund's Common Stock was
+5.21%, based on a change in per share net asset value from $14.83 to $15.13,
and assuming reinvestment of $.413 per share ordinary income dividends.
The average yields for the Fund's Auction Market Preferred Stock for the six
months ended April 30, 2003 were: Series A, 1.05%; Series B, 1.02%; Series C,
1.08%; Series D, 2.18%; and Series E, 1.26%.
For a description of the Fund's total investment return based on a change in the
per share market value (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 Fund's market value can
vary significantly from total investment return based on changes in the Fund's
net asset value.
The Municipal Market Environment
During the six-month period ended April 30, 2003, amid considerable weekly and
monthly volatility, long-term fixed income interest rates generally declined.
Geopolitical tensions and volatile equity valuations continued to overshadow
economic fundamentals as they have for most of the last 12 months. Reacting to
the strong U.S. equity rally that began last October, fixed income bond yields
remained under pressure in November 2002, as U.S. equity markets continued to
strengthen. During November, the Standard & Poor's 500 (S&P 500) Index rose an
additional 5.50%. Equity prices were supported by further signs of U.S. economic
recovery, especially improving labor market activity. In late November,
third-quarter 2002 U.S. gross domestic product growth was 4%, well above the
second-quarter 2002 rate of 1.30%. Financial conditions were also strengthened
by a larger-than-expected reduction in short-term interest rates by the Federal
Reserve Board in early November. The Federal Funds target rate was lowered 50
basis points (0.50%) to 1.25%, its lowest level since the 1960s. This action by
the Federal Reserve Board was largely viewed as being taken to bolster the
sputtering U.S. economic recovery. Rebounding U.S. equity markets and the
prospects for a more substantial U.S. economic recovery pushed long-term U.S.
Treasury yield levels to 5.10% by late November.
However, into early 2003, softer equity prices and renewed investor concerns
about U.S. military action against Iraq and North Korea again pushed bond prices
higher. Reacting to disappointing holiday sales and corporate managements'
attempts to scale back analysts' expectation of future earnings, the S&P 500
Index declined more than 10% from December 2002 to February 2003. Fearing an
eventual U.S./Iraq military confrontation in 2003, investors again sought the
safety of U.S. Treasury obligations and the prices of fixed income issues rose.
By the end of February 2003, U.S. Treasury bond yields had declined
approximately 40 basis points to 4.67%.
Bond yields continued to fall into early March. Once direct U.S. military action
against Iraq began, bond yields quickly rose. Prior uncertainty surrounding the
Iraqi situation was obviously removed and early U.S. military successes fostered
the hope that the conflict would be quickly and positively concluded.
Concurrently, the S&P 400 Index rose over 6% as investors, in part, sold fixed
income issues to purchase equities in anticipation of a strong U.S. economic
recovery once the Iraqi conflict was resolved. By mid-March, U.S. Treasury bond
yields again rose to above 5%. However, as there was growing sentiment that
hostilities may not be resolved in a matter of weeks, U.S. Treasury bond yields
again declined to end the month at 4.81%.
For the six months ended April 30, 2003, long-term U.S. Treasury bond yields
ratcheted back to near 5% by mid-April, as U.S. equity markets continued to
improve and the safe-haven premium U.S. Treasury issues had commanded prior to
the beginning of the Iraqi conflict continued to be withdrawn. However, with the
quick positive resolution of the Iraqi war, investors quickly resumed their
focus on the fragile U.S. economic recovery. Business activity in the United
States has remained sluggish, especially job creation. Investors have also been
concerned that the recent SARS outbreak would have a material, negative impact
on world economic conditions, especially in China and Japan. First quarter 2003
U.S. gross domestic product was released in late April initially estimating U.S.
economic activity to be growing at 1.60%, well below many analysts' assessments.
These factors, as well as the possibility that the Federal Reserve Board could
again lower short-term interest rates to encourage more robust U.S. economic
growth, pushed bond prices higher during the last two weeks of the period. By
April 30, 2003, long-term U.S. Treasury bond yields had declined to almost
4.75%. Over the past six months, long-term U.S. bond yields fell more than 20
basis points.
For the six months ended April 30, 2003, long-term tax-exempt bond yields also
fell modestly. Yield volatility was reduced relative to that seen in U.S.
Treasury issues, as municipal bond prices were much less sensitive to worldwide
geopolitical pressures on a daily and weekly basis. Tax-exempt bond yields
generally followed their taxable counterparts higher, responding to a more
positive U.S. fixed income environment and continued slow economic growth. After
rising approximately 10 basis points in November 2002 to 5.30%, municipal bond
yields generally declined through February 2003. At February 28, 2003, long-term
tax-exempt revenue bond yields, as measured by the Bond Buyer Revenue Bond
Index, fell to approximately 5.05%. However, similar to U.S. Treasury bond
yields, once military action began in Iraq, municipal bond yields rose sharply
to nearly 5.20% before declining to approximately 5.10% by the end of April.
Over the past six months, long-term tax-exempt bond yields fell approximately 11
basis points, slightly less than U.S. Treasury obligations.
A number of factors have combined to generate consistently strong demand for
municipal bonds throughout the six-month period ended April 30, 2003. Generally
weak U.S. equity markets have supported continued positive demand for tax-exempt
products as investors have sought the relative security of fixed income issues.
Also, with tax-exempt money market rates near 1%, the demand for longer maturity
municipal issues has increased as investors have opted to buy longer maturity
issues rather than remain in cash reserves. Additionally, investors received
approximately $30 billion in January 2003 from bond maturities, coupon income
and proceeds from early redemptions. However, these positive demand factors were
not totally able to offset the increase in tax-exempt new-issue supply,
preventing more significant declines in tax-exempt bond yields. This modest
underperformance has served to make municipal bonds a particularly attractive
purchase relative to their taxable counterparts. Throughout most of the yield
curve, municipal bonds have been able to be purchased at yields near or
exceeding those of comparable Treasury issues. Compared to their recent
historical averages of 82% - 88% of U.S. Treasury yields, municipal bond yield
ratios in their current 95% - 105% range are likely to prove attractive to
long-term investors.
Declining U.S. equity markets and escalating geopolitical pressures have
resulted in reduced economic activity and consumer confidence. It is important
to note that, despite all the recent negative factors impeding the growth of
U.S. businesses, the U.S. economy still grew at an approximate 2.50% rate for
all of 2002, twice that of 2001. Similar expansion is expected for early 2003.
Lower oil prices, reduced geopolitical uncertainties, increased Federal spending
for defense, and a likely Federal tax cut are all factors which should promote
stronger economic growth later this year. However, it is questionable to expect
that business and investor confidence can be so quickly restored as to trigger
dramatic, explosive U.S. economic growth and engender associated, large-scale
interest rate increases. The resumption of solid
2 & 3
MuniYield New York Insured Fund, Inc., April 30, 2003
economic growth is likely to be a gradual process accompanied by equally
graduated increases in bond yields. Moderate economic growth, especially within
a context of negligible inflationary pressures, should not greatly endanger the
positive fixed income environments tax-exempt products currently enjoy.
Specific to New York, difficult negotiations between the state's legislature and
the governor have led to a delay in passage of the state's budget. Still facing
a sizable budget gap of approximately $11.5 billion, both sides have been unable
to agree on proposals submitted by both sides. As a result, the legislature has
submitted a proposed budget that could garner the two-thirds majority required
from the senate and assembly to override the governor's veto. Suggested
proposals with a realistic chance of approval include an increase in the state
sales tax of a quarter percent to 4.25%, an income tax surcharge on wealthier
state residents and the restoration of spending programs that had been
previously cut in the governor's proposed budget. The state is also closer to
passing authorization for the issuance of approximately $4.2 billion in a
tobacco-hybrid bond issue. Initially, state parties had considered issuing bonds
that would have used the tobacco payments to pay off the bonds but included a
pledge of the mortgage recording tax revenue in the event tobacco funds were
insufficient. However, the state seems to be leaning toward issuing the bonds
with a general fund appropriation pledge. Such a structure could have negative
rating implications.
Portfolio Strategy
During the six-month period ended April 30, 2003, we focused on enhancing the
Fund's dividend stream and reducing net asset price volatility. Market
volatility was expected because of conflicting economic signals and the war with
Iraq. Reducing net asset volatility generally involved reducing the Fund's
interest rate sensitivity. This strategy worked well in January 2003 as interest
rates increased from near historic lows. Since then, interest rates have gone
lower as a result of economic uncertainty, an unstable stock market and the war
with Iraq. As interest rates have fallen further, we shifted to a more defensive
position. While this strategy may have been implemented a bit early, we believe
that interest rates do not have much further to fall. The conclusion to the
Iraqi war should lift the tremendous downward pressure being applied upon the
U.S. economy. We expect the economy to revive by year-end and drive interest
rates higher.
During the six-month period ended April 30, 2003, the Fund's borrowing costs
remained in the 1% - 1.50% range, with interest rates presently near 1%. These
very attractive funding levels, in combination with the steep tax-exempt yield
curve, have continued to generate significant income benefits to the Fund's
Common Stock shareholders. We do not expect any material reduction in the Fund's
borrowing costs in 2003 as no additional monetary easings by the Federal Reserve
Board are anticipated. We expect the Fund's short-term borrowing costs to remain
at current attractive levels for most of the coming year. However, should
short-term tax-exempt rates rise, the benefits of leverage will diminish and the
yield paid to the Common Stock shareholder will decline. (For a more complete
explanation of the benefits and risks of leveraging, see page 1 of this report
to shareholders.)
In Conclusion
We appreciate your ongoing interest in MuniYield New York Insured Fund, Inc.,
and we look forward to assisting you with your financial needs in the months and
years to come.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Kenneth A. Jacob
Kenneth A. Jacob
Senior Vice President
/s/ John M. Loffredo
John M. Loffredo
Senior Vice President
/s/ Roberto Roffo
Roberto Roffo
Vice President and Portfolio Manager
May 19, 2003
PROXY RESULTS
During the six-month period ended April 30, 2003, MuniYield New York Insured
Fund, Inc.'s Common Stock shareholders voted on the following proposal. The
proposal was approved at a shareholders' meeting on April 28, 2003. A
description of the proposal and number of shares voted are as follows:
- -----------------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- -----------------------------------------------------------------------------------------------------------------------------
1. To elect the Fund's Directors: Terry K. Glenn 36,701,372 740,567
James H. Bodurtha 36,698,055 743,884
Joe Grills 36,684,369 757,570
Roberta Cooper Ramo 36,673,776 768,163
Robert S. Salomon, Jr. 36,681,046 760,893
Stephen B. Swensrud 36,689,624 752,315
- -----------------------------------------------------------------------------------------------------------------------------
During the six-month period ended April 30, 2003, MuniYield New York Insured
Fund, Inc.'s Preferred Stock shareholders (Series A, B, C, D & E) voted on the
following proposal. The proposal was approved at a shareholders' meeting on
April 28, 2003. A description of the proposal and number of shares voted are as
follows:
- -----------------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- -----------------------------------------------------------------------------------------------------------------------------
1. To elect the Fund's Board of Directors: Terry K. Glenn, James H. Bodurtha, Joe Grills,
Herbert I. London, Andre F. Perold, Roberta Cooper Ramo, Robert S. Salomon, Jr.
and Stephen B. Swensrud 10,404 30
- -----------------------------------------------------------------------------------------------------------------------------
4 & 5
MuniYield New York Insured Fund, Inc., April 30, 2003
SCHEDULE OF INVESTMENTS (in Thousands)
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
New York--134.8% AAA Aaa $23,790 Albany County, New York, Airport Authority Revenue Bonds, AMT, 6% due
12/15/2023 (c) $ 27,330
-------------------------------------------------------------------------------------------------------------
AAA Aaa 8,200 Buffalo and Fort Erie, New York, Public Bridge Authority, Toll
Bridge System Revenue Bonds, 5.75% due 1/01/2025 (d) 8,769
-------------------------------------------------------------------------------------------------------------
Buffalo, New York, School, GO, Series D (b):
AAA Aaa 1,250 5.50% due 12/15/2014 1,421
AAA Aaa 1,500 5.50% due 12/15/2016 1,685
-------------------------------------------------------------------------------------------------------------
AAA Aaa 4,300 Buffalo, New York, Sewer Authority Revenue Refunding Bonds, Series F,
6% due 7/01/2013 (b) 5,128
-------------------------------------------------------------------------------------------------------------
NR* Baa2 3,750 Cicero, New York, Local Development Corporation Revenue Bonds
(Cicero Community Recreation Project), Series A, 6.75% due 5/01/2042 4,100
-------------------------------------------------------------------------------------------------------------
AAA Aaa 1,700 Dutchess County, New York, Resource Recovery Agency Revenue Bonds
(Solid Waste System--Forward), Series A, 5.40% due 1/01/2013 (d) 1,906
-------------------------------------------------------------------------------------------------------------
Huntington, New York, GO, Refunding (a):
NR* Aaa 485 5.50% due 4/15/2011 555
NR* Aaa 460 5.50% due 4/15/2012 533
NR* Aaa 455 5.50% due 4/15/2013 524
NR* Aaa 450 5.50% due 4/15/2014 521
NR* Aaa 450 5.50% due 4/15/2015 523
-------------------------------------------------------------------------------------------------------------
NR* Aaa 1,675 Ilion, New York, Central School District, GO, Series B, 5.50% due
6/15/2015 1,957
-------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Commuter Facilities
Revenue Bonds, Series A (e):
AAA Aaa 2,000 5.75% due 1/01/2008 (d) 2,326
AAA NR* 7,945 5.50% due 7/01/2011 (b) 9,237
-------------------------------------------------------------------------------------------------------------
AAA Aaa 10,000 Metropolitan Transportation Authority, New York, Commuter Facilities
Revenue Refunding Bonds, Series B, 4.875% due 7/01/2018 (b)(h) 10,567
-------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Dedicated Tax Fund
Revenue Bonds, Series A:
AAA Aaa 3,000 4.75% due 10/01/2015 (b)(e) 3,318
AAA Aaa 1,015 5% due 11/15/2032 (c) 1,041
-------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Revenue Refunding
Bonds:
NR* Aaa 28,900 RIB, Series 724X, 9.88% due 11/15/2032 (c)(f) 36,330
AAA Aaa 2,500 Series A, 5.25% due 11/15/2031 (b) 2,628
-------------------------------------------------------------------------------------------------------------
AAA Aaa 19,000 Metropolitan Transportation Authority, New York, Service Contract
Revenue Refunding Bonds, Series A, 5.75% due 7/01/2031 (a) 21,389
-------------------------------------------------------------------------------------------------------------
AAA Aaa 5,605 Metropolitan Transportation Authority, New York, Transit Facilities
Revenue Bonds, Series A, 5.75% due 7/01/2007 (d)(e) 6,507
-------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Transit Facilities
Revenue Refunding Bonds:
AAA Aaa 5,000 Series A, 4.75% due 7/01/2024 (d)(h) 5,148
AAA Aaa 350 Series B, 4.75% due 7/01/2026 (b)(h) 360
AAA Aaa 2,885 Series C, 5.125% due 1/01/2012 (c)(e) 3,267
AAA Aaa 6,615 Series C, 5.125% due 7/01/2012 (c)(e) 7,535
-------------------------------------------------------------------------------------------------------------
AAA Aaa 8,200 Metropolitan Transportation Authority, New York, Transportation
Revenue Refunding Bonds, Series F, 5% due 11/15/2031 (d) 8,406
-------------------------------------------------------------------------------------------------------------
Monroe County, New York, IDA, Revenue Bonds (Southview Towers
Project), AMT:
NR* Aa1 1,400 6.125% due 2/01/2020 1,556
NR* Aa1 1,125 6.25% due 2/01/2031 1,245
-------------------------------------------------------------------------------------------------------------
AAA Aaa 12,130 Nassau Health Care Corporation, New York, Health System Revenue
Bonds, 5.75% due 8/01/2029 (c) 13,508
-------------------------------------------------------------------------------------------------------------
BBB A3 705 New York City, New York, City Health and Hospital Corporation,
Health System Revenue Bonds, Series A, 5.375% due 2/15/2026 719
-------------------------------------------------------------------------------------------------------------
AAA Aaa 16,555 New York City, New York, City IDA, IDR (Japan Airlines Company),
AMT, 6% due 11/01/2015 (c) 17,785
-------------------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds:
NR* Aaa 12,500 RIB, Series 726X, 9.88% due 6/15/2027 (d)(f) 15,524
AAA Aaa 2,850 Series A, 5.75% due 6/15/2031 (b) 3,208
AAA Aaa 11,100 Series B, 5.75% due 6/15/2026 (d) 12,295
AAA Aaa 17,200 Series B, 5.75% due 6/15/2029 (d) 19,313
A1+ VMIG1+ 14,200 VRDN, Series C, 1.35% due 6/15/2022 (b)(g) 14,200
A1+ VMIG1+ 3,500 VRDN, Series C, 1.35% due 6/15/2023 (b)(g) 3,500
-------------------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance Authority,
Water and Sewer System Revenue Refunding Bonds:
AAA Aaa 5,000 5.50% due 6/15/2033 (d) 5,457
AAA Aaa 2,250 Series A, 5.375% due 6/15/2026 (c) 2,406
A1+ VMIG1+ 7,300 VRDN, Series A, 1.35% due 6/15/2025 (b)(g) 7,300
A1+ VMIG1+ 10,000 VRDN, Series G, 1.35% due 6/15/2024 (b)(g) 10,000
-------------------------------------------------------------------------------------------------------------
AAA Aaa 2,020 New York City, New York, City Transit Authority, Metropolitan
Transportation Authority, Triborough, COP, Series A, 5.625% due
1/01/2012 (a) 2,284
-------------------------------------------------------------------------------------------------------------
Portfolio
Abbreviations
To simplify the listings of MuniYield New York Insured Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the names of many
of the securities according to the list below and at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DRIVERS Derivative Inverse Tax-Exempt Receipts
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
RIB Residual Interest Bonds
VRDN Variable Rate Demand Notes
6 & 7
MuniYield New York Insured Fund, Inc., April 30, 2003
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
New York New York City, New York, City Transitional Finance Authority
(continued) Revenue Bonds, Future Tax Secured:
AAA Aaa $ 3,000 Refunding, Series D, 5.25% due 2/01/2021 (d) $ 3,227
AA+ Aa2 7,100 Series B, 6.25% due 5/15/2010 (e) 8,616
AA+ Aa2 800 Series B, 6.25% due 11/15/2017 948
AAA Aaa 6,805 Series B, 6.25% due 11/15/2017 (b) 8,083
AAA Aaa 7,610 Series E, 5.25% due 2/01/2020 (d) 8,237
AAA Aaa 4,000 Series E, 5.25% due 2/01/2021 (d) 4,303
AAA Aaa 2,500 Series E, 5.25% due 2/01/2022 (d) 2,675
-------------------------------------------------------------------------------------------------------------
A A2 10,000 New York City, New York, Fiscal Year 2003, GO, Series I, 5.375%
due 3/01/2027 10,335
-------------------------------------------------------------------------------------------------------------
New York City, New York, GO:
A Aaa 11,043 RIB, Series 725X, 9.88% due 3/15/2027 (c)(f) 13,281
AAA Aaa 3,000 Series A, 5.75% due 5/15/2024 (b) 3,320
AAA Aaa 2,500 Series B, 5.75% due 8/01/2013 (d) 2,854
-------------------------------------------------------------------------------------------------------------
New York City, New York, GO, Refunding:
AAA Aaa 1,000 Series A, 6.375% due 5/15/2013 (b) 1,189
AAA Aaa 70 Series B, 7% due 2/01/2018 (a) 71
A A2 3,650 Series G, 5.75% due 2/01/2020 3,902
-------------------------------------------------------------------------------------------------------------
AAA Aaa 11,500 New York City, New York, IDA, Civic Facility Revenue Bonds (USTA
National Tennis Center Project), 6.375% due 11/15/2014 (c) 12,526
-------------------------------------------------------------------------------------------------------------
AAA Aaa 1,275 New York City, New York, IDA, Civic Facility Revenue Refunding Bonds
(Nightingale-Bamford School), 5.25% due 1/15/2018 (a) 1,397
-------------------------------------------------------------------------------------------------------------
AAA Aaa 7,970 New York City, New York, IDA, Parking Facility Revenue Bonds (Royal
Charter--New York Presbyterian), 5.75% due 12/15/2029 (c) 8,930
-------------------------------------------------------------------------------------------------------------
AAA Aaa 14,970 New York City, New York, IDA, Special Facilities Revenue Bonds
(Terminal One Group), AMT, 6.125% due 1/01/2024 (d) 15,652
-------------------------------------------------------------------------------------------------------------
AAA Aaa 8,000 New York State Dormitory Authority, Hospital Revenue Refunding Bonds
(North General Hospital), 5% due 2/15/2025 (j) 8,224
-------------------------------------------------------------------------------------------------------------
New York State Dormitory Authority Revenue Bonds:
AAA Aaa 5,715 (City University System), Consolidated Second Generation, Series
A, 6.125% due 7/01/2013 (a) 6,747
AAA Aaa 4,250 (Eger Health Care and Rehabilitation Center), 6.10% due
8/01/2037 (i) 4,978
AAA Aaa 2,000 (New School for Social Research), 5.75% due 7/01/2026 (d) 2,240
AAA Aaa 7,300 (School Districts Financing Program), Series E, 5.75% due
10/01/2030 (d) 8,142
AAA Aaa 1,000 Series B, 6.50% due 2/15/2011 (d)(h) 1,225
AAA Aaa 3,560 (State University Adult Facilities), Series B, 5.75% due
5/15/2010 (c)(e) 4,208
AAA Aaa 710 (Upstate Community Colleges), Series A, 6% due 7/01/2015 (c) 833
AAA Aaa 1,070 (Upstate Community Colleges), Series A, 6% due 7/01/2016 (c) 1,255
-------------------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Revenue Refunding Bonds:
AAA Aaa 8,165 (City University System), Consolidated Second Generation, Series
A, 6.125% due 7/01/2011 (a) 9,628
AAA Aaa 10,140 (City University System), Consolidated Second Generation, Series
A, 6.125% due 7/01/2012 (a) 11,916
AAA Aaa 1,000 (City University System), Consolidated, Series 1, 5.625% due
1/01/2008 (c)(e) 1,162
AAA Aaa 4,400 (City University System), Series C, 7.50% due 7/01/2010 (b) 5,339
AAA Aaa 4,405 (Mental Health Services), Series A, 5.75% due 2/15/2027 (d) 4,894
BB Baa3 500 (Mount Sinai Health), Series A, 6.625% due 7/01/2018 530
AAA Aaa 1,370 (School District Financing Program), Series I, 5.75% due
10/01/2018 (d) 1,569
AAA Aaa 6,000 (Siena College), 5.75% due 7/01/2026 (d) 6,719
-------------------------------------------------------------------------------------------------------------
AAA Aaa 12,750 New York State Energy Research and Development Authority, Facilities
Revenue Refunding Bonds (Consolidated Edison Co. of New York),
Series A, 6.10% due 8/15/2020 (a) 14,072
-------------------------------------------------------------------------------------------------------------
AAA Aaa 4,555 New York State Energy Research and Development Authority, Gas
Facilities Revenue Bonds (Brooklyn Union Gas Company), AMT, Series
B, 6.75% due 2/01/2024 (d) 4,641
-------------------------------------------------------------------------------------------------------------
AAA Aaa 3,500 New York State Environmental Facilities Corporation, Special
Obligation Revenue Refunding Bonds (Riverbank State Park), 6.25%
due 4/01/2012 (a) 4,224
-------------------------------------------------------------------------------------------------------------
AAA Aaa 2,695 New York State HFA, Revenue Refunding Bonds (Housing Mortgage
Project), Series A, 6.10% due 11/01/2015 (c) 2,967
-------------------------------------------------------------------------------------------------------------
New York State Medical Care Facilities Finance Agency Revenue Bonds:
AAA Aaa 5,375 (Health Center Project--Second Mortgage), Series A, 6.375% due
11/15/2019 (a) 5,994
AAA Aaa 1,475 (Mental Health Services), Series A, 6% due 2/15/2005 (d)(e) 1,626
AAA Aaa 25 (Mental Health Services), Series A, 6% due 2/15/2025 (d) 26
-------------------------------------------------------------------------------------------------------------
New York State Medical Care Facilities Finance Agency, Revenue
Refunding Bonds (Hospital & Nursing Homes) (i):
AAA NR* 2,000 Series B, 6.25% due 2/15/2025 2,207
AAA Aaa 11,085 Series C, 6.375% due 2/15/2008 (d)(e) 11,827
-------------------------------------------------------------------------------------------------------------
NR* Aa1 3,235 New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds,
AMT, Series 90, 6.35% due 10/01/2030 3,615
-------------------------------------------------------------------------------------------------------------
New York State Mortgage Agency, Homeowner Mortgage Revenue Refunding
Bonds, AMT:
NR* Aa1 1,250 Series 54, 6.20% due 10/01/2026 1,382
NR* Aa1 2,170 Series 58, 6.40% due 4/01/2027 2,397
NR* Aa1 375 Series 86, 5.95% due 10/01/2020 415
-------------------------------------------------------------------------------------------------------------
New York State Mortgage Agency Revenue Bonds, AMT (d):
AAA Aaa 385 24th Series, 6.125% due 10/01/2030 417
AAA NR* 10,000 DRIVERS, Series 196, 11.06% due 10/01/2030 (f) 12,469
NR* Aaa 2,850 DRIVERS, Series 295, 10.11% due 4/01/2030 (f) 3,261
-------------------------------------------------------------------------------------------------------------
AAA NR* 4,990 New York State Mortgage Agency Revenue Refunding Bonds, DRIVERS,
AMT, Series 279, 9.96% due 10/01/2028 (d)(f) 5,789
-------------------------------------------------------------------------------------------------------------
AAA Aaa 2,820 New York State Thruway Authority, Highway and Bridge Trust Fund
Revenue Bonds, Series A, 6.25% due 4/01/2011 (c) 3,327
-------------------------------------------------------------------------------------------------------------
8 & 9
MuniYield New York Insured Fund, Inc., April 30, 2003
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
New York AAA Aaa $ 5,200 New York State Thruway Authority, Highway and Bridge Trust Fund,
(concluded) Revenue Refunding Bonds, Series C, 5.25% due 4/01/2011 (d) $ 5,849
-------------------------------------------------------------------------------------------------------------
New York State Thruway Authority, Second General Highway and Bridge
Trust Fund Revenue Bonds, Series A (d):
AAA Aaa 1,000 5.25% due 4/01/2022 1,073
AAA Aaa 3,045 5.25% due 4/01/2023 3,251
-------------------------------------------------------------------------------------------------------------
New York State Thruway Authority, Service Contract Revenue Bonds
(Local Highway and Bridges Project):
AAA Aaa 10,000 5.625% due 4/01/2009 (d)(e) 11,693
AAA Aaa 13,800 5.75% due 4/01/2010 (a)(e) 16,281
AAA Aaa 2,000 Series A-2, 5.375% due 4/01/2016 (d) 2,218
-------------------------------------------------------------------------------------------------------------
New York State Thruway Authority, Service Contract Revenue Refunding
Bonds (Local Highway) (d):
NR* NR* 5,095 6% due 4/01/2007 (e) 5,954
NR* NR* 1,330 6% due 4/01/2011 1,525
NR* NR* 2,075 6% due 4/01/2012 2,380
-------------------------------------------------------------------------------------------------------------
AAA Aaa 3,190 New York State Urban Development Corporation, Revenue Refunding
Bonds (Correctional Capital Facilities), Series A, 6.50% due
1/01/2011 (c) 3,845
-------------------------------------------------------------------------------------------------------------
Niagara County, New York, IDA, Solid Waste Disposal Revenue
Refunding Bonds, AMT:
BBB Baa1 8,000 Series A, 5.45% due 11/15/2026 8,447
BBB Baa1 2,000 Series C, 5.625% due 11/15/2024 2,118
-------------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 Niagara Falls, New York, GO (Water Treatment Plant), AMT, 7.25%
due 11/01/2010 (d) 1,258
-------------------------------------------------------------------------------------------------------------
AAA Aaa 2,705 Niagara, New York, Frontier Authority, Airport Revenue Bonds
(Buffalo Niagara International Airport), Series B, 5.50% due
4/01/2019 (d) 2,987
-------------------------------------------------------------------------------------------------------------
AAA Aaa 1,260 North Country, New York, Development Authority, Solid Waste
Management System Revenue Refunding Bonds, 6% due 5/15/2015 (c) 1,522
-------------------------------------------------------------------------------------------------------------
North Hempstead, New York, GO, Refunding, Series B (b):
AAA Aaa 1,745 6.40% due 4/01/2013 2,143
AAA Aaa 555 6.40% due 4/01/2017 700
-------------------------------------------------------------------------------------------------------------
AAA Aaa 1,665 Oneida County, New York, IDA, Civic Facilities Revenue Bonds (Mohawk
Valley), Series A, 5.20% due 2/01/2013 (c) 1,824
-------------------------------------------------------------------------------------------------------------
AA A1 4,500 Onondaga County, New York, IDA, Sewer Facilities Revenue Bonds
(Bristol-Myers Squibb Company Project), AMT, 5.75% due 3/01/2024 5,110
-------------------------------------------------------------------------------------------------------------
AAA Aaa 2,180 Port Authority of New York and New Jersey, Consolidated Revenue
Bonds, AMT, 97th Series, 6.50% due 7/15/2019 (b) 2,348
-------------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 Port Authority of New York and New Jersey, Consolidated Revenue
Refunding Bonds, AMT, 119th Series, 5.50% due 9/15/2016 (b) 5,472
-------------------------------------------------------------------------------------------------------------
AAA Aaa 4,075 Port Authority of New York and New Jersey, Revenue Bonds, Trust
Receipts, AMT, Class R, Series 10, 10.079% due 1/15/2017 (c)(f) 4,976
-------------------------------------------------------------------------------------------------------------
AAA NR* 7,500 Port Authority of New York and New Jersey Revenue Refunding Bonds,
DRIVERS, AMT, Series 177, 10.34% due 10/15/2032 (d)(f) 9,546
-------------------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Special Obligation
Revenue Bonds (d):
AAA NR* 1,750 DRIVERS, AMT, Series 192, 9.85% due 12/01/2025 (f) 2,058
AAA NR* 5,080 DRIVERS, AMT, Series 278, 9.85% due 12/01/2022 (f) 5,984
AAA Aaa 14,750 (JFK International Air Terminal), AMT, Series 6, 6.25% due
12/01/2010 17,041
AAA Aaa 7,175 (Special Project--JFK International Air Terminal), AMT, Series 6,
6.25% due 12/01/2011 8,289
AAA Aaa 4,425 (Special Project--JFK International Air Terminal), AMT, Series 6,
6.25% due 12/01/2013 5,140
AAA Aaa 7,380 (Special Project--JFK International Air Terminal), AMT, Series 6,
6.25% due 12/01/2014 8,601
-------------------------------------------------------------------------------------------------------------
AAA Aaa 1,255 Rensselaer County, New York, IDA, Civic Facility Revenue Bonds
(Polytech Institute), Series B, 5.50% due 8/01/2022 (a) 1,375
-------------------------------------------------------------------------------------------------------------
Suffolk County, New York, IDA, Solid Waste Disposal Facility Revenue
Refunding Bonds (Ogden Martin System Huntington Project), AMT (a):
AAA Aaa 8,530 6% due 10/01/2010 9,984
AAA Aaa 9,170 6.15% due 10/01/2011 10,844
AAA Aaa 6,470 6.25% due 10/01/2012 7,752
-------------------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York, General Purpose
Revenue Refunding Bonds (d):
AAA Aaa 1,410 Series B, 5% due 11/15/2010 1,578
AAA Aaa 2,305 Series Y, 6% due 1/01/2012 (h) 2,724
-------------------------------------------------------------------------------------------------------------
AA- NR* 4,700 Triborough Bridge and Tunnel Authority, New York, Revenue Bonds,
DRIVERS, Series 293, 9.41% due 1/01/2032 (f) 5,487
-------------------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York, Revenue Refunding
Bonds:
AAA Aaa 8,000 5.25% due 11/15/2023 8,531
AAA Aaa 14,560 5% due 11/15/2032 (d) 14,926
-------------------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York, Subordinate
Revenue Bonds:
A+ A1 6,000 5.25% due 11/15/2030 6,277
AAA Aaa 10,000 5% due 11/15/2032 (b) 10,272
-------------------------------------------------------------------------------------------------------------
AAA Aaa 2,010 Yonkers, New York, GO, Series A, 5.75% due 10/01/2017 (b) 2,318
====================================================================================================================================
Puerto Rico--5.7% A- A3 10,000 Children's Trust Fund, Puerto Rico, Tobacco Settlement Revenue
Refunding Bonds, 5.50% due 5/15/2039 7,982
-------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway and Transportation Authority,
Transportation Revenue Bonds:
AAA Aaa 1,900 5.25% due 7/01/2018 (b) 2,105
A Baa1 8,495 Series D, 5.75% due 7/01/2041 9,403
AAA Aaa 2,265 Series G, 5.25% due 7/01/2019 (b) 2,492
AAA Aaa 1,000 Series G, 5.25% due 7/01/2021 (b) 1,085
AAA Aaa 1,250 Trust Receipts, Class R, Series B, 10.079% due 7/01/2035 (d)(f) 1,693
-------------------------------------------------------------------------------------------------------------
BBB+ Baa3 1,750 Puerto Rico Public Finance Corporation, Commonwealth Appropriation
Revenue Bonds, Series E, 5.50% due 8/01/2029 1,824
-------------------------------------------------------------------------------------------------------------
NR* Aa2 6,100 Puerto Rico Public Finance Corporation Revenue Bonds, DRIVERS,
Series 272, 9.13% due 8/01/2030 (f) 7,279
====================================================================================================================================
Total Municipal Bonds (Cost--$774,294)--140.5% 838,686
====================================================================================================================================
10 & 11
MuniYield New York Insured Fund, Inc., April 30, 2003
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
Shares
Held Short-Term Securities Value
====================================================================================================================================
22 CMA New York Municipal Money Fund** $ 22
====================================================================================================================================
Total Short-Term Securities (Cost--$22)--0.0% 22
====================================================================================================================================
Total Investments (Cost--$774,316)--140.5% 838,708
Unrealized Depreciation on Forward Interest Rate Swaps***--(0.2%) (1,159)
Other Assets Less Liabilities--3.1% 18,336
Preferred Stock, at Redemption Value--(43.4%) (259,129)
---------
Net Assets Applicable to Common Stock--100.0% $ 596,756
=========
====================================================================================================================================
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) Prerefunded.
(f) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the rate in
effect at April 30, 2003.
(g) The interest rate is subject to change periodically based upon prevailing
market rates. The interest rate shown is the rate in effect at April 30,
2003.
(h) Escrowed to maturity.
(i) FHA Insured.
(j) XL Capital Insured.
+ Highest short-term rating by Moody's Investors Service, Inc.
* Not Rated.
** 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 22 $25
--------------------------------------------------------------------------
*** Forward interest rate swaps entered into as of April 30, 2003 were as
follows:
(in Thousands)
--------------------------------------------------------------------------
Unrealized
Notional Appreciation
Amount (Depreciation)
--------------------------------------------------------------------------
Receive a variable rate equal to 7-Day Bond
Market Association rate at quarterly reset
date and pay a fixed rate equal to 4.265%.
Broker, JP Morgan Chase
Expires, July 9, 2023 42,500 $(1,358)
Receive a variable rate equal to 3-month USD
LIBOR and pay a fixed rate equal to 4.17%.
Broker, JP Morgan Chase
Expires, June 6, 2013 41,000 199
-------
$(1,159)
=======
--------------------------------------------------------------------------
See Notes to Financial Statements.
STATEMENT OF NET ASSETS
As of April 30, 2003
===============================================================================================================================
Assets: Investments, at value (identified cost--$774,315,664) ............. $ 838,708,091
Cash .............................................................. 41,263
Receivables:
Interest ........................................................ $ 13,432,406
Securities sold ................................................. 5,649,699 19,082,105
-------------
Prepaid expenses and other assets ................................. 127,844
-------------
Total assets ...................................................... 857,959,303
-------------
===============================================================================================================================
Liabilities: Unrealized depreciation on forward interest rate swaps ............ 1,159,013
Payables:
Dividends to Common Stock shareholders .......................... 394,665
Investment adviser .............................................. 359,508
Other affiliates ................................................ 6,578 760,751
-------------
Accrued expenses .................................................. 154,833
-------------
Total liabilities ................................................. 2,074,597
-------------
===============================================================================================================================
Preferred Stock: Preferred Stock, at redemption value, par value $.05 per share
(1,700 Series A shares, 1,700 Series B shares, 2,800 Series C
shares, 1,960 Series D shares and 2,200 Series E shares of AMPS*
issued and outstanding at $25,000 per share liquidation preference) 259,128,510
-------------
===============================================================================================================================
Net Assets Applicable Net assets applicable to Common Stock ............................. $ 596,756,196
To Common Stock: =============
===============================================================================================================================
Analysis of Net Common Stock, par value $.10 per share (39,445,962 shares issued
Assets Applicable and outstanding) .................................................. $ 3,944,596
To Common Stock: Paid-in capital in excess of par .................................. 557,669,466
Undistributed investment income--net .............................. $ 5,624,195
Accumulated realized capital losses on investments--net ........... (33,715,475)
Unrealized appreciation on investments--net ....................... 63,233,414
-------------
Total accumulated earnings--net ................................... 35,142,134
-------------
Total--Equivalent to $15.13 net asset value per share of Common
Stock (market price--$13.52) ...................................... $ 596,756,196
=============
===============================================================================================================================
* Auction Market Preferred Stock.
See Notes to Financial Statements.
12 & 13
MuniYield New York Insured Fund, Inc., April 30, 2003
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2003
===============================================================================================================================
Investment Interest .......................................................... $ 22,324,849
Income: Dividends ......................................................... 24,587
-------------
Total income ...................................................... 22,349,436
-------------
===============================================================================================================================
Expenses: Investment advisory fees .......................................... $ 2,097,801
Commission fees ................................................... 332,121
Accounting services ............................................... 127,383
Transfer agent fees ............................................... 47,122
Professional fees ................................................. 32,111
Printing and shareholder reports .................................. 21,787
Custodian fees .................................................... 21,723
Directors' fees and expenses ...................................... 20,667
Listing fees ...................................................... 14,649
Pricing fees ...................................................... 12,885
Other ............................................................. 28,138
-------------
Total expenses before reimbursement ............................... 2,756,387
Reimbursement of expenses ......................................... (13,495)
-------------
Total expenses after reimbursement ................................ 2,742,892
-------------
Investment income--net ............................................ 19,606,544
-------------
===============================================================================================================================
Realized & Unrealized Realized loss on investments--net ................................. (2,468,292)
Gain (Loss) on Change in unrealized appreciation/depreciation on investments--net 12,815,562
Investments--Net: -------------
Total realized and unrealized gain on investments--net ............ 10,347,270
-------------
===============================================================================================================================
Dividends to Investment income--net ............................................ (1,684,111)
Preferred Stock -------------
Shareholders: Net Increase in Net Assets Resulting from Operations .............. $ 28,269,703
=============
===============================================================================================================================
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 2003 2002
==============================================================================================================================
Operations: Investment income--net ........................................... $ 19,606,544 $ 37,085,056
Realized loss on investments--net ................................ (2,468,292) (1,928,997)
Change in unrealized appreciation/depreciation on investments--net 12,815,562 (5,490,653)
Dividends to Preferred Stock shareholders ........................ (1,684,111) (3,893,109)
------------- -------------
Net increase in net assets resulting from operations ............. 28,269,703 25,772,297
------------- -------------
==============================================================================================================================
Dividends & Investment income--net ........................................... (16,306,961) (32,765,197)
Distributions to Realized gain on investments--net ................................ -- (155,733)
Common Stock ------------- -------------
Shareholders: Net decrease in net assets resulting from dividends and
distributions to Common Stock shareholders ....................... (16,306,961) (32,920,930)
------------- -------------
==============================================================================================================================
Net Assets Total increase (decrease) in net assets applicable to Common Stock 11,962,742 (7,148,633)
Applicable to Beginning of period .............................................. 584,793,454 591,942,087
Common Stock: ------------- -------------
End of period* ................................................... $ 596,756,196 $ 584,793,454
============= =============
==============================================================================================================================
*Undistributed investment income--net ............................. $ 5,624,195 $ 4,008,723
============= =============
==============================================================================================================================
See Notes to Financial Statements.
14 & 15
MuniYield New York Insured Fund, Inc., April 30, 2003
FINANCIAL HIGHLIGHTS
The following per share data and ratios have
been derived from information provided in the For the Six For the
financial statements. Months Ended Year Ended October 31,
April 30, --------------------------------------------
Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999
==================================================================================================================================
Per Share Net asset value, beginning of period ........ $ 14.83 $ 15.01 $ 13.76 $ 13.02 $ 16.26
Operating -------- -------- -------- -------- --------
Performance:++ Investment income--net ...................... .50@@@ .94 .96 .87 1.03
Realized and unrealized gain (loss) on
investments--net ............................ .25 (.19) 1.26 .90 (2.47)
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net ..................... (.04) (.10) (.20) (.25) (.16)
Realized gain on investments--net .......... -- --@ -- -- (.07)
In excess of realized gain on investments--net -- -- -- -- (.03)
-------- -------- -------- -------- --------
Total from investment operations ............ .71 .65 2.02 1.52 (1.70)
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net ..................... (.41) (.83) (.77) (.78) (.89)
Realized gain on investments--net .......... -- --@ -- -- (.45)
In excess of realized gain on investments--net -- -- -- -- (.20)
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders .......................... (.41) (.83) (.77) (.78) (1.54)
-------- -------- -------- -------- --------
Net asset value, end of period .............. $ 15.13 $ 14.83 $ 15.01 $ 13.76 $ 13.02
======== ======== ======== ======== ========
Market price per share, end of period ....... $ 13.52 $ 13.36 $ 14.02 $ 12.25 $12.4375
======== ======== ======== ======== ========
==================================================================================================================================
Total Investment Based on market price per share ............. 4.36%@@ 1.24% 21.26% 5.11% (15.63%)
Return:** ======== ======== ======== ======== ========
Based on net asset value per share .......... 5.21%@@ 4.97% 15.57% 12.79% (11.40%)
======== ======== ======== ======== ========
==================================================================================================================================
Ratios Based on Total expenses, net of reimbursement and
Average Net Assets excluding reorganization expenses*** ........ .94%* .96% .97% 1.01% 1.02%
Of Common Stock: ======== ======== ======== ======== ========
Total expenses, excluding reorganization
expenses*** ................................. .95%* .96% .97% 1.01% 1.02%
======== ======== ======== ======== ========
Total expenses*** ........................... .95%* .96% .97% 1.16% 1.02%
======== ======== ======== ======== ========
Total investment income--net*** ............. 6.74%* 6.37% 6.66% 7.21% 6.96%
======== ======== ======== ======== ========
Amount of dividends to Preferred Stock
shareholders ................................ .58%* .66% 1.38% 1.93% 1.04%
======== ======== ======== ======== ========
Investment income--net, to Common Stock
shareholders ................................ 6.16%* 5.71% 5.28% 5.28% 5.92%
======== ======== ======== ======== ========
==================================================================================================================================
Ratios Based on Total expenses, net of reimbursement and
Average Net Assets excluding reorganization expenses ........... .65%* .66% .67% .68% .71%
Of Common & ======== ======== ======== ======== ========
Preferred Stock:*** Total expenses, excluding reorganization
expenses .................................... .66%* .66% .67% .68% .71%
======== ======== ======== ======== ========
Total expenses .............................. .66%* .66% .67% .78% .71%
======== ======== ======== ======== ========
Total investment income--net ................ 4.68%* 4.41% 4.59% 4.82% 4.79%
======== ======== ======== ======== ========
==================================================================================================================================
Ratios Based on Dividends to Preferred Stock shareholders ... 1.31%* 1.49% 3.07% 3.91% 2.30%
Average Net Assets ======== ======== ======== ======== ========
Of Preferred Stock:
==================================================================================================================================
Supplemental Net assets applicable to Common Stock, end of
Data: period (in thousands) ....................... $596,756 $584,793 $591,942 $542,709 $163,807
======== ======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) .............................. $259,000 $259,000 $259,000 $259,000 $ 85,000
======== ======== ======== ======== ========
Portfolio turnover .......................... 25.38% 87.56% 83.08% 148.51% 99.71%
======== ======== ======== ======== ========
==================================================================================================================================
Leverage: Asset coverage per $1,000 ................... $ 3,304 $ 3,258 $ 3,285 $ 3,095 $ 2,927
======== ======== ======== ======== ========
==================================================================================================================================
Dividends Per Share Series A--Investment income--net ............ $ 130 $ 334 $ 791 $ 980 $ 566
On Preferred Stock ======== ======== ======== ======== ========
Outstanding:+ Series B--Investment income--net ............ $ 126 $ 305 $ 731 $ 941 $ 583
======== ======== ======== ======== ========
Series C--Investment income--net ............ $ 135 $ 356 $ 774 $ 661 --
======== ======== ======== ======== ========
Series D--Investment income--net ............ $ 270 $ 503 $ 715 $ 634 --
======== ======== ======== ======== ========
Series E--Investment income--net ............ $ 156 $ 356 $ 812 $ 653 --
======== ======== ======== ======== ========
==================================================================================================================================
* 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.
*** Do not reflect the effect of dividends to Preferred Stock shareholders.
+ The Fund's Preferred Stock was issued on September 16, 1992 (Series A and
Series B) and March 6, 2000 (Series C, Series D and Series E).
++ Certain prior year amounts have been reclassified to conform to current
year presentation.
@ Amount is less than $.01 per share.
@@ Aggregate total investment return.
@@@ Based on average shares outstanding.
See Notes to Financial Statements.
16 & 17
MuniYield New York Insured Fund, Inc., April 30, 2003
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield New York Insured Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end management
investment company. 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 MYN. 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 most recent bid price or yield
equivalent as obtained by the Fund's pricing service from dealers that make
markets in such 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). Securities with remaining
maturities 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 their 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 movement 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.
o 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.
o Options -- The Fund is authorized to write covered call options and purchase
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).
Written and purchased options are non-income producing investments.
o Forward interest rate swaps -- The Fund is authorized to enter into forward
interest rate swaps. In a forward interest rate swap, the Fund and the
counterparty agree to pay or receive interest on a specified notional contract
amount, commencing on a specified future effective date, unless terminated
earlier. The value of the agreement is determined by quoted fair values received
daily by the Fund from the counterparty. 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 .50% of the Fund's average weekly net assets, including
proceeds from the issuance of Preferred Stock. For the six months ended April
30, 2003, FAM reimbursed the Fund in the amount of $13,495.
For the six months ended April 30, 2003, the Fund reimbursed FAM $9,860 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 six
months ended April 30, 2003 were $207,802,987 and $229,642,140, respectively.
Net realized gains (losses) for the six months ended April 30, 2003 and net
unrealized gains (losses) as of April 30, 2003 were as follows:
- --------------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Gains (Losses)
- --------------------------------------------------------------------------------
Long-term investments ................ $ 7,230,752 $ 64,392,427
Financial futures contracts .......... (2,632,012) --
Forward interest rate swaps .......... (7,067,032) (1,159,013)
------------ ------------
Total ................................ $ (2,468,292) $ 63,233,414
============ ============
- --------------------------------------------------------------------------------
As of April 30, 2003, net unrealized appreciation for Federal income tax
purposes aggregated $64,229,731, of which $65,824,673 related to appreciated
securities and $1,594,942 related to depreciated securities. The aggregate cost
of
18 & 19
MuniYield New York Insured Fund, Inc., April 30, 2003
NOTES TO FINANCIAL STATEMENTS (concluded)
investments at April 30, 2003 for Federal income tax purposes was $774,478,360.
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 the holders of Common Stock.
Common Stock
Shares issued and outstanding during the six months ended April 30, 2003 and the
year ended October 31, 2002 remained constant.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are redeemable shares of Preferred Stock
of the Fund, with a par value of $.05 per share and a liquidation preference of
$25,000 per share, 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 yields in effect at April 30, 2003 were as follows: Series
A, .95%; Series B, 1.15%; Series C, 1.25%; Series D, 2.15%; and Series E, .965%.
Shares issued and outstanding during the six months ended April 30, 2003 and the
year ended October 31, 2002 remained constant.
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 six months ended April 30, 2003, Merrill Lynch, Pierce, Fenner
& Smith Incorporated, an affiliate of FAM, earned $99,831 as commissions.
5. Capital Loss Carryforward:
On October 31, 2002, the Fund had a net capital loss carryforward of
$24,965,865, of which $12,664,140 expires in 2007, $9,294,569 expires in 2008
and $3,007,156 expires in 2010. This amount will be available to offset like
amounts of any future taxable gains.
6. Subsequent Event:
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of $.068900 per share on May 29, 2003 to shareholders of record on May
16, 2003.
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute all or a portion of its net
investment income to its shareholders on a monthly basis. In order to provide
shareholders with a more consistent yield to the current trading price of shares
of Common Stock of the Fund, the Fund 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 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 Fund for any particular month may be more or less than the amount of net
investment income earned by the Fund during such month. The Fund's current
accumulated but undistributed net investment income, if any, is disclosed in the
Statement of Net Assets, which comprises part of the financial information
included in this report.
20 & 21
MuniYield New York Insured Fund, Inc., April 30, 2003
QUALITY PROFILE
The quality ratings of securities in the Fund as of April 30, 2003 were as
follows:
- --------------------------------------------------------------------------------
Percent of
Total
S&P Rating/Moody's Rating Investments
- --------------------------------------------------------------------------------
AAA/Aaa ................................................. 83.5%
AA/Aa ................................................... 4.5
A/A ..................................................... 4.6
BBB/Baa ................................................. 2.0
NR (Not Rated) .......................................... 1.2
Other* .................................................. 4.2
- --------------------------------------------------------------------------------
* Temporary investments in short-term municipal securities.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
James H. Bodurtha, Director
Joe Grills, Director
Herbert I. London, Director
Andre F. Perold, Director
Roberta Cooper Ramo, Director
Robert S. Salomon, Jr., Director
Stephen B. Swensrud, Director
Kenneth A. Jacob, Senior Vice President
John M. Loffredo, Senior Vice President
Roberto W. Roffo, Vice President
Donald C. Burke, Vice President and Treasurer
Brian D. Stewart, Secretary
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
The Bank of New York
100 Church Street
New York, NY 10286
NYSE Symbol
MYN
- --------------------------------------------------------------------------------
Melvin R. Seiden, Director of MuniYield New York Insured Fund, Inc., has
recently retired. The Fund's Board of Directors wishes Mr. Seiden well in his
retirement.
- --------------------------------------------------------------------------------
[LOGO] Merrill Lynch Investment Managers
[GRAPHICS OMITTED]
MuniYield New York Insured Fund, Inc. seeks to provide shareholders with as high
a level of current income exempt from Federal income tax and New York State and
New York City 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 issuer, is exempt from Federal income tax and New York State and
New York City personal income taxes.
This report, including the financial information herein, is transmitted to
shareholders of MuniYield New York Insured Fund, Inc. for their information. It
is not a prospectus. Past performance results shown in this report should not be
considered a representation of future performance. 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.
Statements and other information herein are as dated and are subject to change.
MuniYield New York Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
[RECYCLED LOGO] Printed on post-consumer recycled paper #16159--4/03
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 (not answered until July 15, 2003 and only
annually for funds)
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 (not answered until July
15, 2003 and only annually for funds)
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.
(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. N/A (not answered
until July 1, 2003)
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.
MuniYield New York Insured Fund, Inc.
By: /s/ Terry K. Glenn
---------------------------
Terry K. Glenn,
President of
MuniYield New York Insured Fund, Inc.
Date: June 23, 2003
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
MuniYield New York Insured Fund, Inc.
Date: June 23, 2003
By: /s/ Donald C. Burke
---------------------------
Donald C. Burke,
Chief Financial Officer of
MuniYield New York Insured Fund, Inc.
Date: June 23, 2003
Attached hereto as an exhibit are the certifications pursuant to
Section 906 of the Sarbanes-Oxley Act.