|
|
|
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock MuniYield New Jersey
Quality Fund, Inc. (MJI)
|
|
|
|
|
BlackRock MuniYield Pennsylvania
Quality Fund (MPA)
|
|
Increase (Decrease) in Net Assets Applicable to Common Shareholders:
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended
July 31,
2013
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended
July 31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
3,876,998
|
|
|
$
|
7,643,570
|
|
|
|
|
$
|
4,990,301
|
|
|
$
|
10,296,569
|
|
Net realized gain (loss)
|
|
|
(2,141,108
|
)
|
|
|
(311,747
|
)
|
|
|
|
|
(1,938,563
|
)
|
|
|
141,354
|
|
Net change in unrealized appreciation/depreciation
|
|
|
6,955,575
|
|
|
|
(17,628,493
|
)
|
|
|
|
|
7,529,026
|
|
|
|
(22,994,319
|
)
|
Distributions to VRDP Shareholders from net realized gain
|
|
|
|
|
|
|
(5,857
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations
|
|
|
8,691,465
|
|
|
|
(10,302,527
|
)
|
|
|
|
|
10,580,764
|
|
|
|
(12,556,396
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and Distributions to Common Shareholders From
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(3,949,435
|
)
|
|
|
(7,777,215
|
)
1
|
|
|
|
|
(5,107,968
|
)
|
|
|
(10,214,489
|
)
1
|
Net realized gain
|
|
|
(38,170
|
)
|
|
|
(254,189
|
)
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in net assets resulting from dividends and distributions to Common Shareholders
|
|
|
(3,987,605
|
)
|
|
|
(8,031,404
|
)
|
|
|
|
|
(5,107,968
|
)
|
|
|
(10,214,489
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Share Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinvestment of common dividends
|
|
|
|
|
|
|
473,838
|
|
|
|
|
|
|
|
|
|
65,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets Applicable to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total increase (decrease) in net assets applicable to Common Shareholders
|
|
|
4,703,860
|
|
|
|
(17,860,093
|
)
|
|
|
|
|
5,472,796
|
|
|
|
(22,705,359
|
)
|
Beginning of period
|
|
|
127,081,884
|
|
|
|
144,941,977
|
|
|
|
|
|
167,857,126
|
|
|
|
190,562,485
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
$
|
131,785,744
|
|
|
$
|
127,081,884
|
|
|
|
|
$
|
173,329,922
|
|
|
$
|
167,857,126
|
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed net investment income, end of period
|
|
$
|
2,505,429
|
|
|
$
|
2,577,866
|
|
|
|
|
$
|
1,913,193
|
|
|
$
|
2,030,860
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Determined in accordance with federal income tax
regulations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended January 31, 2014 (Unaudited)
|
|
BlackRock
MuniHoldings
California
Quality
Fund, Inc.
(MUC)
|
|
|
BlackRock
MuniHoldings
New Jersey
Quality
Fund, Inc.
(MUJ)
|
|
|
BlackRock
MuniYield
Investment
Quality Fund
(MFT)
|
|
|
BlackRock
MuniYield
Michigan
Quality
Fund, Inc.
(MIY)
|
|
|
BlackRock
MuniYield
New Jersey
Quality
Fund, Inc.
(MJI)
|
|
|
BlackRock
MuniYield
Pennsylvania
Quality Fund
(MPA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Provided by Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
$
|
43,146,183
|
|
|
$
|
20,284,840
|
|
|
$
|
7,299,675
|
|
|
$
|
13,832,027
|
|
|
$
|
8,691,465
|
|
|
$
|
10,580,764
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in interest receivable
|
|
|
(142,777
|
)
|
|
|
264,728
|
|
|
|
45,751
|
|
|
|
(286,251
|
)
|
|
|
193,998
|
|
|
|
270,778
|
|
Increase in cash pledged for financial futures contracts
|
|
|
(664,000
|
)
|
|
|
(173,000
|
)
|
|
|
(169,000
|
)
|
|
|
(145,000
|
)
|
|
|
(80,000
|
)
|
|
|
(353,000
|
)
|
Increase in prepaid expenses
|
|
|
(5,711
|
)
|
|
|
(23,651
|
)
|
|
|
(11,933
|
)
|
|
|
(15,261
|
)
|
|
|
(17,274
|
)
|
|
|
(13,073
|
)
|
Increase (decrease) in investment advisory fees payable
|
|
|
(13,526
|
)
|
|
|
645
|
|
|
|
(5,737
|
)
|
|
|
(6,922
|
)
|
|
|
(812
|
)
|
|
|
(6,440
|
)
|
Decrease in interest expense and fees payable
|
|
|
(57,335
|
)
|
|
|
(7,601
|
)
|
|
|
(7,402
|
)
|
|
|
(5,527
|
)
|
|
|
(4,111
|
)
|
|
|
(11,719
|
)
|
Decrease in other accrued expenses payable
|
|
|
(59,459
|
)
|
|
|
(45,233
|
)
|
|
|
(12,295
|
)
|
|
|
(38,565
|
)
|
|
|
(13,022
|
)
|
|
|
(18,782
|
)
|
Increase in variation margin payable on financial futures contracts
|
|
|
118,748
|
|
|
|
32,656
|
|
|
|
32,655
|
|
|
|
26,718
|
|
|
|
14,844
|
|
|
|
65,312
|
|
Increase (decrease) in Officers and Directors fees payable
|
|
|
19,507
|
|
|
|
352
|
|
|
|
(83
|
)
|
|
|
229
|
|
|
|
(5
|
)
|
|
|
7
|
|
Net realized loss on investments
|
|
|
6,625,877
|
|
|
|
4,380,120
|
|
|
|
4,229,940
|
|
|
|
7,075,021
|
|
|
|
2,172,297
|
|
|
|
2,032,537
|
|
Net unrealized gain on investments
|
|
|
(33,012,990
|
)
|
|
|
(15,485,711
|
)
|
|
|
(7,945,911
|
)
|
|
|
(13,073,857
|
)
|
|
|
(7,011,104
|
)
|
|
|
(7,733,889
|
)
|
Amortization of premium and accretion of discount on investments
|
|
|
2,590,636
|
|
|
|
(134,081
|
)
|
|
|
338,119
|
|
|
|
469,064
|
|
|
|
(223,730
|
)
|
|
|
210,781
|
|
Amortization of deferred offering costs
|
|
|
51,930
|
|
|
|
3,023
|
|
|
|
24,947
|
|
|
|
2,218
|
|
|
|
2,970
|
|
|
|
2,451
|
|
Proceeds from sales of long-term investments
|
|
|
133,884,304
|
|
|
|
50,927,802
|
|
|
|
54,077,525
|
|
|
|
33,483,121
|
|
|
|
21,894,627
|
|
|
|
37,599,778
|
|
Purchases of long-term investments
|
|
|
(110,272,532
|
)
|
|
|
(50,094,240
|
)
|
|
|
(52,309,829
|
)
|
|
|
(21,433,294
|
)
|
|
|
(20,586,622
|
)
|
|
|
(25,173,649
|
)
|
Net proceeds from sales (purchases) of short-term securities
|
|
|
(5,311,155
|
)
|
|
|
3,177,150
|
|
|
|
9,705,693
|
|
|
|
(136,987
|
)
|
|
|
1,459,374
|
|
|
|
1,671,698
|
|
|
|
|
|
|
Cash provided by operating activities
|
|
|
36,897,700
|
|
|
|
13,107,799
|
|
|
|
15,292,115
|
|
|
|
19,746,734
|
|
|
|
6,492,895
|
|
|
|
19,123,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Used for Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in bank overdraft
|
|
|
(12,651
|
)
|
|
|
(8,444
|
)
|
|
|
(4,529
|
)
|
|
|
(7,264
|
)
|
|
|
(4,566
|
)
|
|
|
(5,337
|
)
|
Cash receipts from TOB trust certificates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95,000
|
|
|
|
|
|
|
|
|
|
Cash payments for TOB trust certificates
|
|
|
(19,294,984
|
)
|
|
|
(3,531,804
|
)
|
|
|
(11,678,010
|
)
|
|
|
(11,483,787
|
)
|
|
|
(2,500,724
|
)
|
|
|
(14,010,249
|
)
|
Cash dividends paid to Common Shareholders
|
|
|
(17,590,065
|
)
|
|
|
(9,567,551
|
)
|
|
|
(3,609,576
|
)
|
|
|
(8,350,683
|
)
|
|
|
(3,987,605
|
)
|
|
|
(5,107,968
|
)
|
|
|
|
|
|
Cash used for financing activities
|
|
|
(36,897,700
|
)
|
|
|
(13,107,799
|
)
|
|
|
(15,292,115
|
)
|
|
|
(19,746,734
|
)
|
|
|
(6,492,895
|
)
|
|
|
(19,123,554
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at beginning of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for interest and fees
|
|
$
|
1,889,119
|
|
|
$
|
362,699
|
|
|
$
|
388,872
|
|
|
$
|
816,610
|
|
|
$
|
156,280
|
|
|
$
|
478,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
48
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Financial Highlights
|
|
BlackRock MuniHoldings California Quality Fund, Inc.
(MUC)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
Period
July 1, 2009
to July 31,
2009
|
|
|
Year Ended
June 30,
2009
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
14.52
|
|
|
$
|
16.41
|
|
|
$
|
14.27
|
|
|
$
|
14.55
|
|
|
$
|
13.21
|
|
|
$
|
13.05
|
|
|
$
|
13.84
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.42
|
|
|
|
0.86
|
|
|
|
0.95
|
|
|
|
0.97
|
|
|
|
0.92
|
|
|
|
0.08
|
|
|
|
0.90
|
|
Net realized and unrealized gain (loss)
|
|
|
0.63
|
|
|
|
(1.82
|
)
|
|
|
2.13
|
|
|
|
(0.33
|
)
|
|
|
1.24
|
|
|
|
0.14
|
|
|
|
(0.89
|
)
|
Dividends to AMPS Shareholders from net investment income
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
(0.02
|
)
|
|
|
(0.03
|
)
|
|
|
(0.00
|
)
2
|
|
|
(0.15
|
)
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
1.05
|
|
|
|
(0.96
|
)
|
|
|
3.07
|
|
|
|
0.62
|
|
|
|
2.13
|
|
|
|
0.22
|
|
|
|
(0.14
|
)
|
|
|
|
|
|
Dividends to Common Shareholders from net investment income
|
|
|
(0.43
|
)
|
|
|
(0.93
|
)
3
|
|
|
(0.93
|
)
3
|
|
|
(0.90
|
)
3
|
|
|
(0.79
|
)
3
|
|
|
(0.06
|
)
3
|
|
|
(0.65
|
)
3
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
15.14
|
|
|
$
|
14.52
|
|
|
$
|
16.41
|
|
|
$
|
14.27
|
|
|
$
|
14.55
|
|
|
$
|
13.21
|
|
|
$
|
13.05
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
13.74
|
|
|
$
|
13.31
|
|
|
$
|
16.36
|
|
|
$
|
13.15
|
|
|
$
|
14.04
|
|
|
$
|
12.18
|
|
|
$
|
11.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
7.66%
|
5
|
|
|
(6.16)%
|
|
|
|
22.26%
|
|
|
|
4.88%
|
|
|
|
16.96%
|
|
|
|
1.75%
|
5
|
|
|
0.21%
|
|
|
|
|
|
|
Based on market price
|
|
|
6.58%
|
5
|
|
|
(13.71)%
|
|
|
|
32.27%
|
|
|
|
0.16%
|
|
|
|
22.40%
|
|
|
|
10.59%
|
5
|
|
|
(3.88)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common
Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.64%
|
6
|
|
|
1.64%
|
7
|
|
|
1.48%
|
7
|
|
|
1.38%
|
7
|
|
|
1.23%
|
7
|
|
|
1.34%
|
6,7,8
|
|
|
1.59%
|
7
|
|
|
|
|
|
Total expenses after fees waived
|
|
|
1.56%
|
6
|
|
|
1.56%
|
7
|
|
|
1.39%
|
7
|
|
|
1.25%
|
7
|
|
|
1.12%
|
7
|
|
|
1.19%
|
6,7,8
|
|
|
1.40%
|
7
|
|
|
|
|
|
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs
9
|
|
|
0.93%
|
6
|
|
|
0.92%
|
7
|
|
|
1.01%
|
7,10
|
|
|
1.02%
|
7
|
|
|
0.98%
|
7
|
|
|
1.06%
|
6,7,8
|
|
|
1.02%
|
7
|
|
|
|
|
|
Net investment income
|
|
|
5.73%
|
6
|
|
|
5.27%
|
7
|
|
|
6.14%
|
7
|
|
|
6.93%
|
7
|
|
|
6.52%
|
7
|
|
|
6.59%
|
6,7,8
|
|
|
7.08%
|
7
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
0.06%
|
|
|
|
0.16%
|
|
|
|
0.18%
|
|
|
|
0.23%
|
6
|
|
|
1.15%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
5.73%
|
6
|
|
|
5.27%
|
|
|
|
6.08%
|
|
|
|
6.77%
|
|
|
|
6.34%
|
|
|
|
6.36%
|
6,8
|
|
|
5.93%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
620,825
|
|
|
$
|
595,269
|
|
|
$
|
671,077
|
|
|
$
|
583,400
|
|
|
$
|
594,734
|
|
|
$
|
540,144
|
|
|
$
|
533,256
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
254,000
|
|
|
$
|
254,000
|
|
|
$
|
254,000
|
|
|
$
|
287,375
|
|
|
|
|
|
|
VMTP Shares outstanding at $100,000 liquidation value, end of period (000).
|
|
$
|
254,000
|
|
|
$
|
254,000
|
|
|
$
|
254,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
10%
|
|
|
|
34%
|
|
|
|
46%
|
|
|
|
24%
|
|
|
|
25%
|
|
|
|
1%
|
|
|
|
19%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
82,421
|
|
|
$
|
83,538
|
|
|
$
|
78,166
|
|
|
$
|
71,392
|
|
|
|
|
|
|
Asset coverage per VMTP Shares at $100,000 liquidation value, end of period
|
|
$
|
344,419
|
|
|
$
|
334,358
|
|
|
$
|
364,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Amount is greater than $(0.005) per share.
|
3
|
|
Determined in accordance with federal income tax regulations.
|
4
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
5
|
|
Aggregate total investment return.
|
7
|
|
Does not reflect the effect of dividends to AMPS shareholders.
|
8
|
|
Certain non-recurring expenses have been included in the ratio but not annualized. If these expenses and amortization of offering costs were annualized,
the ratios of total expenses, total expenses after fees waived, total expenses after fees waived excluding interest expense and fees, net investment income and net investment income to Common Shareholders would have been 1.43%, 1.28%, 1.15%, 6.50%
and 6.27%, respectively.
|
9
|
|
Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VMTP shares, respectively.
|
10
|
|
For the year ended July 31, 2012, the total expense ratio after fees waived and excluding interest expense, fees, amortization of offering costs,
liquidity and remarketing fees was 0.97%.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
49
|
|
|
|
Financial Highlights
|
|
BlackRock MuniHoldings New Jersey Quality Fund, Inc.
(MUJ)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
14.51
|
|
|
$
|
16.54
|
|
|
$
|
14.73
|
|
|
$
|
15.19
|
|
|
$
|
14.40
|
|
|
$
|
14.35
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.43
|
|
|
|
0.86
|
|
|
|
0.83
|
|
|
|
0.93
|
|
|
|
1.00
|
|
|
|
0.98
|
|
Net realized and unrealized gain (loss)
|
|
|
0.52
|
|
|
|
(2.00
|
)
|
|
|
1.87
|
|
|
|
(0.47
|
)
|
|
|
0.67
|
|
|
|
(0.11
|
)
|
Dividends and distributions to AMPS shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.03
|
)
|
|
|
(0.03
|
)
|
|
|
(0.16
|
)
|
Net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.00
|
)
2
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
0.95
|
|
|
|
(1.14
|
)
|
|
|
2.70
|
|
|
|
0.43
|
|
|
|
1.64
|
|
|
|
0.71
|
|
|
|
|
|
|
Dividends and distributions to Common Shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(0.44
|
)
|
|
|
(0.89
|
)
3
|
|
|
(0.89
|
)
3
|
|
|
(0.89
|
)
3
|
|
|
(0.84
|
)
3
|
|
|
(0.66
|
)
3
|
Net realized gain
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
3
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions to Common Shareholders
|
|
|
(0.45
|
)
|
|
|
(0.89
|
)
|
|
|
(0.89
|
)
|
|
|
(0.89
|
)
|
|
|
(0.85
|
)
|
|
|
(0.66
|
)
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
15.01
|
|
|
$
|
14.51
|
|
|
$
|
16.54
|
|
|
$
|
14.73
|
|
|
$
|
15.19
|
|
|
$
|
14.40
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
13.54
|
|
|
$
|
13.30
|
|
|
$
|
16.05
|
|
|
$
|
13.74
|
|
|
$
|
15.05
|
|
|
$
|
13.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
7.01%
|
5
|
|
|
(7.19)%
|
|
|
|
18.96%
|
|
|
|
3.28%
|
|
|
|
11.95%
|
|
|
|
6.13%
|
|
|
|
|
|
|
Based on market price
|
|
|
5.31%
|
5
|
|
|
(12.33)%
|
|
|
|
23.76%
|
|
|
|
(2.77)%
|
|
|
|
19.37%
|
|
|
|
9.45%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.69%
|
6
|
|
|
1.61%
|
|
|
|
1.81%
|
7
|
|
|
1.21%
|
7
|
|
|
1.13%
|
7
|
|
|
1.30%
|
7
|
|
|
|
|
|
Total expenses after fees waived
|
|
|
1.61%
|
6
|
|
|
1.58%
|
|
|
|
1.78%
|
7
|
|
|
1.17%
|
7
|
|
|
1.08%
|
7
|
|
|
1.21%
|
7
|
|
|
|
|
|
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs
8
|
|
|
1.38%
|
6,9
|
|
|
1.33%
|
9
|
|
|
1.43%
|
7,9
|
|
|
1.11%
|
7
|
|
|
1.05%
|
7
|
|
|
1.10%
|
7
|
|
|
|
|
|
Net investment income
|
|
|
5.94%
|
|
|
|
5.28%
|
|
|
|
5.28%
|
7
|
|
|
6.36%
|
7
|
|
|
6.71%
|
7
|
|
|
7.04%
|
7
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.21%
|
|
|
|
0.22%
|
|
|
|
1.13%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
5.94%
|
6
|
|
|
5.28%
|
|
|
|
5.28%
|
|
|
|
6.15%
|
|
|
|
6.49%
|
|
|
|
5.91%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
319,883
|
|
|
$
|
309,165
|
|
|
$
|
351,837
|
|
|
$
|
313,084
|
|
|
$
|
322,681
|
|
|
$
|
305,856
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
172,700
|
|
|
$
|
172,700
|
|
|
|
|
|
|
VRDP Shares outstanding at $100,000 liquidation value, end of period (000)
|
|
$
|
172,700
|
|
|
$
|
172,700
|
|
|
$
|
172,700
|
|
|
$
|
172,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Turnover
|
|
|
10%
|
|
|
|
10%
|
|
|
|
17%
|
|
|
|
12%
|
|
|
|
13%
|
|
|
|
9%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
71,713
|
|
|
$
|
69,278
|
|
|
|
|
|
|
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period
|
|
$
|
285,224
|
|
|
$
|
279,019
|
|
|
$
|
303,727
|
|
|
$
|
281,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Amount is greater than $(0.005) per share.
|
3
|
|
Determined in accordance with federal income tax regulations.
|
4
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
5
|
|
Aggregate total investment return.
|
7
|
|
Does not reflect the effect of dividends to AMPS shareholders.
|
8
|
|
Interest expense, fees, and amortization of offering costs related to TOBs and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.
|
9
|
|
For the six months ended January 31, 2014 and for the two years ended July 31, 2013 and July 31, 2012, the total expense ratio after fees
waived and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.95%, 0.93% and 1.01%, respectively.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Financial Highlights
|
|
BlackRock MuniYield Investment Quality Fund (MFT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
13.61
|
|
|
$
|
15.73
|
|
|
$
|
13.40
|
|
|
$
|
13.87
|
|
|
$
|
12.83
|
|
|
$
|
13.42
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.43
|
|
|
|
0.84
|
|
|
|
0.87
|
|
|
|
0.91
|
|
|
|
0.92
|
|
|
|
0.94
|
|
Net realized and unrealized gain (loss)
|
|
|
0.43
|
|
|
|
(2.11
|
)
|
|
|
2.32
|
|
|
|
(0.49
|
)
|
|
|
0.98
|
|
|
|
(0.70
|
)
|
Dividends to AMPS shareholders from net investment income
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
(0.04
|
)
|
|
|
(0.04
|
)
|
|
|
(0.15
|
)
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
0.86
|
|
|
|
(1.27
|
)
|
|
|
3.18
|
|
|
|
0.38
|
|
|
|
1.86
|
|
|
|
0.09
|
|
|
|
|
|
|
Dividends to Common Shareholders from net investment income
|
|
|
(0.43
|
)
|
|
|
(0.85
|
)
2
|
|
|
(0.85
|
)
2
|
|
|
(0.85
|
)
2
|
|
|
(0.82
|
)
2
|
|
|
(0.68
|
)
2
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
14.04
|
|
|
$
|
13.61
|
|
|
$
|
15.73
|
|
|
$
|
13.40
|
|
|
$
|
13.87
|
|
|
$
|
12.83
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
12.93
|
|
|
$
|
12.20
|
|
|
$
|
15.47
|
|
|
$
|
12.39
|
|
|
$
|
14.28
|
|
|
$
|
11.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
6.73%
|
4
|
|
|
(8.41)%
|
|
|
|
24.51%
|
|
|
|
3.20%
|
|
|
|
14.99%
|
|
|
|
1.94%
|
|
|
|
|
|
|
Based on market price
|
|
|
9.65%
|
4
|
|
|
(16.52)%
|
|
|
|
32.43%
|
|
|
|
(7.32)%
|
|
|
|
28.72%
|
|
|
|
7.08%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common
Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.74%
|
5
|
|
|
1.72%
|
|
|
|
1.58%
|
6
|
|
|
1.23%
|
6
|
|
|
1.19%
|
6
|
|
|
1.40%
|
6
|
|
|
|
|
|
Total expenses after fees waived
|
|
|
1.74%
|
5
|
|
|
1.72%
|
|
|
|
1.58%
|
6
|
|
|
1.23%
|
6
|
|
|
1.19%
|
6
|
|
|
1.37%
|
6
|
|
|
|
|
|
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs
7
|
|
|
1.03%
|
5
|
|
|
1.00%
|
|
|
|
1.08%
|
6,8
|
|
|
1.11%
|
6
|
|
|
1.09%
|
6
|
|
|
1.19%
|
6
|
|
|
|
|
|
Net investment income
|
|
|
6.19%
|
5
|
|
|
5.36%
|
|
|
|
5.94%
|
6
|
|
|
6.91%
|
6
|
|
|
6.80%
|
6
|
|
|
7.54%
|
6
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
0.08%
|
|
|
|
0.28%
|
|
|
|
0.29%
|
|
|
|
1.23%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
6.19%
|
5
|
|
|
5.36%
|
|
|
|
5.86%
|
|
|
|
6.63%
|
|
|
|
6.51%
|
|
|
|
6.31%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
118,978
|
|
|
$
|
115,287
|
|
|
$
|
133,160
|
|
|
$
|
113,423
|
|
|
$
|
117,341
|
|
|
$
|
108,434
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
56,525
|
|
|
$
|
56,525
|
|
|
$
|
56,525
|
|
|
|
|
|
|
VMTP Shares outstanding at $100,000 liquidation value, end of period (000)
|
|
$
|
56,500
|
|
|
$
|
56,500
|
|
|
$
|
56,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
25%
|
|
|
|
51%
|
|
|
|
43%
|
|
|
|
29%
|
|
|
|
38%
|
|
|
|
43%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
75,165
|
|
|
$
|
76,900
|
|
|
$
|
72,961
|
|
|
|
|
|
|
Asset coverage per VMTP Shares at $100,000 liquidation value, end of period
|
|
$
|
310,580
|
|
|
$
|
304,049
|
|
|
$
|
335,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Determined in accordance with federal income tax regulations.
|
3
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
4
|
|
Aggregate total investment return.
|
6
|
|
Does not reflect the effect of dividends to AMPS shareholders.
|
7
|
|
Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.
|
8
|
|
For the Year ended July 31, 2012, the total expense ratio after fees waived and excluding interest expense, fees, amortization of offering costs,
liquidity and remarketing fees was 1.05%.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
51
|
|
|
|
Financial Highlights
|
|
BlackRock MuniYield Michigan Quality Fund, Inc.
(MIY)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
14.16
|
|
|
$
|
16.18
|
|
|
$
|
14.63
|
|
|
$
|
14.92
|
|
|
$
|
13.93
|
|
|
$
|
14.16
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.43
|
|
|
|
0.90
|
|
|
|
0.87
|
|
|
|
0.93
|
|
|
|
0.98
|
|
|
|
1.00
|
|
Net realized and unrealized gain (loss)
|
|
|
0.33
|
|
|
|
(2.00
|
)
|
|
|
1.61
|
|
|
|
(0.26
|
)
|
|
|
0.94
|
|
|
|
(0.40
|
)
|
Dividends to AMPS shareholders from net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.04
|
)
|
|
|
(0.05
|
)
|
|
|
(0.16
|
)
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
0.76
|
|
|
|
(1.10
|
)
|
|
|
2.48
|
|
|
|
0.63
|
|
|
|
1.87
|
|
|
|
0.44
|
|
|
|
|
|
|
Dividends to Common Shareholders from net investment income
|
|
|
(0.46
|
)
|
|
|
(0.92
|
)
2
|
|
|
(0.93
|
)
2
|
|
|
(0.92
|
)
2
|
|
|
(0.88
|
)
2
|
|
|
(0.67
|
)
2
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
14.46
|
|
|
$
|
14.16
|
|
|
$
|
16.18
|
|
|
$
|
14.63
|
|
|
$
|
14.92
|
|
|
$
|
13.93
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
13.09
|
|
|
$
|
12.57
|
|
|
$
|
16.05
|
|
|
$
|
13.39
|
|
|
$
|
14.55
|
|
|
$
|
12.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
5.85%
|
4
|
|
|
(7.09)%
|
|
|
|
17.60%
|
|
|
|
4.78%
|
|
|
|
14.31%
|
|
|
|
4.66%
|
|
|
|
|
|
|
Based on market price
|
|
|
7.95%
|
4
|
|
|
(16.86)%
|
|
|
|
27.46%
|
|
|
|
(1.67)%
|
|
|
|
26.76%
|
|
|
|
5.95%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common
Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.59%
|
5
|
|
|
1.50%
|
|
|
|
1.72%
|
|
|
|
1.37%
|
6
|
|
|
1.07%
|
6
|
|
|
1.27%
|
6
|
|
|
|
|
|
Total expenses after fees waived
|
|
|
1.59%
|
5
|
|
|
1.50%
|
|
|
|
1.72%
|
|
|
|
1.36%
|
6
|
|
|
1.07%
|
6
|
|
|
1.25%
|
6
|
|
|
|
|
|
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs
7
|
|
|
0.96%
|
5
|
|
|
0.89%
|
|
|
|
1.38%
|
8
|
|
|
1.23%
|
6
|
|
|
1.03%
|
6
|
|
|
1.09%
|
6
|
|
|
|
|
|
Net investment income
|
|
|
6.14%
|
5
|
|
|
5.62%
|
|
|
|
5.65%
|
|
|
|
6.48%
|
6
|
|
|
6.72%
|
6
|
|
|
7.37%
|
6
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.25%
|
|
|
|
0.31%
|
|
|
|
1.19%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
6.14%
|
5
|
|
|
5.62%
|
|
|
|
5.65%
|
|
|
|
6.23%
|
|
|
|
6.41%
|
|
|
|
6.18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
263,868
|
|
|
$
|
258,341
|
|
|
$
|
294,804
|
|
|
$
|
266,326
|
|
|
$
|
271,609
|
|
|
$
|
253,630
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
144,650
|
|
|
$
|
144,650
|
|
|
|
|
|
|
VRDP Shares outstanding at $100,000 liquidation value, end of period (000)
|
|
$
|
144,600
|
|
|
$
|
144,600
|
|
|
$
|
144,600
|
|
|
$
|
144,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
6%
|
|
|
|
17%
|
|
|
|
19%
|
|
|
|
16%
|
|
|
|
15%
|
|
|
|
9%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
71,945
|
|
|
$
|
68,838
|
|
|
|
|
|
|
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period
|
|
$
|
282,481
|
|
|
$
|
278,659
|
|
|
$
|
303,876
|
|
|
$
|
284,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Determined in accordance with federal income tax regulations.
|
3
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
4
|
|
Aggregate total investment return.
|
6
|
|
Does not reflect the effect of dividends to AMPS shareholders.
|
7
|
|
Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.
|
8
|
|
For the year ended July 31, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees and amortization
of offering costs, liquidity and remarketing fees was 0.98%.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
52
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Financial Highlights
|
|
BlackRock MuniYield New Jersey Quality Fund, Inc.
(MJI)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
14.29
|
|
|
$
|
16.35
|
|
|
$
|
14.53
|
|
|
$
|
15.00
|
|
|
$
|
14.07
|
|
|
$
|
14.23
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.44
|
|
|
|
0.86
|
|
|
|
0.82
|
|
|
|
0.91
|
|
|
|
0.98
|
|
|
|
0.96
|
|
Net realized and unrealized gain (loss)
|
|
|
0.53
|
|
|
|
(2.01
|
)
|
|
|
1.89
|
|
|
|
(0.48
|
)
|
|
|
0.94
|
|
|
|
(0.27
|
)
|
Distributions to VRDP Shareholders from net realized gain
|
|
|
|
|
|
|
(0.00
|
)
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and distributions to AMPS shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.04
|
)
|
|
|
(0.04
|
)
|
|
|
(0.15
|
)
|
Net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
0.97
|
|
|
|
(1.15
|
)
|
|
|
2.71
|
|
|
|
0.39
|
|
|
|
1.87
|
|
|
|
0.53
|
|
|
|
|
|
|
Dividends to Common Shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(0.44
|
)
|
|
|
(0.88
|
)
3
|
|
|
(0.89
|
)
3
|
|
|
(0.86
|
)
3
|
|
|
(0.84
|
)
3
|
|
|
(0.67
|
)
3
|
Net realized gain
|
|
|
(0.00
|
)
2
|
|
|
(0.03
|
)
3
|
|
|
|
|
|
|
|
|
|
|
(0.10
|
)
3
|
|
|
(0.02
|
)
3
|
|
|
|
|
|
Total dividends and distributions to Common Shareholders
|
|
|
(0.44
|
)
|
|
|
(0.91
|
)
|
|
|
(0.89
|
)
|
|
|
(0.86
|
)
|
|
|
(0.94
|
)
|
|
|
(0.69
|
)
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
14.82
|
|
|
$
|
14.29
|
|
|
$
|
16.35
|
|
|
$
|
14.53
|
|
|
$
|
15.00
|
|
|
$
|
14.07
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
13.42
|
|
|
$
|
13.27
|
|
|
$
|
16.31
|
|
|
$
|
13.16
|
|
|
$
|
14.92
|
|
|
$
|
12.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
7.31%
|
5
|
|
|
(7.41)%
|
|
|
|
19.32%
|
|
|
|
3.10%
|
|
|
|
13.90%
|
|
|
|
4.94%
|
|
|
|
|
|
|
Based on market price
|
|
|
4.64%
|
5
|
|
|
(13.81)%
|
|
|
|
31.42%
|
|
|
|
(6.12)%
|
|
|
|
24.34%
|
|
|
|
6.22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common
Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.63%
|
6
|
|
|
1.54%
|
|
|
|
1.71%
|
7
|
|
|
1.13%
|
7
|
|
|
1.06%
|
7
|
|
|
1.22%
|
7
|
|
|
|
|
|
Total expenses after fees waived
|
|
|
1.63%
|
6
|
|
|
1.53%
|
|
|
|
1.70%
|
7
|
|
|
1.12%
|
7
|
|
|
1.05%
|
7
|
|
|
1.21%
|
7
|
|
|
|
|
|
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs
8
|
|
|
1.39%
|
6,9
|
|
|
1.29%
|
9
|
|
|
1.38%
|
7,9
|
|
|
1.08%
|
7
|
|
|
1.02%
|
7
|
|
|
1.11%
|
7
|
|
|
|
|
|
Net investment income
|
|
|
6.08%
|
6
|
|
|
5.34%
|
|
|
|
5.31%
|
7
|
|
|
6.32%
|
7
|
|
|
6.64%
|
7
|
|
|
7.10%
|
7
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.31%
|
|
|
|
0.29%
|
|
|
|
1.12%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
6.08%
|
6
|
|
|
5.34%
|
|
|
|
5.31%
|
|
|
|
6.01%
|
|
|
|
6.35%
|
|
|
|
5.98%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
131,786
|
|
|
$
|
127,082
|
|
|
$
|
144,942
|
|
|
$
|
128,481
|
|
|
$
|
132,281
|
|
|
$
|
123,806
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
64,475
|
|
|
$
|
64,475
|
|
|
|
|
|
|
VRDP Shares outstanding at $100,000 liquidation value, end of period (000)
|
|
$
|
64,400
|
|
|
$
|
64,400
|
|
|
$
|
64,400
|
|
|
$
|
64,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
10%
|
|
|
|
11%
|
|
|
|
21%
|
|
|
|
12%
|
|
|
|
12%
|
|
|
|
8%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
76,294
|
|
|
$
|
73,008
|
|
|
|
|
|
|
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period
|
|
$
|
304,636
|
|
|
$
|
297,332
|
|
|
$
|
325,065
|
|
|
$
|
299,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Amount is greater than $(0.005) per share.
|
3
|
|
Determined in accordance with federal income tax regulations.
|
4
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
5
|
|
Aggregate total investment return.
|
7
|
|
Does not reflect the effect of dividends to AMPS shareholders.
|
8
|
|
Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.
|
9
|
|
For the six months ended January 31, 2014 and for the two years ended July 31, 2013 and July 31, 2012, the total expense ratio after fees
waived and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.00%, 0.93% and 0.99%, respectively.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
53
|
|
|
|
Financial Highlights
|
|
BlackRock MuniYield Pennsylvania Quality Fund (MPA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
14.59
|
|
|
$
|
16.57
|
|
|
$
|
14.97
|
|
|
$
|
15.38
|
|
|
$
|
14.28
|
|
|
$
|
14.30
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.43
|
|
|
|
0.90
|
|
|
|
0.85
|
|
|
|
0.92
|
|
|
|
0.92
|
|
|
|
0.93
|
|
Net realized and unrealized gain (loss)
|
|
|
0.49
|
|
|
|
(1.99
|
)
|
|
|
1.66
|
|
|
|
(0.38
|
)
|
|
|
1.02
|
|
|
|
(0.15
|
)
|
Dividends to AMPS shareholders from net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.03
|
)
|
|
|
(0.03
|
)
|
|
|
(0.14
|
)
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
0.92
|
|
|
|
(1.09
|
)
|
|
|
2.51
|
|
|
|
0.51
|
|
|
|
1.91
|
|
|
|
0.64
|
|
|
|
|
|
|
Dividends to Common Shareholders from net investment income
|
|
|
(0.44
|
)
|
|
|
(0.89
|
)
2
|
|
|
(0.91
|
)
2
|
|
|
(0.92
|
)
2
|
|
|
(0.81
|
)
2
|
|
|
(0.66
|
)
2
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
15.07
|
|
|
$
|
14.59
|
|
|
$
|
16.57
|
|
|
$
|
14.97
|
|
|
$
|
15.38
|
|
|
$
|
14.28
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
13.29
|
|
|
$
|
13.07
|
|
|
$
|
15.98
|
|
|
$
|
13.94
|
|
|
$
|
15.26
|
|
|
$
|
12.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
6.84%
|
4
|
|
|
(6.78)%
|
|
|
|
17.34%
|
|
|
|
3.84%
|
|
|
|
14.18%
|
|
|
|
5.88%
|
|
|
|
|
|
|
Based on market price
|
|
|
5.18%
|
4
|
|
|
(13.42)%
|
|
|
|
21.53%
|
|
|
|
(2.55)%
|
|
|
|
25.70%
|
|
|
|
9.78%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common
Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.53%
|
5
|
|
|
1.53%
|
|
|
|
1.65%
|
|
|
|
1.37%
|
6
|
|
|
1.15%
|
6
|
|
|
1.27%
|
6
|
|
|
|
|
|
Total expenses after fees waived
|
|
|
1.53%
|
5
|
|
|
1.53%
|
|
|
|
1.65%
|
|
|
|
1.36%
|
6
|
|
|
1.15%
|
6
|
|
|
1.25%
|
6
|
|
|
|
|
|
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs
7
|
|
|
0.97%
|
5
|
|
|
0.94%
|
|
|
|
1.28%
|
8
|
|
|
1.14%
|
6
|
|
|
1.00%
|
6
|
|
|
1.06%
|
6
|
|
|
|
|
|
Net investment income
|
|
|
5.94%
|
5
|
|
|
5.46%
|
|
|
|
5.38%
|
|
|
|
6.24%
|
6
|
|
|
6.17%
|
6
|
|
|
6.82%
|
6
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.18%
|
|
|
|
0.22%
|
|
|
|
1.00%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
5.94%
|
5
|
|
|
5.46%
|
|
|
|
5.38%
|
|
|
|
6.06%
|
|
|
|
5.95%
|
|
|
|
5.82%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
173,330
|
|
|
$
|
167,857
|
|
|
$
|
190,562
|
|
|
$
|
171,938
|
|
|
$
|
176,530
|
|
|
$
|
163,918
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
66,350
|
|
|
$
|
66,350
|
|
|
|
|
|
|
VRDP Shares outstanding at $100,000 liquidation value, end of period (000)
|
|
$
|
66,300
|
|
|
$
|
66,300
|
|
|
$
|
66,300
|
|
|
$
|
66,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
9%
|
|
|
|
8%
|
|
|
|
23%
|
|
|
|
11%
|
|
|
|
6%
|
|
|
|
18%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
91,517
|
|
|
$
|
86,765
|
|
|
|
|
|
|
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period
|
|
$
|
361,433
|
|
|
$
|
353,178
|
|
|
$
|
387,425
|
|
|
$
|
359,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Determined in accordance with federal income tax regulations.
|
3
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
4
|
|
Aggregate total investment return.
|
6
|
|
Does not reflect the effect of dividends to AMPS shareholders.
|
7
|
|
Interest expense, fees and amortization of offering costs related to TOBs and/or VRDP shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.
|
8
|
|
For the year ended July 31, 2012, the total expense ratio after fees waived and excluding interest expense, fees, amortization of offering costs,
liquidity and remarketing fees was 0.99%.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
54
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Notes to Financial Statements
(Unaudited)
|
|
|
1. Organization:
BlackRock MuniHoldings California Quality Fund, Inc. (MUC),
BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ), BlackRock MuniYield Investment Quality Fund (MFT), BlackRock MuniYield Michigan Quality Fund, Inc. (MIY), BlackRock MuniYield New Jersey Quality Fund,
Inc. (MJI) and BlackRock MuniYield Pennsylvania Quality Fund (MPA) (collectively, the Funds or individually a Fund), are registered under the Investment Company Act of 1940, as non-diversified,
closed-end management investment companies. MUC, MUJ, MIY and MJI are organized as Maryland corporations. MFT and MPA are organized as a Massachusetts business trusts. The Boards of Directors and the Boards of Trustees of the Funds are collectively
referred to throughout this report as the Board of Directors or the Board, and the directors/trustees thereof are collectively referred to throughout this report as Directors. The Funds determine and make
available for publication the NAVs of their Common Shares on a daily basis.
2. Significant Accounting Policies:
The Funds financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (US
GAAP), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations
during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Funds:
Valuation: US GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date.
The Funds determine the fair values of their financial instruments at market value using independent dealers or pricing services under policies approved by the Board. The BlackRock Global Valuation Methodologies Committee (the Global
Valuation Committee) is the committee formed by management to develop global pricing policies and procedures and to provide oversight of the pricing function for the Funds for all financial instruments.
Municipal investments (including commitments to purchase such investments on a when-issued basis) are valued on the basis of prices provided by
dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in
comparable investments and information with respect to various relationships between investments. Financial futures contracts traded on exchanges are valued at their last sale price. Investments in open-end registered investment companies are valued
at NAV each business day.
In the event that the application of these methods of valuation results in a price for an investment that is deemed not
to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the BlackRock Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting
fair value (Fair Value Assets). When determining the price for Fair Value Assets, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive from the current sale of
that asset in an arms-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant consistent with the principles of fair value measurements, which
include the market approach, income approach and/or in the case of recent investments, the cost approach, as appropriate. The market approach, generally consists of using comparable market transactions. The income approach generally is used to
discount future cash flows to present value and is adjusted for liquidity as appropriate. These factors include but are not limited to: (i) attributes specific to the investment or asset; (ii) the principal market for the investment or
asset; (iii) the customary participants in the principal market for the investment or asset; (iv) data assumptions by market participants for the investment or asset, if reasonably available; (v) quoted prices for similar investments
or assets in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. Due to the
inherent uncertainty of valuations of such investments, the fair values may differ from the values that would have been used had an active market existed. The Global Valuation Committee, or its delegate, employs various methods for calibrating
valuation approaches for investments where an active market does not exist, including regular due diligence of the Funds pricing vendors, regular reviews of key inputs and assumptions, transactional back-testing or disposition analysis to
compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Value Assets is subsequently reported to
the Board or a committee thereof on a quarterly basis.
Segregation and Collateralization: In cases where a Fund enters into certain investments
(e.g. financial futures contracts,) or certain borrowings (e.g. TOBs) that would be senior securities for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid securities having a market value at
least equal to the amount of the Funds future obligations under such borrowings. Doing so allows the investment or borrowing to be excluded from treatment as a senior security. Furthermore, if required by an exchange or
counterparty agreement, the Fund may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.
Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are
entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income, including amortization and accretion of premiums
and discounts on debt securities, is recognized on the accrual basis.
Dividends and Distributions: Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend date. The character and timing of dividends and distributions are determined in accordance with federal income tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
55
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
regulations, which may differ from US GAAP. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 9.
Income Taxes: It is each Funds policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies, and to distribute substantially all of their taxable income to their shareholders. Therefore, no federal income tax provision is required.
Each Fund files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Funds US federal tax returns remains open
for each of the four years ended July 31, 2013. The statutes of limitations on each Funds state and local tax returns may remain open for an additional year depending upon the jurisdiction.
Management has analyzed tax laws and regulations and their application to the Funds facts and circumstances and does not believe there are any
uncertain tax positions that require recognition of a tax liability.
Deferred Compensation Plan: Under the Deferred Compensation Plan (the
Plan) approved by each Funds Board, the independent Directors (Independent Directors) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent
dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Directors. This has the same economic effect for the Independent Directors as if the Independent Directors had invested the
deferred amounts directly in certain other BlackRock Closed-End Funds.
The Plan is not funded and obligations thereunder represent general
unsecured claims against the general assets of each Fund. Deferred compensation liabilities are included in officers and directors fees payable in the Statements of Assets and Liabilities and will remain as a liability of the Funds until
such amounts are distributed in accordance with the Plan.
Other: Expenses directly related to a Fund are charged to that Fund. Other operating
expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods.
The Funds have
an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodian imposes fees on overdrawn cash
balances, which can be offset by accumulated credits earned or may result in additional custody charges.
3. Securities and Other Investments:
Zero-Coupon Bonds: The Funds may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not
provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.
Forward Commitments and When-Issued Delayed Delivery Securities: The Funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such
transactions normally occurs within a month or more after the purchase or sale commitment is made. The Funds may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell
the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Funds may be required to pay more at settlement than the security is worth. In addition, the Funds are not entitled to any of
the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the
counterparty, the Funds maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Schedules of Investments.
Municipal Bonds Transferred to TOBs: The Funds leverage their assets through the use of TOBs. A TOB is a special purpose entity established by a third party sponsor, into which a fund, or an agent on behalf
of a fund, transfers municipal bonds into a trust (TOB Trust). Other funds managed by the investment advisor may also contribute municipal bonds to a TOB into which a Fund has contributed bonds. A TOB typically issues two classes of
beneficial interests: short-term floating rate certificates (TOB Trust Certificates), which are sold to third party investors, and residual certificates (TOB Residuals), which are generally issued to the participating funds
that contributed the municipal bonds to the TOB Trust. If multiple funds participate in the same TOB, the rights and obligations under the TOB Residual will be shared among the funds ratably in proportion to their participation.
The TOB Residuals held by a Fund include the right of a Fund (1) to cause the holders of a proportional share of the TOB Trust Certificates to tender
their certificates at par plus accrued interest upon the occurrence of certain mandatory tender events defined in the TOB agreements, and (2) to transfer, subject to a specified number of days prior notice, a corresponding share of the
municipal bonds from the TOB to a Fund. The TOB may also be collapsed without the consent of a Fund, as the TOB Residual holder, upon the occurrence of certain termination events as defined in the TOB agreements. Such termination events may include
the bankruptcy or default of the municipal bond, a substantial downgrade in credit quality of the municipal bond, the inability of the TOB to obtain renewal of the liquidity support agreement, a substantial decline in market value of the municipal
bond and a judgment or ruling that interest on the municipal bond is subject to federal income taxation. Upon the occurrence of a termination event, the TOB would generally be liquidated in full with the proceeds typically applied first to any
accrued fees owed to the trustee, remarketing agent and liquidity provider, and then to the holders of the TOB Trust Certificates up to par plus accrued interest owed on the TOB Trust Certificates, with the balance paid out to the TOB Residual
holder. During the six months ended January 31, 2014, no TOBs in which the Funds participated were terminated without the consent of the Funds.
The cash received by the TOB from the sale of the TOB Trust Certificates, less transaction expenses, is paid to a Fund. The Funds typically invests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
the cash received in additional municipal bonds. Each Funds transfer of the municipal bonds to a TOB Trust is accounted for as a secured borrowing; therefore, the municipal bonds deposited
into a TOB are presented in the Funds Schedules of Investments and the TOB Trust Certificates are shown in other liabilities in the Statements of Assets and Liabilities. The carrying amount of each Funds payable to the holder of the TOB
Trust Certificates, as reported in Statements of Assets and Liabilities as TOB Trust Certificates, approximates its fair value.
The Funds may
invest in TOBs on either a non-recourse or recourse basis. TOB Trusts are typically supported by a liquidity facility provided by a bank or other financial institution (the Liquidity Provider) that allows the holders of the TOB Trust
Certificates to tender their certificates in exchange for payment from the Liquidity Provider of par plus accrued interest on any business day prior to the occurrence of the termination events described above. When a Fund invests in TOBS on a
non-recourse basis, and the Liquidity Provider is required to make a payment under the liquidity facility due to a termination event, the Liquidity Provider will typically liquidate all or a portion of the municipal securities held in the TOB Trust
and then fund, on a net basis, the balance, if any,) of the amount owed under the liquidity facility over the liquidation proceeds (the Liquidation Shortfall). If a Fund invests in a TOB on a recourse basis, the Fund will typically enter
into a reimbursement agreement with the Liquidity Provider where the Fund is required to repay the Liquidity Provider the amount of any Liquidation Shortfall. As a result, a Fund investing in a recourse TOB will bear the risk of loss with respect to
any Liquidation Shortfall. If multiple funds participate in any such TOB, these losses will be shared ratably, including the maximum potential amounts owed by the Funds at January 31, 2014, in proportion to their participation. The recourse TOB
Trusts are identified in the Schedules of Investments including the maximum potential amounts owed by the Funds at January 31, 2014.
Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by the Funds on an accrual
basis. Interest expense incurred on the secured borrowing and other expenses related to remarketing, administration and trustee services to a TOB are shown as interest expense, fees and amortization of offering costs in the Statements of Operations.
The TOB Trust Certificates have interest rates that generally reset weekly and their holders have the option to tender such certificates to the TOB for redemption at par at each reset date. At January 31, 2014, the aggregate value of the
underlying municipal bonds transferred to TOBs, the related liability for TOB Trust Certificates and the range of interest rates on the liability for TOB Trust Certificates were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying
Municipal Bonds
Transferred to TOBs
|
|
|
Liability
for TOB Trust
Certificates
|
|
|
Range of
Interest Rates
|
|
MUC
|
|
$
|
309,774,611
|
|
|
$
|
150,520,948
|
|
|
|
0.04% - 0.12%
|
|
MUJ
|
|
$
|
62,062,637
|
|
|
$
|
34,699,311
|
|
|
|
0.04% - 0.10%
|
|
MFT
|
|
$
|
37,578,671
|
|
|
$
|
20,333,757
|
|
|
|
0.04% - 0.24%
|
|
MIY
|
|
$
|
45,915,175
|
|
|
$
|
23,487,000
|
|
|
|
0.04% - 0.19%
|
|
MJI
|
|
$
|
31,578,169
|
|
|
$
|
18,044,269
|
|
|
|
0.04% - 0.10%
|
|
MPA
|
|
$
|
69,741,977
|
|
|
$
|
38,993,653
|
|
|
|
0.05% - 0.16%
|
|
For the six months ended January 31, 2014, the Funds average TOB Trust Certificates outstanding and the daily
weighted average interest rate, including fees, were as follows:
|
|
|
|
|
|
|
|
|
|
|
Average TOB Trust
Certificates
Outstanding
|
|
|
Daily Weighted
Average
Interest Rate
|
|
MUC
|
|
$
|
159,482,507
|
|
|
|
0.59
|
%
|
MUJ
|
|
$
|
35,496,826
|
|
|
|
0.67
|
%
|
MFT
|
|
$
|
22,487,491
|
|
|
|
0.70
|
%
|
MIY
|
|
$
|
26,162,010
|
|
|
|
0.55
|
%
|
MJI
|
|
$
|
18,451,952
|
|
|
|
0.70
|
%
|
MPA
|
|
$
|
40,605,908
|
|
|
|
0.63
|
%
|
Should short-term interest rates rise, the Funds investments in TOBs may adversely affect the Funds net
investment income and dividends to Common Shareholders. Also, fluctuations in the market value of municipal bonds deposited into the TOB Trust may adversely affect the Funds NAVs per share.
4. Derivative Financial Instruments:
The
Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to economically hedge their exposure to certain risks such as interest rate risk. These contracts may be transacted
on an exchange or OTC.
Financial Futures Contracts: The Funds purchase and/or sell financial futures contracts and options on financial futures
contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying
instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of
a cash settlement amount on the settlement date.
Upon entering into a financial futures contract, the Funds are required to deposit initial
margin with the broker in the form of cash or securities in an amount that varies depending on a contracts size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract.
Securities deposited as initial margin are designated on the Schedules of Investments and cash deposited, if any, is recorded on the Statements of Assets and Liabilities as cash pledged for financial futures contracts. Pursuant to the contract, the
Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin. Variation margin is recorded by the Funds as unrealized appreciation
or depreciation and, if applicable, as a receivable or payable for variation margin in the Statements of Assets and Liabilities.
When the
contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an
imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
57
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
The following is a summary of the Funds derivative financial instruments categorized by risk exposure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Values of Derivative Financial Instruments as of January 31,
2014
|
|
Liabilities Derivatives
|
|
|
|
|
|
Value
|
|
|
|
Statements of Assets
and Liabilities
Location
|
|
MUC
|
|
|
MUJ
|
|
|
MFT
|
|
|
MIY
|
|
|
MJI
|
|
|
MPA
|
|
Interest rate contracts
|
|
Net unrealized
appreciation/depreciation
1
|
|
$
|
(553,625
|
)
|
|
$
|
(122,165
|
)
|
|
$
|
(58,458
|
)
|
|
$
|
(99,953
|
)
|
|
$
|
(55,529
|
)
|
|
$
|
(204,863
|
)
|
|
1
|
|
Includes cumulative appreciation/depreciation on financial futures contracts as reported in the Schedules of Investments. Only current days
variation margin is reported within the Statements of Assets and Liabilities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Effect of Derivative Financial Instruments in the Statements of
Operations
Six Months Ended January 31, 2014
|
|
|
|
Net Realized Gain From
|
|
|
|
MUC
|
|
|
MUJ
|
|
|
MFT
|
|
|
MIY
|
|
|
MJI
|
|
|
MPA
|
|
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial futures contracts
|
|
$
|
39,559
|
|
|
$
|
68,608
|
|
|
$
|
63,138
|
|
|
$
|
56,141
|
|
|
$
|
31,189
|
|
|
$
|
93,974
|
|
|
|
Net Change in Unrealized Depreciation on
|
|
|
|
MUC
|
|
|
MUJ
|
|
|
MFT
|
|
|
MIY
|
|
|
MJI
|
|
|
MPA
|
|
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial futures contracts
|
|
$
|
(553,625
|
)
|
|
$
|
(122,165
|
)
|
|
$
|
(58,458
|
)
|
|
$
|
(99,953
|
)
|
|
$
|
(55,529
|
)
|
|
$
|
(204,863
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended January 31, 2014, the average quarterly balances of outstanding derivative financial instruments were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MUC
|
|
|
MUJ
|
|
|
MFT
|
|
|
MIY
|
|
|
MJI
|
|
|
MPA
|
|
Financial futures contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of contracts sold
|
|
|
400
|
|
|
|
83
|
|
|
|
91
|
|
|
|
68
|
|
|
|
38
|
|
|
|
110
|
|
Average notional value of contracts sold
|
|
$
|
50,621,875
|
|
|
$
|
10,418,633
|
|
|
$
|
11,501,188
|
|
|
$
|
8,254,336
|
|
|
$
|
4,735,742
|
|
|
$
|
13,832,500
|
|
Counterparty Credit Risk: A derivative contract may
suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments,
guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not
have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange-traded futures
with respect to initial and variation margin that is held in a clearing brokers customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or
goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing brokers
customers, potentially resulting in losses to the Funds.
5. Investment Advisory Agreement and Other Transactions with Affiliates:
The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate, for 1940 Act purposes, of BlackRock, Inc.
(BlackRock).
Each Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the Manager), the
Funds investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of each Funds portfolio and provides the necessary
personnel, facilities, equipment and certain other services necessary to the operations of each Fund. For such services, each Fund pays the Manager a monthly fee based on a percentage of each Funds average daily net assets at the following
annual rates:
|
|
|
|
|
MUC
|
|
|
0.55%
|
|
MUJ
|
|
|
0.55%
|
|
MFT
|
|
|
0.50%
|
|
MIY
|
|
|
0.50%
|
|
MJI
|
|
|
0.50%
|
|
MPA
|
|
|
0.50%
|
|
Average daily net assets are the average daily value of each Funds total assets minus its total accrued liabilities.
The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
indirectly through its investment in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection
with each Funds investment in other affiliated investment companies, if any. These amounts are included in fees waived by Manager in the Statements of Operations. For the six months ended January 31, 2014, the amounts waived were as
follows:
|
|
|
|
|
MUC
|
|
$
|
1,314
|
|
MUJ
|
|
$
|
3,216
|
|
MFT
|
|
$
|
212
|
|
MIY
|
|
$
|
80
|
|
MJI
|
|
$
|
1,356
|
|
MPA
|
|
$
|
77
|
|
The Manager, for MUC and MUJ, voluntarily agreed to waive its investment advisory fee on the proceeds of the Preferred Shares
and TOBs that exceed 35% of total assets minus the sum of its accrued liabilities. This amount is included in fees waived by Manager in the Statements of Operations. For the six months ended January 31, 2014 the waivers were:
|
|
|
|
|
MUC
|
|
$
|
253,712
|
|
MUJ
|
|
$
|
117,037
|
|
The Manager entered into a sub-advisory agreement with BlackRock Investment Management, LLC (BIM), an affiliate
of the Manager. The Manager pays BIM for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Fund to the Manager.
Certain officers and/or Directors of the Funds are officers and/or directors of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Funds Chief
Compliance Officer, which is included in officer and directors in the Statements of Operations.
The Funds may purchase securities from, or sell
securities to, an affiliated fund provided the affiliation is solely due to having a common investment adviser, common officers or common directors. For the six months ended January 31, 2014, the sale transactions with an affiliated fund in
compliance with Rule 17a-7 under the 1940 Act for MFT was $1,921,337.
6. Purchases and Sales:
Purchases and sales of investments, excluding short-term securities, for the six months ended January 31, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
|
Sales
|
|
MUC
|
|
$
|
104,293,714
|
|
|
$
|
131,201,031
|
|
MUJ
|
|
$
|
50,094,240
|
|
|
$
|
51,636,047
|
|
MFT
|
|
$
|
47,151,933
|
|
|
$
|
52,403,703
|
|
MIY
|
|
$
|
24,211,485
|
|
|
$
|
37,683,728
|
|
MJI
|
|
$
|
20,586,622
|
|
|
$
|
22,183,910
|
|
MPA
|
|
$
|
25,173,649
|
|
|
$
|
37,187,245
|
|
7. Income Tax Information:
As of July 31, 2013, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expires July 31,
|
|
MUC
|
|
|
MFT
|
|
|
MIY
|
|
|
MPA
|
|
2016
|
|
|
|
|
|
|
|
|
|
$
|
1,401,889
|
|
|
|
|
|
2017
|
|
$
|
6,504,940
|
|
|
|
|
|
|
|
2,031,132
|
|
|
$
|
1,066,968
|
|
2018
|
|
|
|
|
|
$
|
4,665,782
|
|
|
|
|
|
|
|
893,908
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,303
|
|
|
|
|
|
|
Total
|
|
$
|
6,504,940
|
|
|
$
|
4,665,782
|
|
|
$
|
3,433,021
|
|
|
$
|
2,011,179
|
|
|
|
|
|
|
As of January 31, 2014, gross unrealized appreciation and depreciation based on cost for federal income tax purposes
were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MUC
|
|
|
MUJ
|
|
|
MFT
|
|
|
MIY
|
|
|
MJI
|
|
|
MPA
|
|
Tax cost
|
|
$
|
816,744,350
|
|
|
$
|
468,242,453
|
|
|
$
|
164,037,324
|
|
|
$
|
390,443,110
|
|
|
$
|
188,060,319
|
|
|
$
|
231,238,557
|
|
|
|
|
|
|
Gross unrealized appreciation
|
|
$
|
46,737,588
|
|
|
$
|
24,554,495
|
|
|
$
|
11,181,125
|
|
|
$
|
17,776,008
|
|
|
$
|
8,998,278
|
|
|
$
|
9,377,821
|
|
Gross unrealized depreciation
|
|
|
(5,192,017
|
)
|
|
|
(3,931,202
|
)
|
|
|
(903,147
|
)
|
|
|
(6,633,090
|
)
|
|
|
(2,267,505
|
)
|
|
|
(3,341,151
|
)
|
|
|
|
|
|
Net unrealized appreciation
|
|
$
|
41,545,571
|
|
|
$
|
20,623,293
|
|
|
$
|
10,277,978
|
|
|
$
|
11,142,918
|
|
|
$
|
6,730,773
|
|
|
$
|
6,036,670
|
|
|
|
|
|
|
8. Concentration, Market and Credit Risk:
MUC, MUJ, MIY, MJI and MPA invest a substantial amount of their assets in issuers located in a single state or limited number of states.
Please see the Schedules of Investments for concentrations in specific states or US territories.
Many municipalities insure repayment of their
bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its
obligation.
In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in
the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers
whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer
credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk
by entering into
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
59
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial
assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds exposure to market, issuer and
counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.
The Funds invest a significant portion of its assets in fixed-income securities and/or uses derivatives tied to the fixed income markets. See the Schedules
of Investments for these securities and/or derivatives. Changes in market interest rates or economic conditions, including the Federal Reserves decision in December 2013 to taper its quantitative easing policy, may affect the value and/or
liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Funds may be subject to a greater risk of rising
interest rates due to the current period of historically low rates.
As of January 31, 2014, MUC, MIY and MPA invested a significant portion
of their assets in securities in the county/city/special district/school district sector. MIY invested a significant portion of its assets in securities in the education sector. MUJ and MJI invested a significant portion of their assets in
securities in the state sector. MUJ, MFT and MJI invested a significant portion of their assets in securities in the transportation sector. MUC and MFT also invested a significant portion of their assets in securities in the utilities sector.
Changes in economic conditions affecting the county/city/special district/school district, education, state, transportation and utilities sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of
positions in such securities.
The Funds may hold a significant amount of bonds subject to calls by the issuers at defined dates and prices. When
bonds are called by issuers and the Funds reinvest the proceeds received, such investments may be in securities with lower yields than the bonds originally held, and correspondingly, could adversely impact the yield and total return performance of a
fund.
On December 10, 2013, regulators published final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the Volcker Rule), which prohibit banking entities from engaging in proprietary trading of certain instruments and limit such entities investments in, and relationships with, covered funds, as defined in the
rules. Banking entities subject to the rules are required to fully comply by July 21, 2015. These rules may preclude banking entities and their affiliates from (i) sponsoring TOB trust programs (as such programs are presently
structured) and (ii) continuing relationships with or services for existing TOB trust programs. As a result, TOB trusts may need to be restructured or unwound. There can be no assurances that TOB trusts can be restructured, that new
sponsors of TOB trusts will develop, or that alternative forms of leverage will be available to the Fund. Any alternative forms of leverage may be more or less advantageous to the Fund than existing TOB leverage.
TOB transactions constitute an important component of the municipal bond market. Accordingly, implementation of the Volcker Rule may adversely impact
the municipal market, including through reduced demand for and liquidity of municipal bonds and increased financing costs for municipal issuers. Any such developments could adversely affect the Fund. The ultimate impact of these rules on
the TOB market and the overall municipal market is not yet certain.
9. Capital Share Transactions:
MFT and MPA are authorized to issue an unlimited number of shares, all of which were initially classified as Common Shares. The par value for each
Funds Common Shares is $0.10. The par value for each Funds Preferred Shares outstanding is $0.05. Each Funds Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without approval of Common
Shareholders.
MUC, MUJ, MIY and MJI are authorized to issue 200 million shares, par value $0.10 per share, all of which were initially
classified as Common Shares. Each Funds Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without approval of Common Shareholders.
Common Shares
For the periods shown, shares issued and outstanding increased by the following amounts
as a result of dividend reinvestment:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31, 2014
|
|
|
Year Ended
July 31, 2013
|
|
MUC
|
|
|
|
|
|
|
111,790
|
|
MUJ
|
|
|
|
|
|
|
29,853
|
|
MFT
|
|
|
|
|
|
|
5,789
|
|
MIY
|
|
|
|
|
|
|
29,750
|
|
MJI
|
|
|
|
|
|
|
28,723
|
|
MPA
|
|
|
|
|
|
|
3,912
|
|
Preferred Shares
Each
Funds Preferred Shares rank prior to the Funds Common Shares as to the payment of dividends by the Fund and distribution of assets upon dissolution or liquidation of the Fund. The 1940 Act prohibits the declaration of any dividend on the
Funds Common Shares or the repurchase of the Funds Common Shares if the Fund fails to maintain the asset coverage of at least 200% of the liquidation preference of the outstanding Preferred Shares. In addition, pursuant to the Preferred
Shares governing instrument, the Fund is restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with the Preferred Shares or repurchasing such shares if the Fund fails to declare and pay dividends on
the Preferred Shares, redeem any Preferred Shares required to be redeemed under the Preferred Shares governing instrument or comply with the basic maintenance amount requirement of the rating agencies then rating the Preferred Shares.
The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common
Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Directors for each Fund. In addition, the 1940 Act requires that along with approval by shareholders
that might otherwise be required, the approval of the holders of a majority of any outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
Preferred Shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Funds
sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.
VRDP Shares
MUJ, MIY, MJI and MPA (collectively, the VRDP Funds), have issued Series W-7
VRDP Shares, $100,000 liquidation value per share, in a privately negotiated offering. The VRDP Shares were offered to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act of 1933, as amended, (the
Securities Act) and include a liquidity feature, pursuant to a liquidity agreement, that allows the holders of VRDP Shares to have their shares purchased by the liquidity provider in the event of a failed remarketing. The VRDP Funds are
required to redeem the VRDP Shares owned by the liquidity provider after six months of continuous, unsuccessful remarketing. Upon the occurrence of the first unsuccessful remarketing, the VRDP Funds are required to segregate liquid assets to fund
the redemption. The VRDP Shares are subject to certain restrictions on transfer.
The VRDP Shares outstanding as of the six months ended
January 31, 2014, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue
Date
|
|
|
Shares
Issued
|
|
|
Aggregate
Principal
|
|
|
Maturity
Date
|
|
MUJ
|
|
|
6/30/11
|
|
|
|
1,727
|
|
|
$
|
172,700,000
|
|
|
|
7/01/41
|
|
MIY
|
|
|
4/21/11
|
|
|
|
1,446
|
|
|
$
|
144,600,000
|
|
|
|
5/01/41
|
|
MJI
|
|
|
6/30/11
|
|
|
|
644
|
|
|
$
|
64,400,000
|
|
|
|
7/01/41
|
|
MPA
|
|
|
5/19/11
|
|
|
|
633
|
|
|
$
|
66,300,000
|
|
|
|
6/01/41
|
|
The VRDP Funds entered into a fee agreement with the liquidity provider that may require an initial commitment and a per
annum liquidity fee payable to the liquidity provider. These fees, if applicable, are shown as liquidity fees in the Statements of Operations.
The fee agreement between MUJ and MJI and its respective liquidity provider is for a 364-day term and expired on June 26, 2013. MUJ and MJI renewed its
respective fee agreement for an additional 364 days.
The fee agreement between MUJ, MIY, MJI and MPA and the liquidity provider are scheduled to
expire, unless renewed or terminated in advance, as follows:
|
|
|
|
|
|
|
Date
|
|
MUJ
|
|
|
6/25/14
|
|
MIY
|
|
|
7/09/15
|
|
MJI
|
|
|
6/25/14
|
|
MPA
|
|
|
7/09/15
|
|
In the event the fee agreement is not renewed or is terminated in advance, and the VRDP Funds do not enter into a fee
agreement with an alternate liquidity provider, the VRDP Shares will be subject to mandatory purchase by the liquidity provider prior to the termination of the fee agreement. The VRDP Funds are required to redeem any VRDP Shares purchased by the
liquidity provider six months after the purchase date. Immediately after the purchase of any VRDP Shares by the liquidity provider, the VRDP Funds are required to begin to segregate liquid assets with the VRDP Funds custodian to fund the
redemption. There is no assurance the VRDP Funds will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.
Each VRDP Fund is required to redeem its VRDP Shares on the maturity date, unless earlier redeemed or repurchased. Six months prior to the maturity date,
each VRDP Fund is required to begin to segregate liquid assets with the Funds custodian to fund the redemption. In addition, VRDP Funds are required to redeem certain of its outstanding VRDP Shares if it fails to maintain certain asset
coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, the VRDP Shares may be redeemed, in whole or in part,
at any time at the option of the VRDP Funds. The redemption price per VRDP Share is equal to the liquidation value per share plus any outstanding unpaid dividends.
Dividends on the VRDP Shares are payable monthly at a variable rate set weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum
rate. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the
length of time that the VRDP Shares fail to be remarketed. At the date of issuance, the VRDP Shares were assigned a long-term rating of Aaa from Moodys and AAA from Fitch. Subsequent to the issuance of the VRDP Shares, Moodys completed a
review of its methodology for rating securities issued by registered closed-end funds. As of January 31, 2014, the VRDP Shares were assigned a long term rating of Aa2 from Moodys under its new rating methodology. The VRDP Shares continue
to be assigned a long-term rating of AAA from Fitch.
The short-term ratings on the VRDP Shares are directly related to the short-term ratings of
the liquidity provider for such VRDP Shares. Changes in the credit quality of the liquidity provider could cause a change in the short-term credit ratings of the VRDP Shares as rated by Moodys, Fitch and/or S&P. A change in the short-term
credit rating of the liquidity provider or the VRDP Shares may adversely affect the dividend rate paid on such shares, although the dividend rate paid on the VRDP Shares is not directly related based upon either short-term rating. As of
January 31, 2014, the short-term ratings of the liquidity provider and the VRDP Shares for MUJ and MJI were P-1, F1 and A1 as rated by Moodys, Fitch and/or S&P, respectively, which is within the two highest rating categories. The
liquidity provider may be terminated prior to the scheduled termination date if the liquidity provider fails to maintain short-term debt ratings in one of the two highest rating categories. The short-term ratings on the VRDP Shares for MIY and MPA
were withdrawn by Moodys, Fitch and/or S&P at the commencement of the special rate period, as described below.
For financial reporting
purposes, the VRDP Shares are considered debt of the issuer; therefore, the liquidation value, which approximates fair value of the VRDP Shares is recorded as a liability in the Statements of Assets
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SEMI-ANNUAL REPORT
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JANUARY 31, 2014
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61
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Notes to Financial Statements (continued)
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and Liabilities. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VRDP Shares are included
as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VRDP Shares are treated as equity for tax purposes. Dividends paid to holders of the VRDP Shares are generally classified as tax-exempt
income for tax-reporting purposes.
The VRDP Funds may incur remarketing fees of 0.10% on the aggregate principal amount of all the VRDP Shares,
which, if any, are included in remarketing fees on Preferred Shares in the Statements of Operations. All of the remarketable VRDP Shares that were tendered for remarketing during the six months January 31, 2014 were successfully remarketed.
The annualized dividend rates for the VRDP Shares for the six months ended January 31, 2014, were as follows:
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Rate
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MUJ
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0.27%
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MIY
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1.01%
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MJI
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0.27%
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MPA
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1.01%
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On June 21, 2012, MIY and MPA announced a special rate period for a three-year term ending June 24, 2015 with
respect to their VRDP Shares. The liquidity and fee agreements remain in effect for the duration of the special rate period and the VRDP Shares are still subject to mandatory redemption by MIY and MPA on maturity date. The VRDP Shares will not be
remarketed or subject to optional or mandatory tender events during such time. During the special rate period, MIY and MPA are required to maintain the same asset coverage, basic maintenance amount and leverage requirements for the VRDP Shares. MIY
and MPA will not pay any liquidity and remarketing fees during the special rate period and instead will pay dividends monthly based on the sum of the Securities Industry and Financial Markets Association SIFMA Municipal Swap Index and a
percentage per annum based on the long-term ratings assigned to the VRDP Shares. The short-term ratings were withdrawn by Moodys, Fitch and/or S&P. Short-term ratings may be re-assigned upon the termination of the special rate period when
the VRDP Shares revert back to remarketable securities.
If MIY or MPA redeem the VRDP Shares on a date that is one year or more before the end of
the special rate period and the VRDP Shares are rated above A1/A by Moodys and Fitch respectively, then such redemption is subject to a redemption premium payable to the holder of the VRDP Shares based on the time remaining in the special rate
period, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. After June 24, 2015, the holder of the VRDP Shares and MIY and MPA may mutually agree to extend the special rate period. If
the special rate period is not extended, the VRDP Shares will revert back to remarketable securities and will be remarketed and available for purchase by qualified institutional investors.
VRDP Shares issued and outstanding remained constant for the six months ended January 31, 2014.
VMTP Shares
MUC and MFT (collectively, the VMTP
Funds), have issued Series W-7 VMTP Shares, $100,000 liquidation value per share, in a privately negotiated offering and sale of VMTP Shares exempt from registration under the Securities Act.
The VMTP Shares outstanding as of the six months ended January 31, 2014 were as follows:
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Issue
Date
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Shares
Issued
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Aggregate
Principal
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Term
Date
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MUC
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3/22/12
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2,540
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$
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254,000,000
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4/01/15
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MFT
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12/16/11
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565
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$
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56,500,000
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1/02/15
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Each VMTP Fund is required to redeem its VMTP Shares on the term date, unless earlier redeemed or repurchased or unless
extended. There is no assurance that the term of a Funds VMTP Shares will be extended or that a Funds VMTP Shares will be replaced with any other preferred shares or other form of leverage upon the redemption or repurchase of the VMTP
Shares. Six months prior to term date, each VMTP Fund is required to begin to segregate liquid assets with the Funds custodian to fund the redemption. In addition, each VMTP Fund is required to redeem certain of its outstanding VMTP Shares if
it fails to maintain certain asset coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, a Funds VMTP
Shares may be redeemed, in whole or in part, at any time at the option of the Fund. The redemption price per VMTP Share is equal to the liquidation value per share plus any outstanding unpaid dividends and applicable redemption premium. If the Fund
redeems the VMTP Shares on a date that is one year or more prior to the term date and the VMTP Shares are rated above A1/A+ by Moodys and Fitch, respectively, then such redemption is subject to a prescribed redemption premium (up to 3% of the
liquidation preference) payable to the holder of the VMTP Shares based on the time remaining to the term date, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. The VMTP Shares are
subject to certain restrictions on transfer, and a Fund may also be required to register the VMTP Shares for sale under the Securities Act under certain circumstances. In addition, amendments to the VMTP governing document generally require the
consent of the holders of VMTP Shares.
Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a
fixed rate spread to the SIFMA Municipal Swap Index. The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by Moodys and Fitch. At the date of issuance, the VMTP Shares were assigned long-term
ratings of Aaa from Moodys and AAA from Fitch. Subsequent to the issuance of the VMTP Shares, Moodys completed a review of its methodology for rating securities issued by registered closed-end funds. As of January 31, 2014, the VMTP
Shares of MUC and MFT were assigned a long-term rating of Aa2 and Aa1, respectively, from Moodys under its new ratings methodology. The VMTP Shares continue to be assigned a long-term rating of AAA from Fitch. The dividend rate on the
VMTP Shares is subject to a step-up spread if the Fund fails to comply with certain provisions, including, among other
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62
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SEMI-ANNUAL REPORT
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JANUARY 31, 2014
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Notes to Financial Statements (concluded)
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things, the timely payment of dividends, redemptions or gross-up payments, and maintaining certain asset coverage and leverage requirements.
The average annualized dividend rates for the VMTP Shares for the six months ended January 31, 2014 were as follows:
For financial reporting purposes, the VMTP Shares are considered debt of the issuer; therefore the liquidation value, which
approximates fair value, of the VMTP Shares is recorded as a liability in the Statements of Assets and Liabilities. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends
accrued and paid on the VMTP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VMTP Shares are treated as equity for tax purposes. Dividends paid to holders of the
VMTP Shares are generally classified as tax-exempt income for tax-reporting purposes.
VMTP Shares issued and outstanding remained constant for
the six months ended January 31, 2014.
Offering Costs: The Funds incurred costs in connection with the issuance of VRDP Shares and/or
VMTP Shares. For VRDP Shares, these costs were recorded as a deferred charge and will be amortized over the 30-year life of the VRDP Shares with the exception of upfront fees paid to the liquidity provider which were amortized over the life of the
liquidity agreement. For VMTP Shares, these costs were recorded as a deferred charge and will be amortized over the 3-year life of the VMTP Shares. Amortization of these costs is included in interest expense, fees and amortization of offering costs
in the Statements of Operations.
10. Subsequent Events:
Managements evaluation of the impact of all subsequent events on the Funds financial statements was completed through the date the financial statements were issued and the following items were
noted:
On February 28, 2014, the Boards of MUJ and MJI authorized the Funds to designate an approximate three-year period, during which the VRDP
Shares will not be subject to any remarketing and the dividend rate will be based on a predetermined methodology (the special rate period). Subject to the Funds final determination to implement the special rate period and the
receipt of required approvals from the liquidity provider and remarketing agent and other requirements, it is currently expected that the implementation and commencement of the special rate period will occur sometime in the second quarter of 2014.
The implementation of the special rate period will result in a mandatory tender of the VRDP Shares prior to the commencement of the special rate period. The VRDP Shares will remain subject to mandatory redemption by the Funds on the VRDP
Shares maturity date.
Each Fund paid a net investment income dividend on March 3, 2014 to Common Shareholders of record on
February 14, 2014 as follows:
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Common
Dividend
Per Share
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MUC
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$
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0.0715
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MUJ
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$
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0.0740
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MFT
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$
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0.0710
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MIY
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$
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0.0740
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MJI
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$
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0.0740
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MPA
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$
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0.0740
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Additionally, the Funds declared a net investment income dividend on March 3, 2014 payable to Common Shareholders of
record on March 14, 2014 for the same amounts noted above.
The dividends declared on Preferred Shares for the period February 1, 2014
to February 28, 2014 were as follows:
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Series
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Dividends
Declared
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MUC VMTP Shares
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W-7
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$
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201,530
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MUJ VRDP Shares
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W-7
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$
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31,796
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MFT VMTP Shares
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W-7
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$
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44,828
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MIY VRDP Shares
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W-7
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$
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109,104
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MJI VRDP Shares
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W-7
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$
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11,857
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MPA VRDP Shares
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W-7
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$
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50,025
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SEMI-ANNUAL REPORT
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JANUARY 31, 2014
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63
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