UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-07083
Name of Fund: MuniYield Arizona Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, MuniYield Arizona Fund, Inc., 800 Scudders Mill Road,
Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton,
NJ, 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 10/31/05
Date of reporting period: 11/01/04 - 10/31/05
Item 1 - Report to Stockholders
MuniYield Arizona Fund, Inc.
MuniYield California Fund, Inc.
MuniYield California Insured Fund, Inc.
MuniYield Florida Fund
MuniYield Michigan Insured Fund II, Inc.
MuniYield New York Insured Fund, Inc.
Annual Reports
October 31, 2005
(BULL LOGO) Merrill Lynch Investment Managers
www.mlim.ml.com
Mercury Advisors
A Division of Merrill Lynch Investment Managers
www.mercury.ml.com
These reports, including the financial information herein, are transmitted to
shareholders of MuniYield Arizona Fund, Inc., MuniYield California Fund, Inc.,
MuniYield California Insured Fund, Inc., MuniYield Florida Fund, MuniYield
Michigan Insured Fund II, Inc. and MuniYield New York Insured Fund, Inc. for
their information. This is not a prospectus. Past performance results shown in
these reports should not be considered a representation of future performance.
The Funds have leveraged their Common Shares/Stock and intend to remain
leveraged by issuing Preferred Shares/Stock to provide the Common Shareholders/
Common Stock shareholders with potentially higher rates of return. Leverage
creates risks for Common Shareholders/Common Stock shareholders, including the
likelihood of greater volatility of net asset value and market price of shares
of the Common Shares/Stock, and the risk that fluctuations in the short-term
dividend rates of the Preferred Shares/Stock may affect the yield to Common
Shareholders/Common Stock shareholders. Statements and other information herein
are as dated and are subject to change.
A description of the policies and procedures that the Funds use to determine
how to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-MER-FUND (1-800-637-3863);
(2) at www.mutualfunds.ml.com; and (3) on the Securities and Exchange
Commission's Web site at http://www.sec.gov. Information about how the
Funds vote proxies relating to securities held in the Funds' portfolios
during the most recent 12-month period ended June 30 is available (1) at
www.mutualfunds.ml.com; and (2) on the Securities and Exchange Commission's
Web site at http://www.sec.gov.
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MuniYield Arizona Fund, Inc.
MuniYield California Fund, Inc.
MuniYield California Insured Fund, Inc.
MuniYield Florida Fund
MuniYield Michigan Insured Fund II, Inc.
MuniYield New York Insured Fund, Inc.
The Benefits and Risks of Leveraging
The Funds utilize leveraging to seek to enhance the yield and net asset value
of their Common Shares/Common Stock. However, these objectives cannot be
achieved in all interest rate environments. To leverage, the Funds issue
Preferred Shares/Stock, which pays dividends at prevailing short-term interest
rates, and invests the proceeds in long-term municipal bonds. The interest
earned on these investments, net of dividends to Preferred Shares/Stock,
is paid to Common Shareholders/Common Stock shareholders in the form of
dividends, and the value of these portfolio holdings is reflected in the per
share net asset value of the Funds' Common Shares/Stock. However, in order to
benefit Common Shareholders/Common Stock shareholders, the yield curve must
be positively sloped; that is, short-term interest rates must be lower than
long-term interest rates. At the same time, a period of generally declining
interest rates will benefit Common Shareholders/Common Stock shareholders. If
either of these conditions change, then the risks of leveraging will begin to
outweigh the benefits.
To illustrate these concepts, assume a fund's Common Shares/Stock
capitalization of $100 million and the issuance of Preferred Shares/Stock for
an additional $50 million, creating a total value of $150 million available for
investment in long-term municipal bonds. If prevailing short-term interest
rates are approximately 3% and long-term interest rates are approximately 6%,
the yield curve has a strongly positive slope. The fund pays dividends on the
$50 million of Preferred Shares/Stock based on the lower short-term interest
rates. At the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates.
In this case, the dividends paid to Preferred Shareholders/Preferred Stock
shareholders are significantly lower than the income earned on the fund's
long-term investments, and therefore the Common Shareholders/Common Stock
shareholders are the beneficiaries of the incremental yield. However, if
short-term interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the Common
Shares/Stock will be reduced or eliminated completely. At the same time, the
market value of the fund's Common Shares/Stock (that is, its price as listed
on the American Stock Exchange) may, as a result, decline. Furthermore, if
long-term interest rates rise, the Common Shares'/Stocks' net asset value will
reflect the full decline in the price of the portfolio's investments, since
the value of the fund's Preferred Shares/Stock does not fluctuate. In addition
to the decline in net asset value, the market value of the fund's Common
Shares/Stock may also decline.
As a part of their investment strategy, the Funds may invest in certain
securities whose potential income return is inversely related to changes in a
floating interest rate ("inverse floaters"). In general, income on inverse
floaters will decrease when short-term interest rates increase and increase
when short-term interest rates decrease. Investments in inverse floaters may be
characterized as derivative securities and may subject the Funds to the risks
of reduced or eliminated interest payments and losses of invested principal. In
addition, inverse floaters have the effect of providing investment leverage
and, as a result, the market value of such securities will generally be more
volatile than that of fixed-rate, tax-exempt securities. To the extent the
Funds invest in inverse floaters, the market value of each Fund's portfolio and
the net asset value of each Fund's shares may also be more volatile than if the
Funds did not invest in these securities. As of October 31, 2005, the
percentages of MuniYield Arizona Fund, Inc.'s, MuniYield California Fund,
Inc.'s, MuniYield California Insured Fund, Inc.'s, MuniYield Florida Fund's,
MuniYield Michigan Insured Fund II, Inc.'s and MuniYield New York Insured Fund,
Inc.'s total net assets invested in inverse floaters were 8.87%, 4.00%, 2.06%,
6.03%, 11.13% and 11.80%, respectively, before the deduction of Preferred
Shares/Stock.
ANNUAL REPORTS OCTOBER 31, 2005
A Letter From the President
Dear Shareholder
As the financial markets continued to muddle their way through 2005, the
Federal Reserve Board (the Fed) advanced its monetary tightening campaign full
steam ahead. The 12th consecutive interest rate hike since June 2004 came on
November 1, bringing the target federal funds rate to 4%. The central bank is
clearly more focused on inflationary figures than on economic growth, which
has shown some signs of moderating. Despite rising short-term interest rates
and record-high energy prices, the major market indexes managed to post
positive results for the current reporting period:
Total Returns as of October 31, 2005 6-month 12-month
U.S. equities (Standard & Poor's 500 Index) + 5.27% + 8.72%
Small-cap U.S. equities (Russell 2000 Index) +12.25 +12.08
International equities (MSCI Europe Australasia Far East Index) + 8.63 +18.09
Fixed income (Lehman Brothers Aggregate Bond Index) + 0.15 + 1.13
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 0.59 + 2.54
High yield bonds (Credit Suisse First Boston High Yield Index) + 2.87 + 3.54
The headlines in recent months focused on Hurricanes Katrina and Rita and,
more recently, the nomination of Ben Bernanke to succeed Alan Greenspan as
Chairman of the Fed. While the hurricanes prompted a spike in energy prices
and short-term disruptions to production and spending, the longer-term
economic impact is likely to be tempered. In fact, the fiscal stimulus
associated with reconstruction efforts in the Gulf Coast region could add to
gross domestic product growth in 2006. Notably, the uncontroversial nomination
of Dr. Bernanke was well received by the markets.
The U.S. equity markets remained largely range bound in 2005. Up to this
point, strong corporate earnings reports and relatively low long-term bond
yields have worked in favor of equities. Looking ahead, high energy prices,
continued interest rate hikes, a potential consumer slowdown and/or
disappointing earnings pose the greatest risks to U.S. stocks. Internationally,
many markets have benefited from strong economic statistics, trade surpluses
and solid finances.
The bond market continued to be characterized by a flattening yield curve,
although long-term yields finally began to inch higher toward period end. The
10-year Treasury yield hit 4.57% on October 31, 2005, its highest level in
more than six months. Still, the difference between the two-year and 10-year
Treasury yield was just 17 basis points (.17%) at period end, compared to 149
basis points a year earlier.
Financial markets are likely to face continued crosscurrents in the months
ahead. Nevertheless, opportunities do exist and we encourage you to work with
your financial advisor to diversify your portfolio among a variety of asset
types. This can help to diffuse risk while also tapping into the potential
benefits of a broader range of investment alternatives. As always, we thank
you for trusting Merrill Lynch Investment Managers with your investment
assets.
Sincerely,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
President and Director/Trustee
ANNUAL REPORTS OCTOBER 31, 2005
A Discussion With Your Funds' Portfolio Managers
Throughout the year, we continued to focus on increasing the income provided
to shareholders and, by period-end, had moved the Funds to a more neutral
position on interest rates.
Describe the recent market environment relative to municipal bonds.
Over the past year, long-term bond yields were little changed. Initially, U.S.
Treasury prices rallied strongly, while their yields, which move in the
opposite direction, fell. By the end of June 2005, 30-year U.S. Treasury bond
yields had declined 60 basis points (.60%) to 4.19%. Bond prices improved in
response to several favorable factors, including moderating U.S. economic
growth, slowing growth in foreign economies, modest inflationary pressures and
strong demand for U.S. Treasury issues on the part of Asian governments.
During the final months of the period, however, bond yields rose (prices fell)
as investors worried that higher energy costs in the wake of Hurricanes Katrina
and Rita would pressure inflation upward. Stronger-than-expected third quarter
gross domestic product growth also added to inflationary concerns. For its
part, the Federal Reserve Board (the Fed) continued to raise short-term
interest rates at each of its meetings, lifting the federal funds target rate
to 4% on November 1, 2005. As short-term interest rates moved higher in concert
with the Fed rate hikes and longer-term bond yields remained steadier, the
yield curve continued to flatten.
During the past 12 months, 30-year Treasury bond yields declined three basis
points to 4.76%, while 10-year Treasury note yields rose 52 basis points to
4.57%. Tax-exempt bond yields exhibited a similar pattern. According to
Municipal Market Data, the yield on AAA-rated issues maturing in 30 years
increased one basis point to 4.59%, while the yield on AAA-rated issues
maturing in 10 years rose 52 basis points to 3.92%.
Historically low nominal tax-exempt bond yields continued to encourage
municipalities to issue new debt and refund outstanding, higher-couponed
issues. During the past year, more than $394 billion in new long-term tax-
exempt bonds was issued, an 8.4% increase over the previous year's total of
$363 billion. During the first nine months of 2005, the volume of refunding
issues increased by more than 55% versus the same period one year ago.
Refunding issues were heavily weighted in the 10-year - 20-year maturity range,
putting pressure on intermediate tax-exempt bond yields while supporting longer-
term bond prices.
Investor demand for municipal product remained positive during most of the
period. The most current statistics from the Investment Company Institute
indicate that, year-to-date through September 2005, net new cash flows into
long-term municipal bond funds exceeded $6.7 billion - a significant
improvement from the $12.9 billion net outflow seen during the same period in
2004. Notably, throughout much of the past year, high yield tax-exempt bond
funds have been the principal target for these new cash inflows. During recent
months, these lower-rated and non-rated bond funds received an average of $115
million per week. The need to invest these cash flows has led to strong demand
for lower-rated issues and a consequent narrowing of credit spreads.
Solid investor demand for tax-exempt issues generally helped municipal bond
performance approach that of taxable bonds in recent months and reverse some
of their prior underperformance. In addition, the ratio of tax-exempt bond
yields to taxable bond yields remains attractive and should continue to draw
both traditional and non-traditional investors to the municipal marketplace,
especially if municipal bond issuance remains manageable.
The communities shattered by Hurricanes Katrina and Rita will require
extensive reconstruction. It is too early to estimate the amount of tax-exempt
debt that may be required to finance these efforts or to assess the overall
impact on the municipal market. However, much of the rebuilding is likely to
be funded through federal loans and grants, and the reconstruction will likely
be spread over a number of years. Consequently, any new municipal bond
issuance prompted by the hurricanes is not likely to disrupt the tax-exempt
market in the near future.
MuniYield Arizona Fund, Inc.
Describe conditions in the state of Arizona.
In March 2005, credit rating agency Moody's issued its first-ever issuer
rating on the State of Arizona, which reflects the overall credit quality of
the state. Moody's rating of Aa3, with a stable outlook, was based on
Arizona's trend of economic growth and diversification, particularly in high-
tech manufacturing and tourism; a track record of reasonably strong budgetary
and financial management; and moderate state debt levels that are coming under
slight pressure from school construction needs.
ANNUAL REPORTS OCTOBER 31, 2005
Indicators for the first two months of fiscal year 2006 (which began July 1,
2005) showed continued economic improvement in the state and increasing
revenue collections. Through August 2005, General Fund collections, at
$1.3 billion, exceeded the fiscal year-to-date forecasts and were
$205.1 million ahead of collections as of the same time last year. The
strong performance continues to be driven by growth in sales taxes, a
particularly favorable indicator of an improving state economy, and corporate
income taxes. The enacted fiscal year 2006 budget requires any revenues above
forecast to be deposited into the state's Budget Stabilization Fund beginning
in February 2006, after revenues are reported for the first six months of the
fiscal year.
Overall, economic growth in Arizona is accelerating, with the state's job
growth among the strongest in the nation. The growth has been led by the
construction sector, which continues to support the healthy pace of household
formation in Arizona, in addition to the defense and health care sectors.
Arizona was largely spared in the recent round of military Base Realignment
and Closure (BRAC) recommendations, and expects to lose only 550 military
jobs. The state's unemployment rate is projected to close the year at 4.7%,
representing a 0.3% decline from 2004 and a 1.3% decline from its peak in 2002.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2005, the Common Stock of MuniYield
Arizona Fund, Inc. had net annualized yields of 6.42% and 5.76%, based on a
year-end per share net asset value of $14.39 and a per share market price of
$16.03, respectively, and $.924 per share income dividends. Over the same
period, the total investment return on the Fund's Common Stock was +1.91%,
based on a change in per share net asset value from $15.04 to $14.39, and
assuming reinvestment of all distributions.
The Fund provided a positive total return for the year. Our defensive market
posture benefited performance in the second half of the year as long-term bond
yields finally began to rise after remaining stubbornly low for some time. The
Fund's above-average yield allowed us to continue providing a stable monthly
dividend to shareholders, while the advance refunding of several credits in
the portfolio also aided performance. When municipal bonds are refinanced
ahead of their maturity date, their prices generally increase sharply.
Hindering Fund returns, especially early in the period, was our underexposure
to longer-maturity bonds, which performed well as the yield curve flattened.
The early months of the period also saw the extraordinary redemption of a Fund
holding, which served as a drag on performance. We worked with the Municipal
Research Group to recommit these monies to the long end of the Arizona tax-
exempt market.
For the six-month period ended October 31, 2005, the total investment return
on the Fund's Common Stock was -.43%, based on a change in per share net asset
value from $14.90 to $14.39, and assuming reinvestment of all distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the American Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Stock can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
As in prior periods, we continued to favor bonds in the 25-year maturity range
and with premium coupons. More recently, we began to transition away from our
defensive market stance, taking advantage of episodes of market weakness
(rising yields and falling prices) to move toward a more neutral duration. We
made this shift in recognition of the overall higher yields in the market. The
long end of the curve, where yields had remained stubbornly low, finally began
to inch higher toward period-end. We also looked for opportunities to purchase
lower-rated, higher-yielding bonds to generate incremental income for the
portfolio. Our ability to execute on this strategy was somewhat limited by
infrequent issuance of these types of securities and generally unattractive
spreads and coupon structures when they did come to market.
The yield curve flattening phenomenon continued throughout the year, although
it was a much more significant factor in the first half of the fiscal year than
in the latter months. From May to October, the municipal yield curve flattened
approximately 10 basis points - 15 basis points between the 10-year and 30-year
sectors. This compared to 40 basis points of flattening in the first six
months. Nevertheless, we continued to pursue higher yields throughout the year
by moving further out on the curve and reducing exposure to shorter maturities.
In doing so, we carefully considered each bond's acquisition yield to ensure
that the sales would not have a material negative impact on the Fund's income
stream, as some of these shorter-maturity bonds were acquired in higher
interest rate environments. We also maintained the Fund's fully invested
position in an effort to preserve the level of income available to
shareholders.
ANNUAL REPORTS OCTOBER 31, 2005
A Discussion With Your Funds' Portfolio Managers (continued)
In another effort to generate additional income for the portfolio, the Fund
increased its use of leverage during the period with the issuance of
additional Auction Market Preferred Stock (AMPS). With the proceeds from the
sale of the AMPS, we invested in the longer end of the municipal yield curve,
consistent with our underlying investment strategy. Fortunately, issuance of
Arizona municipal bonds was particularly strong in the second half of the
fiscal year. This provided us with sufficient opportunity to invest the
proceeds from bond sales and our new AMPS issuance in a timely manner and in
issues with attractive structures.
Finally, the fiscal year saw the advance refunding of some of our Puerto Rico
bonds (which are tax-exempt in all 50 states). In the process, these bonds,
which had been rated in the BBB range, became AAA quality. We took the
opportunity to lock in some profits and reinvest the proceeds into new Puerto
Rico paper.
For the six-month period ended October 31, 2005, the Fund's AMPS had an
average yield of 2.13% for Series A, 2.17% for Series B and 2.34% for Series
C. The Fed's interest rate hikes are clearly having a material impact on the
Fund's borrowing costs. The Fed raised the short-term interest rate target 200
basis points during the 12-month period (and once more on November 1). Still,
the tax-exempt yield curve remained relatively steep and continued to generate
an income benefit to the holders of Common Stock from the leveraging of
Preferred Stock. However, should the spread between short-term and long-term
interest rates narrow, the benefits of leveraging will decline and, as a
result, reduce the yield on the Fund's Common Stock. At the end of the period,
the Fund's leverage amount, due to AMPS, was 38.41% of total net assets,
before the deduction of Preferred Stock. (For a more complete explanation of
the benefits and risks of leveraging, see page 2 of this report to
shareholders.)
How would you characterize the Fund's position at the close of the period?
We continue to favor maturities in the 25-year range. The Fund ended the period
close to neutral in terms of interest rate exposure. The Fed, having already
raised interest rates 12 times since June 2004, has come a long way in its
measured monetary tightening campaign. In recognition of this and the higher
rates all along the curve, we believe a more neutral duration is the
appropriate course. Having said that, we stand ready to adjust our strategy as
market dynamics dictate. At period-end, the Fund remained fully invested,
reflecting our efforts to generate the greatest level of tax-exempt income for
our shareholders.
MuniYield California Fund, Inc.
Describe conditions in the State of California.
Moody's Investors Services upgraded California's credit rating from A3 to A2 in
July 2005, after Governor Schwarzenegger signed a new budget for the state.
Moody's attributed the upgrade to "a continuing favorable trend of recovery in
the state's economy and tax revenues, better-than-expected financial
performance in fiscal 2005, and a moderately improved financial outlook for
2006 and beyond." Positive aspects of the budget included a moderate school
funding increase and the lack of any new debt issuance. The budget did not
include any new taxes or borrowings.
Nevertheless, California remained the lowest rated state in the country, with
an A rating from Standard & Poor's and an A- rating from Fitch. Despite the
low rating, the state's bonds gained in value as yields generally trended
lower during the past 12 months. By period-end, California general obligation
bonds (GOs) once again were trading at historically tight spreads to high-
quality bonds.
How did the Fund perform during the fiscal year?
For the year ended October 31, 2005, the Common Stock of MuniYield California
Fund, Inc. had net annualized yields of 5.74% and 6.33%, based on a year-end
per share net asset value of $14.73 and a per share market price of $13.37,
respectively, and $.846 per share income dividends. Over the same period, the
total investment return on the Fund's Common Stock was +2.59%, based on a
change in per share net asset value from $15.27 to $14.73, and assuming
reinvestment of all distributions.
ANNUAL REPORTS OCTOBER 31, 2005
The Fund's total return, based on net asset value, lagged the +5.51% average
return of its comparable Lipper category of California Municipal Debt Funds.
(Funds in this Lipper category invest primarily in municipal debt issues
exempt from taxation in the State of California.) The Fund's relatively high
credit quality - 73.3% of assets were invested in AAA-rated securities at
period end - left the portfolio underweighted in higher-yielding investments
that outperformed during the year as credit spreads tightened dramatically.
Based on the recommendation of our internal Municipal Department Investment
Committee, the Fund also had a relatively short duration, which limits the
portfolio's sensitivity to changes in interest rates. The goal was to mute
price volatility in the portfolio in the case of rising interest rates. A more
aggressive stance, however, would have delivered higher returns from capital
appreciation. Finally, the Fund was underweighted in tobacco bonds based on
our concerns about the litigation risk associated with these credits.
Ultimately, tobacco bonds were the top performers for the year, and our
underexposure detracted from relative performance.
For the six-month period ended October 31, 2005, the total investment return
on the Fund's Common Stock was +.65%, based on a change in per share net asset
value from $15.06 to $14.73, and assuming reinvestment of all distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Stock can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
After maintaining a defensive market stance for the bulk of the fiscal period,
we began to move to a more neutral duration stance in the final months of the
year. A relatively active California new-issue calendar and a market starting
to provide higher investment yields in response to Fed interest rate hikes
offered us opportunities to extend the portfolio's duration. Accordingly, we
purchased some longer-maturity bonds, financed in part through sales of
selected shorter-duration prerefunded securities.
We identified certain sectors that were outperforming the general municipal
market. For example, we bought noncallable zero-coupon bonds when they were
offering an additional 85 basis points of income over comparable AAA-rated
securities. In August, we sold a portion of our zero-coupon holdings as yield
spreads narrowed to 55 basis points - 60 basis points. We may enter this
sector once again if spreads widen in the coming month.
Finally, efforts were undertaken to improve the Fund's income accrual.
Specifically, we issued additional Auction Market Preferred Stock (AMPS) to
raise the Fund's leverage amount. We used the proceeds from the sale to
purchase longer-maturity, insured California bonds. Both the added leverage
and the presence of longer bonds contributed to a slight lengthening of the
Fund's duration exposure. The additional leverage also should enable the Fund
to generate a higher income accrual.
For the six-month period ended October 31, 2005, the Fund's AMPS had average
yields of 2.03% for Series A, 2.08% for Series B, 2.38% for Series C and 2.48%
for Series D. The Fed's interest rate hikes are clearly having a material
impact on the Fund's borrowing costs. The Fed raised the short-term interest
rate target 200 basis points during the 12-month period (and 25 basis points
more on November 1). Still, the tax-exempt yield curve remained relatively
steep and continued to generate an income benefit to the holders of Common
Stock from the leveraging of Preferred Stock. However, should the spread
between short-term and long-term interest rates narrow, the benefits of
leveraging will decline and, as a result, reduce the yield on the Fund's
Common Stock. At the end of the period, the Fund's leverage amount, due to
AMPS, was 35.81% of total net assets, before the deduction of Preferred Stock.
(For a more complete explanation of the benefits and risks of leveraging, see
page 2 of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
The steps taken in recent months have placed the portfolio in a neutral
position with respect to interest rate risk. During the period, our credit
quality breakdown remained essentially unchanged, with 83% of assets invested
in securities rated AA or better - a very high level of credit quality compared
to our peers. Following the dramatic tightening in credit spreads, we do not
see additional value at this point in "reaching for yield" by investing in
lower-rated bonds that do not sufficiently compensate investors for the added
risk. Instead, we chose to pursue higher yields by employing additional AMPS
leverage, a strategy aimed at improving the Fund's current income
distribution.
ANNUAL REPORTS OCTOBER 31, 2005
A Discussion With Your Funds' Portfolio Managers (continued)
MuniYield California Insured Fund, Inc.
Describe conditions in the State of California.
Moody's Investors Services upgraded California's credit rating from A3 to A2
in July 2005, after Governor Schwarzenegger signed a new budget for the state.
Moody's attributed the upgrade to "a continuing favorable trend of recovery
in the state's economy and tax revenues, better-than-expected financial
performance in fiscal 2005, and a moderately improved financial outlook for
2006 and beyond." Positive aspects of the budget included a moderate school
funding increase and the lack of any new debt issuance. The budget did not
include any new taxes or borrowings.
Nevertheless, California remained the lowest-rated state in the country, with
an A rating from Standard & Poor's and an A- rating from Fitch. Despite the
low rating, the state's bonds gained in value as yields generally trended
lower during the past 12 months. By period-end, California general obligation
bonds (GOs) once again were trading at historically tight spreads to high-
quality bonds.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2005, the Common Stock of MuniYield
California Insured Fund, Inc. had net annualized yields of 5.91% and 6.19%,
based on a year-end per share net asset value of $14.82 and a per share market
price of $14.16, respectively, and $.876 per share income dividends. Over the
same period, the total investment return on the Fund's Common Stock was
+3.55%, based on a change in per share net asset value from $15.23 to $14.82,
and assuming reinvestment of all distributions.
The Fund's total return, based on net asset value, slightly lagged the +3.94%
average return of its comparable Lipper category of California Insured
Municipal Debt Funds. (Funds in this Lipper category invest primarily in
municipal debt issues exempt from taxation in the State of California and
insured as to timely payment.) The Fund's high degree of credit quality - 95%
of assets were invested in AAA-rated securities with bond insurance at period
end - left the portfolio underweighted in higher-yielding investments that
outperformed during the year as credit spreads tightened dramatically.
The Fund also had a relatively short duration to limit the changes in interest
rates. The goal was to mute price volatility in the portfolio in case of
rising interest rates. While a more aggressive stance would have delivered
higher returns from capital appreciation, our focus has always been on
delivering the highest possible degree of tax-exempt income with a relatively
low duration and high-quality mix of assets. Finally, the Fund had no exposure
to tobacco bonds based on our concerns about the litigation risk associated
with these issues. Ultimately, tobacco bonds were the market's best performers,
and our lack of exposure detracted from relative performance for the year.
For the six-month period ended October 31, 2005, the total investment return
on the Fund's Common Stock was +.30%, based on a change in per share net asset
value from $15.23 to $14.82, and assuming reinvestment of all distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Stock can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
After maintaining a defensive market posture for the bulk of the fiscal
period, we began to move to a more neutral duration stance in the final months
of the year. A relatively active California new-issue calendar and a market
starting to provide higher investment yields in response to Fed interest rate
hikes offered us opportunities to extend the portfolio's duration. Accordingly,
we purchased some longer-maturity bonds, financed in part through sales of
selected shorter-duration prerefunded securities.
A major change during the past year involved the issuance of additional
Auction Market Preferred Stock (AMPS) to effectively increase the Fund's use
of leverage. We used the proceeds from the sale to purchase longer-maturity,
insured California bonds. Both the added leverage and the presence of longer
bonds contributed to a lengthening of the Fund's duration exposure. The
additional leverage also should help the Fund to generate a higher income
accrual.
ANNUAL REPORTS OCTOBER 31, 2005
For the six-month period ended October 31, 2005, the Fund's AMPS had average
yields of 2.35% for Series A, 2.09% for Series B, 2.05% for Series C, 2.00%
for Series D, 2.05% for Series E and 2.21% for Series F. The Fed's interest
rate hikes are clearly having a material impact on the Fund's borrowing costs.
The Fed raised the short-term interest rate target 200 basis points during the
12-month period (and once more on November 1). Still, the tax-exempt yield
curve remained relatively steep and continued to generate an income benefit to
the holders of Common Stock from the leveraging of Preferred Stock. However,
should the spread between short-term and long-term interest rates narrow, the
benefits of leveraging will decline and, as a result, reduce the yield on the
Fund's Common Stock. At the end of the period, the Fund's leverage amount, due
to AMPS, was 35.07% of total net assets, before the deduction of Preferred
Stock. (For a more complete explanation of the benefits and risks of
leveraging, see page 2 of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
The steps taken in recent months have placed the portfolio in a neutral
position with respect to interest rate risk. During the period, our credit
quality breakdown remained essentially unchanged, with 95% of assets invested
in securities rated AAA with bond insurance. Although we are authorized to
invest a portion of the Fund's assets in lower-rated bonds, we have been
underutilizing this available basket given the very tight credit spreads in
the market today. Instead, we have chosen to pursue higher yields by employing
additional AMPS leverage, a strategy aimed at improving the Fund's current
income distribution.
MuniYield Florida Fund
Describe conditions in the State of Florida.
Florida maintains credit ratings of AA1 from Moody's, AAA from Standard &
Poor's and AA+ from Fitch - all with stable trends. The favorable ratings are
based on the state's solid economic and financial performance, in addition to
moderate debt and a proactive government that responds to economic downturns
faster than other states. Florida's continued economic strength is bolstered
by robust population growth, which is attributed to the state's attractive
physical environment and favorable business climate. Although the growth in
population has put a strain on services such as education, transportation and
healthcare, it also has allowed the state to recover more quickly from sub par
economic trends.
Currently, Florida's revenues are higher than budgeted and expenditures remain
under control due to prudent fiscal oversight. The fiscal year 2005 budget was
brought into balance through tight expenditure controls, including outsourcing
work and requiring local governments to pick up costs historically incurred by
the state. To pay for these additional expenses, municipalities imposed
increases to property taxes and/or local sales taxes through voter initiatives.
Given the government's concerns over the high health care costs facing the
state, Governor Jeb Bush has proposed a partially private health insurance
plan. Florida continues to maintain solid fund balances with consistent
General Fund operations. In addition, the state has a working Capital Reserve
Fund and a Budget Stabilization Fund in excess of $2 billion.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2005, the Common Shares of MuniYield
Florida Fund had net annualized yields of 6.20% and 6.19%, based on a year-end
per share net asset value of $14.91 and a per share market price of $14.93,
respectively, and $.924 per share income dividends. Over the same period, the
total investment return on the Fund's Common Stock was +3.98%, based on a
change in per share net asset value from $15.27 to $14.91, and assuming
reinvestment of all distributions.
The Fund's total return, based on net asset value, outpaced the +3.81% average
return of the Lipper Florida Municipal Debt Funds category for the 12-month
period. (Funds in this Lipper category limit their investment to those
securities exempt from taxation in the State of Florida.)
Three factors affected Fund performance during the period. First was our yield
curve positioning. Essentially, we continued to focus on the longer end of
curve, which significantly outperformed the short end as the yield curve
flattened and shorter-term bond prices suffered. The municipal yield curve is
actually quite steep in comparison to the Treasury curve, with a difference of
155 basis points between the one-year and the 30-year sectors. Thus, our
commitment to the long end paid off. Second, the Fund's uninsured credits,
which performed particularly well during the period, contributed to
performance. This was especially true of our investments in the Florida
hospital sector. Finally, our commitment to an above-average coupon structure
continued to benefit the Fund's relative results.
For the six-month period ended October 31, 2005, the total investment return
on the Fund's Common Shares was +.47%, based on a change in per share net
asset value from $15.30 to $14.91, and assuming reinvestment of all
distributions.
ANNUAL REPORTS OCTOBER 31, 2005
A Discussion With Your Funds' Portfolio Managers (continued)
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Shares (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Shares can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
We continued to focus on increasing the income provided to shareholders and
muting the Fund's net asset value volatility. To that end, we sought to sell
some of the portfolio's prerefunded bonds in the five-year - 10-year maturity
range. In doing so, we were cognizant not to sell bonds that were booked at
higher yields than are available in the current market.
In August, the Fund increased its use of leverage through the issuance of
$15 million in additional Auction Market Preferred Shares (AMPS). With the
proceeds, we generally focused on premium-coupon bonds in the 20-year - 25-year
maturity range whenever they became available. This is where we have been able
to capture higher yields with reduced volatility. Our efforts in this area
have been somewhat limited by a lack of new long-term bonds in the Florida
municipal market. Although new issuance increased 38% versus the previous
12-month period, much of the supply in the market has come in the form of
refinancings, the majority of which offered maturities of only 15 years - 20
years and yields below 5%. Importantly, we remained fully invested throughout
the fiscal year in order to augment the portfolio's yield.
For the six-month period ended October 31, 2005, the Fund's AMPS had average
yields of 2.43% for Series A, 2.37% for Series B and 2.59% for Series C. The
Fed's interest rate hikes are clearly having a material impact on the Fund's
borrowing costs. The Fed raised the short-term interest rate target 200 basis
points during the 12-month period (and once more on November 1). Still, the
tax-exempt yield curve remained relatively steep and continued to generate
an income benefit to the holders of Common Shares from the leveraging of
Preferred Shares. However, should the spread between short-term and long-term
interest rates narrow, the benefits of leveraging will decline and, as a
result, reduce the yield on the Fund's Common Shares. At the end of the
period, the Fund's leverage amount, due to AMPS, was 35.25% of total net
assets, before the deduction of Preferred Shares. (For a more complete
explanation of the benefits and risks of leveraging, see page 2 of this report
to shareholders.)
How would you characterize the Fund's position at the close of the period?
We would characterize the Fund's position as fairly neutral in terms of
interest rate risk. Currently, we favor bonds with 20-year - 25-year
maturities and prefer to structure coupons of 5.25%. Long-term bond yields,
which had been slow to react to the Fed's interest rate hikes, have started to
inch upward. We will look for an increase in long-term rates as an opportunity
to pursue higher-coupon bonds in the 20-year - 30-year maturity range and will
remain fully invested to augment shareholders' income.
MuniYield Michigan Insured Fund II, Inc.
Describe conditions in the State of Michigan.
At period end, Michigan maintained credit ratings of Aa2, AA and AA with a
stable outlook from Moody's, Standard & Poor's and Fitch, respectively. All
three agencies downgraded the state during the period, citing the troubled
automotive sector and weak revenue estimates. Michigan's debt ratios, however,
are quite low for a populous state and indicate relative flexibility in
responding to economic downturns. The state's pension system is well-funded.
Whether Michigan's credit rating is downgraded further depends on a recovering
economy, stable employment trends and continued budget balancing. Employment
in the state declined in 2004 for the fourth consecutive year, although
the annual rate of job losses has moderated each year since 2001. The
manufacturing sector - particularly the auto industry, led by General Motors
Corp. - has been responsible for the job losses, which have weighed on revenue
collections and could indicate longer-term economic problems for the state.
On the positive side, preliminary data for September 2005 revealed a 6.4%
unemployment rate, a significant improvement over the 7.1% rate a year earlier.
As of September 30, 2005, the end of the state's fiscal year, Michigan showed
a near-zero reserve balance in its major operating funds, reflecting the use
of its past surpluses to close budget shortfalls. Through August 2005,
Michigan's general fund revenues for the 2005 fiscal year were almost 1% above
estimates. Governor Granholm recently approved a $41 billion budget for fiscal
year 2006 with no reliance on broad-based tax increases. The budget generally
maintained spending cuts proposed by the governor to eliminate a general fund
deficit of $770 million.
ANNUAL REPORTS OCTOBER 31, 2005
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2005, the Common Stock of MuniYield
Michigan Insured Fund II, Inc. had net annualized yields of 6.21% and 6.27%,
based on a year-end per share net asset value of $14.54 and a per share market
price of $14.41, respectively, and $.903 per share income dividends. Over the
same period, the total investment return on the Fund's Common Stock was
+1.73%, based on a change in per share net asset value from $15.21 to $14.54,
and assuming reinvestment of all distributions.
The Fund's total return, based on net asset value, trailed the +3.18% average
return of the Lipper Michigan Municipal Debt Funds category for the 12-month
period. (Funds in this Lipper category limit their investment to securities
exempt from taxation in Michigan or a city in Michigan.) The underperformance
can be attributed in part to the portfolio's relatively defensive interest
rate positioning, which proved to be premature as yields on longer bonds
failed to rise to the extent anticipated. Another source of underperformance
relative to our Lipper peers was the Fund's high degree of credit quality
during a market environment in which lower-rated bonds, particularly BBB-rated
hospital and corporate-backed issues, were generally strong performers. As an
insured Fund, we own fewer lower-rated, higher-yielding securities than most
of our competitors. At the end of the period, approximately 84% of the Fund's
assets were invested in AAA-rated bonds.
For the six month period ended October 31, 2005, the total investment return
on the Fund's Common Stock was -.34%, based on a change in per share net asset
value from $15.04 to $14.54, and assuming reinvestment of all distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Stock can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
We added higher-yielding issues to the portfolio whenever we found them to be
attractively priced. However, narrowing credit spreads forced us to limit
these purchases because the additional yield available remained unattractive
compared to historical levels.
In mid-September, we issued additional Auction Market Preferred Stock (AMPS) in
an effort to enhance the Fund's income stream and bring the portfolio's
leverage ratio more in line with that of its peers. We reinvested the proceeds
of this issuance in more interest rate-sensitive securities with maturity dates
ranging from 2030 to 2036. We believe these bonds should perform well, as
interest rates are expected to be relatively stable and the yield curve still
quite flat in the coming months.
For the 12-month period ended October 31, 2005, the Fund's AMPS had average
yields of 2.27% for Series A, 2.33% for Series B and 2.56% for Series C. The
Fed's interest rate hikes are clearly having a material impact on the Fund's
borrowing costs. The Fed raised the short-term interest rate target 200 basis
points during the 12-month period (and 25 basis points more on November 1).
Still, the tax-exempt yield curve remained relatively steep and continued to
generate an income benefit to the holders of Common Shares from the leveraging
of Preferred Shares. However, should the spread between short-term and long-
term interest rates narrow, the benefits of leveraging will decline and, as a
result, reduce the yield on the Fund's Common Shares. At the end of the
period, the Fund's leverage amount, due to AMPS, was 36.95% of total net
assets, before the deduction of Preferred Stock. (For a more complete
explanation of the benefits and risks of leveraging, see page 2 of this report
to shareholders.)
How would you characterize the Fund's position at the close of the period?
The Fund ended the period in a neutral position with respect to interest
rate risk. We expect to maintain this positioning in the near future in
anticipation of continued moderate economic expansion and negligible
inflationary pressures. Higher energy costs, especially for winter heating
fuel, are expected to weigh on consumer spending and confidence and could
promote a relatively stable interest rate environment. If, however, the U.S.
economy strengthens or retail prices rise more than expected, we would likely
position the portfolio more defensively in anticipation of higher interest
rates down the road.
ANNUAL REPORTS OCTOBER 31, 2005
A Discussion With Your Funds' Portfolio Managers (concluded)
Regardless of the economic backdrop, we plan to keep the portfolio fully
invested to enhance shareholder income. Future portfolio activity is likely to
focus on our ongoing efforts to maintain the Fund's attractive distribution
yield.
MuniYield New York Insured Fund, Inc.
Describe conditions in the State of New York.
The State of New York maintains credit ratings of A1, AA and AA- from Moody's,
Standard and Poor's (S&P) and Fitch, respectively. Moody's assigns a positive
outlook to the state's rating, reflecting an upgrade in November 2004, while
Fitch and S&P carry stable outlooks. The state's economy continues to improve
and revenue collections are increasing. State tax collections remain largely
dependent on the performance of the financial sector, but tax receipts for
fiscal year 2005 (ended March 31, 2005) were 15% above the prior fiscal year.
Due to surging tax collections, particularly income taxes, the fiscal year
2005 operating surplus totaled $1.2 billion.
For the first time in more than 20 years, New York lawmakers approved a budget
on time. The fiscal year 2006 budget calls for $105 billion in spending and
forecasts a 5% increase in tax receipts for the fiscal year (which began April
1, 2005). Aided by this revenue growth, the enacted budget includes most of
the governor's original proposals for closing an estimated $4 billion deficit.
However, this does not factor in a lawsuit won by the Campaign for Fiscal
Equity that could add up to $2 billion in annual state education spending.
Crafting balanced budgets beyond fiscal year 2006 will present a challenge
given political resistance to additional tax hikes and cuts in popular
programs, as well as pressure from local governments for pension and Medicaid
relief, and new education spending. General fund receipts are 0.7% ahead of
budget through the first quarter of fiscal year 2006.
The New York economy produced good job growth in 2004, with total non-farm
labor increasing 0.5% from the prior year. This was the first annual gain
since 2000. Preliminary August 2005 employment (seasonally adjusted) is 1%
above the prior August level. New York ranks fifth-highest among all states in
per capita income. Modest income growth through the remainder of 2005 would
boost personal income tax receipts, which account for roughly 38% of general
fund receipts.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2005, the Common Stock of MuniYield
New York Insured Fund, Inc. had net annualized yields of 5.89% and 6.38%,
based on a year-end per share net asset value of $14.26 and a per share market
price of $13.17, respectively, and $.840 per share income dividends. Over the
same period, the total investment return on the Fund's Common Stock was
+2.53%, based on a change in per share net asset value from $14.81 to $14.26,
and assuming reinvestment of all distributions.
The Fund's total return, based on net asset value, lagged the +3.22% average
return of the Lipper New York Insured Municipal Debt Funds category for the
12-month period. (Funds in this Lipper category invest primarily in securities
exempt from taxation in New York and insured as to timely payment.) The
underperformance is attributed to the portfolio's slightly shorter-than-
average duration, which we maintained for the bulk of the period based on our
belief that strong economic growth, coupled with a Fed tightening, would cause
long-term bond yields to increase. The defensive positioning was designed to
limit portfolio volatility and protect the Fund's net asset value from the
price impact associated with rising rates. However, long-term yields did not
behave as expected and our short duration detracted from returns on a relative
basis. Also hindering performance was our exposure to Puerto Rico paper, which
we had increased from 7.3% of net assets to 11.3% during the year. Although
these bonds underperformed the broader market during this particular period,
they offer good liquidity, tradability and yield characteristics.
On the positive side, we sought to capitalize on the flattening yield curve by
moving into longer-dated securities as opportunities presented themselves.
This strategy helped the Fund's total return as the price of longer-dated
bonds increased. Over the course of the year, we increased the portfolio's
exposure to bonds maturing in 30 years or longer from 24.7% of net assets to
39.8%.
For the most part, our focus during the period centered on yield rather than
total return. As a result, the Fund was able to gain a competitive yield
advantage versus its New York insured fund peers. While some of our
competitors were forced to cut their dividends as market rates declined, the
Fund was able to maintain an above-average monthly distribution rate.
ANNUAL REPORTS OCTOBER 31, 2005
For the six-month period ended October 31, 2005, the total investment return
on the Fund's Common Stock was -.37%, based on a change in per share net asset
value from $14.76 to $14.26, and assuming reinvestment of all distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Stock can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
For the most part, we focused on protecting the Fund's net asset value and
providing shareholders with above-average income. To that end, we sought out
opportunities to trade into higher-yielding bonds, and we were cognizant to
retain those bonds booked into the portfolio at relatively attractive yields.
We also remained essentially fully invested throughout the year and, whenever
possible, we took opportunities to move further out on the yield curve to pick
up incremental yield.
We maintained the portfolio's defensive market posture until June, when we
began to move toward a more neutral stance. In all, we increased the
portfolio's average maturity by about one year.
Recently, there has been little long-maturity new issuance in the New York
municipal market. As issuers are refunding their existing debt, they have
tended to do so with short and intermediate issues. The limited supply of
longer-dated maturities has provided for few trading opportunities. Until
market yields increase or the new-issue calendar produces compelling
opportunities, we are looking to enhance the diversification of the portfolio.
For example, we added bonds insured by two new insurers in the municipal
marketplace, XL Capital Assurance (XLCA) and CIFG. In anticipation that they
would outperform over time, we purchased these bonds at wider spreads than
those offered by bonds backed by traditional insurers.
For the six-month period ended October 31, 2005, the Fund's Auction Market
Preferred Stock (AMPS) had average yields as follows: Series A, 2.15%; Series
B, 2.07%; Series C, 2.19%; Series D, 2.23%; Series E, 2.09%; and Series F,
2.32%. The Fed's interest rate hikes are clearly having a material impact on
the Fund's borrowing costs. The Fed raised the short-term interest rate target
200 basis points during the 12-month period (and once more on November 1).
Still, the tax-exempt yield curve remained relatively steep and continued to
generate an income benefit to the holders of Common Shares from the leveraging
of Preferred Shares. However, should the spread between short-term and long-
term interest rates narrow, the benefits of leveraging will decline and, as a
result, reduce the yield on the Fund's Common Shares. At the end of the
period, the Fund's leverage amount, due to AMPS, was 35.08% of total net
assets, before the deduction of Preferred Stock. (For a more complete
explanation of the benefits and risks of leveraging, see page 2 of this report
to shareholders.)
How would you characterize the portfolio's position at the close of the
period?
We ended the period with a neutral market outlook. The Fed, increasingly
concerned about inflation, has not given any signal that it is finished
increasing interest rates. In turn, it appears that the market has extrapolated
further interest rate hikes. This creates volatility as investors adjust their
assumptions about the markets.
Against this backdrop, we will look to trade the market and take advantage of
the volatility. The benefit of the recent upturn in long-term rates is that it
allows us to restructure the portfolio in terms of coupon, call date and
maturity without having an overly negative impact on yield. Over time,
increased trading opportunities can translate into enhanced total return
performance.
Michael A. Kalinoski, CFA
Vice President and Portfolio Manager
MuniYield Arizona Fund, Inc.
Walter C. O'Connor, CFA
Vice President and Portfolio Manager
MuniYield California Fund, Inc.
MuniYield California Insured Fund, Inc.
Robert D. Sneeden
Vice President and Portfolio Manager
MuniYield Florida Fund
Fred K. Stuebe
Vice President and Portfolio Manager
MuniYield Michigan Insured Fund II, Inc.
Timothy T. Browse, CFA
Vice President and Portfolio Manager
MuniYield New York Insured Fund, Inc.
November 16, 2005
ANNUAL REPORTS OCTOBER 31, 2005
Portfolio Information
Quality Profiles as of October 31, 2005
Percent of
MuniYield Arizona Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 46.0%
AA/Aa 10.9
A/A 12.4
BBB/Baa 23.5
BB/Ba 1.0
NR (Not Rated) 4.6
Other* 1.6
* Includes portfolio holdings in variable rate demand notes and
short-term investments.
Percent of
MuniYield California Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 73.3%
AA/Aa 9.4
A/A 12.4
BBB/Baa 4.7
Other* 0.2
* Includes portfolio holdings in short-term investments.
Percent of
MuniYield California Insured Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 95.3%
AA/Aa 1.1
A/A 3.3
Other* 0.3
* Includes portfolio holdings in variable rate demand notes and
short-term investments.
Percent of
MuniYield Florida Fund Total
By S&P/Moody's Rating Investments
AAA/Aaa 70.8%
AA/Aa 1.5
A/A 6.5
BBB/Baa 17.5
NR (Not Rated) 2.2
Other* 1.5
* Includes portfolio holdings in variable rate demand notes and
short-term investments.
Percent of
MuniYield Michigan Insured Fund II, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 84.4%
AA/Aa 4.5
A/A 4.7
BBB/Baa 4.0
Other 2.4
* Includes portfolio holdings in short-term investments.
Percent of
MuniYield New York Insured Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 87.3%
AA/Aa 1.2
A/A 5.9
BBB/Baa 5.1
Other* 0.5
* Includes portfolio holdings in variable rate demand notes and
short-term investments.
Swap Agreements
The Funds may invest in swap agreements, which are over-the-counter contracts
in which one party agrees to make periodic payments based on the change in
market value of a specified bond, basket of bonds, or index in return for
periodic payments based on a fixed or variable interest rate or the change in
market value of a different bond, basket of bonds or index. Swap agreements may
be used to obtain exposure to a bond or market without owning or taking
physical custody of securities. Swap agreements involve the risk that the party
with whom each Fund has entered into a swap will default on its obligation to
pay the Fund and the risk that the Fund will not be able to meet its
obligations to pay the other party to the agreement.
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (In Thousands)
MuniYield Arizona Fund, Inc.
Face
Amount Municipal Bonds Value
Arizona--135.2%
$ 1,650 Arizona Educational Loan Marketing Corporation,
Educational Loan Revenue Refunding Bonds, AMT,
Junior Sub-Series, 6.30% due 12/01/2008 $ 1,652
Arizona Health Facilities Authority, Hospital System
Revenue Bonds (John C. Lincoln Health Network):
500 6.875% due 12/01/2020 556
1,125 7% due 12/01/2025 1,253
1,785 Arizona Health Facilities Authority Revenue Bonds
(Catholic Healthcare West), Series A, 6.625%
due 7/01/2020 1,993
1,000 Arizona School Facilities Board, State School
Improvement Revenue Bonds, 5.50% due 7/01/2011 (i) 1,095
4,335 Arizona State University Revenue Bonds, DRIVERS,
Series 270, 7.987% due 7/01/2021 (e)(k) 5,222
Arizona Student Loan Acquisition Authority, Student
Loan Revenue Refunding Bonds, AMT:
3,285 Junior Subordinated Series B-1, 6.15%
due 5/01/2029 3,508
1,000 Senior-Series A-1, 5.90% due 5/01/2024 1,059
Arizona Tourism and Sports Authority, Tax
Revenue Bonds:
1,000 (Baseball Training Facilities Project), 5%
due 7/01/2016 1,022
2,000 (Multi-Purpose Stadium Facility), Series A, 5.375%
due 7/01/2023 (b) 2,168
100 Coconino County, Arizona, Pollution Control Corporation
Revenue Bonds (Arizona Public Service Co.--Navajo
Project), VRDN, AMT, Series A, 2.77% due 10/01/2029 (l) 100
500 Glendale, Arizona, Development Authority, Educational
Facilities Revenue Refunding Bonds (American Graduate
School International), 5.875% due 7/01/2006 (c)(i) 514
1,000 Greater Arizona Development Authority, Infrastructure
Revenue Bonds, Series B, 5% due 8/01/2030 (b) 1,033
Maricopa County, Arizona, Hospital Revenue Refunding
Bonds (Sun Health Corporation):
1,670 6.125% due 4/01/2007 (i) 1,765
735 6.125% due 4/01/2018 764
1,000 Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1), Series A,
6.625% due 7/01/2020 1,001
2,400 Maricopa County, Arizona, IDA, Hospital Facility
Revenue Refunding Bonds (Samaritan Health Services),
Series A, 7% due 12/01/2016 (b)(d) 2,938
2,395 Maricopa County, Arizona, IDA, M/F Housing Revenue
Bonds (Place Five and Greenery Apartments), Series A,
6.625% due 1/01/2027 (d) 2,571
Face
Amount Municipal Bonds Value
Arizona (continued)
$ 1,000 Maricopa County, Arizona, Peoria Unified School
District Number 11, GO, Second Series, 5%
due 7/01/2025 (e) $ 1,040
1,485 Maricopa County, Arizona, Pollution Control
Corporation, PCR, Refunding (Public Service
Company of New Mexico Project), Series A, 6.30%
due 12/01/2026 1,563
2,250 Maricopa County, Arizona, Public Finance Corporation,
Lease Revenue Bonds, RIB, Series 511X, 8.04%
due 7/01/2014 (a)(k) 2,650
1,825 Maricopa County, Arizona, Scottsdale Unified School
District Number 48, GO, 6.60% due 7/01/2012 2,131
500 Maricopa County, Arizona, Tempe Elementary Unified
School District Number 3, GO, Refunding, 7.50%
due 7/01/2010 (e) 583
1,000 Maricopa County, Arizona, Unified School District
Number 090, School Improvement, GO (Saddle
Mountain), Series A, 5% due 7/01/2014 1,030
Mesa, Arizona, IDA Revenue Bonds (Discovery
Health Systems), Series A (b)(i):
1,000 5.625% due 1/01/2010 1,088
1,000 5.875% due 1/01/2010 1,096
1,000 Navajo County, Arizona, IDA, IDR (Stone Container
Corporation Project), AMT, 7.40% due 4/01/2026 1,027
1,000 Nogales Arizona Municipal Development Authority, Inc.,
Revenue Bonds, 5% due 6/01/2030 (a) 1,027
4,500 Northern Arizona University System Revenue Bonds,
5.50% due 6/01/2034 (e) 4,871
4,000 Phoenix, Arizona, Civic Improvement Corporation,
Excise Tax Revenue Bonds (Civic Plaza Expansion
Project), Sub-Series A, 5% due 7/01/2030 (e) 4,139
Phoenix, Arizona, Civic Improvement Corporation,
Water System Revenue Refunding Bonds, Junior Lien:
2,500 5.50% due 7/01/2020 (e) 2,719
2,000 5% due 7/01/2029 (b) 2,076
Pima County, Arizona, IDA, Education Revenue Bonds
(Arizona Charter Schools Project), Series C:
750 6.70% due 7/01/2021 791
1,000 6.75% due 7/01/2031 1,045
1,000 Pima County, Arizona, IDA, Education Revenue
Refunding Bonds (Arizona Charter Schools Project II),
Series A, 6.75% due 7/01/2021 1,057
1,000 Pima County, Arizona, IDA, Revenue Refunding Bonds
(Health Partners), Series A, 5.625% due 4/01/2014 (b) 1,049
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedules of
Investments, we have abbreviated the names of many of the securities
according to the list at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DATES Daily Adjustable Tax-Exempt Securities
DRIVERS Derivative Inverse Tax-Exempt Receipts
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
VRDN Variable Rate Demand Notes
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (concluded) (In Thousands)
MuniYield Arizona Fund, Inc.
Face
Amount Municipal Bonds Value
Arizona (concluded)
$ 370 Pima County, Arizona, IDA, S/F Mortgage Revenue
Refunding Bonds, AMT, Series A-1, 6.20%
due 11/01/2030 (f)(g) $ 389
3,050 Pima County, Arizona, Unified School District Number 1,
Tucson, GO, Refunding, 7.50% due 7/01/2009 (e) 3,466
Pinal County, Arizona, COP:
1,250 5% due 12/01/2026 1,261
1,250 5% due 12/01/2029 1,253
3,000 Salt River Project, Arizona, Agriculture Improvement
and Power District, Electric System Revenue Refunding
Bonds, Series A, 5% due 1/01/2035 3,101
2,250 Scottsdale, Arizona, IDA, Hospital Revenue Bonds
(Scottsdale Healthcare), 5.80% due 12/01/2031 2,383
1,195 Show Low, Arizona, IDA, Hospital Revenue Bonds
(Navapache Regional Medical Center), 5%
due 12/01/2035 (j) 1,209
1,500 South Campus Group LLC, Arizona Student Housing
Revenue Bonds (Arizona State University South Campus
Project), Series 2003, 5.625% due 9/01/2035 (b) 1,633
2,060 Tempe, Arizona, Excise Tax Revenue Bonds, 5%
due 7/01/2025 2,150
2,000 Tempe, Arizona, GO, 3.50% due 7/01/2024 1,718
575 Tucson and Pima County, Arizona, IDA, S/F Mortgage
Revenue Refunding Bonds (Mortgage-Backed Securities
Program), AMT, Series A-1, 6% due 7/01/2021 (f)(g) 587
500 Tucson, Arizona, GO, Series D, 5% due 7/01/2021 525
1,000 Tucson, Arizona, IDA, Senior Living Facilities Revenue
Bonds (Christian Care Tucson Inc. Project), Series A,
6.125% due 7/01/2024 (j) 1,092
1,105 University of Arizona, COP, Refunding, Series A,
5.125% due 6/01/2029 (a) 1,152
Vistancia Community Facilities District, Arizona, GO:
1,275 6.75% due 7/15/2022 1,361
750 5.75% due 7/15/2024 753
2,000 Yavapai County, Arizona, IDA, Hospital Facility
Revenue Bonds (Yavapai Regional Medical Center),
Series A, 6% due 8/01/2033 2,126
Face
Amount Municipal Bonds Value
Puerto Rico--24.4%
$ 500 Puerto Rico Commonwealth, GO, Refunding, RITR,
Class R, Series 3, 8.451% due 7/01/2016 (b)(k) $ 593
Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Refunding Bonds:
1,000 Series J, 5.50% due 7/01/2014 (i) 1,114
2,000 Series K, 5% due 7/01/2025 2,041
2,000 Puerto Rico Commonwealth, Public Improvement, GO,
Series A, 5.125% due 7/01/2031 2,039
Puerto Rico Electric Power Authority, Power
Revenue Bonds:
1,000 Series II, 5.25% due 7/01/2031 1,034
1,500 Series NN, 5.125% due 7/01/2029 1,553
695 Trust Receipts, Class R, Series 16 HH, 8.451%
due 7/01/2013 (h)(k) 838
2,000 Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Revenue Bonds
(Cogeneration Facility--AES Puerto Rico Project),
AMT, 6.625% due 6/01/2026 2,149
2,540 Puerto Rico Public Buildings Authority, Government
Facilities Revenue Refunding Bonds, Series I, 5.25%
due 7/01/2033 2,624
1,700 Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Revenue Bonds, Series E, 5.50%
due 8/01/2029 1,777
Total Municipal Bonds
(Cost--$99,356)--159.6% 103,117
Shares
Held Short-Term Securities
1,607 CMA Arizona Municipal Money Fund (m) 1,607
Total Short-Term Securities
(Cost--$1,607)--2.5% 1,607
Total Investments (Cost--$100,963*)--162.1% 104,724
Other Assets Less Liabilities--0.3% 214
Preferred Stock, at Redemption Value--(62.4%) (40,308)
----------
Net Assets Applicable to Common Stock--100.0% $ 64,630
==========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2005, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 100,971
===============
Gross unrealized appreciation $ 4,217
Gross unrealized depreciation (464)
---------------
Net unrealized appreciation $ 3,753
===============
(a) AMBAC Insured.
(b) MBIA Insured.
(c) Connie Lee Insured.
(d) Escrowed to maturity.
(e) FGIC Insured.
(f) FHLMC Collateralized.
(g) FNMA/GNMA Collateralized.
(h) FSA Insured.
(i) Prerefunded.
(j) Radian Insured.
(k) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(l) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate changes
periodically based upon prevailing market rates.
(m) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA Arizona Municipal Money Fund 693 $11
See Notes to Financial Statements
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (In Thousands)
MuniYield California Fund, Inc.
Face
Amount Municipal Bonds Value
California--147.5%
$ 1,730 ABAG Finance Authority for Nonprofit Corporations,
California, Revenue Refunding Bonds (Redwood
Senior Homes and Services), 6% due 11/15/2022 $ 1,860
3,975 Antioch Area Public Facilities Financing Agency,
California, Special Tax (Community Facilities District
Number 1989-1), 5.70% due 8/01/2009 (a)(h) 4,348
2,820 Arcata, California, Joint Powers Financing Authority,
Tax Allocation Revenue Refunding Bonds (Community
Development Project Loan), Series A, 6%
due 8/01/2023 (a) 2,835
2,500 Bakersfield, California, COP, Refunding (Convention
Center Expansion Project), 5.80% due 4/01/2017 (b) 2,613
5,000 California Health Facilities Financing Authority Revenue
Bonds (Kaiser Permanente), RIB, Series 26, 8.01%
due 6/01/2022 (e)(j) 5,641
1,490 California Health Facilities Financing Authority, Revenue
Refunding Bonds (Pomona Valley Hospital Medical
Center), Series A, 5.625% due 7/01/2019 (b) 1,573
4,990 California Infrastructure and Economic Development
Bank Revenue Bonds (J. David Gladstone Institute
Project), 5.50% due 10/01/2022 5,229
3,000 California Pollution Control Financing Authority, Solid
Waste Disposal Revenue Bonds (Waste Management
Inc. Project), AMT, Series A-2, 5.40% due 4/01/2025 3,096
6,250 California Pollution Control Financing Authority, Solid
Waste Disposal Revenue Refunding Bonds (Waste
Management Inc. Project), AMT, Series B, 5%
due 7/01/2027 6,136
California Rural Home Mortgage Finance Authority,
S/F Mortgage Revenue Bonds (Mortgage-Backed
Securities Program), AMT:
50 Series A-1, 6.90% due 12/01/2024 (c)(f) 52
80 Series B, 6.15% due 6/01/2020 (d) 80
4,500 California State Department of Water Resources, Power
Supply Revenue Bonds, Series A, 5.75% due 5/01/2017 4,946
6,000 California State Department of Water Resources
Revenue Bonds (Central Valley Project), 5.25%
due 7/01/2022 6,023
California State, GO, Refunding:
1,635 5.25% due 2/01/2029 1,704
8,000 5.75% due 5/01/2030 8,676
2,785 (Veterans), AMT, Series BJ, 5.70% due 12/01/2032 2,855
California State Public Works Board, Lease
Revenue Bonds:
2,000 (California State University), Series C, 5.40%
due 10/01/2022 (b) 2,105
5,000 (Department of Corrections), Series C, 5.50%
due 6/01/2023 5,378
6,645 (Department of Health Services), Series A, 5.75%
due 11/01/2017 (b) 7,251
2,500 (University of California--Institution Project),
Series C, 5% due 4/01/2030 (a) 2,536
17,000 (Various Community College Projects), Series A,
5.625% due 3/01/2016 (a) 17,478
California State, Various Purpose, GO:
4,730 5.50% due 4/01/2030 5,058
6,850 5.50% due 11/01/2033 7,342
Face
Amount Municipal Bonds Value
California (continued)
$ 5,250 California Statewide Communities Development
Authority, COP (John Muir/Mount Diablo Health
System), 5.125% due 8/15/2022 (b) $ 5,487
California Statewide Communities Development
Authority, Health Facility Revenue Bonds (Memorial
Health Services), Series A:
3,270 6% due 10/01/2023 3,587
3,000 5.50% due 10/01/2033 3,111
2,380 California Statewide Communities Development
Authority, Water Revenue Bonds (Pooled Financing
Program), Series C, 5.25% due 10/01/2028 (e) 2,507
2,000 Chino Basin, California, Regional Financing Authority
Revenue Bonds (Inland Empire Utility Agency Sewer
Project), 5.75% due 11/01/2009 (b)(h) 2,202
6,270 Coast Community College District, California,
Capital Appreciation, GO, Refunding, 5.02%**
due 8/01/2021 (b) 2,966
2,705 Contra Costa County, California, Public Financing
Lease Revenue Refunding Bonds (Various Capital
Facilities), Series A, 5.30% due 8/01/2020 (b) 2,842
3,750 Cucamonga, California, County Water District, COP,
5.125% due 9/01/2035 (g) 3,851
2,500 Davis, California, Joint Unified School District,
Community Facilities District, Special Tax Refunding
Bonds, Number 1, 5.50% due 8/15/2021 (b) 2,567
4,000 Fremont, California, Unified School District, Alameda
County, GO (Election of 2002), Series B, 5%
due 8/01/2030 (e) 4,147
4,650 Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds,
Series A-4, 7.80% due 6/01/2042 5,653
5,595 Grossmont-Cuyamaca Community College District,
California, GO (Election of 2002), Series B, 5%
due 8/01/2029 (g) 5,809
5,025 Indio, California, Water Authority, Water Enterprise
Revenue Bonds, 5.125% due 4/01/2030 (a) 5,275
Industry, California, Urban Development Agency,
Tax Allocation Refunding Bonds (b):
14,915 (Civic Recreation Industrial), Series 1, 5.50%
due 5/01/2021 15,606
5,000 (Civic-Recreational-Industrial Redevelopment
Project No. 1), 5.50% due 5/01/2020 5,226
3,010 La Quinta, California, Financing Authority, Local Agency
Tax Allocation and Revenue Refunding Bonds, RIB,
Series II-R-412X, 7.441% due 9/01/2034 (a)(j) 3,247
3,500 Lancaster, California, Redevelopment Agency,
Subordinate Tax Allocation Refunding Bonds (Combined
Redevelopment Project Areas--Housing Programs),
Series B, 5% due 8/01/2034 (g) 3,576
2,000 Los Angeles, California, COP (Sonnenblick Del Rio West
Los Angeles), 6.20% due 11/01/2031 (a) 2,236
Los Angeles, California, Harbor Department Revenue
Bonds, AMT:
4,000 RITR, Series RI-7, 9.505% due 11/01/2026 (b)(j) 4,288
2,000 Series B, 6% due 8/01/2015 2,056
6,000 Series B, 5.375% due 11/01/2023 6,148
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (continued) (In Thousands)
MuniYield California Fund, Inc.
Face
Amount Municipal Bonds Value
California (continued)
$ 7,000 Los Angeles, California, Wastewater System Revenue
Bonds, Series A, 5% due 6/01/2023 (g) $ 7,270
4,500 Los Angeles, California, Wastewater System, Revenue
Refunding Bonds, Subordinate Series A, 5%
due 6/01/2027 (b) 4,649
3,780 Los Angeles County, California, Metropolitan
Transportation Authority, Sales Tax Revenue
Refunding Bonds, Proposition A, First Tier
Senior-Series A, 5% due 7/01/2027 (a) 3,930
5,000 Los Angeles County, California, Public Works
Financing Authority, Lease Revenue Bonds (Multiple
Capital Facilities Project VI), Series A, 5.625%
due 5/01/2010 (a)(h) 5,478
3,735 Los Angeles County, California, Public Works Financing
Authority, Lease Revenue Refunding Bonds (Master
Refunding Project), Series A, 5% due 12/01/2028 (b) 3,860
Los Angeles County, California, Sanitation Districts
Financing Authority, Revenue Refunding Bonds (Capital
Projects--District Number 14), Sub-Series B (g):
2,305 5% due 10/01/2025 2,402
2,550 5% due 10/01/2030 2,641
1,000 Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, Series A, 5%
due 7/01/2030 (e) 1,036
2,865 Midpeninsula Regional Open Space District Financing
Authority, California, Revenue Refunding Bonds, 5%
due 9/01/2034 (a) 2,934
8,705 Modesto, California, Wastewater Treatment Facilities
Revenue Bonds, 5.625% due 11/01/2007 (b)(h) 9,223
7,570 Morgan Hill, California, Unified School District, GO,
5%** due 8/01/2026 (g) 2,695
8,595 Napa Valley, California, Community College District,
Capital Appreciation, GO (Election of 2002), Series B,
5.16%** due 8/01/2024 (b) 3,417
1,750 North City-West, California, School Facilities Financing
Authority, Special Tax Refunding Bonds, Series B,
5.75% due 9/01/2015 (e) 1,822
Oakland, California, Alameda County Unified School
District, GO (b):
4,240 (Election of 2000), 5% due 8/01/2027 4,395
3,290 Series F, 5.50% due 8/01/2017 3,562
3,770 Series F, 5.50% due 8/01/2018 4,082
Oakland, California, Joint Powers Financing Authority,
Lease Revenue Bonds (Oakland Administration
Buildings) (a)(h):
11,395 5.75% due 8/01/2006 11,852
2,000 5.90% due 8/01/2006 2,082
5,250 Orange County, California, Sanitation District, COP, 5%
due 2/01/2033 (g) 5,361
3,000 Oxnard, California, Financing Authority, Wastewater
Revenue Bonds (Redwood Trunk Sewer and Headworks
Projects), Series A, 5.25% due 6/01/2034 (g) 3,173
1,000 Palm Springs, California, Financing Authority, Lease
Revenue Refunding Bonds (Convention Center Project),
Series A, 5.50% due 11/01/2035 (b) 1,092
Face
Amount Municipal Bonds Value
California (continued)
$ 2,000 Peralta, California, Community College District, GO
(Election of 2000), Series D, 5% due 8/01/2030 (e) $ 2,073
1,750 Pleasant Valley, California, School District, Ventura
County, GO, Series C, 5.75% due 8/01/2025 (b)(i) 1,871
1,500 Plumas, California, Unified School District, GO
(Election 2002), Series B, 5% due 8/01/2026 (e) 1,561
2,255 Pomona, California, Public Financing Authority Revenue
Refunding Bonds (Merged Redevelopment Project),
Series A1, 5.75% due 2/01/2034 2,310
10,600 Port of Oakland, California, Port Revenue Refunding
Bonds, Series I, 5.40% due 11/01/2017 (b) 11,241
5,807 Port of Oakland, California, RIB, Refunding, AMT,
Series 717X, 7.80% due 11/01/2027 (g)(j) 6,369
4,315 Rancho Cucamonga, California, Redevelopment
Agency, Tax Allocation Refunding Bonds (Rancho
Redevelopment Project), 5.25% due 9/01/2020 (e) 4,561
2,345 Richmond, California, Redevelopment Agency, Tax
Allocation, Refunding Bonds (Harbour Redevelopment
Project), Series A, 5.50% due 7/01/2018 (b) 2,516
5,000 Sacramento, California, Municipal Utility District,
Electric Revenue Refunding Bonds, Series L, 5.125%
due 7/01/2022 (b) 5,222
Sacramento County, California, Sanitation District
Financing Authority, Revenue Refunding Bonds:
6,775 (County Sanitation District Number 1), 5%
due 8/01/2035 (b) 7,002
5,695 Series A, 5.60% due 12/01/2017 5,763
5,190 Series A, 5.75% due 12/01/2018 5,253
7,500 Series A, 6% due 12/01/2020 7,592
9,000 Series A, 5.875% due 12/01/2027 9,110
10,100 San Bernardino, California, City Unified School District,
GO, Refunding, Series A, 5.875% due 8/01/2009 (g)(h) 11,101
3,000 San Bernardino, California, Joint Powers Financing
Authority, Lease Revenue Bonds (Department of
Transportation Lease), Series A, 5.50%
due 12/01/2020 (b) 3,065
1,665 San Diego, California, Community College District,
GO (Election of 2002), 5% due 5/01/2030 (e) 1,725
3,600 San Diego, California, Unified School District, GO
(Election of 1998), Series F, 5% due 7/01/2029 (e) 3,725
San Francisco, California, Bay Area Rapid Transit District,
Sales Tax Revenue Refunding Bonds, Series A (b):
6,000 5% due 7/01/2030 6,218
5,430 5% due 7/01/2034 5,613
1,720 San Francisco, California, City and County Educational
Facilities, GO (Community College), Series A, 5.75%
due 6/15/2019 1,856
1,310 San Francisco, California, City and County Zoo Facilities,
GO, Series B, 5.75% due 6/15/2019 1,414
4,615 San Jose, California, Airport Revenue Bonds, Series D,
5% due 3/01/2028 (b) 4,748
San Jose-Evergreen, California, Community College
District, Capital Appreciation, GO (Election of 2004),
Refunding, Series A (b):
10,005 5.12%** due 9/01/2023 4,085
5,000 5.33%** due 9/01/2028 1,514
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (concluded) (In Thousands)
MuniYield California Fund, Inc.
Face
Amount Municipal Bonds Value
California (continued)
$ 5,000 San Juan, California, Unified School District, GO
(Election of 2002), 5% due 8/01/2028 (b) $ 5,162
5,040 San Ysidro, California, School District, Capital
Appreciation, GO (Election of 1997), Series D,
5.249%** due 8/01/2027 (g) 1,696
2,020 Santa Clara, California, Unified School District, GO,
5.50% due 7/01/2021 (g) 2,187
3,500 Santa Clara County, California, Housing Authority,
M/F Housing Revenue Bonds (John Burns Gardens
Apartments Project), AMT, Series A, 6% due 8/01/2041 3,556
1,170 Santa Clarita, California, Community College District,
GO (Election 2001), 5% due 8/01/2028 (e) 1,216
8,315 Santa Monica, California, Community College District,
GO (Election of 2002), Refunding, Series C, 5.07%**
due 8/01/2028 (b) 2,552
4,000 Santa Monica, California, Community College District,
GO (Election of 2004), Series A, 5% due 5/01/2030 (b) 4,144
4,000 Santa Monica, California, Redevelopment Agency, Tax
Allocation Bonds (Earthquake Recovery Redevelopment
Project), 6% due 7/01/2029 (a) 4,358
2,500 Sequoia, California, Unified High School District, GO,
Refunding, 5% due 7/01/2028 (e) 2,605
6,875 Sonoma County, California, Junior College District,
GO (Election 2002), Refunding, Series B, 5%
due 8/01/2028 (e) 7,143
2,265 South Bayside, California, Waste Management Authority,
Waste System Revenue Bonds, 5.75% due 3/01/2020 (a) 2,461
6,750 South Tahoe, California, Joint Powers Financing
Authority, Revenue Refunding Bonds (South Tahoe
Redevelopment Project Area No. 1), Series A, 5%
due 10/01/2028 (a) 6,974
3,235 Taft, California, Public Financing Authority, Lease
Revenue Bonds (Community Correctional Facility),
Series A, 6.05% due 1/01/2017 (b) 3,371
1,310 Torrance, California, Hospital Revenue Refunding
Bonds (Torrance Memorial Medical Center), Series A,
6% due 6/01/2022 1,430
1,000 Ventura, California, Unified School District, GO
(Election of 1997), Series H, 5.125% due 8/01/2034 (e) 1,041
Face
Amount Municipal Bonds Value
California (concluded)
$ 3,990 Vernon, California, Electric System Revenue Bonds
(Malburg Generating Station Project), 5.50%
due 4/01/2008 (h) $ 4,213
5,000 Vista, California, Joint Powers Financing Authority,
Lease Revenue Refunding Bonds, 5.625%
due 5/01/2016 (b) 5,275
5,055 West Contra Costa, California, Unified School District,
Capital Appreciation, GO (Election of 2002), Series C,
4.849%** due 8/01/2027 (g) 1,693
Puerto Rico--4.1%
2,140 Puerto Rico Commonwealth Highway and
Transportation Authority, Highway Revenue Bonds,
Series Y, 5.50% due 7/01/2006 (b)(h) 2,207
Puerto Rico Commonwealth Infrastructure Financing
Authority, Special Tax and Capital Appreciation
Revenue Bonds, Series A:
9,750 4.66%** due 7/01/2033 (g) 2,484
9,750 4.77%** due 7/01/2043 (a) 1,494
6,500 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Series NN, 5.125% due 7/01/2029 6,731
U.S. Virgin Islands--1.1%
3,000 Virgin Islands Government Refinery Facilities, Revenue
Refunding Bonds (Hovensa Coker Project), AMT,
6.50% due 7/01/2021 3,380
Total Municipal Bonds
(Cost--$463,744)--152.7% 479,039
Shares
Held Short-Term Securities
817 CMA California Municipal Money Fund (k) 817
Total Short-Term Securities
(Cost--$817)--0.3% 817
Total Investments (Cost--$464,561*)--153.0% 479,856
Other Assets Less Liabilities--2.8% 8,868
Preferred Stock, at Redemption Value--(55.8%) (175,016)
----------
Net Assets Applicable to Common Stock--100.0% $ 313,708
==========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2005, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 464,516
===============
Gross unrealized appreciation $ 18,033
Gross unrealized depreciation (2,693)
---------------
Net unrealized appreciation $ 15,340
===============
** Represents a zero coupon bond; the interest rate shown reflects
the effective yield at the time of purchase.
(a) AMBAC Insured.
(b) MBIA Insured.
(c) FHLMC Collateralized.
(d) FNMA/GNMA Collateralized.
(e) FSA Insured.
(f) GNMA Collateralized.
(g) FGIC Insured.
(h) Prerefunded.
(i) Escrowed to maturity.
(j) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(k) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA California Municipal Money Fund (42) $33
See Notes to Financial Statements
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (In Thousands)
MuniYield California Insured Fund, Inc.
Face
Amount Municipal Bonds Value
California--140.0%
$ 7,000 ABAG Finance Authority for Nonprofit Corporations,
California, COP (Children's Hospital Medical Center),
6% due 12/01/2029 (a) $ 7,690
2,350 Alameda, California, GO, 5% due 8/01/2033 (f) 2,424
5,665 Alhambra, California, Unified School District, GO
(Election of 2004), Series A, 5% due 8/01/2029 (b) 5,882
3,580 Anaheim, California, Public Financing Authority,
Electric System Distribution Facilities Revenue Bonds,
Series A, 5% due 10/01/2031 (e) 3,664
2,400 Anaheim, California, Union High School District, GO
(Election of 2002), 5% due 8/01/2027 (f) 2,479
3,675 Bakersfield, California, COP, Refunding (Convention
Center Expansion Project), 5.80% due 4/01/2017 (f) 3,842
255 Bay Area Government Association, California, Tax
Allocation Revenue Refunding Bonds (California
Redevelopment Agency Pool), Series A, 6%
due 12/15/2024 (e) 258
3,990 Brentwood, California, Infrastructure Refinancing
Authority, Infrastructure Revenue Refunding Bonds,
Series A, 5.20% due 9/02/2029 (e) 4,152
California Community College Financing Authority,
Lease Revenue Bonds, Series A (f):
3,215 5.95% due 12/01/2022 3,563
1,100 6% due 12/01/2029 1,221
5,000 California Educational Facilities Authority Revenue
Bonds (University of San Diego), Series A, 5.50%
due 10/01/2032 5,244
13,425 California Educational Facilities Authority, Student
Loan Revenue Bonds (CalEdge Loan Program), AMT,
5.55% due 4/01/2028 (a) 13,890
2,100 California HFA, Home Mortgage Revenue Bonds,
VRDN, AMT, Series B, 2.75% due 8/01/2033 (e)(i) 2,100
2,750 California Health Facilities Financing Authority
Revenue Bonds (Kaiser Permanente), Series A,
5.50% due 6/01/2022 (e)(j) 2,926
California Rural Home Mortgage Finance Authority,
S/F Mortgage Revenue Bonds (Mortgage-Backed
Securities Program), AMT:
680 Series A, 6.35% due 12/01/2029 (c)(d) 690
75 Series A-1, 6.90% due 12/01/2024 (c)(m) 78
305 Series B, 6.25% due 12/01/2031 (d) 306
12,680 California State Department of Veteran Affairs, Home
Purpose Revenue Refunding Bonds, Series A, 5.35%
due 12/01/2027 (a) 13,123
7,500 California State Department of Water Resources,
Power Supply Revenue Bonds, Series A, 5.75%
due 5/01/2017 8,244
860 California State, GO, 6.25% due 10/01/2019 (f) 871
California State, GO, Refunding:
9,935 DRIVERS, AMT, Series 239, 8.375%
due 12/01/2032 (a)(h) 10,517
3,000 Series BX, 5.50% due 12/01/2031 (e) 3,046
Face
Amount Municipal Bonds Value
California (continued)
$ 4,530 California State Public Works Board, Lease Revenue
Bonds (Department of Corrections--Ten
Administrative Segregation Housing Units),
Series A, 5.25% due 3/01/2020 (a) $ 4,784
16,675 California State Public Works Board, Lease Revenue
Refunding Bonds (Department of Corrections), Series B,
5.625% due 11/01/2016 (f) 17,413
5,950 California State, Various Purpose, GO, 5.50%
due 11/01/2033 6,377
4,100 California Statewide Communities Development
Authority, COP (Kaiser Permanente), 5.30%
due 12/01/2015 (e)(j) 4,242
3,685 California Statewide Communities Development
Authority, Health Facility Revenue Bonds (Memorial
Health Services), Series A, 6% due 10/01/2023 4,042
8,155 Calleguas-Las Virgenes, California, Public Financing
Authority Revenue Bonds (Calleguas Municipal Water
District Project), Series A, 5% due 7/01/2033 (f) 8,363
6,000 Capistrano, California, Unified School District,
Community Facility District, Special Tax Refunding
Bonds, 5% due 9/01/2029 (b) 6,193
Ceres, California, Redevelopment Agency, Tax
Allocation Bonds (Ceres Redevelopment Project Area
Number 1) (f):
4,600 5.75% due 11/01/2030 5,078
4,000 5% due 11/01/2033 4,119
6,000 Chaffey, California, Union High School District, GO,
Series C, 5.375% due 5/01/2023 (e) 6,510
5,910 Chula Vista, California, Elementary School District, COP,
5% due 9/01/2029 (f) 6,084
2,540 Coalinga, California, Redevelopment Agency Tax
Allocation Bonds, 5.90% due 9/15/2025 (f) 2,853
2,000 Compton, California, Unified School District, GO
(Election of 2002), Series B, 5% due 6/01/2029 (f) 2,069
4,135 Contra Costa, California, Water District, Water Revenue
Refunding Bonds, Series L, 5% due 10/01/2032 (e) 4,242
12,180 Contra Costa County, California, COP, Refunding
(Merrithew Memorial Hospital Project), 5.375%
due 11/01/2017 (f) 12,887
8,500 Corona, California, COP (Clearwater Cogeneration
Project), 5% due 9/01/2028 (f) 8,715
2,000 Coronado, California, Community Development
Agency, Tax Allocation Bonds (Coronado Community
Development Project), 5.60% due 9/01/2030 (f) 2,171
10,000 East Bay, California, Municipal Utility District, Water
System Revenue Bonds, Sub-Series A, 5%
due 6/01/2035 (f) 10,330
El Monte, California, School District, GO, Series B (b):
3,025 5.375% due 5/01/2022 3,282
2,525 5.375% due 5/01/2027 2,733
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (continued) (In Thousands)
MuniYield California Insured Fund, Inc.
Face
Amount Municipal Bonds Value
California (continued)
$ 9,045 El Monte, California, Unified School District, GO,
(Election of 2002) Series B, 5% due 3/01/2029 (f) $ 9,379
Fremont, California, Unified School District, Alameda
County, GO:
6,000 (Election of 2002), Series B, 5% due 8/01/2030 (e) 6,220
10,755 Series A, 5.50% due 8/01/2026 (b) 11,783
4,295 Fresno, California, Joint Powers Financing Authority,
Lease Revenue Bonds, Series A, 5.75%
due 6/01/2026 (e) 4,701
4,390 Glendale, California, Electric Revenue Bonds, 5%
due 2/01/2032 (f) 4,499
3,810 Hercules, California, Redevelopment Agency, Tax
Allocation Refunding Bonds (Hercules Merged Project
Area), 5% due 8/01/2029 (a) 3,916
Hesperia, California, Community Redevelopment Agency,
Tax Allocation Bonds, Series A (k):
5,000 5% due 9/01/2025 5,160
3,840 5% due 9/01/2035 3,921
1,910 Imperial, California, Community College District, GO
(Election of 2004), 5% due 8/01/2026 (b) 1,984
2,500 La Quinta, California, Financing Authority, Local Agency
Revenue Bonds, Series A, 5.25% due 9/01/2024 (a) 2,673
4,500 Lancaster, California, Redevelopment Agency,
Subordinate Tax Allocation Refunding Bonds
(Combined Redevelopment Project Areas--Housing
Programs), Series B, 5% due 8/01/2034 (b) 4,598
3,800 Las Lomitas, California, School District, GO
(Election of 2001), 5.50% due 7/01/2012 (e)(g) 4,245
3,050 Little Lake, California, City School District, GO,
Refunding, 5.50% due 7/01/2025 (e) 3,362
10,260 Lodi, California, Unified School District, GO
(Election of 2002), 5% due 8/01/2029 (e) 10,585
7,575 Long Beach, California, Harbor Revenue Bonds, RIB,
AMT, Series 786-X, 7.80% due 5/15/2024 (h) 8,204
2,735 Long Beach, California, Harbor Revenue Refunding
Bonds, AMT, Series A, 5% due 5/15/2022 (f) 2,819
10,000 Los Angeles, California, Community Redevelopment
Agency, Community Redevelopment Financing Authority
Revenue Bonds (Bunker Hill Project), Series A, 5%
due 12/01/2027 (e) 10,316
Los Angeles, California, Department of Airports,
Airport Revenue Bonds, AMT (b):
290 (Los Angeles International Airport), Series D,
5.625% due 5/15/2012 293
2,500 (Ontario International Airport), Series A, 6%
due 5/15/2017 2,556
Los Angeles, California, Harbor Department Revenue
Bonds, AMT (f)(h):
7,365 RIB, Series 349, 9.50% due 11/01/2026 7,896
7,000 Trust Receipts, Class R, Series 7, 9.43%
due 11/01/2026 7,505
Face
Amount Municipal Bonds Value
California (continued)
$ 7,000 Los Angeles, California, Unified School District, GO,
Series E, 5% due 7/01/2030 (a) $ 7,255
3,165 Los Angeles, California, Water and Power Revenue
Refunding Bonds (Power System), Series A-A-2, 5.375%
due 7/01/2021 (f) 3,384
Los Angeles County, California, Metropolitan
Transportation Authority, Sales Tax Revenue
Refunding Bonds:
5,240 Proposition A, First Tier Senior-Series A, 5%
due 7/01/2027 (a) 5,447
6,500 Proposition A, First Tier Senior-Series A, 5%
due 7/01/2035 (a) 6,716
2,000 Proposition C, Second Tier Senior-Series A, 5.25%
due 7/01/2030 (b) 2,111
5,000 Los Angeles County, California, Public Works Financing
Authority, Lease Revenue Refunding Bonds (Master
Refunding Project), Series A, 5% due 12/01/2028 (f) 5,168
4,850 Los Angeles County, California, Sanitation Districts
Financing Authority, Revenue Refunding Bonds (Capital
Projects--District Number 14), Sub-Series B, 5%
due 10/01/2034 (b) 5,008
5,830 Los Gatos, California, Joint Union High School
District, GO (Election of 1998), Series C, 5.375%
due 6/01/2012 (e)(g) 6,466
3,000 Los Rios, California, Community College District, GO
(Election of 2002), Series B, 5% due 8/01/2027 (f) 3,105
Metropolitan Water District of Southern California,
Waterworks Revenue Bonds:
5,370 Series B-1, 5% due 10/01/2033 (b) 5,525
1,090 Series B-3, 5% due 10/01/2029 (f) 1,129
4,245 Nevada County, California, COP, Refunding, 5.25%
due 10/01/2019 (f) 4,517
2,000 New Haven, California, Unified School District, GO,
Refunding, 5.75% due 8/01/2020 (e) 2,216
2,720 Oakland, California, GO (Measure DD), Series A, 5%
due 1/15/2026 (f) 2,809
2,000 Oakland, California, State Building Authority, Lease
Revenue Bonds (Elihu M. Harris State Office Building),
Series A, 5.50% due 4/01/2014 (a) 2,118
1,245 Orange County, California, Airport Revenue Refunding
Bonds, AMT, 5.625% due 7/01/2012 (f) 1,308
6,360 Orange County, California, Public Financing Authority,
Lease Revenue Refunding Bonds (Juvenile Justice
Center Facility), 5.375% due 6/01/2018 (a) 6,916
16,920 Orange County, California, Recovery COP, Refunding,
Series A, 6% due 7/01/2006 (f)(g) 17,586
10,000 Oxnard, California, Financing Authority, Wastewater
Revenue Bonds (Redwood Trunk Sewer and Headworks
Projects), Series A, 5.25% due 6/01/2034 (b) 10,577
9,645 Oxnard, California, Unified High School District, GO,
Refunding, Series A, 6.20% due 8/01/2030 (f) 11,137
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (continued) (In Thousands)
MuniYield California Insured Fund, Inc.
Face
Amount Municipal Bonds Value
California (continued)
$ 1,275 Palm Springs, California, Financing Authority, Lease
Revenue Refunding Bonds (Convention Center Project),
Series A, 5.50% due 11/01/2035 (f) $ 1,393
4,640 Palmdale, California, Water District Public Facility
Corporation, COP, 5% due 10/01/2029 (b) 4,778
5,000 Placentia-Yorba Linda, California, Unified School
District, GO (Election of 2002), Series C, 5%
due 8/01/2029 (f) 5,191
10,000 Port of Oakland, California, RITR, AMT, Class R,
Series 5, 8.465% due 11/01/2012 (b)(h) 11,423
7,500 Port of Oakland, California, Revenue Bonds, AMT,
Series K, 5.75% due 11/01/2029 (b) 7,991
19,035 Port of Oakland, California, Revenue Refunding
Bonds, AMT, Series L, 5.375% due 11/01/2027 (b) 19,955
Rio Hondo, California, Community College District,
GO, Series A (f):
3,000 5% due 8/01/2026 3,116
3,500 5.25% due 6/01/2029 3,722
3,000 Riverside, California, COP, 5% due 9/01/2028 (a) 3,082
6,000 Riverside, California, Unified School District, GO
(Election of 2001), Series A, 5.25% due 2/01/2023 (b) 6,429
4,500 Riverside County, California, Asset Leasing Corporation,
Leasehold Revenue Refunding Bonds (Riverside County
Hospital Project), Series B, 5.70% due 6/01/2016 (f) 5,040
2,565 Saddleback Valley, California, Unified School District,
GO, 5% due 8/01/2029 (e) 2,655
San Benito, California Health Care District, GO (k):
3,445 5% due 7/01/2029 3,541
4,070 5% due 7/01/2031 4,170
5,000 San Bernardino, California, City Unified School District,
GO, Series A, 5% due 8/01/2028 (e) 5,172
690 San Bernardino County, California, S/F Home Mortgage
Revenue Refunding Bonds, AMT, Series A-1, 6.25%
due 12/01/2031 (d) 691
2,665 San Diego, California, Community College District, GO
(Election of 2002), 5% due 5/01/2030 (e) 2,761
San Diego County, California, COP (Salk Institute for
Bio Studies) (f):
3,570 5.75% due 7/01/2022 3,935
5,200 5.75% due 7/01/2031 5,724
7,350 San Diego County, California, Water Authority, Water
Revenue Bonds, COP, Series A, 5% due 5/01/2030 (e) 7,586
San Francisco, California, Bay Area Rapid Transit District,
Sales Tax Revenue Refunding Bonds, Series A (f):
9,630 5% due 7/01/2030 9,981
10,500 5% due 7/01/2034 10,853
3,000 San Francisco, California, City and County Airport
Commission, International Airport Revenue Bonds,
Second Series, Issue 12-B, 5.625% due 5/01/2021 (b) 3,065
Face
Amount Municipal Bonds Value
California (continued)
San Francisco, California, City and County Airport
Commission, International Airport Revenue Refunding
Bonds, Second Series 28B (f):
$ 3,000 5.25% due 5/01/2023 $ 3,189
6,455 5.25% due 5/01/2024 6,858
San Francisco, California, City and County Airport
Commission, International Airport, Special Facilities
Lease Revenue Bonds (SFO Fuel Company LLC), AMT,
Series A (e):
1,000 6.10% due 1/01/2020 1,066
985 6.125% due 1/01/2027 1,051
San Francisco, California, Community College District,
GO, Refunding, Series A (b):
1,735 5.375% due 6/15/2019 1,885
1,730 5.375% due 6/15/2020 1,865
1,925 5.375% due 6/15/2021 2,075
4,135 San Jose, California, Airport Revenue Bonds, Series D,
5% due 3/01/2028 (f) 4,254
3,650 San Jose, California, Redevelopment Agency, Tax
Allocation Bonds, RIB, AMT, Series 149, 8.70%
due 8/01/2027 (f)(h) 4,056
4,250 San Juan, California, Unified School District, GO
(Election of 2002), 5% due 8/01/2028 (f) 4,387
1,700 San Mateo County, California, Community College
District, COP, 5% due 10/01/2029 (f) 1,750
4,350 San Mateo County, California, Transit District, Sales
Tax Revenue Refunding Bonds, Series A, 5%
due 6/01/2029 (f) 4,514
2,595 Santa Clara, California, Redevelopment Agency, Tax
Allocation Bonds (Bayshore North Project), Series A,
5.25% due 6/01/2019 (a) 2,770
5,500 Santa Clara, California, Subordinated Electric Revenue
Bonds, Series A, 5% due 7/01/2028 (f) 5,676
1,100 Santa Clara Valley, California, Water District, Water
Utility System Revenue, Series A, 5.125%
due 6/01/2031 (b) 1,146
Santa Rosa, California, High School District, GO:
3,000 5.375% due 8/01/2026 (e) 3,234
2,500 (Election of 2002), 5% due 8/01/2028 (f) 2,581
6,750 Shasta, California, Joint Powers Financing Authority,
Lease Revenue Bonds (County Administration Building
Project), Series A, 5% due 4/01/2033 (f) 6,896
South Tahoe, California, Joint Powers Financing
Authority, Revenue Refunding Bonds (South Tahoe
Redevelopment Project Area No. 1), Series A:
1,645 5% due 10/01/2029 (e) 1,694
5,830 5% due 10/01/2034 (e) 5,971
5,455 5% due 10/01/2035 (a) 5,596
5,000 Southern California Public Power Authority, Power
Project Revenue Bonds (Magnolia Power Project),
Series A-1, 5% due 7/01/2033 (a) 5,137
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (concluded) (In Thousands)
MuniYield California Insured Fund, Inc.
Face
Amount Municipal Bonds Value
California (concluded)
$ 1,055 Stockton, California, Public Financing Revenue
Refunding Bonds, Series A, 5.875% due 9/02/2016 (e) $ 1,057
2,660 Sweetwater, California, Union High School District,
Public Financing Authority, Special Tax Revenue Bonds,
Series A, 5% due 9/01/2027 (e) 2,743
1,500 Tehachapi, California, COP, Refunding (Installment
Sale), 5.75% due 11/01/2016 (e) 1,693
6,000 Tracy, California, Community Development Agency,
Tax Allocation Refunding Bonds, Series A, 5%
due 3/01/2034 (a) 6,128
3,000 Turlock, California, Public Finance Authority, Sewer
Revenue Bonds, Series A, 5% due 9/15/2033 (b) 3,086
University of California Revenue Bonds :
8,720 (Multiple Purpose Projects), Series Q, 5%
due 9/01/2024 (e) 9,045
6,110 (Multiple Purpose Projects), Series Q, 5%
due 9/01/2033 (e) 6,285
4,790 Series O, 5.125% due 9/01/2031 (b) 4,949
6,130 Vacaville, California, Unified School District, GO
(Election of 2001), 5.25% due 8/01/2012 (e)(g) 6,762
3,395 Ventura County, California, Community College
District, GO, Refunding, Series A, 5% due 8/01/2027 (f) 3,507
2,550 Vista, California, Unified School District, GO, Series B,
5% due 8/01/2028 (b) 2,632
2,185 Walnut, California, Public Financing Authority, Tax
Allocation Revenue Bonds (Walnut Improvement
Project), 5.375% due 9/01/2021 (a) 2,349
6,690 West Contra Costa, California, Unified School District,
GO (Election of 2002), Series B, 5% due 8/01/2032 (e) 6,860
Face
Amount Municipal Bonds Value
Puerto Rico--9.8%
Puerto Rico Commonwealth Infrastructure Financing
Authority, Special Tax and Capital Appreciation Revenue
Bonds, Series A (a):
$20,000 4.56%** due 7/01/2029 $ 6,264
5,500 4.77%** due 7/01/2043 843
8,410 Puerto Rico Commonwealth, Public Improvement,
GO, 5.75% due 7/01/2010 (f)(g) 9,203
1,000 Puerto Rico Electric Power Authority, Power
Revenue Bonds, Series NN, 5.125%
due 7/01/2029 1,036
10,000 Puerto Rico Municipal Finance Agency, GO, RIB,
Series 225, 8.53% due 8/01/2012 (e)(h) 11,797
20,000 Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Revenue Bonds, Series E, 5.75%
due 2/01/2007 (g) 20,635
Total Municipal Bonds
(Cost--$738,685)--149.8% 762,589
Shares
Held Short-Term Securities
7 CMA California Municipal Money Fund (l) 7
Total Short-Term Securities
(Cost--$7)--0.0% 7
Total Investments (Cost--$738,692*)--149.8% 762,596
Other Assets Less Liabilities--4.2% 21,489
Preferred Stock, at Redemption Value--(54.0%) (275,019)
----------
Net Assets Applicable to Common Stock--100.0% $ 509,066
==========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2005, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 738,662
===============
Gross unrealized appreciation $ 27,659
Gross unrealized depreciation (3,725)
---------------
Net unrealized appreciation $ 23,934
===============
** Represents a zero coupon bond; the interest rate shown reflects
the effective yield at the time of purchase.
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FHLMC Collateralized.
(d) FNMA/GNMA Collateralized.
(e) FSA Insured.
(f) MBIA Insured.
(g) Prerefunded.
(h) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(i) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate changes
periodically based upon prevailing market rates.
(j) Escrowed to maturity.
(k) XL Capital Insured.
(l) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA California Municipal Money Fund (26) $19
(m) GNMA Collateralized.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (In Thousands)
MuniYield Florida Fund
Face
Amount Municipal Bonds Value
Florida--129.4%
$ 2,100 Alachua County, Florida, School Board, COP, 5.25%
due 7/01/2029 (a) $ 2,232
2,000 Beacon Tradeport Community Development District,
Florida, Special Assessment Revenue Refunding
Bonds (Commercial Project), Series A, 5.625%
due 5/01/2032 (k) 2,134
2,870 Broward County, Florida, Airport System Revenue
Bonds, AMT, Series I, 5.75% due 10/01/2018 (a) 3,129
1,000 Broward County, Florida, Educational Facilities Authority
Revenue Bonds (Nova Southeastern University), Series B,
5.625% due 4/01/2034 1,036
Citrus County, Florida, Hospital Board Revenue
Refunding Bonds (Citrus Memorial Hospital):
2,385 6.25% due 8/15/2023 2,586
2,850 6.375% due 8/15/2032 3,071
3,160 Collier County, Florida, IDA, IDR, Refunding (Southern
States Utilities), AMT, 6.50% due 10/01/2025 3,256
1,650 Duval County, Florida, HFA, S/F Mortgage Revenue
Refunding Bonds, AMT, 5.40% due 10/01/2021 (d)(i) 1,673
6,180 Flagler County, Florida, Capital Improvement Revenue
Bonds, 5% due 10/01/2030 (b) 6,380
635 Florida Housing Finance Corporation, Homeowner
Mortgage Revenue Refunding Bonds, AMT, Series 4,
6.25% due 7/01/2022 (e) 658
Florida Municipal Loan Council Revenue Bonds (b):
1,580 Series A-1, 5.125% due 7/01/2034 1,638
4,250 Series B, 5.375% due 11/01/2030 4,501
1,220 Florida State Board of Education, Capital Outlay, GO,
Public Education, Series A, 6% due 1/01/2010 (f) 1,349
2,500 Florida State Board of Education, GO (Public Education
Capital Outlay), Series J, 5% due 6/01/2031 2,577
1,000 Florida State Board of Education, Lottery Revenue
Bonds, Series A, 6% due 7/01/2014 (c) 1,110
1,000 Florida State Governmental Utility Authority, Utility
Revenue Bonds (Lehigh Utility System), 5.125%
due 10/01/2033 (a) 1,037
1,075 Gainesville, Florida, Utilities System Revenue Bonds,
Series A, 5.25% due 10/01/2022 1,159
5,900 Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System),
Series A, 6% due 11/15/2031 6,318
Hillsborough County, Florida, Court Facilities Revenue
Bonds (f):
3,945 5.40% due 5/01/2007 (a) 4,154
1,055 5.40% due 5/01/2012 1,161
Hillsborough County, Florida, IDA, Exempt Facilities
Revenue Bonds (National Gypsum), AMT:
2,500 Series A, 7.125% due 4/01/2030 2,772
3,750 Series B, 7.125% due 4/01/2030 4,157
1,000 Hillsborough County, Florida, IDA, Hospital Revenue
Bonds (H. Lee Moffitt Cancer Center Project), Series C,
5.50% due 7/01/2032 1,025
1,500 Hillsborough County, Florida, School Board, COP, 5%
due 7/01/2029 (b) 1,547
Face
Amount Municipal Bonds Value
Florida (continued)
$ 4,000 Hillsborough County, Florida, School District, Sales
Tax Revenue Refunding Bonds, 5.375%
due 10/01/2011 (a)(f) $ 4,366
12,000 Jacksonville Electric Authority, Florida, Water and
Sewer System Revenue Bonds, Series C, 5.25%
due 10/01/2006 (b)(f) 12,241
1,000 Jacksonville, Florida, Economic Development
Commission, Health Care Facilities Revenue
Bonds (Mayo Clinic--Jacksonville), Series A,
5.50% due 11/15/2036 (b) 1,075
1,140 Jacksonville, Florida, Economic Development
Commission, IDR (Metropolitan Parking Solutions
Project), 5.50% due 10/01/2030 (g) 1,193
1,500 Jacksonville, Florida, Excise Taxes Revenue Bonds,
Series B, 5.125% due 10/01/2032 (c) 1,550
2,315 Jacksonville, Florida, Guaranteed Entitlement Revenue
Refunding and Improvement Bonds, 5.25%
due 10/01/2032 (c) 2,428
1,000 Jacksonville, Florida, Health Facilities Authority, Hospital
Revenue Bonds (Southern Baptist Hospital), VRDN,
Series A, 2.70% due 8/15/2033 (o) 1,000
3,500 Lakeland, Florida, Hospital System Revenue Bonds
(Lakeland Regional Health System), Series A, 5.50%
due 11/15/2026 (b) 3,737
2,075 Lee County, Florida, Capital Revenue Bonds, 5.25%
due 10/01/2023 (a) 2,230
65 Lee County, Florida, HFA, S/F Mortgage Revenue Bonds
(Multi-County Program), AMT, Series A-1, 7.125%
due 3/01/2028 (d)(i) 66
1,000 Lee County, Florida, Transportation Facilities Revenue
Bonds (Sanibel Bridges and Causeway), Series B, 5%
due 10/01/2035 (m) 1,025
170 Leon County, Florida, HFA, S/F Mortgage Revenue
Bonds (Multi-County Program), AMT, Series B, 7.30%
due 1/01/2028 (d)(j) 171
260 Manatee County, Florida, HFA, S/F Mortgage Revenue
Bonds, AMT, Sub-Series 2, 7.75% due 5/01/2026 (d)(j) 265
290 Manatee County, Florida, HFA, S/F Mortgage Revenue
Refunding Bonds, AMT, Sub-Series 1, 6.25%
due 11/01/2028 (d) 294
Martin County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Martin Memorial Medical
Center), Series A:
1,350 5.75% due 11/15/2022 1,443
3,535 5.875% due 11/15/2032 3,756
3,000 Miami Beach, Florida, Water and Sewer Revenue
Bonds, 5.75% due 9/01/2025 (a) 3,285
Miami-Dade County, Florida, Aviation Revenue Bonds,
AMT, Series A:
4,335 5% due 10/01/2033 (e) 4,380
4,300 (Miami International Airport), 6%
due 10/01/2029 (c) 4,687
465 (Miami International Airport), 5%
due 10/01/2033 (c) 470
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (continued) (In Thousands)
MuniYield Florida Fund
Face
Amount Municipal Bonds Value
Florida (continued)
$ 1,490 Miami-Dade County, Florida, Aviation Revenue
Refunding Bonds (Miami International Airport), AMT,
Series A, 5% due 10/01/2038 (m) $ 1,491
1,750 Miami-Dade County, Florida, Educational Facilities
Authority Revenue Bonds (University of Miami),
Series A, 5.75% due 4/01/2029 (a) 1,905
Miami-Dade County, Florida, Expressway Authority,
Toll System Revenue Bonds (c):
8,000 DRIVERS, Series 160, 9.737% due 7/01/2010 (f)(n) 10,026
3,750 Series B, 5% due 7/01/2033 3,856
Miami-Dade County, Florida, GO (Building Better
Communities Program) (c):
2,750 5% due 7/01/2030 2,848
2,000 5% due 7/01/2035 2,065
545 Miami-Dade County, Florida, HFA, Home Ownership
Mortgage Revenue Refunding Bonds, AMT,
Series A-1, 6.30% due 10/01/2020 (d)(i) 567
3,300 Miami-Dade County, Florida, Health Facilities
Authority, Hospital Revenue Refunding Bonds,
DRIVERS, Series 208, 8.237% due 8/15/2017 (a)(n) 3,858
3,265 Miami-Dade County, Florida, Public Facilities Revenue
Bonds (Jackson Health System), Series A, 5%
due 6/01/2029 (b) 3,363
3,200 Miami-Dade County, Florida, School Board COP,
Series A, 5.50% due 10/01/2009 (e)(f) 3,448
2,800 Miami-Dade County, Florida, Solid Waste System
Revenue Bonds, 5.25% due 10/01/2030 (b) 2,987
Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds:
1,750 (Adventist Health System), 6.25%
due 11/15/2024 1,923
5,140 (Orlando Regional Healthcare), 6%
due 12/01/2028 5,513
10,500 Orange County, Florida, School Board, COP, Series A,
5.25% due 8/01/2023 (b) 11,077
8,615 Orange County, Florida, Tourist Development, Tax
Revenue Bonds, 5.50% due 10/01/2032 (a) 9,248
Orlando and Orange County, Florida, Expressway
Authority Revenue Bonds, Series B (a):
3,000 5% due 7/01/2030 3,088
7,335 5% due 7/01/2035 7,522
1,000 Orlando, Florida, Utilities Commission, Water and
Electric Revenue Refunding Bonds, Series C, 5.25%
due 10/01/2023 1,070
1,955 Osceola County, Florida, School Board, COP, Series A,
5.25% due 6/01/2027 (a) 2,061
1,760 Osceola County, Florida, Tourist Development Tax
Revenue Bonds, Series A, 5.50% due 10/01/2027 (c) 1,908
1,000 Palm Bay, Florida, Utility System Improvement Revenue
Bonds, Series A, 5% due 10/01/2025 (c) 1,045
3,390 Palm Beach County, Florida, Criminal Justice Facilities
Revenue Bonds, 7.20% due 6/01/2015 (c) 4,247
150 Palm Beach County, Florida, HFA, S/F Mortgage
Revenue Refunding Bonds, AMT, Series A, 6.80%
due 10/01/2027 (d)(i) 152
Face
Amount Municipal Bonds Value
Florida (continued)
$ 1,260 Palm Beach County, Florida, Public Improvement
Revenue Bonds (Convention Center Project), 5.625%
due 11/01/2011 (c)(f) $ 1,394
6,000 Palm Beach County, Florida, School Board, COP,
Series A, 6.25% due 8/01/2010 (c)(f) 6,768
1,435 Palm Coast, Florida, Utility System Revenue Bonds, 5%
due 10/01/2027 (b) 1,480
Pinellas County, Florida, HFA, S/F Housing Revenue
Refunding Bonds (Multi-County Program), AMT,
Series A-1 (d)(i):
570 6.30% due 9/01/2020 574
870 6.35% due 9/01/2025 877
3,000 Pinellas County, Florida, Health Facilities Authority
Revenue Bonds (BayCare Health System Inc.), 5.75%
due 11/15/2029 3,173
3,200 Pinellas County, Florida, Health Facilities Authority
Revenue Refunding Bonds (Pooled Hospital Loan
Program), DATES, 2.69% due 12/01/2015 (a)(o) 3,200
4,385 Polk County, Florida, School Board COP, Master Lease,
Series A, 5.50% due 1/01/2025 (e) 4,731
1,200 Port Everglades Authority, Florida, Port Revenue Bonds,
7.125% due 11/01/2016 (h) 1,437
1,000 Port St. Lucie, Florida, GO, 5% due 7/01/2032 (b) 1,033
1,215 Port St. Lucie, Florida, Utility Revenue Bonds, 5.25%
due 9/01/2025 (b) 1,299
1,325 Reedy Creek, Florida, Improvement District, Utilities
Revenue Bonds, Series 1, 5% due 10/01/2021 (a) 1,395
Saint Johns County, Florida, Sales Tax Revenue
Bonds, GO (a):
1,200 Series A, 5.25% due 10/01/2034 1,272
1,015 Series B, 5.25% due 10/01/2032 1,076
1,000 Seminole County, Florida, Sales Tax Revenue Bonds,
Series A, 5% due 10/01/2031 (b) 1,035
4,250 South Broward, Florida, Hospital District Revenue Bonds,
DRIVERS, Series 337, 8.237% due 5/01/2032 (b)(n) 4,929
South Lake County, Florida, Hospital District Revenue
Bonds (South Lake Hospital Inc.):
1,000 5.80% due 10/01/2034 1,036
1,150 6.375% due 10/01/2034 1,230
5,000 Tampa Bay, Florida, Water Utility System Revenue Bonds,
5.75% due 10/01/2011 (c)(f) 5,557
University of Central Florida (UCF) Athletics Association
Inc., COP, Series A (c):
875 5% due 10/01/2030 903
3,235 5.25% due 10/01/2034 3,404
270 University of Central Florida, COP (UCF Convocation
Center), Series A, 5% due 10/01/2035 (c) 276
Village Center Community Development District, Florida,
Recreational Revenue Bonds, Series A (b):
1,385 5% due 11/01/2032 1,420
1,995 5.375% due 11/01/2034 2,144
1,000 5.125% due 11/01/2036 1,041
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (continued) (In Thousands)
MuniYield Florida Fund
Face
Amount Municipal Bonds Value
Florida (concluded)
$ 5,040 Village Center Community Development District,
Florida, Utility Revenue Bonds, 5.125%
due 10/01/2028 (b) $ 5,258
5,000 Volusia County, Florida, School Board, COP (Master
Lease Program), 5.50% due 8/01/2024 (e) 5,347
2,400 Winter Haven, Florida, Utility System Revenue Refunding
and Improvement Bonds, 5% due 10/01/2035 (b) 2,480
District of Columbia--0.5%
1,000 Metropolitan Washington Airports Authority, D.C.,
Airport System Revenue Bonds, AMT, Series A, 5.25%
due 10/01/2032 (c) 1,026
Illinois--0.5%
1,000 Chicago, Illinois, O'Hare International Airport, General
Airport Revenue Bonds, Third Lien, AMT, Series D, 5%
due 1/01/2034 (m) 1,007
Massachusetts--0.3%
580 Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A, 5%
due 8/15/2030 (e) 599
Nevada--1.3%
2,505 Clark County, Nevada, IDR (Southwest Gas
Corporation Project), Refunding, AMT, Series B,
5% due 12/01/2033 (c) 2,525
New Jersey--3.5%
New Jersey EDA, Cigarette Tax Revenue Bonds:
3,500 5.50% due 6/15/2024 3,633
1,735 5.75% due 6/15/2029 1,823
505 5.50% due 6/15/2031 519
1,000 Tobacco Settlement Financing Corporation of
New Jersey, Asset-Backed Revenue Bonds, 7%
due 6/01/2041 1,170
Face
Amount Municipal Bonds Value
Texas--1.6%
$ 3,305 San Antonio, Texas, Convention Center Hotel Finance
Corporation, Contract Revenue Empowerment Zone
Bonds, AMT, Series A, 5% due 7/15/2034 (a) $ 3,331
Virginia--5.5%
10,880 Tobacco Settlement Financing Corporation of
Virginia, Asset-Backed Revenue Bonds, 5.50%
due 6/01/2026 11,132
Puerto Rico--11.3%
1,000 Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation
Revenue Bonds, Series G, 5% due 7/01/2042 1,002
Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation
Revenue Refunding Bonds:
8,000 Series D, 5.75% due 7/01/2012 (f) 8,956
4,800 Series K, 5% due 7/01/2040 4,814
2,000 Puerto Rico Public Buildings Authority, Government
Facilities Revenue Refunding Bonds, Series I, 5%
due 7/01/2036 2,007
Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Revenue Bonds, Series E:
1,715 5.70% due 2/01/2010 (f) 1,865
4,025 5.50% due 8/01/2029 4,208
Total Municipal Bonds
(Cost--$297,118)--153.9% 310,976
Shares
Held Short-Term Securities
500 Merrill Lynch Institutional Tax-Exempt Fund (l) 500
Total Short-Term Securities
(Cost--$500)--0.2% 500
Total Investments (Cost--$297,618*)--154.1% 311,476
Other Assets Less Liabilities--0.3% 573
Preferred Shares, at Redemption Value--(54.4%) (110,007)
----------
Net Assets Applicable to Common Shares--100.0% $ 202,042
==========
Forward interest rate swaps outstanding as of October 31, 2005
were as follows:
Notional Unrealized
Amount Appreciation
Pay a fixed rate of 3.779% and receive a
floating rate based on 1-week USD Bond
Market Association Rate
Broker, JPMorgan Chase Bank
Expires November 2015 $23,300 $ 164
Pay a fixed rate of 3.801% and receive a
floating rate based on 1-week USD Bond
Market Association Rate
Broker, JPMorgan Chase Bank
Expires January 2016 $11,400 82
--------
Total $ 246
========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2005, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 297,535
===============
Gross unrealized appreciation $ 14,912
Gross unrealized depreciation (971)
---------------
Net unrealized appreciation $ 13,941
===============
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (concluded) (In Thousands)
MuniYield Florida Fund
(a) AMBAC Insured.
(b) MBIA Insured.
(c) FGIC Insured.
(d) GNMA Collateralized.
(e) FSA Insured.
(f) Prerefunded.
(g) ACA Insured.
(h) Escrowed to maturity.
(i) FNMA Collateralized.
(j) FHLMC Collateralized.
(k) Radian Insured.
(l) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
Merrill Lynch Institutional Tax-Exempt Fund (7,130) $55
(m) CIFG Insured.
(n) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(o) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate changes
periodically based upon prevailing market rates.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (In Thousands)
MuniYield Michigan Insured Fund II, Inc.
Face
Amount Municipal Bonds Value
Michigan--146.2%
$ 2,400 Adrian, Michigan, City School District, GO, 5%
due 5/01/2034 (d) $ 2,467
Anchor Bay, Michigan, School District, GO
(School Building and Site) (c)(f):
2,000 Series I, 6% due 5/01/2009 2,168
3,165 Series II, 5.75% due 5/01/2010 3,460
2,150 Bullock Creek, Michigan, School District, GO, 5.50%
due 5/01/2010 (e)(f) 2,328
1,000 Central Montcalm, Michigan, Public Schools, GO,
5.75% due 5/01/2009 (e)(f) 1,077
3,850 Charlotte, Michigan, Public School District, GO, 5.375%
due 5/01/2009 (c)(f) 4,100
2,420 Delta County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (Mead Westvaco--Escanaba),
Series A, 6.25% due 4/15/2012 (f) 2,764
Detroit, Michigan, City School District (School
Building and Site Improvement), GO, Series A (c)(f):
2,000 5% due 5/01/2013 2,146
1,480 5.375% due 5/01/2013 1,624
1,850 Detroit, Michigan, Sewer Disposal Revenue Refunding
Bonds, Second Lien, Series A, 5% due 7/01/2030 (e) 1,912
Detroit, Michigan, Water Supply System Revenue
Bonds:
1,000 DRIVERS, Series 200, 8.487% due 7/01/2011 (c)(f)(g) 1,229
4,600 Senior Lien, Series A, 5% due 7/01/2034 (e) 4,717
2,000 Series B, 5.25% due 7/01/2032 (e) 2,103
4,400 Series B, 5% due 7/01/2034 (e) 4,512
2,500 Dickinson County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (International Paper Company
Project), Series A, 5.75% due 6/01/2016 2,633
2,170 Dickinson County, Michigan, Healthcare System,
Hospital Revenue Refunding Bonds, 5.80%
due 11/01/2024 (h) 2,270
East Grand Rapids, Michigan, Public School District,
GO (d)(f):
1,610 5.75% due 5/01/2009 1,734
6,300 6% due 5/01/2009 6,828
Eaton Rapids, Michigan, Public Schools, School Building
and Site, GO (d):
2,000 5.25% due 5/01/2023 2,137
1,000 5% due 5/01/2026 1,038
1,250 5% due 5/01/2029 1,290
Flint, Michigan, Hospital Building Authority Revenue
Refunding Bonds (Hurley Medical Center), Series A (h):
385 5.375% due 7/01/2020 394
775 6% due 7/01/2020 839
1,800 Fowlerville, Michigan, Community Schools, School
District, GO, 5% due 5/01/2030 (c) 1,854
3,650 Gibraltar, Michigan, School District, School Building
and Site, GO, 5% due 5/01/2028 (c) 3,773
Face
Amount Municipal Bonds Value
Michigan (continued)
Grand Blanc, Michigan, Community Schools, GO (c):
$ 1,000 5.625% due 5/01/2017 $ 1,097
1,000 5.625% due 5/01/2018 1,097
1,100 5.625% due 5/01/2019 1,206
Grand Rapids, Michigan, Building Authority Revenue
Bonds, Series A (a):
665 5.50% due 10/01/2012 (f) 735
805 5.50% due 10/01/2018 881
190 5.50% due 10/01/2019 208
1,500 Grand Rapids, Michigan, Sanitation Sewer System
Revenue Refunding and Improvement Bonds, Series A,
5.50% due 1/01/2022 (c) 1,693
225 Harper Woods, Michigan, City School District,
School Building and Site, GO, Refunding, 5%
due 5/01/2034 (c) 231
4,500 Hartland, Michigan, Consolidated School District, GO,
6% due 5/01/2010 (c)(f) 4,956
1,275 Haslett, Michigan, Public School District, Building and
Site, GO, 5.625% due 11/01/2011 (e)(f) 1,409
2,000 Howell, Michigan, Public Schools, GO, 5.875%
due 5/01/2009 (e)(f) 2,161
2,660 Hudsonville, Michigan, Public Schools, School Building
and Site, GO, 5% due 5/01/2029 (d) 2,745
3,975 Jackson, Michigan, Public Schools, GO, 5.375%
due 5/01/2010 (c)(f) 4,283
7,550 Kalamazoo, Michigan, Hospital Finance Authority,
Hospital Facility Revenue Refunding Bonds (Bronson
Methodist Hospital), 5.50% due 5/15/2008 (e)(f) 8,018
3,000 Kent, Michigan, Hospital Finance Authority Revenue
Bonds (Spectrum Health), Series A, 5.50%
due 7/15/2011 (e)(f) 3,296
1,440 Ludington, Michigan, Area School District, GO, 5.25%
due 5/01/2023 (e) 1,548
1,125 Michigan Higher Education Facilities Authority, Limited
Obligation Revenue Bonds (Hillsdale College Project),
5% due 3/01/2035 1,133
1,000 Michigan Higher Education Facilities Authority, Limited
Obligation Revenue Refunding Bonds (Hope College),
Series A, 5.90% due 4/01/2032 1,043
Michigan Higher Education Facilities Authority Revenue
Refunding Bonds (College for Creative Studies):
550 5.85% due 12/01/2022 563
1,000 5.90% due 12/01/2027 1,022
3,000 Michigan Higher Education Student Loan Authority,
Student Loan Revenue Bonds, AMT, Series XVII-B,
5.40% due 6/01/2018 (a) 3,085
Michigan State Building Authority Revenue Bonds:
1,185 (Facilities Program), Series II, 4.67%**
due 10/15/2009 (a)(b) 1,026
1,675 (Facilities Program), Series II, 4.77%**
due 10/15/2010 (a)(b) 1,386
2,675 GO, RIB, Series 481, 8.04% due 4/15/2009 (e)(g) 3,089
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (continued) (In Thousands)
MuniYield Michigan Insured Fund II, Inc.
Face
Amount Municipal Bonds Value
Michigan (continued)
Michigan State Building Authority, Revenue
Refunding Bonds:
$ 2,000 (Facilities Program), Series II, 5%
due 10/15/2029 (e) $ 2,061
3,000 (Facilities Program), Series II, 5%
due 10/15/2033 (a) 3,095
3,500 RIB, Series 517X, 8.04% due 10/15/2010 (d)(g) 4,149
Michigan State COP:
3,870 5.50% due 6/01/2010 (a)(f) 4,124
5,380 RIB, Series 530, 8.54% due 9/01/2011 (e)(g) 6,453
1,500 Michigan State Comprehensive Transportation
Revenue Refunding Bonds, Series A, 5.50%
due 11/01/2018 (d) 1,635
635 Michigan State, HDA, Rental Housing Revenue Bonds,
AMT, Series A, 5.30% due 10/01/2037 (e) 640
115 Michigan State, HDA, Revenue Refunding Bonds, AMT,
Series B, 5.50% due 6/01/2030 (e) 118
1,000 Michigan State Hospital Finance Authority, Hospital
Revenue Bonds (Mid-Michigan Obligation Group),
Series A, 5.50% due 4/15/2018 (a) 1,065
Michigan State Hospital Finance Authority, Hospital
Revenue Refunding Bonds:
1,300 (Crittenton Hospital), Series A, 5.625%
due 3/01/2027 1,361
1,250 (Sparrow Obligation Group), 5.625%
due 11/15/2031 (e) 1,296
2,000 Michigan State Hospital Finance Authority Revenue
Bonds (Mercy Health Services), Series R, 5.375%
due 8/15/2026 (a)(b) 2,043
Michigan State Hospital Finance Authority, Revenue
Refunding Bonds:
7,090 5% due 11/15/2036 (e) 7,241
8,000 (Ascension Health Credit), Series A, 6.125%
due 11/15/2009 (e)(f) 8,830
2,500 (Ascension Health Credit), Series A, 6.125%
due 11/15/2009 (f) 2,759
3,760 (Ascension Health Credit), Series A, 6.25%
due 11/15/2009 (e)(f) 4,171
3,215 (Mercy Health Services), Series X, 6%
due 8/15/2009 (e)(f) 3,539
1,000 (Mercy-Mount Clemens), Series A, 6%
due 5/15/2014 (e) 1,085
2,000 (Mercy-Mount Clemens), Series A, 5.75%
due 5/15/2029 (e) 2,132
5,500 (Trinity Health), Series A, 6% due 12/01/2027 (a) 6,082
1,000 (Trinity Health Credit), Series C, 5.375%
due 12/01/2023 1,045
3,450 (Trinity Health Credit), Series C, 5.375%
due 12/01/2030 3,599
1,900 (Trinity Health Credit), Series D, 5% due 8/15/2034 1,931
Face
Amount Municipal Bonds Value
Michigan (continued)
Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds:
$ 8,000 (Detroit Edison Company), AMT, Series A, 5.55%
due 9/01/2029 (e) $ 8,367
2,000 (Detroit Edison Company Fund--Pollution),
Series AA, 6.95% due 5/01/2011 (c) 2,306
3,200 (Detroit Edison Pollution Control), Series C, 5.45%
due 9/01/2029 3,304
1,375 (Dow Chemical Company Project), AMT, 5.50%
due 12/01/2028 1,458
6,500 Monroe County, Michigan, Economic Development
Corp., Limited Obligation Revenue Refunding Bonds
(Detroit Edison Co. Project), Series AA, 6.95%
due 9/01/2022 (c) 8,358
1,000 Plainwell, Michigan, Community Schools, School
District, School Building and Site, GO, 5.50%
due 11/01/2012 (d)(f) 1,100
1,000 Pontiac, Michigan, Tax Increment Finance Authority,
Revenue Refunding Bonds (Development Area
Number 3), 5.375% due 6/01/2017 (h) 1,041
1,000 Reed, Michigan, City Public Schools, School Building
and Site, GO, 5% due 5/01/2026 (d) 1,038
1,900 Rochester, Michigan, Community School District, GO,
Series II, 5.50% due 11/01/2011 (e)(f) 2,086
1,500 Romulus, Michigan, Community Schools, GO, 5.75%
due 5/01/2009 (c)(f) 1,616
Saginaw Valley State University, Michigan, General
Revenue Refunding Bonds (c):
1,450 5% due 7/01/2024 1,508
1,000 5% due 7/01/2034 1,028
6,500 Saint Clair County, Michigan, Economic Revenue
Refunding Bonds (Detroit Edison Company), RIB,
Series 282, 9.79% due 8/01/2024 (a)(g) 7,705
2,650 South Lyon, Michigan, Community Schools, GO,
Series A, 5.75% due 5/01/2010 (e)(f) 2,897
Southfield, Michigan, Public Schools, School Building
and Site, GO, Series A (d):
1,950 5.25% due 5/01/2027 2,074
1,000 5% due 5/01/2029 1,032
1,000 Sparta, Michigan, Area Schools, School Building and
Site, GO, 5% due 5/01/2030 (c) 1,030
2,015 Sturgis, Michigan, Public School District, GO,
Refunding, 5% due 5/01/2030 (c) 2,081
6,500 Wayne Charter County, Michigan, Airport Revenue
Bonds (Detroit Metropolitan Wayne County), AMT,
Series A, 5.375% due 12/01/2015 (e) 6,820
1,180 Wayne Charter County, Michigan, Detroit
Metropolitan Airport, GO, Airport Hotel, Series A,
5% due 12/01/2030 (e) 1,210
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (concluded) (In Thousands)
MuniYield Michigan Insured Fund II, Inc.
Face
Amount Municipal Bonds Value
Michigan (concluded)
Wayne County, Michigan, Airport Authority Revenue
Bonds, AMT (e):
$ 4,090 DRIVERS, Series 1081-Z, 7.458%
due 6/01/2013 (g) $ 4,452
7,100 (Detroit Metropolitan Wayne County Airport), 5%
due 12/01/2034 7,189
5,300 Wyoming, Michigan, Sewage Disposal System Revenue
Bonds, 5% due 6/01/2030 (e) 5,475
1,330 Zeeland, Michigan, Public Schools, School Building
and Site, GO, 5% due 5/01/2029 (e) 1,373
Puerto Rico--7.9%
3,000 Puerto Rico Commonwealth Highway and Transportation
Authority, Transportation Revenue Refunding Bonds,
Series K, 5% due 7/01/2040 3,009
Puerto Rico Commonwealth Infrastructure
Financing Authority, Special Tax and Capital
Appreciation Revenue Bonds, Series A:
4,600 4.68%** due 7/01/2031 (c) 1,297
11,700 4.66%** due 7/01/2036 (a) 2,560
Face
Amount Municipal Bonds Value
Puerto Rico (concluded)
Puerto Rico Electric Power Authority, Power
Revenue Bonds:
$ 4,075 Series RR, 5% due 7/01/2035 (c) $ 4,230
2,270 Trust Receipts, Class R, Series 16 HH, 8.451%
due 7/01/2013 (d)(g) 2,736
Total Municipal Bonds
(Cost--$254,307)--154.1% 270,142
Shares
Held Short-Term Securities
6,613 CMA Michigan Municipal Money Fund (i) 6,613
Total Short-Term Securities
(Cost--$6,613)--3.8% 6,613
Total Investments (Cost--$260,920*)--157.9% 276,755
Liabilities in Excess of Other Assets--(1.4%) (2,448)
Preferred Stock, at Redemption Value--(56.5%) (99,043)
----------
Net Assets, Applicable to Common Stock--100.0% $ 175,264
==========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2005, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 260,735
===============
Gross unrealized appreciation $ 17,180
Gross unrealized depreciation (1,160)
---------------
Net unrealized appreciation $ 16,020
===============
** Represents a zero coupon bond; the interest rate shown reflects
the effective yield at the time of purchase.
(a) AMBAC Insured.
(b) Escrowed to maturity.
(c) FGIC Insured.
(d) FSA Insured.
(e) MBIA Insured.
(f) Prerefunded.
(g) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(h) ACA Insured.
(i) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA Michigan Municipal Money Fund 2,447 $33
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (In Thousands)
MuniYield New York Insured Fund, Inc.
Face
Amount Municipal Bonds Value
New York--134.9%
$23,790 Albany County, New York, Airport Authority, Airport
Revenue Bonds, AMT, 6% due 12/15/2023 (c) $ 25,330
Buffalo, New York, School, GO, Series D (b):
1,250 5.50% due 12/15/2014 1,367
1,500 5.50% due 12/15/2016 1,651
4,300 Buffalo, New York, Sewer Authority, Revenue Refunding
Bonds, Series F, 6% due 7/01/2013 (b) 4,905
1,700 Dutchess County, New York, Resource Recovery
Agency Revenue Bonds (Solid Waste System-Forward),
Series A, 5.40% due 1/01/2013 (d) 1,845
Erie County, New York, IDA, School Facility Revenue
Bonds (City of Buffalo Project) (c):
1,900 5.75% due 5/01/2020 2,101
5,250 5.75% due 5/01/2024 5,698
Huntington, New York, GO, Refunding (a):
485 5.50% due 4/15/2011 530
460 5.50% due 4/15/2012 510
455 5.50% due 4/15/2013 503
450 5.50% due 4/15/2014 501
450 5.50% due 4/15/2015 503
1,675 Ilion, New York, Central School District, GO, Series B,
5.50% due 6/15/2010 (b)(e) 1,837
Long Island Power Authority, New York, Electric System
Revenue Bonds, Series A (a):
7,000 5% due 9/01/2029 7,252
8,500 5% due 9/01/2034 8,757
2,600 Madison County, New York, IDA, Civic Facility Revenue
Bonds (Colgate University Project), Series A, 5%
due 7/01/2035 (a) 2,680
2,000 Metropolitan Transportation Authority, New York,
Commuter Facilities Revenue Bonds, Series A,
5.75% due 1/01/2008 (d)(e) 2,134
10,000 Metropolitan Transportation Authority, New York,
Commuter Facilities Revenue Refunding Bonds,
Series B, 4.875% due 7/01/2018 (b)(h) 10,305
Metropolitan Transportation Authority, New York,
Dedicated Tax Fund Revenue Bonds, Series A:
7,280 5% due 11/15/2011 (b)(e) 7,831
1,015 5% due 11/15/2032 (c) 1,041
10,600 Metropolitan Transportation Authority, New York,
Dedicated Tax Fund, Revenue Refunding Bonds,
Series A, 5% due 11/15/2030 (d) 10,904
Metropolitan Transportation Authority, New York,
Revenue Bonds:
4,665 Series A, 5% due 11/15/2033 (a) 4,821
2,500 Series A, 4.50% due 11/15/2034 (a) 2,408
7,500 Series B, 5% due 11/15/2035 (d) 7,751
Metropolitan Transportation Authority, New York,
Revenue Refunding Bonds:
28,900 RIB, Series 724X, 8.55% due 11/15/2032 (c)(g) 35,201
1,740 Series A, 5.125% due 11/15/2022 (b) 1,836
5,000 Series A, 5% due 11/15/2030 (c) 5,143
2,500 Series A, 5.25% due 11/15/2031 (b) 2,635
1,500 Series B, 5% due 11/15/2028 (d) 1,553
Face
Amount Municipal Bonds Value
New York (continued)
$ 2,000 Metropolitan Transportation Authority, New York,
Service Contract Revenue Refunding Bonds, Series A,
5% due 7/01/2025 (b) $ 2,076
Metropolitan Transportation Authority, New York,
Transit Facilities Revenue Refunding Bonds,
Series C (c)(e):
2,885 5.125% due 1/01/2012 3,113
1,640 5.125% due 7/01/2012 1,774
3,000 Metropolitan Transportation Authority, New York,
Transportation Revenue Bonds, Series A, 5%
due 11/15/2032 (b) 3,086
Metropolitan Transportation Authority, New York,
Transportation Revenue Refunding Bonds, Series F (d):
6,235 5.25% due 11/15/2027 6,649
5,000 5% due 11/15/2031 5,134
Monroe County, New York, IDA Revenue Bonds
(Southview Towers Project), AMT:
1,400 6.125% due 2/01/2020 1,510
1,125 6.25% due 2/01/2031 1,217
1,410 Montgomery County, New York, IDA, Lease Revenue
Bonds (Hamilton Fulton Montgomery Board of
Cooperative Educational Services Project), Series A,
5% due 7/01/2034 (l) 1,444
12,130 Nassau Health Care Corporation, New York, Health
System Revenue Bonds, 5.75% due 8/01/2009 (c)(e) 13,380
455 New York City, New York, City Health and Hospital
Corporation, Health System Revenue Bonds, Series A,
5.375% due 2/15/2026 467
1,275 New York City, New York, City IDA, Civic Facility
Revenue Refunding Bonds (Nightingale--Bamford
School), 5.25% due 1/15/2018 (a) 1,369
7,710 New York City, New York, City IDA, IDR (Japan Airlines
Company), AMT, 6% due 11/01/2015 (c) 7,987
7,970 New York City, New York, City IDA, Parking Facility
Revenue Bonds (Royal Charter--New York
Presbyterian), 5.75% due 12/15/2029 (c) 8,919
14,970 New York City, New York, City IDA, Special Facilities
Revenue Bonds (Terminal One Group Association
Project), AMT, 6.125% due 1/01/2024 (d) 15,117
500 New York City, New York, City Municipal Water
Finance Authority, Water and Sewer System,
Crossover Revenue Refunding Bonds, Series F,
5% due 6/15/2029 (c) 512
New York City, New York, City Municipal Water
Finance Authority, Water and Sewer System
Revenue Bonds:
12,500 RIB, Series 726X, 8.55% due 6/15/2027 (d)(g) 15,098
2,850 Series A, 5.75% due 6/15/2009 (b)(e) 3,111
4,085 Series B, 5.75% due 6/15/2006 (d)(e) 4,195
17,200 Series B, 5.75% due 6/15/2007 (d)(e) 18,089
New York City, New York, City Municipal Water
Finance Authority, Water and Sewer System, Revenue
Refunding Bonds (d):
5,000 5.50% due 6/15/2033 5,372
1,250 Series A, 5.125% due 6/15/2034 1,285
7,015 Series B, 5.75% due 6/15/2026 7,200
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (continued) (In Thousands)
MuniYield New York Insured Fund, Inc.
Face
Amount Municipal Bonds Value
New York (continued)
$ 1,020 New York City, New York, City Transit Authority,
Metropolitan Transportation Authority, Triborough,
COP, Series A, 5.625% due 1/01/2012 (a) $ 1,111
New York City, New York, City Transitional Finance
Authority, Future Tax Secured Revenue Bonds:
6,805 Series B, 6.25% due 5/15/2010 (b)(e) 7,670
800 Series B, 6.25% due 5/15/2010 (e) 902
1,260 Series C, 5.50% due 5/01/2009 (e) 1,345
16,195 Series C, 5% due 2/01/2033 (b) 16,646
2,500 Series E, 5.25% due 2/01/2022 (d) 2,683
3,000 New York City, New York, City Transitional Finance
Authority, Future Tax Secured, Revenue Refunding
Bonds, Series D, 5.25% due 2/01/2021 (d) 3,220
1,000 New York City, New York, City Transitional Finance
Authority, Revenue Refunding Bonds, Series A, 5%
due 11/15/2026 (b) 1,032
New York City, New York, GO:
11,043 RIB, Series 725X, 8.55% due 3/15/2027 (c)(g) 13,262
3,000 Series A, 5.75% due 5/15/2010 (e) 3,319
2,500 Series B, 5.75% due 8/01/2013 (d) 2,752
3,750 Series D, 5.25% due 10/15/2023 3,944
2,500 Series D, 5% due 11/01/2026 2,560
5,200 Series D, 5% due 11/01/2034 5,279
8,000 Series J, 5% due 5/15/2023 8,212
9,000 Series M, 5% due 4/01/2035 9,142
2,295 Sub-Series C-1, 4.75% due 8/15/2025 2,296
1,150 Sub-Series C-1, 5.25% due 8/15/2026 1,212
New York City, New York, GO, Refunding:
895 Series A, 6.375% due 5/15/2010 (b)(e) 1,013
105 Series A, 6.375% due 5/15/2013 (b) 118
70 Series B, 7% due 2/01/2018 (a) 70
3,200 VRDN, Series H, Sub-Series H-2, 2.74%
due 8/01/2014 (d)(f) 3,200
5,000 New York City, New York, IDA, Civic Facility Revenue
Bonds (Ethical Culture Fieldston School Project),
Sub-Series B-1, 4.50% due 6/01/2035 (l) 4,806
New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds (a):
6,500 DRIVERS, Series 1133Z, 7.50% due 10/15/2012 (g) 7,400
3,000 Series A, 5% due 10/15/2029 3,123
18,700 Series A, 5% due 10/15/2032 19,397
650 Series A, 4.50% due 10/15/2033 633
4,250 New York City, New York, Trust for Cultural Resources,
Revenue Refunding Bonds (American Museum of
Natural History), Series A, 5% due 7/01/2036 (d) 4,393
1,000 New York State Dormitory Authority, Consolidated
Revenue Refunding Bonds (City University System),
Series 1, 5.625% due 1/01/2008 (c)(e) 1,069
New York State Dormitory Authority Revenue Bonds:
3,820 (Eger Health Care and Rehabilitation Center),
6.10% due 8/01/2037 (i) 4,215
1,500 (Long Island University), Series B, 5.25%
due 9/01/2028 (k) 1,560
2,500 (Mental Health Services Facilities Improvement),
Series B, 5% due 2/15/2030 (a) 2,590
2,000 (New School for Social Research), 5.75%
due 7/01/2007 (d)(e) 2,124
Face
Amount Municipal Bonds Value
New York (continued)
New York State Dormitory Authority Revenue Bonds
(concluded):
$ 1,180 (New York State Rehabilitation Association),
Series A, 5.25% due 7/01/2019 (j) $ 1,260
1,000 (New York State Rehabilitation Association),
Series A, 5.125% due 7/01/2023 (j) 1,040
6,900 (School Districts Financing Program), Series E,
5.75% due 10/01/2030 (d) 7,641
1,000 Series B, 6.50% due 2/15/2011 (d)(h) 1,141
3,560 (State University Adult Facilities), Series B, 5.75%
due 5/15/2010 (c)(e) 3,938
1,780 (Upstate Community Colleges), Series A, 6%
due 7/01/2010 (c)(e) 1,988
New York State Dormitory Authority Revenue
Refunding Bonds:
3,810 (City University System), Series C, 7.50%
due 7/01/2010 (b) 4,213
4,350 (Mental Health Services Facilities Improvement),
Series A, 5.75% due 2/15/2007 (d)(e) 4,580
55 (Mental Health Services Facilities Improvement),
Series A, 5.75% due 2/15/2027 (d) 58
1,370 (School District Financing Program), Series I, 5.75%
due 10/01/2018 (d) 1,528
6,000 (Siena College), 5.75% due 7/01/2026 (d) 6,349
New York State Dormitory Authority, Supported Debt
Revenue Bonds, Series B:
1,570 (Mental Health Facilities), 5.25%
due 2/15/2014 (e) 1,711
270 (Mental Health Facilities), 5.25%
due 2/15/2023 285
2,500 (State University Dormitory Facilities), 4.375%
due 7/01/2030 (d) 2,389
1,000 New York State Dormitory Authority, Supported Debt
Revenue Refunding Bonds (Department of Health),
Series A, 5% due 7/01/2025 (j) 1,034
4,555 New York State Energy Research and Development
Authority, Gas Facilities Revenue Bonds (Brooklyn Union
Gas Company), AMT, Series B, 6.75% due 2/01/2024 (d) 4,627
6,750 New York State Energy Research and Development
Authority, Gas Facilities Revenue Refunding Bonds
(Brooklyn Union Gas Company/Keyspan), AMT, Series A,
4.70% due 2/01/2024 (b) 6,713
3,500 New York State Environmental Facilities Corporation,
Special Obligation Revenue Refunding Bonds
(Riverbank State Park), 6.25% due 4/01/2012 (a) 3,993
2,405 New York State, HFA, Revenue Refunding Bonds
(Housing Mortgage Project), Series A, 6.10%
due 11/01/2015 (c) 2,492
800 New York State Housing Finance Agency, State
Personal Income Tax Revenue Bonds (Economic
Development and Housing), Series A, 5%
due 9/15/2023 (d) 830
1,375 New York State Housing Finance Agency, State Personal
Income Tax, Revenue Refunding Bonds (Economic
Development and Housing), Series A, 5%
due 9/15/2030 (b) 1,420
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (continued) (In Thousands)
MuniYield New York Insured Fund, Inc.
Face
Amount Municipal Bonds Value
New York (continued)
$ 5,375 New York State Medical Care Facilities Finance Agency,
Revenue Bonds (Health Center Project--Second
Mortgage), Series A, 6.375% due 11/15/2019 (a) $ 5,496
9,530 New York State Mortgage Agency, Homeowner
Mortgage Revenue Refunding Bonds, AMT, Series 67,
5.80% due 10/01/2028 (d) 9,650
2,800 New York State Mortgage Agency Revenue
Bonds, DRIVERS, AMT, Series 295, 8.784%
due 4/01/2030 (d)(g) 3,004
New York State Municipal Bond Bank Agency, Special
School Purpose Revenue Bonds, Series C:
3,470 5.25% due 6/01/2019 3,672
3,920 5.25% due 6/01/2020 4,175
6,000 New York State Thruway Authority, General Revenue
Bonds, Series F, 5% due 1/01/2030 (a) 6,214
New York State Thruway Authority, General Revenue
Refunding Bonds Series G (c):
8,000 4.75% due 1/01/2029 8,074
13,500 4.75% due 1/01/2030 13,582
3,600 5% due 1/01/2030 3,740
6,750 5% due 1/01/2032 6,985
2,820 New York State Thruway Authority, Highway and
Bridge Trust Fund Revenue Bonds, Series A, 6.25%
due 4/01/2011 (c) 3,154
New York State Thruway Authority, Local Highway and
Bridge Service Contract Revenue Bonds (e):
3,000 5.75% due 4/01/2010 (a) 3,313
2,000 Series A-2, 5.375% due 4/01/2008 (d) 2,120
New York State Thruway Authority, Local Highway and
Bridge Service Contract, Revenue Refunding Bonds (d):
2,170 6% due 4/01/2007 (e) 2,298
1,330 6% due 4/01/2011 1,407
2,075 6% due 4/01/2012 2,195
3,045 New York State Thruway Authority, Second General
Highway and Bridge Trust Fund Revenue Bonds,
Series A, 5.25% due 4/01/2013 (d)(e) 3,326
4,750 New York State Urban Development Corporation,
Personal Income Tax Revenue Bonds, Series C-1,
5% due 3/15/2013 (d)(e) 5,112
3,190 New York State Urban Development Corporation,
Revenue Refunding Bonds (Correctional Capital
Facilities), Series A, 6.50% due 1/01/2011 (c) 3,611
1,000 Niagara Falls, New York, City School District, COP,
Refunding (High School Facility), 5%
due 6/15/2028 (c) 1,032
1,000 Niagara Falls, New York, GO (Water Treatment Plant),
AMT, 7.25% due 11/01/2010 (d)(e) 1,152
2,705 Niagara, New York, Frontier Authority, Airport Revenue
Bonds (Buffalo Niagara International Airport), Series B,
5.50% due 4/01/2019 (d) 2,895
1,260 North Country, New York, Development Authority,
Solid Waste Management System, Revenue Refunding
Bonds, 6% due 5/15/2015 (c) 1,429
Face
Amount Municipal Bonds Value
New York (continued)
North Hempstead, New York, GO, Refunding,
Series B (b):
$ 1,745 6.40% due 4/01/2013 $ 2,030
555 6.40% due 4/01/2017 665
1,665 Oneida County, New York, IDA, Civic Facilities
Revenue Bonds (Mohawk Valley), Series A, 5.20%
due 2/01/2013 (c) 1,755
2,500 Port Authority of New York and New Jersey,
Consolidated Revenue Bonds, AMT, 137th Series,
5.125% due 7/15/2030 (c) 2,595
4,000 Port Authority of New York and New Jersey,
Consolidated Revenue Refunding Bonds, AMT,
119th Series, 5.50% due 9/15/2016 (b) 4,102
4,075 Port Authority of New York and New Jersey,
Revenue Bonds, Trust Receipts, AMT, Class R,
Series 10, 8.65% due 1/15/2017 (c)(g) 4,364
7,500 Port Authority of New York and New Jersey,
Revenue Refunding Bonds, DRIVERS, AMT,
Series 177, 8.977% due 10/15/2032 (d)(g) 8,303
Port Authority of New York and New Jersey, Special
Obligation Revenue Bonds (d):
14,750 (JFK International Air Terminal), 6.25%
due 12/01/2010 16,204
7,175 (JFK International Air Terminal LLC), 6.25%
due 12/01/2011 7,956
4,425 (Special Project--JFK International Air Terminal),
6.25% due 12/01/2013 4,937
7,380 (Special Project--JFK International Air Terminal),
6.25% due 12/01/2014 8,320
Port Authority of New York and New Jersey, Special
Obligation Revenue Bonds, DRIVERS (d)(g):
1,750 Series 192, 8.477% due 12/01/2025 1,891
5,080 Series 278, 8.466% due 12/01/2022 5,677
1,255 Rensselaer County, New York, IDA, Civic Facility
Revenue Bonds (Rensselaer Polytechnic Institute),
Series B, 5.50% due 8/01/2022 (a) 1,351
4,625 Suffolk County, New York, IDA, IDR (Keyspan--Port
Jefferson), AMT, 5.25% due 6/01/2027 4,716
Suffolk County, New York, IDA, Solid Waste Disposal
Facility, Revenue Refunding Bonds (Ogden Martin
System Huntington Project), AMT (a):
8,530 6% due 10/01/2010 9,374
9,170 6.15% due 10/01/2011 10,245
6,470 6.25% due 10/01/2012 7,321
2,250 Suffolk County, New York, Public Improvement, GO,
Series B, 4.50% due 11/01/2024 (d) 2,219
Tobacco Settlement Financing Corporation of New York
Revenue Bonds:
5,000 Series A-1, 5.25% due 6/01/2020 (a) 5,378
5,000 Series A-1, 5.25% due 6/01/2021 (a) 5,361
2,000 Series A-1, 5.25% due 6/01/2022 (a) 2,142
2,000 Series C-1, 5.50% due 6/01/2021 2,165
1,900 Series C-1, 5.50% due 6/01/2022 2,045
2,305 Triborough Bridge and Tunnel Authority, New York,
General Purpose Revenue Refunding Bonds, Series Y,
6% due 1/01/2012 (d)(h) 2,546
ANNUAL REPORTS OCTOBER 31, 2005
Schedule of Investments (concluded) (In Thousands)
MuniYield New York Insured Fund, Inc.
Face
Amount Municipal Bonds Value
New York (concluded)
Triborough Bridge and Tunnel Authority, New York,
Revenue Refunding Bonds (d):
$ 7,000 5.25% due 11/15/2023 $ 7,490
19,675 5% due 11/15/2032 20,179
2,265 Series A, 5% due 1/01/2012 (e) 2,428
235 Series A, 5% due 1/01/2032 240
1,500 Series B, 5% due 11/15/2032 1,538
Triborough Bridge and Tunnel Authority, New York,
Subordinate Revenue Bonds:
2,465 5% due 11/15/2028 (a) 2,552
6,000 Series A, 5.25% due 11/15/2030 (d) 6,355
5,000 Yonkers, New York, GO, Refunding, Series B, 5%
due 8/01/2035 (d) 5,151
2,010 Yonkers, New York, GO, Series A, 5.75%
due 10/01/2010 (b)(e) 2,235
Guam--0.8%
A.B. Won Guam International Airport Authority,
General Revenue Refunding Bonds, AMT, Series C (d):
2,240 5.25% due 10/01/2021 2,360
2,050 5.25% due 10/01/2022 2,160
Puerto Rico--17.0%
Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation
Revenue Bonds:
2,265 Series G, 5.25% due 7/01/2019 (b) 2,450
1,000 Series G, 5.25% due 7/01/2021 (b) 1,081
1,250 Trust Receipts, Class R, Series B, 8.70%
due 7/01/2035 (d)(g) 1,530
Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Refunding Bonds:
3,000 Series D, 5.75% due 7/01/2012 (e) 3,358
10,750 Series K, 5% due 7/01/2035 10,790
4,000 Series L, 5.25% due 7/01/2041 (j) 4,381
Face
Amount Municipal Bonds Value
Puerto Rico (concluded)
Puerto Rico Commonwealth Infrastructure Financing
Authority, Special Tax and Capital Appreciation Revenue
Bonds, Series A:
$23,530 4.62%** due 7/01/2031 (b) $ 6,636
3,900 4.67%** due 7/01/2035 (a) 899
8,000 4.77%** due 7/01/2044 (a) 1,165
Puerto Rico Commonwealth Infrastructure Financing
Authority, Special Tax Revenue Bonds Series B:
15,945 5% due 7/01/2041 15,992
4,750 5% due 7/01/2041 (j) 4,882
Puerto Rico Commonwealth, Public Improvement,
GO, Series A:
4,605 5.25% due 7/01/2019 4,836
7,480 5.25% due 7/01/2020 7,845
Puerto Rico Electric Power Authority, Power
Revenue Bonds:
4,750 Series NN, 5.125% due 7/01/2029 4,919
7,315 Series RR, 5% due 7/01/2029 (j) 7,610
7,095 Series RR, 5% due 7/01/2030 (l) 7,359
Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Revenue Bonds, Series E:
2,300 5.50% due 2/01/2012 (e) 2,524
700 5.50% due 8/01/2029 732
6,100 Puerto Rico Public Finance Corporation Revenue Bonds,
DRIVERS, Series 272, 9.293% due 8/01/2030 (g) 6,487
Total Municipal Bonds
(Cost--$830,006)--152.7% 858,627
Shares
Held Short-Term Securities
1,101 CMA New York Municipal Money Fund (m) 1,101
Total Short-Term Securities
(Cost--$1,101)--0.2% 1,101
Total Investments (Cost--$831,107*)--152.9% 859,728
Other Assets Less Liabilities--1.2% 6,784
Preferred Stock, at Redemption Value--(54.1%) (304,038)
----------
Net Assets Applicable to Common Stock--100.0% $ 562,474
==========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2005, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 831,226
===============
Gross unrealized appreciation $ 32,968
Gross unrealized depreciation (4,466)
---------------
Net unrealized appreciation $ 28,502
===============
** Represents a zero coupon bond; the interest rate shown reflects
the effective yield at the time of purchase.
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) Prerefunded.
(f) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features which qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate changes
periodically based upon prevailing market rates.
(g) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(h) Escrowed to maturity.
(i) FHA Insured.
(j) CIFG Insured.
(k) Radian Insured.
(l) XL Capital Insured.
(m) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA New York Municipal Money Fund 1,049 $12
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Statements of Net Assets
MuniYield
MuniYield MuniYield California
Arizona California Insured
As of October 31, 2005 Fund, Inc. Fund, Inc. Fund, Inc.
Assets
Investments in unaffiliated securities, at value* $ 103,117,535 $ 479,039,632 $ 762,589,675
Investments in affiliated securities, at value** 1,606,805 816,866 6,642
Cash 13,746 14,921 100,617
Receivable for securities sold 160,000 11,692,523 12,271,539
Interest receivable 1,842,023 7,883,616 12,631,497
Dividends from affiliates 90 48 --
Prepaid expenses 6,475 10,637 39,426
--------------- --------------- ---------------
Total assets 106,746,674 499,458,243 787,639,396
--------------- --------------- ---------------
Liabilities
Payable for securities purchased 1,616,201 10,174,834 2,757,599
Dividends payable to Common Stock shareholders -- 141,729 254,604
Payable to investment adviser 41,533 193,770 312,119
Payable to other affiliates 1,253 5,976 9,769
Accrued expenses 35,551 64,550 77,676
Offering cost payable 114,165 152,772 142,847
--------------- --------------- ---------------
Total liabilities 1,808,703 10,733,631 3,554,614
--------------- --------------- ---------------
Preferred Stock
Preferred Stock, at redemption value of AMPS+++ at $25,000 per
share liquidation preference*** 40,307,655 175,016,450 275,018,800
--------------- --------------- ---------------
Net Assets Applicable to Common Stock
Net assets applicable to Common Stock $ 64,630,316 $ 313,708,162 $ 509,065,982
=============== =============== ===============
Net Assets Consist of
Undistributed investment income--net $ 801,394 $ 1,340,144 $ 4,912,758
Undistributed (accumulated) realized capital gains (losses)--net 425,923 (4,510,862) (17,416,035)
Unrealized appreciation--net 3,761,376 15,295,936 23,904,203
--------------- --------------- ---------------
Total accumulated earnings--net 4,988,693 12,125,218 11,400,926
Common Stock, par value $.10 per share++ 449,277 2,129,526 3,436,120
Paid-in capital in excess of par 59,192,346 299,453,418 494,228,936
--------------- --------------- ---------------
Net Assets $ 64,630,316 $ 313,708,162 $ 509,065,982
=============== =============== ===============
Net asset value per share of Common Stock $ 14.39 $ 14.73 $ 14.82
=============== =============== ===============
Market Price $ 16.03 $ 13.37 $ 14.16
=============== =============== ===============
* Identified cost in unaffiliated securities $ 99,356,159 $ 463,743,696 $ 738,685,472
=============== =============== ===============
** Identified cost in affiliated securities $ 1,606,805 $ 816,866 $ 6,642
=============== =============== ===============
*** Preferred Stock authorized, issued and outstanding:
Series A Shares, par value $.10 per share 518 2,400 1,800
=============== =============== ===============
Series B Shares, par value $.10 per share 694 2,400 1,800
=============== =============== ===============
Series C Shares, par value $.10 per share 400 800 1,600
=============== =============== ===============
Series D Shares, par value $.10 per share -- 1,400 2,000
=============== =============== ===============
Series E Shares, par value $.10 per share -- -- 2,000
=============== =============== ===============
Series F Shares, par value $.10 per share -- -- 1,800
=============== =============== ===============
++ Common Stock issued and outstanding 4,492,769 21,295,255 34,361,200
=============== =============== ===============
+++ Auction Market Preferred Stock.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Statements of Net Assets (concluded)
MuniYield MuniYield
MuniYield Michigan New York
Florida Insured Insured
As of October 31, 2005 Fund Fund II, Inc. Fund, Inc.
Assets
Investments in unaffiliated securities, at value* $ 310,975,608 $ 270,142,269 $ 858,626,969
Investments in affiliated securities, at value** 500,000 6,612,968 1,101,072
Cash 47,855 66,344 71,780
Unrealized appreciation on forward interest rate swaps 245,613 -- --
Receivable for securities sold 385,804 -- 2,563,813
Interest receivable 4,249,657 5,299,064 13,966,735
Dividends from affiliates 35 364 65
Prepaid expenses 10,989 11,052 22,491
--------------- --------------- ---------------
Total assets 316,415,561 282,132,061 876,352,925
--------------- --------------- ---------------
Liabilities
Payable for securities purchased 4,024,318 7,438,410 8,952,133
Dividends payable to Common Stock shareholders/Common Shareholders 55,322 102,311 316,911
Payable to investment adviser 124,034 105,237 345,382
Payable to other affiliates 3,675 3,315 10,302
Accrued expenses 46,626 46,148 78,730
Offering cost payable 112,154 129,567 137,228
--------------- --------------- ---------------
Total liabilities 4,366,129 7,824,988 9,840,686
--------------- --------------- ---------------
Preferred Stock/Shares
Preferred Stock/Shares, at redemption value of AMPS+++ at $25,000
per share liquidation preference*** 110,007,392 99,042,684 304,037,919
--------------- --------------- ---------------
Net Assets Applicable to Common Stock/Shares
Net assets applicable to Common Stock/Shares $ 202,042,040 $ 175,264,389 $ 562,474,320
=============== =============== ===============
Net Assets Consist of
Undistributed investment income--net $ 2,185,695 $ 1,659,927 $ 6,238,805
Accumulated realized capital losses--net (10,044,135) (7,351,255) (33,403,822)
Unrealized appreciation--net 14,102,784 15,835,727 28,620,962
--------------- --------------- ---------------
Total accumulated earnings--net 6,244,344 10,144,399 1,455,945
Common Stock/Shares, par value $.10 per share++ 1,355,188 1,205,413 3,944,596
Paid-in capital in excess of par 194,442,508 163,914,577 557,073,779
--------------- --------------- ---------------
Net Assets $ 202,042,040 $ 175,264,389 $ 562,474,320
=============== =============== ===============
Net asset value per share of Common Stock/Shares $ 14.91 $ 14.54 $ 14.26
=============== =============== ===============
Market Price $ 14.93 $ 14.41 $ 13.17
=============== =============== ===============
* Identified cost in unaffiliated securities $ 297,118,437 $ 254,306,542 $ 830,006,007
=============== =============== ===============
** Identified cost in affiliated securities $ 500,000 $ 6,612,968 $ 1,101,072
=============== =============== ===============
*** Preferred Stock/Shares authorized, issued and outstanding:
Series A Shares, par value $.05 per share 2,200 2,200 1,700
=============== =============== ===============
Series B Shares, par value $.05 per share 1,600 -- 1,700
=============== =============== ===============
Series B Shares, par value $.10 per share -- 1,360 --
=============== =============== ===============
Series C Shares, par value $.05 per share 600 -- 2,800
=============== =============== ===============
Series C Shares, par value $.10 per share -- 400 --
=============== =============== ===============
Series D Shares, par value $.05 per share -- -- 1,960
=============== =============== ===============
Series E Shares, par value $.05 per share -- -- 2,200
=============== =============== ===============
Series F Shares, par value $.10 per share -- -- 1,800
=============== =============== ===============
++ Common Stock/Shares issued and outstanding 13,551,880 12,054,131 39,445,962
=============== =============== ===============
+++ Auction Market Preferred Stock.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Statements of Operations
MuniYield
MuniYield MuniYield California
Arizona California Insured
For the Year Ended October 31, 2005 Fund, Inc. Fund, Inc. Fund, Inc.
Investment Income
Interest and amortization of premium and discount earned $ 5,138,539 $ 22,873,496 $ 37,767,542
Dividends from affiliates 11,031 32,995 19,078
--------------- --------------- ---------------
Total income 5,149,570 22,906,491 37,786,620
--------------- --------------- ---------------
Expenses
Investment advisory fees 492,618 2,323,916 3,781,687
Commission fees 80,779 361,210 593,492
Accounting services 61,391 160,190 238,443
Transfer agent fees 43,843 81,197 120,264
Professional fees 43,413 51,292 56,240
Printing and shareholder reports 19,048 31,026 41,687
Listing fees 1,965 19,117 24,437
Custodian fees 7,850 26,697 39,488
Pricing fees 8,237 16,427 23,250
Directors' fees and expenses 14,216 23,237 30,346
Other 27,673 51,286 71,987
--------------- --------------- ---------------
Total expenses before reimbursement 801,033 3,145,595 5,021,321
Reimbursement of expenses (3,447) (8,629) (5,890)
--------------- --------------- ---------------
Total expenses after reimbursement 797,586 3,136,966 5,015,431
--------------- --------------- ---------------
Investment income--net 4,351,984 19,769,525 32,771,189
--------------- --------------- ---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain on:
Investments--net 686,663 2,911,589 4,521,492
Futures contracts--net -- 375,335 36,942
--------------- --------------- ---------------
Total realized gain--net 686,663 3,286,924 4,558,434
--------------- --------------- ---------------
Change in unrealized appreciation on investments--net (2,891,468) (12,950,108) (16,405,544)
--------------- --------------- ---------------
Total realized and unrealized loss--net (2,204,805) (9,663,184) (11,847,110)
--------------- --------------- ---------------
Dividends & Distributions to Preferred Stock Shareholders
Dividends & distributions to Preferred Stock shareholders from:
Investment income--net (607,302) (2,698,791) (4,367,576)
Realized gain--net (6,640) -- --
--------------- --------------- ---------------
Total dividends & distributions to Preferred Stock shareholders (613,942) (2,698,791) (4,367,576)
--------------- --------------- ---------------
Net Increase in Net Assets Resulting from Operations $ 1,533,237 $ 7,407,550 $ 16,556,503
=============== =============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Statements of Operations (concluded)
MuniYield MuniYield
MuniYield Michigan New York
Florida Insured Insured
For the Year Ended October 31, 2005 Fund Fund II, Inc. Fund, Inc.
Investment Income
Interest and amortization of premium and discount earned $ 15,447,461 $ 13,778,534 $ 42,507,937
Dividends from affiliates 54,620 33,073 12,165
--------------- --------------- ---------------
Total income 15,502,081 13,811,607 42,520,102
--------------- --------------- ---------------
Expenses
Investment advisory fees 1,520,533 1,351,069 4,222,879
Commission fees 246,120 226,335 670,073
Accounting services 116,154 107,592 250,410
Transfer agent fees 67,131 68,031 139,614
Professional fees 72,269 49,415 52,742
Printing and shareholder reports 29,178 27,972 43,474
Listing fees 19,117 19,117 28,037
Custodian fees 18,283 15,951 42,276
Pricing fees 16,073 17,023 30,119
Directors'/Trustees' fees and expenses 19,256 18,414 33,028
Other 44,317 39,472 49,051
--------------- --------------- ---------------
Total expenses before reimbursement 2,168,431 1,940,391 5,561,703
Reimbursement of expenses (5,400) (11,630) (3,165)
--------------- --------------- ---------------
Total expenses after reimbursement 2,163,031 1,928,761 5,558,538
--------------- --------------- ---------------
Investment income--net 13,339,050 11,882,846 36,961,564
--------------- --------------- ---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net 1,873,138 2,121,683 3,293,258
Futures contracts and/or forward interest rate swaps--net (553,679) 3,966 (2,417,318)
--------------- --------------- ---------------
Total realized gain--net 1,319,459 2,125,649 875,940
--------------- --------------- ---------------
Change in unrealized appreciation/depreciation on:
Investments--net (5,541,203) (9,349,405) (22,766,690)
Futures contracts and/or forward interest rate swaps--net 792,877 164,768 1,918,507
--------------- --------------- ---------------
Total change in unrealized appreciation/depreciation--net (4,748,326) (9,184,637) (20,848,183)
--------------- --------------- ---------------
Total realized and unrealized loss--net (3,428,867) (7,058,988) (19,972,243)
--------------- --------------- ---------------
Dividends to Preferred Stock Shareholders/Preferred Shareholders
Investment income--net (1,961,036) (1,750,817) (5,032,367)
--------------- --------------- ---------------
Net Increase in Net Assets Resulting from Operations $ 7,949,147 $ 3,073,041 $ 11,956,954
=============== =============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Statements of Changes in Net Assets MuniYield Arizona Fund, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2005 2004
Operations
Investment income--net $ 4,351,984 $ 4,374,915
Realized gain--net 686,663 622,237
Change in unrealized appreciation--net (2,891,468) 1,148,593
Dividends and distributions to Preferred Stock shareholders (613,942) (278,765)
--------------- ---------------
Net increase in net assets resulting from operations 1,533,237 5,866,980
--------------- ---------------
Dividends & Distributions to Common Stock Shareholders
Investment income--net (4,139,688) (4,095,919)
Realized gain--net (98,063) --
--------------- ---------------
Net decrease in net assets resulting from dividends and distributions to
Common Stock shareholders (4,237,751) (4,095,919)
--------------- ---------------
Stock Transactions
Value of shares issued to Common Stock shareholders in reinvestment of dividends 347,232 212,430
Offering and underwriting costs resulting from issuance of Preferred Stock (229,567) --
--------------- ---------------
Net increase in net assets resulting from stock transactions 117,665 212,430
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock (2,586,849) 1,983,491
Beginning of year 67,217,165 65,233,674
--------------- ---------------
End of year* $ 64,630,316 $ 67,217,165
=============== ===============
* Undistributed investment income--net $ 801,394 $ 1,199,703
=============== ===============
See Notes to Financial Statements.
MuniYield California Fund, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2005 2004
Operations
Investment income--net $ 19,769,525 $ 21,821,368
Realized gain--net 3,286,924 1,796,120
Change in unrealized appreciation--net (12,950,108) 554,785
Dividends to Preferred Stock shareholders (2,698,791) (1,424,248)
--------------- ---------------
Net increase in net assets resulting from operations 7,407,550 22,748,025
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (18,399,100) (20,698,988)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (18,399,100) (20,698,988)
--------------- ---------------
Stock Transactions
Offering and underwriting costs resulting from issuance of Preferred Stock (504,510) --
--------------- ---------------
Net decrease in net assets resulting from stock transactions (504,510) --
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock (11,496,060) 2,049,037
Beginning of year 325,204,222 323,155,185
--------------- ---------------
End of year* $ 313,708,162 $ 325,204,222
=============== ===============
* Undistributed investment income--net $ 1,340,144 $ 2,668,510
=============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Statements of Changes in Net Assets MuniYield California Insured Fund, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2005 2004
Operations
Investment income--net $ 32,771,189 $ 32,456,607
Realized gain (loss)--net 4,558,434 (393,889)
Change in unrealized appreciation--net (16,405,544) 4,656,645
Dividends to Preferred Stock shareholders (4,367,576) (2,199,184)
--------------- ---------------
Net increase in net assets resulting from operations 16,556,503 34,520,179
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (30,100,411) (30,100,412)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (30,100,411) (30,100,412)
--------------- ---------------
Stock Transactions
Offering and underwriting costs resulting from issuance of Preferred Stock (595,687) --
--------------- ---------------
Net decrease in net assets resulting from stock transactions (595,687) --
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock (14,139,595) 4,419,767
Beginning of year 523,205,577 518,785,810
--------------- ---------------
End of year* $ 509,065,982 $ 523,205,577
=============== ===============
* Undistributed investment income--net $ 4,912,758 $ 6,609,556
=============== ===============
See Notes to Financial Statements.
MuniYield Florida Fund
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2005 2004
Operations
Investment income--net $ 13,339,050 $ 13,551,874
Realized gain (loss)--net 1,319,459 (1,088,496)
Change in unrealized appreciation/depreciation--net (4,748,326) 5,043,296
Dividends to Preferred Shareholders (1,961,036) (979,988)
--------------- ---------------
Net increase in net assets resulting from operations 7,949,147 16,526,686
--------------- ---------------
Dividends to Common Shareholders
Investment income--net (12,521,937) (12,521,937)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Shareholders (12,521,937) (12,521,937)
--------------- ---------------
Shares Transactions
Offering and underwriting costs resulting from issuance of Preferred Shares (280,155) --
--------------- ---------------
Net decrease in net assets resulting from share transactions (280,155) --
--------------- ---------------
Net Assets Applicable to Common Shares
Total increase (decrease) in net assets applicable to Common Shares (4,852,945) 4,004,749
Beginning of year 206,894,985 202,890,236
--------------- ---------------
End of year* $ 202,042,040 $ 206,894,985
=============== ===============
* Undistributed investment income--net $ 2,185,695 $ 3,329,618
=============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Statements of Changes in Net Assets MuniYield Michigan Insured Fund II, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2005 2004
Operations
Investment income--net $ 11,882,846 $ 12,033,282
Realized gain (loss)--net 2,125,649 (1,293,828)
Change in unrealized appreciation/depreciation--net (9,184,637) 1,251,894
Dividends to Preferred Stock shareholders (1,750,817) (855,584)
--------------- ---------------
Net increase in net assets resulting from operations 3,073,041 11,135,764
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (10,914,778) (11,149,121)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (10,914,778) (11,149,121)
--------------- ---------------
Stock Transactions
Value of shares issued to Common Stock shareholders in reinvestment of dividends 112,030 --
Offering and underwriting costs resulting from issuance of Preferred Stock (229,567) --
--------------- ---------------
Net decrease in net assets resulting from stock transactions (117,537) --
--------------- ---------------
Net Assets Applicable to Common Stock
Total decrease in net assets applicable to Common Stock (7,959,274) (13,357)
Beginning of year 183,223,663 183,237,020
--------------- ---------------
End of year* $ 175,264,389 $ 183,223,663
=============== ===============
* Undistributed investment income--net $ 1,659,927 $ 2,442,676
=============== ===============
See Notes to Financial Statements.
MuniYield New York Insured Fund, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2005 2004
Operations
Investment income--net $ 36,961,564 $ 36,051,644
Realized gain (loss)--net 875,940 (15,384,933)
Change in unrealized appreciation/depreciation--net (20,848,183) 15,015,826
Dividends to Preferred Stock shareholders (5,032,367) (2,455,390)
--------------- ---------------
Net increase in net assets resulting from operations 11,956,954 33,227,147
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (33,134,608) (33,004,436)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (33,134,608) (33,004,436)
--------------- ---------------
Stock Transactions
Offering and underwriting costs resulting from issuance of Preferred Stock (595,687) --
--------------- ---------------
Net decrease in net assets resulting from stock transactions (595,687) --
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock (21,773,341) 222,711
Beginning of year 584,247,661 584,024,950
--------------- ---------------
End of year* $ 562,474,320 $ 584,247,661
=============== ===============
* Undistributed investment income--net $ 6,238,805 $ 7,444,216
=============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights MuniYield Arizona Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of year $ 15.04 $ 14.64 $ 14.53 $ 14.19 $ 13.11
---------- ---------- ---------- ---------- ----------
Investment income--net .97++ .98++ 1.00++ .97 .94
Realized and unrealized gain (loss)--net (.49) .40 .05 .26 1.02
Less dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.14) (.06) (.06) (.09) (.20)
Realized gain--net --*** -- -- -- --
---------- ---------- ---------- ---------- ----------
Total from investment operations .34 1.32 .99 1.14 1.76
---------- ---------- ---------- ---------- ----------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.92) (.92) (.88) (.80) (.68)
Realized gain--net (.02) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions to Common Stock
shareholders (.94) (.92) (.88) (.80) (.68)
---------- ---------- ---------- ---------- ----------
Offering and underwriting costs resulting from the
issuance of Preferred Stock (.05) -- -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 14.39 $ 15.04 $ 14.64 $ 14.53 $ 14.19
========== ========== ========== ========== ==========
Market price per share, end of year $ 16.03 $ 15.10 $ 14.13 $ 13.25 $ 13.19
========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 1.91% 9.40% 7.19% 8.60% 14.20%
========== ========== ========== ========== ==========
Based on market price per share 13.07% 13.80% 13.45% 6.54% 25.09%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Common Stock
Total expenses, net of reimbursement** 1.20% 1.19% 1.18% 1.28% 1.33%
========== ========== ========== ========== ==========
Total expenses** 1.20% 1.20% 1.19% 1.28% 1.33%
========== ========== ========== ========== ==========
Total investment income--net** 6.54% 6.65% 6.79% 6.86% 6.88%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Stock shareholders .91% .42% .42% .61% 1.48%
========== ========== ========== ========== ==========
Investment income--net, to Common Stock
shareholders 5.63% 6.23% 6.37% 6.25% 5.41%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Preferred Stock
Dividends to Preferred Stock shareholders 1.90% .92% .91% 1.26% 2.97%
========== ========== ========== ========== ==========
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights (concluded) MuniYield Arizona Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 64,630 $ 67,217 $ 65,234 $ 64,699 $ 63,160
========== ========== ========== ========== ==========
Preferred Stock outstanding, end of year
(in thousands) $ 40,300 $ 30,300 $ 30,300 $ 30,300 $ 30,300
========== ========== ========== ========== ==========
Portfolio turnover 28.08% 23.69% 26.99% 42.51% 45.89%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,604 $ 3,218 $ 3,153 $ 3,135 $ 3,085
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 462 $ 222 $ 220 $ 305 $ 742
========== ========== ========== ========== ==========
Series B--Investment income--net $ 473 $ 236 $ 237 $ 324 $ 742
========== ========== ========== ========== ==========
Series C++++--Investment income--net $ 99 -- -- -- --
========== ========== ========== ========== ==========
* Total investment returns based on market value, which can be significantly greater or lesser
than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
*** Amount is less than $(.01) per share.
++ Based on average shares outstanding.
++++ Series C was issued on August 31, 2005.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights MuniYield California Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of year $ 15.27 $ 15.17 $ 15.14 $ 15.22 $ 14.19
---------- ---------- ---------- ---------- ----------
Investment income--net .93+++ 1.02+++ 1.06+++ 1.07+++ 1.03
Realized and unrealized gain (loss)--net (.46) .12 .04 (.06) 1.05
Less dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.13) (.07) (.10) (.12) (.20)
Realized gain--net -- -- --++ --++ --
---------- ---------- ---------- ---------- ----------
Total from investment operations .34 1.07 1.00 .89 1.88
---------- ---------- ---------- ---------- ----------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.86) (.97) (.97) (.97) (.85)
Realized gain--net -- -- --++ --++ --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions to Common Stock
shareholders (.86) (.97) (.97) (.97) (.85)
---------- ---------- ---------- ---------- ----------
Offering and underwriting costs resulting from the
issuance of Preferred Stock (.02) -- -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 14.73 $ 15.27 $ 15.17 $ 15.14 $ 15.22
========== ========== ========== ========== ==========
Market price per share, end of year $ 13.37 $ 14.43 $ 14.15 $ 14.46 $ 15.10
========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 2.59% 7.74% 7.14% 6.14% 13.85%
========== ========== ========== ========== ==========
Based on market price per share (1.46%) 9.16% 4.64% 2.18% 22.71%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Common Stock
Expenses, net of reimbursement** .98% .96% .95% .99% 1.00%
========== ========== ========== ========== ==========
Total expenses** .98% .96% .96% .99% 1.00%
========== ========== ========== ========== ==========
Total investment income--net** 6.16% 6.79% 6.93% 7.13% 7.00%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Stock shareholders .84% .44% .63% .77% 1.37%
========== ========== ========== ========== ==========
Investment income--net, to Common Stock
shareholders 5.32% 6.35% 6.30% 6.36% 5.63%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Preferred Stock
Dividends to Preferred Stock shareholders 1.88% 1.02% 1.46% 1.76% 3.04%
========== ========== ========== ========== ==========
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights (concluded) MuniYield California Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 313,708 $ 325,204 $ 323,155 $ 322,345 $ 322,524
========== ========== ========== ========== ==========
Preferred Stock outstanding, end of year
(in thousands) $ 175,000 $ 140,000 $ 140,000 $ 140,000 $ 140,000
========== ========== ========== ========== ==========
Portfolio turnover 53.99% 33.60% 20.24% 49.87% 58.17%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,793 $ 3,323 $ 3,308 $ 3,302 $ 3,304
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 482 $ 270 $ 569 $ 607 $ 802
========== ========== ========== ========== ==========
Series B--Investment income--net $ 451 $ 241 $ 217 $ 322 $ 721
========== ========== ========== ========== ==========
Series C--Investment income--net $ 453 $ 250 $ 207 $ 292 $ 745
========== ========== ========== ========== ==========
Series D++++--Investment income--net $ 70 -- -- -- --
========== ========== ========== ========== ==========
* Total investment returns based on market value, which can be significantly greater or lesser
than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
+++ Based on average shares outstanding.
++ Amount is less than $(.01) per share.
++++ Series D was issued on September 21, 2005.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights MuniYield California Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of year $ 15.23 $ 15.10 $ 15.26 $ 15.44 $ 14.24
---------- ---------- ---------- ---------- ----------
Investment income--net .95+++ .94+++ .95+++ .95 1.00
Realized and unrealized gain (loss)--net (.33) .13 (.18) (.22) 1.21
Less dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.13) (.06) (.06) (.09) (.20)
Realized gain--net -- -- -- --++++++ --
---------- ---------- ---------- ---------- ----------
Total from investment operations .49 1.01 .71 .64 2.01
---------- ---------- ---------- ---------- ----------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.88) (.88) (.87) (.81) (.81)
Realized gain--net -- -- -- (.01) --
In excess of realized gain--net -- -- -- -- --++++++
---------- ---------- ---------- ---------- ----------
Total dividends and distributions to Common Stock
shareholders (.88) (.88) (.87) (.82) (.81)
---------- ---------- ---------- ---------- ----------
Offering and underwriting costs resulting from the
issuance of Preferred Stock (.02) -- -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 14.82 $ 15.23 $ 15.10 $ 15.26 $ 15.44
========== ========== ========== ========== ==========
Market price per share, end of year $ 14.16 $ 13.73 $ 13.82 $ 13.68 $ 14.46
========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 3.55% 7.54% 5.29% 4.68% 14.76%
========== ========== ========== ========== ==========
Based on market price per share 9.75% 5.93% 7.50% .20% 12.33%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Common Stock
Total expenses, net of reimbursement and excluding
reorganization expenses** .96% .95% .94% .96% 1.06%
========== ========== ========== ========== ==========
Total expenses, excluding reorganization expenses** .96% .95% .94% .96% 1.06%
========== ========== ========== ========== ==========
Total expenses** .96% .95% .94% 1.00% 1.06%
========== ========== ========== ========== ==========
Total investment income--net** 6.29% 6.29% 6.20% 6.38% 6.74%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Stock shareholders .84% .43% .37% .56% 1.36%
========== ========== ========== ========== ==========
Investment income--net, to Common Stock
shareholders 5.45% 5.86% 5.83% 5.82% 5.38%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Preferred Stock
Dividends to Preferred Stock shareholders 1.86% .96% .85% 1.25% 2.86%
========== ========== ========== ========== ==========
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights (concluded) MuniYield California Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 509,066 $ 523,206 $ 518,786 $ 524,485 $ 283,553
========== ========== ========== ========== ==========
Preferred Stock outstanding, end of year
(in thousands) $ 275,000 $ 230,000 $ 230,000 $ 230,000 $ 130,000
========== ========== ========== ========== ==========
Portfolio turnover 42.13% 68.05% 52.17% 77.13% 59.36%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,851 $ 3,275 $ 3,256 $ 3,280 $ 3,181
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 478 $ 246 $ 216 $ 359 $ 758
========== ========== ========== ========== ==========
Series B--Investment income--net $ 463 $ 238 $ 212 $ 324 $ 700
========== ========== ========== ========== ==========
Series C--Investment income--net $ 441 $ 224 $ 204 $ 320 $ 683
========== ========== ========== ========== ==========
Series D++--Investment income--net $ 480 $ 249 $ 242 $ 203 --
========== ========== ========== ========== ==========
Series E++--Investment income--net $ 448 $ 236 $ 196 $ 201 --
========== ========== ========== ========== ==========
Series F++++--Investment income--net $ 62 -- -- -- --
========== ========== ========== ========== ==========
* Total investment returns based on market value, which can be significantly greater or lesser
than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
++ Series D and E were issued on February 4, 2002.
++++ Series F was issued on September 21, 2005.
++++++ Amount is less than $(.01) per share.
+++ Based on average shares outstanding.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights MuniYield Florida Fund
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of year $ 15.27 $ 14.97 $ 14.97 $ 14.81 $ 13.78
---------- ---------- ---------- ---------- ----------
Investment income--net .98+++ 1.00+++ 1.06+++ 1.03 1.00
Realized and unrealized gain (loss)--net (.26) .29 (.07) .09 1.04
Less dividends and distributions to Preferred
Shareholders:
Investment income--net (.14) (.07) (.07) (.09) (.22)
Realized gain--net -- -- -- --++ --
---------- ---------- ---------- ---------- ----------
Total from investment operations .58 1.22 .92 1.03 1.82
---------- ---------- ---------- ---------- ----------
Less dividends and distributions to Common
Shareholders:
Investment income--net (.92) (.92) (.92) (.87) (.79)
Realized gain--net -- -- -- --++ --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions to Common Shareholders (.92) (.92) (.92) (.87) (.79)
---------- ---------- ---------- ---------- ----------
Offering and underwriting costs resulting from the
issuance of Preferred Shares (.02) -- -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 14.91 $ 15.27 $ 14.97 $ 14.97 $ 14.81
========== ========== ========== ========== ==========
Market price per share, end of year $ 14.93 $ 14.28 $ 13.80 $ 13.34 $ 13.98
========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 3.98% 8.99% 6.76% 7.80% 14.24%
========== ========== ========== ========== ==========
Based on market price per share 11.34% 10.57% 10.44% 1.77% 31.36%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Common Shares
Total expenses, net of reimbursement** 1.05% 1.03% 1.04% 1.06% 1.06%
========== ========== ========== ========== ==========
Total expenses** 1.05% 1.03% 1.04% 1.06% 1.06%
========== ========== ========== ========== ==========
Total investment income--net** 6.46% 6.67% 7.01% 7.00% 6.98%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Shareholders .95% .48% .45% .64% 1.53%
========== ========== ========== ========== ==========
Investment income--net, to Common Shareholders 5.51% 6.19% 6.56% 6.36% 5.45%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Preferred Shares
Dividends to Preferred Shareholders 2.01% 1.03% .97% 1.34% 3.14%
========== ========== ========== ========== ==========
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights (concluded) MuniYield Florida Fund
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Supplemental Data
Net assets applicable to Common Shares,
end of year (in thousands) $ 202,042 $ 206,895 $ 202,890 $ 202,919 $ 200,729
========== ========== ========== ========== ==========
Preferred Shares outstanding, end of year
(in thousands) $ 110,000 $ 95,000 $ 95,000 $ 95,000 $ 95,000
========== ========== ========== ========== ==========
Portfolio turnover 41.96% 36.11% 40.45% 39.54% 86.85%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,837 $ 3,178 $ 3,136 $ 3,136 $ 3,113
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Shares Outstanding
Series A--Investment income--net $ 507 $ 254 $ 247 $ 337 $ 771
========== ========== ========== ========== ==========
Series B--Investment income--net $ 487 $ 263 $ 242 $ 333 $ 801
========== ========== ========== ========== ==========
Series C++++--Investment income--net $ 110 -- -- -- --
========== ========== ========== ========== ==========
* Total investment returns based on market value, which can be significantly greater or lesser
than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Shareholders.
++ Amount is less than $(.01) per share.
++++ Series C was issued on August 31, 2005.
+++ Based on average shares outstanding.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights MuniYield Michigan Insured Fund II, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of year $ 15.21 $ 15.21 $ 14.91 $ 14.97 $ 13.83
---------- ---------- ---------- ---------- ----------
Investment income--net .99+++ 1.00+++ 1.02+++ 1.00 1.00
Realized and unrealized gain (loss)--net (.58) --*** .24 (.07) 1.15
Less dividends to Preferred Stock shareholders from
investment income--net (.15) (.07) (.07) (.10) (.22)
---------- ---------- ---------- ---------- ----------
Total from investment operations .26 .93 1.19 .83 1.93
---------- ---------- ---------- ---------- ----------
Less dividends to Common Stock shareholders from
investment income--net (.91) (.93) (.89) (.89) (.79)
Offering and underwriting costs resulting from the
issuance of Preferred Stock (.02) -- -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 14.54 $ 15.21 $ 15.21 $ 14.91 $ 14.97
========== ========== ========== ========== ==========
Market price per share, end of year $ 14.41 $ 14.54 $ 13.75 $ 13.45 $ 13.85
========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 1.73% 6.78% 8.82% 6.36% 14.91%
========== ========== ========== ========== ==========
Based on market price per share 5.47% 12.91% 9.06% 3.70% 25.13%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Common Stock
Total expenses, net of reimbursement** 1.07% 1.05% 1.01% 1.12% 1.15%
========== ========== ========== ========== ==========
Total expenses** 1.07% 1.07% 1.02% 1.12% 1.15%
========== ========== ========== ========== ==========
Total investment income--net** 6.57% 6.61% 6.73% 6.91% 6.96%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Stock shareholders .97% .47% .47% .66% 1.53%
========== ========== ========== ========== ==========
Investment income--net, to Common Stock shareholders 5.60% 6.14% 6.26% 6.25% 5.43%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Preferred Stock
Dividends to Preferred Stock shareholders 1.96% .96% .97% 1.36% 3.19%
========== ========== ========== ========== ==========
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights (concluded) MuniYield Michigan Insured Fund II, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 175,264 $ 183,224 $ 183,237 $ 179,607 $ 118,508
========== ========== ========== ========== ==========
Preferred Stock outstanding, end of year
(in thousands) $ 99,000 $ 89,000 $ 89,000 $ 89,000 $ 55,000
========== ========== ========== ========== ==========
Portfolio turnover 23.18% 39.26% 30.84% 41.77% 72.58%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,770 $ 3,059 $ 3,059 $ 3,018 $ 3,155
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 488 $ 236 $ 243 $ 343 $ 798
========== ========== ========== ========== ==========
Series B++--Investment income--net $ 494 $ 247 $ 245 $ 136 --
========== ========== ========== ========== ==========
Series C++++--Investment income--net $ 14 -- -- -- --
========== ========== ========== ========== ==========
* Total investment returns based on market value, which can be significantly greater or lesser
than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
*** Amount is less than $(.01) per share.
++ Series B was issued on May 31, 2002.
++++ Series C was issued on October 19, 2005.
+++ Based on average shares outstanding.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights MuniYield New York Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Per Share Operating Performance
Net asset value, beginning of year $ 14.81 $ 14.81 $ 14.83 $ 15.01 $ 13.76
---------- ---------- ---------- ---------- ----------
Investment income--net .94+++ .91+++ .97+++ .94 .96
Realized and unrealized gain (loss)--net (.50) (.01) (.09) (.19) 1.26
Dividends and distributions to Preferred Stock
shareholders:
Investment income--net (.13) (.06) (.07) (.10) (.20)
Realized gain--net -- -- -- --++ --
---------- ---------- ---------- ---------- ----------
Total from investment operations .31 .84 .81 .65 2.02
---------- ---------- ---------- ---------- ----------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.84) (.84) (.83) (.83) (.77)
Realized gain--net -- -- -- --++ --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions to Common Stock
shareholders (.84) (.84) (.83) (.83) (.77)
---------- ---------- ---------- ---------- ----------
Offering and underwriting costs resulting from the
issuance of Preferred Stock (.02) -- -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 14.26 $ 14.81 $ 14.81 $ 14.83 $ 15.01
========== ========== ========== ========== ==========
Market price per share, end of year $ 13.17 $ 13.20 $ 13.25 $ 13.36 $ 14.02
========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 2.53% 6.53% 6.19% 4.97% 15.57%
========== ========== ========== ========== ==========
Based on market price per share 6.24% 6.13% 5.45% 1.24% 21.26%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Common Stock
Total expenses, net of reimbursement** .96% .94% .94% .96% .97%
========== ========== ========== ========== ==========
Total expenses** .96% .95% .94% .96% .97%
========== ========== ========== ========== ==========
Total investment income--net** 6.37% 6.23% 6.49% 6.37% 6.66%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Stock shareholders .87% .42% .50% .66% 1.38%
========== ========== ========== ========== ==========
Investment income--net, to Common Stock
shareholders 5.50% 5.81% 5.99% 5.71% 5.28%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Preferred Stock
Dividends to Preferred Stock shareholders 1.91% .95% 1.13% 1.49% 3.07%
========== ========== ========== ========== ==========
ANNUAL REPORTS OCTOBER 31, 2005
Financial Highlights (concluded) MuniYield New York Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2005 2004 2003 2002 2001
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 562,474 $ 584,248 $ 584,025 $ 584,793 $ 591,942
========== ========== ========== ========== ==========
Preferred Stock outstanding, end of year
(in thousands) $ 304,000 $ 259,000 $ 259,000 $ 259,000 $ 259,000
========== ========== ========== ========== ==========
Portfolio turnover 46.41% 19.91% 51.89% 87.56% 83.08%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,850 $ 3,256 $ 3,255 $ 3,258 $ 3,285
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 493 $ 254 $ 249 $ 334 $ 791
========== ========== ========== ========== ==========
Series B--Investment income--net $ 448 $ 203 $ 232 $ 305 $ 731
========== ========== ========== ========== ==========
Series C--Investment income--net $ 469 $ 240 $ 214 $ 356 $ 774
========== ========== ========== ========== ==========
Series D--Investment income--net $ 464 $ 231 $ 454 $ 503 $ 715
========== ========== ========== ========== ==========
Series E--Investment income--net $ 496 $ 251 $ 255 $ 356 $ 812
========== ========== ========== ========== ==========
Series F++++--Investment income--net $ 65 -- -- -- --
========== ========== ========== ========== ==========
* Total investment returns based on market value, which can be significantly greater or lesser
than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
++ Amount is less than $(.01) per share.
++++ Series F was issued on September 21, 2005.
+++ Based on average shares outstanding.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2005
Notes to Financial Statements
1. Significant Accounting Policies:
MuniYield Arizona Fund, Inc., MuniYield California Fund, Inc., MuniYield
California Insured Fund, Inc., MuniYield Florida Fund, MuniYield Michigan
Insured Fund II, Inc. and MuniYield New York Insured Fund, Inc. (the "Funds"
or individually as the "Fund") are registered under the Investment Company
Act of 1940, as amended, as non-diversified, closed-end management investment
companies. The Funds' financial statements are prepared in conformity with
U.S. generally accepted accounting principles, which may require the use of
management accruals and estimates. Actual results may differ from these
estimates. The Funds determine and make available for publication the net
asset values of their Common Stock/Shares on a daily basis. Common Stock
shares and Common Shares are listed on the New York Stock Exchange under the
symbol MYC for MuniYield California Fund, Inc., MCA for MuniYield California
Insured Fund, Inc., MYF for MuniYield Florida Fund, MYM for MuniYield Michigan
Insured Fund II, Inc. and MYN for MuniYield New York Insured Fund, Inc. Common
Stock is listed on the American Stock Exchange under the symbol MZA for
MuniYield Arizona Fund, Inc. The following is a summary of significant
accounting policies followed by the Funds.
(a) Valuation of investments--Municipal bonds are traded primarily in the over-
the-counter ("OTC") markets and are valued at the last available bid price in
the OTC market or on the basis of values as obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Funds under the general
direction of the Board of Directors/Trustees. Such valuations and procedures
are reviewed periodically by the Board of Directors/Trustees of the Funds.
Financial futures contracts and options thereon, which are traded on exchanges,
are valued at their closing prices as of the close of such exchanges. Options
written or purchased are valued at the last sale price in the case of exchange-
traded options. In the case of options traded in the OTC market, valuation
is the last asked price (options written) or the last bid price (options
purchased). Swap agreements are valued by quoted fair valuations received daily
by the Funds' pricing service. Short-term investments with a remaining maturity
of 60 days or less are valued at amortized cost, which approximates market
value, under which method the investment is valued at cost and any premium or
discount is amortized on a straight line basis to maturity. Investments in
open-end investment companies are valued at their net asset value each business
day. Securities and other assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Board of Directors/Trustees of the Funds.
(b) Derivative financial instruments--Each Fund may engage in various
portfolio investment strategies both to increase the return of the Fund and to
hedge, or protect, their exposure to interest rate movements and movements in
the securities markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
* Financial futures contracts--Each Fund may purchase or sell financial futures
contracts and options on such futures contracts. Futures contracts are
contracts for delayed delivery of securities at a specific future date and at a
specific price or yield. Upon entering into a contract, the Fund deposits and
maintains as collateral such initial margin as required by the exchange on
which the transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
variation margin and are recorded by the Fund as unrealized gains or losses.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed.
* Options--Each Fund may purchase and write call and put options. When the
Fund writes an option, an amount equal to the premium received by the Fund is
reflected as an asset and an equivalent liability. The amount of the liability
is subsequently marked-to-market to reflect the current market value of the
option written. When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or deducted from)
the basis of the security acquired or deducted from (or added to) the proceeds
of the security sold. When an option expires (or the Fund enters into a
closing transaction), the Fund realizes a gain or loss on the option to the
extent of the premiums received or paid (or gain or loss to the extent the
cost of the closing transaction exceeds the premium paid or received).
ANNUAL REPORTS OCTOBER 31, 2005
Notes to Financial Statements (continued)
Written and purchased options are non-income producing investments.
* Forward interest rate swaps--Each Fund may enter into forward interest rate
swaps. In a forward interest rate swap, the Fund and the counterparty agree to
make periodic net payments on a specified notional contract amount, commencing
on a specified future effective date, unless terminated earlier. When the
agreement is closed, the Fund records a realized gain or loss in an amount
equal to the value of the agreement.
(c) Income taxes--It is each Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
(d) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Funds amortize all
premiums and discounts on debt securities.
(e) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
(f) Offering costs--Direct expenses relating to the public offering of the
Fund's Preferred Stock/Shares were charged to capital at the time of issuance
of the shares.
(g) Reclassification for MuniYield Arizona Fund, Inc.--U.S. generally accepted
accounting principles require that certain components of net assets be
adjusted to reflect permanent differences between financial and tax reporting.
Accordingly, during the current year, $3,303 has been reclassified between
undistributed net investment income and accumulated net realized capital gains
on investments as a result of permanent differences attributable to the
reclassification of distributions of taxable income. This reclassification has
no effect on net assets or net asset values per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
Each Fund has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services,
Inc. ("PSI"), an indirect, wholly-owned subsidiary of Merrill Lynch & Co.,
Inc. ("ML & Co."), which is the limited partner.
FAM is responsible for the management of each Fund's portfolio and provides
the necessary personnel, facilities, equipment and certain other services
necessary to the operations of the Fund. For such services, each Fund pays a
monthly fee at an annual rate of .50% of the Fund's average weekly net assets,
including proceeds from the issuance of Preferred Stock/Shares. For the year
ended October 31, 2005, the Investment Adviser agreed to reimburse its
management fee by the amount of management fees each Fund pays to FAM
indirectly through its investment described below:
Investment Reimbursement
MuniYield Arizona CMA Arizona Municipal
Fund, Inc. Money Fund $ 3,447
MuniYield California CMA California Municipal
Fund, Inc. Money Fund $ 8,629
MuniYield California CMA California Municipal
Insured Fund, Inc. Money Fund $ 5,890
MuniYield Florida Merrill Lynch Institutional
Fund Tax-Exempt Fund $ 5,400
MuniYield Michigan CMA Michigan Municipal
Insured Fund II, Inc. Money Fund $11,630
MuniYield New York CMA New York Municipal
Insured Fund, Inc. Money Fund $ 3,165
For the year ended October 31, 2005, Merrill Lynch, Pierce, Fenner, & Smith
Incorporated ("MLPF&S"), an affiliate of FAM, received underwriting fees in
connection with the issuance of the Fund's Preferred Stock/Shares described
below:
Underwriting
Fees
MuniYield Arizona Fund, Inc. $100,000
MuniYield California Fund, Inc. $350,000
MuniYield California Insured Fund, Inc. $450,000
MuniYield Florida Fund $150,000
MuniYield Michigan Insured Fund II, Inc. $100,000
MuniYield New York Insured Fund, Inc. $450,000
ANNUAL REPORTS OCTOBER 31, 2005
Notes to Financial Statements (continued)
For the year ended October 31, 2005, the Funds reimbursed FAM for
certain accounting services. The reimbursements were as follows:
Reimbursement
MuniYield Arizona Fund, Inc. $ 2,845
MuniYield California Fund, Inc. $11,476
MuniYield California Insured Fund, Inc. $18,489
MuniYield Florida Fund $ 7,514
MuniYield Michigan Insured Fund II, Inc. $ 6,783
MuniYield New York Insured Fund, Inc. $19,880
Certain officers and/or directors/trustees of the Funds are officers
and/or directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for
the year ended October 31, 2005 were as follows:
Total Total
Purchases Sales
MuniYield Arizona Fund, Inc. $ 38,080,442 $ 27,249,371
MuniYield California Fund, Inc. $281,101,597 $246,498,573
MuniYield California Insured
Fund, Inc. $353,574,108 $309,775,592
MuniYield Florida Fund $143,351,932 $124,225,536
MuniYield Michigan Insured
Fund II, Inc. $ 77,026,643 $ 61,257,484
MuniYield New York Insured
Fund, Inc. $433,725,205 $385,158,090
4. Stock/Share Transactions:
MuniYield Arizona Fund, Inc., MuniYield California Fund, Inc., MuniYield
California Insured Fund, Inc., MuniYield Michigan Insured Fund II, Inc. and
MuniYield New York Insured Fund, Inc. are authorized to issue 200,000,000
shares of stock, including Preferred Stock, par value $.10 per share, all of
which were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of stock without
approval of holders of Common Stock.
MuniYield Florida Fund is authorized to issue an unlimited number of common
shares of beneficial interest, including Preferred Shares, par value $.10 per
share, all of which were initially classified as Common Shares. The Board of
Trustees is authorized, however, to reclassify any unissued shares of
beneficial interest without approval of holders of Common Shares.
Common Stock/Shares
MuniYield Arizona Fund, Inc.
Shares issued and outstanding during the years ended October 31, 2005 and
October 31, 2004 increased by 23,152 and 14,166, respectively, as a result
of dividend reinvestment.
MuniYield California Fund, Inc.
Shares issued and outstanding during the years ended October 31, 2005 and
October 31, 2004 remained constant.
MuniYield California Insured Fund, Inc.
Shares issued and outstanding during the years ended October 31, 2005 and
October 31, 2004 remained constant.
MuniYield Florida Fund
Shares issued and outstanding during the years ended October 31, 2005 and
October 31, 2004 remained constant.
MuniYield Michigan Insured Fund II, Inc.
Shares issued and outstanding during the years ended October 31, 2005 and
October 2004 increased by 7,539 and remained constant respectively, as a
result of dividend reinvestment.
MuniYield New York Insured Fund, Inc.
Shares issued and outstanding during the years ended October 31, 2005 and
October 31, 2004 remained constant.
Preferred Stock/Shares
Auction Market Preferred Stock are redeemable Preferred Stock/Shares of the
Funds, with a liquidation preference of $25,000 per share plus accrued and
unpaid dividends that entitle their holders to receive cash dividends at an
annual rate that may vary for the successive dividend periods.
ANNUAL REPORTS OCTOBER 31, 2005
Notes to Financial Statements (continued)
The yields in effect at October 31, 2005 were as follows:
MuniYield
MuniYield MuniYield California
Arizona California Insured
Fund, Inc. Fund, Inc. Fund, Inc.
Series A 2.338% 2.40% 2.03%
Series B 2.30% 2.349% 2.25%
Series C 2.436% 2.25% 2.45%
Series D -- 2.45% 2.15%
Series E -- -- 2.35%
Series F -- -- 2.50%
MuniYield MuniYield
MuniYield Michigan New York
Florida Insured II Insured
Fund Fund, Inc. Fund, Inc.
Series A 2.40% 2.50% 2.45%
Series B 2.70% 2.50% 2.14%
Series C 2.57% 2.56% 2.18%
Series D -- -- 2.18%
Series E -- -- 2.40%
Series F -- -- 2.70%
MuniYield Arizona Insured Fund, Inc.
Shares issued and outstanding during the year ended October 31, 2005 increased
by 400 shares from the issuance of an additional series of Preferred Stock.
Shares issued and outstanding during the year ended October 31, 2004 remained
constant.
MuniYield California Fund, Inc.
Shares issued and outstanding during the year ended October 31, 2005 increased
by 1,400 shares from the issuance of an additional series of Preferred Stock.
Shares issued and outstanding during the year ended October 31, 2004 remained
constant.
MuniYield California Insured Fund, Inc.
Shares issued and outstanding during the year ended October 31, 2005 increased
by 1,800 shares from the issuance of an additional series of Preferred Stock.
Shares issued and outstanding during the year ended October 31, 2004 remained
constant.
MuniYield Florida Fund
Shares issued and outstanding during the year ended October 31, 2005 increased
by 600 shares from the issuance of an additional series of Preferred Shares.
Shares issued and outstanding during the year ended October 31, 2004 remained
constant.
MuniYield Michigan Insured Fund II, Inc.
Shares issued and outstanding during the year ended October 31, 2005 increased
by 400 shares from the issuance of an additional series of Preferred Stock.
Shares issued and outstanding during the year ended October 31, 2004 remained
constant.
MuniYield New York Insured Fund, Inc.
Shares issued and outstanding during the year ended October 31, 2005 increased
by 1,800 shares from the issuance of an additional series of Preferred Stock.
Shares issued and outstanding for the year ended October 31, 2004 remained
constant.
The Funds pay commissions to certain broker-dealers at the end of each auction
at an annual rate ranging from .25% to .375%, calculated on the proceeds of
each auction. For the year ended October 31, 2005, MLPF&S earned commissions
as follows:
Commissions
MuniYield Arizona Fund, Inc. $ 32,098
MuniYield California Fund, Inc. $149,583
MuniYield California Insured Fund, Inc. $199,107
MuniYield Florida Fund $140,564
MuniYield Michigan Insured Fund II, Inc. $ 96,811
MuniYield New York Insured Fund, Inc. $251,284
5. Distributions to Shareholders:
MuniYield Arizona Fund, Inc.
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of $.077000 per share on November 29, 2005 to shareholders of record on
November 15, 2005.
The tax character of distributions paid during the fiscal years ended October
31, 2005 and October 31, 2004 was as follows:
10/31/2005 10/31/2004
Distributions paid from:
Tax-exempt income $ 4,746,990 $ 4,374,684
Ordinary income 3,303 --
Net long-term capital
gain 101,400 --
--------------- ---------------
Total distributions $ 4,851,693 $ 4,374,684
=============== ===============
ANNUAL REPORTS OCTOBER 31, 2005
Notes to Financial Statements (continued)
As of October 31, 2005, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 801,394
Undistributed long-term capital gains--net 607,980
---------------
Total undistributed earnings--net 1,409,374
Capital loss carryforward --
Unrealized gains--net 3,579,319*
---------------
Total accumulated earnings--net $ 4,988,693
===============
* The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales and the tax deferral of losses on straddles.
MuniYield California Fund, Inc.
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of $.063000 per share on November 29, 2005 to shareholders of record
on November 15, 2005.
The tax character of distributions paid during the fiscal years ended October
31, 2005 and October 31, 2004 was as follows:
10/31/2005 10/31/2004
Distributions paid from:
Tax-exempt income $ 21,097,891 $ 22,123,236
--------------- ---------------
Total distributions $ 21,097,891 $ 22,123,236
=============== ===============
As of October 31, 2005, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 1,144,504
Undistributed long-term capital gains--net --
---------------
Total undistributed earnings--net 1,144,504
Capital loss carryforward (3,505,291)*
Unrealized gains--net 14,486,005**
---------------
Total accumulated earnings--net $ 12,125,218
===============
* On October 31, 2005, the Fund had a net capital loss carryforward
of $3,505,291, of which $3,151,445 expires in 2008 and $353,846
expires in 2011. This amount will be available to offset like amounts
of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles and the difference
between book and tax amortization methods for premiums and
discounts on fixed income securities.
MuniYield California Insured Fund, Inc.
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of $.073000 per share on November 29, 2005 to shareholders of record
on November 15, 2005.
The tax character of distributions paid during the fiscal years ended October
31, 2005 and October 31, 2004 was as follows:
10/31/2005 10/31/2004
Distributions paid from:
Tax-exempt income $ 34,467,987 $ 32,299,596
--------------- ---------------
Total distributions $ 34,467,987 $ 32,299,596
=============== ===============
As of October 31, 2005, the components of accumulated earnings on a tax
basis were as follows:
Undistributed tax-exempt income--net $ 4,883,041
Undistributed long-term capital gains--net --
---------------
Total undistributed earnings--net 4,883,041
Capital loss carryforward (13,381,827)*
Unrealized gains--net 19,899,712**
---------------
Total accumulated earnings--net $ 11,400,926
===============
* On October 31, 2005, the Fund had a net capital loss carryforward
of $13,381,827, of which $72,467 expires in 2007, $5,722,655
expires in 2008, $9,668 expires in 2009, $4,901,089 expires in
2011 and $2,675,948 expires in 2012. This amount will be available
to offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on
straddles and the difference between book and tax amortization
methods for premiums and discounts on fixed income securities.
MuniYield Florida Fund
The Fund paid a tax-exempt income dividend to holders of Common Shares in
the amount of $.077000 per share on November 29, 2005 to shareholders of
record on November 15, 2005.
The tax character of distributions paid during the fiscal years ended October
31, 2005 and October 31, 2004 was as follows:
10/31/2005 10/31/2004
Distributions paid from:
Tax-exempt income $ 14,482,973 $ 13,501,925
--------------- ---------------
Total distributions $ 14,482,973 $ 13,501,925
=============== ===============
ANNUAL REPORTS OCTOBER 31, 2005
Notes to Financial Statements (concluded)
As of October 31, 2005, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 2,055,100
Undistributed long-term capital gains--net --
---------------
Total undistributed earnings--net 2,055,100
Capital loss carryforward (9,417,859)*
Unrealized gains--net 13,607,103**
---------------
Total accumulated earnings--net $ 6,244,344
===============
* On October 31, 2005, the Fund had a net capital loss carryforward
of $9,417,859, of which $906,731 expires in 2007, $7,036,191
expires in 2008 and $1,474,937 expires in 2012. This amount will
be available to offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles and the difference
between book and tax amortization methods for premiums and
discounts on fixed income securities.
MuniYield Michigan Insured Fund II, Inc.
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of $.075000 per share on November 29, 2005 to shareholders of record
on November 15, 2005.
The tax character of distributions paid during the fiscal years ended October
31, 2005 and October 31, 2004 was as follows:
10/31/2005 10/31/2004
Distributions paid from:
Tax-exempt income $ 12,665,595 $ 12,004,705
--------------- ---------------
Total distributions $ 12,665,595 $ 12,004,705
=============== ===============
As of October 31, 2005, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 1,474,432
Undistributed long-term capital gains--net --
---------------
Total undistributed earnings--net 1,474,432
Capital loss carryforward (5,180,885)*
Unrealized gains--net 13,850,852**
---------------
Total accumulated earnings--net $ 10,144,399
===============
* On October 31, 2005, the Fund had a net capital loss carryforward
of $5,180,885, of which $2,841,781 expires in 2008, $1,050,253
expires in 2010 and $1,288,851 expires in 2012. This amount will
be available to offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles and the difference
between book and tax amortization methods for premiums and
discounts on fixed income securities.
MuniYield New York Insured Fund, Inc.
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of $.070000 per share on November 29, 2005 to shareholders of record
on November 15, 2005.
The tax character of distributions paid during the fiscal years ended October
31, 2005 and October 31, 2004 was as follows:
10/31/2005 10/31/2004
Distributions paid from:
Tax-exempt income $ 38,166,975 $ 35,459,826
--------------- ---------------
Total distributions $ 38,166,975 $ 35,459,826
=============== ===============
As of October 31, 2005, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 6,040,406
Undistributed long-term capital gains--net --
---------------
Total undistributed earnings--net 6,040,406
Capital loss carryforward (27,642,246)*
Unrealized gains--net 23,057,785**
---------------
Total accumulated earnings--net $ 1,455,945
===============
* On October 31, 2005, the Fund had a net capital loss carryforward
of $27,642,246, of which $8,051,889 expires in 2008, $3,007,157
expires in 2010 and $16,583,200 expires in 2012. This amount will
be available to offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles and the difference
between book and tax amortization methods for premiums and
discounts on fixed income securities.
ANNUAL REPORTS OCTOBER 31, 2005
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors/Trustees of
MuniYield Arizona Fund, Inc., MuniYield California Fund, Inc.,
MuniYield California Insured Fund, Inc., MuniYield Florida Fund,
MuniYield Michigan Insured Fund II, Inc. and MuniYield New York
Insured Fund, Inc.:
We have audited the accompanying statements of net assets, including the
schedules of investments, of MuniYield Arizona Fund, Inc., MuniYield
California Fund, Inc., MuniYield California Insured Fund, Inc., MuniYield
Florida Fund, MuniYield Michigan Insured Fund II, Inc. and MuniYield New York
Insured Fund, Inc. (the "Funds"), as of October 31, 2005, and the related
statements of operations for the year then ended, the statements of changes
in net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Funds are not required to have, nor were we engaged to
perform, audits of their internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Funds'
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. Our procedures
included confirmation of securities owned as of October 31, 2005 by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the respective financial
position of MuniYield Arizona Fund, Inc., MuniYield California Fund, Inc.,
MuniYield California Insured Fund, Inc., MuniYield Florida Fund, MuniYield
Michigan Insured Fund II, Inc. and MuniYield New York Insured Fund, Inc. as of
October 31, 2005, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then
ended, and their financial highlights for each of the five years in the period
then ended, in conformity with U.S. generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 19, 2005
Fund Certification (unaudited)
In May 2005, MuniYield Arizona Fund, Inc., MuniYield California Fund, Inc.,
MuniYield California Insured Fund, Inc., MuniYield Florida Fund, MuniYield
Michigan Insured Fund II, Inc. and MuniYield New York Insured Fund, Inc. filed
their Chief Executive Officer Certification for the prior year with the New
York Stock Exchange pursuant to Section 303A.12(a) of the New York Stock
Exchange Corporate Governance Listing Standards.
The Funds' Chief Executive Officer and Chief Financial Officer Certifications
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 were filed with the
Funds' Form N-CSR and are available on the Securities and Exchange
Commission's Web site at http://www.sec.gov.
ANNUAL REPORTS OCTOBER 31, 2005
Automatic Dividend Reinvestment Plan
How the Plan Works--The Funds offer a Dividend Reinvestment Plan (the "Plan")
under which income and capital gains dividends paid by each Fund are
automatically reinvested in additional shares of Common Stock of each Fund.
The Plan is administered on behalf of the shareholders by The Bank of New York
for MuniYield Arizona Fund, Inc., MuniYield California Fund, Inc., MuniYield
Florida Fund, MuniYield Michigan Insured Fund II, Inc. and MuniYield New York
Insured Fund, Inc. and EquiServe Trust Company N.A. for MuniYield California
Insured Fund, Inc. (individually, the "Plan Agent" or together, the "Plan
Agents"). Under the Plan, whenever the Funds declare a dividend, participants
in the Plan will receive the equivalent in shares of Common Stock of each
Fund. The Plan Agents will acquire the shares for the participant's account
either (i) through receipt of additional unissued but authorized shares of
each Fund ("newly issued shares") or (ii) by purchase of outstanding shares of
Common Stock on the open market on the New York Stock Exchange or elsewhere.
If, on the dividend payment date, each Fund's net asset value per share is
equal to or less than the market price per share plus estimated brokerage
commissions (a condition often referred to as a "market premium"), the Plan
Agents will invest the dividend amount in newly issued shares. If the Funds'
net asset value per share is greater than the market price per share (a
condition often referred to as a "market discount"), the Plan Agents will
invest the dividend amount by purchasing on the open market additional shares.
If the Plan Agents are unable to invest the full dividend amount in open
market purchases, or if the market discount shifts to a market premium during
the purchase period, the Plan Agents will invest any uninvested portion in
newly issued shares. The shares acquired are credited to each shareholder's
account. The amount credited is determined by dividing the dollar amount of
the dividend by either (i) when the shares are newly issued, the net asset
value per share on the date the shares are issued or (ii) when shares are
purchased in the open market, the average purchase price per share.
Participation in the Plan--Participation in the Plan is automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
shares of Common Stock of the Funds unless the shareholder specifically elects
not to participate in the Plan. Shareholders who elect not to participate will
receive all dividend distributions in cash. Shareholders who do not wish to
participate in the Plan, must advise their Plan Agent in writing (at the
address set forth below) that they elect not to participate in the Plan.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time without penalty by writing to the Plan Agent.
Benefits of the Plan--The Plan provides an easy, convenient way for
shareholders to make additional, regular investments in the Funds. The Plan
promotes a long-term strategy of investing at a lower cost. All shares
acquired pursuant to the Plan receive voting rights. In addition, if the
market price plus commissions of each Fund's shares is above the net asset
value, participants in the Plan will receive shares of the Funds for less than
they could otherwise purchase them and with a cash value greater than the
value of any cash distribution they would have received. However, there may
not be enough shares available in the market to make distributions in shares
at prices below the net asset value. Also, since each Fund does not redeem
shares, the price on resale may be more or less than the net asset value.
Plan Fees--There are no enrollment fees or brokerage fees for participating in
the Plan. The Plan Agents' service fees for handling the reinvestment of
distributions are paid for by the Funds. However, brokerage commissions may be
incurred when the Funds purchase shares on the open market and shareholders
will pay a pro rata share of any such commissions.
Tax Implications--The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income tax that
may be payable (or required to be withheld) on such dividends. Therefore,
income and capital gains may still be realized even though shareholders do not
receive cash. The value of shares acquired pursuant to the Plan will generally
be excluded from gross income to the extent that the cash amount reinvested
would be excluded from gross income. If, when the Funds' shares are trading at
a market premium, the Funds issue shares pursuant to the Plan that have a
greater fair market value than the amount of cash reinvested, it is possible
that all or a portion of the discount from the market value (which may not
exceed 5% of the fair market value of each Fund's shares) could be viewed as a
taxable distribution. If the discount is viewed as a taxable distribution, it
is also possible that the taxable character of this discount would be
allocable to all the shareholders, including shareholders who do not
participate in the Plan. Thus, shareholders who do not participate in the Plan
might be required to report as ordinary income a portion of their
distributions equal to their allocable share of the discount.
Contact Information--All correspondence concerning the Plan, including any
questions about the Plan, should be directed to the Plan Agent at The Bank
of New York, Church Street Station, P.O. Box 11258, New York, NY 10286-1258,
Telephone: 800-432-8224 for MuniYield Arizona Fund, Inc., MuniYield California
Fund, Inc., MuniYield Florida Fund, MuniYield Michigan Insured Fund II, Inc.
and MuniYield New York Insured Fund, Inc. and EquiServe Trust Company N.A.
(c/o Computershare Investors Services), P.O. Box 43010, Providence, RI
02940-3010, Telephone: 800-426-5523 for MuniYield California Insured Fund, Inc.
ANNUAL REPORTS OCTOBER 31, 2005
Disclosure of Investment Advisory Agreement
Activities of and Composition of the Board of Directors
All but one member of each Fund's Board of Directors is an independent
director whose only affiliation with Fund Asset Management, L.P. (the
"Investment Adviser") or other Merrill Lynch affiliates is as a director of
each Fund and certain other funds advised by the Investment Adviser or its
affiliates. The Co-chairmen of the Boards are also independent directors. New
director nominees are chosen as nominees by a Nominating Committee comprised
of independent directors. All independent directors also are members of each
Board's Audit Committee and the independent directors meet in executive
session at each in-person Board meeting. The Board and the Audit Committee
meet in person for at least two days each quarter and conduct other in-person
and telephone meetings throughout the year, some of which are formal board
meetings, and some of which are informational meetings. The independent
counsel to the independent directors attends all in-person Board and Audit
Committee meetings and other meetings at the independent directors' request.
Investment Advisory Agreements--Matters Considered by the Board
Every year, each Board considers approval of each Fund's investment advisory
agreement (the "Investment Advisory Agreement"). Each Board assesses
the nature, scope and quality of the services provided to each Fund by
the personnel of the Investment Adviser and its affiliates, including
administrative services, shareholder services, oversight of fund accounting,
marketing services and assistance in meeting legal and regulatory requirements.
Each Board also receives and assesses information regarding the services
provided to the Fund by certain unaffiliated service providers.
At various times throughout the year, each Board also considers a range of
information in connection with its oversight of the services provided by
the Investment Adviser and its affiliates. Among the matters considered are:
(a) fees (in addition to management fees) paid to the Investment Adviser and
its affiliates by each Fund; (b) Fund operating expenses paid to third
parties; (c) the resources devoted to and compliance reports relating to each
Fund's investment objective, policies and restrictions, and its compliance
with its Code of Ethics and the Investment Adviser's compliance policies and
procedures; and (d) the nature, cost and character of non-investment
management services provided by the Investment Adviser and its affiliates.
Each Board believes that the Investment Adviser is one of the most experienced
global asset management firms and considers the overall services provided by
the Investment Adviser to be of high quality. Each Board also believes that
the Investment Adviser is financially sound and well managed and notes that
the Investment Adviser is affiliated with one of America's largest financial
firms. Each Board works closely with the Investment Adviser in overseeing the
Investment Adviser's efforts to achieve good performance. As part of this
effort, each Board discusses portfolio manager effectiveness and, when
performance is not satisfactory, discusses with the Investment Adviser taking
steps such as changing investment personnel.
Annual Consideration of Approvals by the Board of Directors
In the period prior to the Board meeting to consider renewal of the Investment
Advisory Agreement, each Board requests and receives materials specifically
relating to the Fund's Investment Advisory Agreement. These materials are
prepared separately for each Fund, and include (a) information compiled by
Lipper Inc. ("Lipper") on the fees and expenses and the investment performance
of the Fund as compared to a comparable group of funds as classified by
Lipper; (b) information comparing the Fund's market price with its net asset
value per share; (c) a discussion by the Fund's portfolio management team on
investment strategies used by the Fund during its most recent fiscal year; (d)
information on the profitability to the Investment Adviser and its affiliates
of the Investment Advisory Agreement and other relationships with the Fund;
and (e) information provided by the Investment Adviser concerning services
related to the valuation and pricing of Fund portfolio holdings, allocation of
Fund brokerage fees, the Fund's portfolio turnover statistics, and direct and
indirect benefits to the Investment Adviser and its affiliates from their
relationship with the Fund.
Certain Specific Renewal Data
In connection with the most recent renewal of each Fund's Investment Advisory
Agreement in May 2005, the independent directors' and Board's review included
the following:
Investment Adviser's Services and Fund Performance--Each Board reviewed the
nature, extent and quality of services provided by the Investment Adviser,
including the investment advisory services and the resulting performance of
each Fund. The Boards focused primarily on the Investment Adviser's investment
advisory services and each Fund's investment performance. Each Board compared
Fund performance - both including and excluding the effects of each Fund's
fees and expenses - to the performance of a comparable group of mutual funds,
and the performance of a relevant index or combination of indexes. While each
Board reviews performance data quarterly, consistent with the Investment
Adviser's investment goals, each Board attaches primary importance to
performance over relatively long periods of time, typically three to five
years.
ANNUAL REPORTS OCTOBER 31, 2005
Disclosure of Investment Advisory Agreement (continued)
MuniYield Arizona Fund, Inc.
The Board noted that for the periods ended May 31, 2005, MuniYield Arizona
Fund, Inc.'s performance was in the fifth quintile for the one-year period, the
second quintile for the three-year period, and ranked second out of five for
the five-year period. The Board expressed concern regarding the poor
performance for the one-year period, but noted that long-term performance was
better. The Board noted that the issuance of additional AMPs subsequent to the
end of the fiscal year should improve the Fund's relative performance. The
Board also noted that there were a very limited number of comparable funds. The
Board reviewed the Fund's investment objectives and strategies. The Board
discussed with senior management of the Investment Adviser responsible for
investment operations and the senior management of the Investment Adviser's
municipal investing group the strategies being used to achieve the stated
objectives. Among other things, the Board considered the size, education and
experience of the Investment Adviser's investment staff, its use of technology,
and the Investment Adviser's approach to training and retaining portfolio
managers and other research, advisory and management personnel. The Board
reviewed the Investment Adviser's compensation policies and practices with
respect to the Fund's portfolio manager. The Board considered the experience of
the Fund's portfolio manager and noted that Mr. Kalinoski has over five years
of experience investing in municipal securities.
MuniYield California Fund, Inc. and MuniYield California Insured Fund, Inc.
The Board noted that MuniYield California Fund, Inc.'s performance was in the
fifth quintile for the one- and three-year periods ended May 31, 2005, and in
the second quintile for the five-year period ended May 31, 2005. The Board
noted that MuniYield California Insured Fund, Inc.'s performance ranked fourth
out of five for the one-year period, third out of four for the three-year
period, and first out of three for the five-year period, ended May 31, 2005.
The Board discussed the issue of MuniYield California Fund, Inc.'s and
MuniYield California Insured Fund, Inc.'s declining relative performance with
management of the Investment Adviser and expressed its concern. The Board
noted that the issuance of additional AMPs subsequent to the end of the fiscal
year should improve the relative performance of both Funds. The Board reviewed
each Fund's investment objectives and strategies. The Board discussed with
senior management of the Investment Adviser responsible for investment
operations and the senior management of the Investment Adviser's municipal
investing group the strategies being used to achieve the stated objectives.
Among other things, each Board considered the size, education and experience
of the Investment Adviser's investment staff, its use of technology, and the
Investment Adviser's approach to training and retaining portfolio managers and
other research, advisory and management personnel. The Board reviewed the
Investment Adviser's compensation policies and practices with respect to the
Funds' portfolio manager. The Board also considered the experience of the
Funds' portfolio manager and noted that Mr. O'Connor has over fifteen years of
experience investing in municipal securities.
MuniYield Florida Fund
The Board noted that MuniYield Florida Fund's performance ranked in the third
quartile for the one- and three-year periods, and in the second quartile for
the five-year period, ended May 31, 2005. The Board noted that the issuance of
additional AMPs subsequent to the end of the fiscal year should improve the
Fund's relative performance. The Board reviewed the Fund's investment
objectives and strategies. The Board discussed with senior management of the
Investment Adviser responsible for investment operations and the senior
management of the Investment Adviser's municipal investing group the
strategies being used to achieve the stated objectives. Among other things,
the Board considered the size, education and experience of the Investment
Adviser's investment staff, its use of technology, and the Investment
Adviser's approach to training and retaining portfolio managers and other
research, advisory and management personnel. The Board reviewed the Investment
Adviser's compensation policies and practices with respect to the Fund's
portfolio manager. The Board also considered the experience of the Fund's
portfolio manager and noted that Mr. Sneeden has over ten years of experience
investing in municipal securities.
ANNUAL REPORTS OCTOBER 31, 2005
Disclosure of Investment Advisory Agreement (continued)
MuniYield Michigan Insured Fund II, Inc.
The Board noted that MuniYield Michigan Insured Fund II, Inc.'s performance
was in the fifth quintile for the one- and three-year periods ended May 31,
2005, and ranked fifth out of five for the five-year period ended May 31,
2005. The Board discussed the Fund's poor relative performance with management
of the Investment Adviser and expressed its concern. The Board also noted that
the comparative information provided compared the Fund's performance to closed-
end leveraged funds investing in municipal debt of another state. The Board
also noted that the issuance of additional AMPs subsequent to the end of the
fiscal year should improve the the Fund's relative performance. The Board
reviewed the Fund's investment objectives and strategies. The Board discussed
with senior management of the Investment Adviser responsible for investment
operations and the senior management of the Investment Adviser's municipal
investing group the strategies being used to achieve the stated objectives.
Among other things, the Board considered the size, education and experience of
the Investment Adviser's investment staff, its use of technology, and the
Investment Adviser's approach to training and retaining portfolio managers and
other research, advisory and management personnel. The Board reviewed the
Investment Adviser's compensation policies and practices with respect to the
Fund's portfolio manager. The Board also considered the experience of the
Fund's portfolio manager and noted that Mr. Stuebe, has over fifteen years of
experience investing in municipal securities.
MuniYield New York Insured Fund, Inc.
The Board noted that for the period ended May 31, 2005, MuniYield New York
Insured Fund, Inc. ranked third out of four for the one-year period, and
second out of three for the three- and five-year periods. The Board was
concerned that despite a change in portfolio managers, the Fund's performance
continued to be poor. The Board also noted that the issuance of additional
AMPs subsequent to the end of the fiscal year should improve the the Fund's
relative performance. The Board reviewed the Fund's investment objectives and
strategies. The Board discussed with senior management of the Investment
Adviser responsible for investment operations and the senior management of the
Investment Adviser's municipal investing group the strategies being used to
achieve the stated objectives. Among other things, the Board considered the
size, education and experience of the Investment Adviser's investment staff,
its use of technology, and the Investment Adviser's approach to training and
retaining portfolio managers and other research, advisory and management
personnel. The Board reviewed the Investment Adviser's compensation policies
and practices with respect to the Fund's portfolio manager. The Board also
considered the experience of the Fund's portfolio manager and noted that Mr.
Browse has over five years of experience investing in municipal securities.
Management Fees and Other Expenses--Each Board reviews the Fund's contractual
management fee rate and actual management fee rate as a percentage of total
assets at common asset levels - the actual rate includes advisory and
administrative service fees and the effects of any fee waivers - compared to
the other funds in its Lipper category. It also compares the Fund's total
expenses to those of other comparable funds. The Investment Adviser noted that
it did not have clients other than investment companies with similar
investment mandates. With respect to each of MuniYield Arizona Fund, Inc.,
MuniYield California Fund, Inc., and MuniYield Florida Fund, the Boards noted
that the contractual and actual management fee rates and total expenses were
lower than the median fees and expenses charged by comparable funds as
determined by Lipper. With respect to MuniYield California Insured Fund, Inc.,
the Board noted that the contractual management fee rate was equal to the
median fee charged by comparable funds, as determined by Lipper, and the
actual management fee rate and total expenses were higher than the median fees
and expenses charged by such comparable funds. The Board noted that two of the
four funds deemed comparable to MuniYield California Insured Fund, Inc. had
fee waivers in effect. With respect to each of MuniYield Michigan Insured Fund
II, Inc. and MuniYield New York Insured Fund, Inc., the Board noted that the
contractual management fee rate and total expenses were lower than the median
fees and expenses charged by comparable funds, as determined by Lipper, and
the actual management fee rate was slightly higher than the median fees
charged by such comparable funds. The Board noted that a number of the funds
considered comparable to MuniYield New York Insured Fund, Inc. were currently
benefiting from fee waivers. Each Board has concluded that the Fund's
management fee and fee rate and overall expense ratio are reasonable compared
to those of other comparable funds.
ANNUAL REPORTS OCTOBER 31, 2005
Disclosure of Investment Advisory Agreement (concluded)
Profitability--Each Board considers the cost of the services provided to
the Fund by the Investment Adviser, and the Investment Adviser's and its
affiliates' profits relating to the management and distribution of the Fund
and the MLIM/FAM-advised funds. As part of its analysis, each Board reviewed
the Investment Adviser's methodology in allocating its costs to the management
of the Fund and concluded that there was a reasonable basis for the allocation.
The Boards also considered federal court decisions discussing an investment
adviser's profitability and profitability levels considered to be reasonable
in those decisions. Each Board believes the Investment Adviser's profits
are reasonable in relation to the nature and quality of services provided.
Economies of Scale--Each Board considered the extent to which economies of
scale might be realized as the assets of a Fund increase and whether there
should be changes in the management fee rate or structure in order to enable
the Fund to participate in these economies of scale. Each Board considered
economies of scale to the extent applicable to each Fund's closed-end
structure and determined that each Fund currently appropriately benefits
from any economies of scale and no changes were currently necessary.
Conclusion
After the independent directors deliberated in executive session, each entire
Board, including all of the independent directors, approved the renewal of the
existing Investment Advisory Agreement, concluding that the advisory fee was
reasonable in relation to the services provided and that a contract renewal
was in the best interests of the shareholders.
Dividend Policy
The Funds' dividend policy is to distribute all or a portion of their net
investment income to their shareholders on a monthly basis. In order to
provide shareholders with a more stable level of dividend distributions, the
Funds may at times pay out less than the entire amount of net investment
income earned in any particular month and may at times in any particular month
pay out such accumulated but undistributed income in addition to net
investment income earned in that month. As a result, the dividends paid by the
Funds for any particular month may be more or less than the amount of net
investment income earned by the Funds during such month. The Funds' current
accumulated but undistributed net investment income, if any, is disclosed in
the Statement of Net Assets, which comprises part of the financial information
included in these reports.
ANNUAL REPORTS OCTOBER 31, 2005
Proxy Results MuniYield California Fund, Inc.
During the six-month period ended October 31, 2005, MuniYield California Fund,
Inc.'s Common Stock shareholders voted on the following proposal. Proposal 3
was approved at a shareholders' meeting on June 27, 2005. A description of the
proposal and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
3. To approve an amendment to Articles Supplementary
or Certificate of Designation. 10,672,757 792,524 913,155
During the six-month period ended October 31, 2005, MuniYield California
Fund, Inc.'s Preferred Stock shareholders (Series A - F) voted on the
following proposal. Proposal 3 was approved at a shareholders' meeting on
June 27, 2005. A description of the proposals and number of shares voted were
as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
3. To approve an amendment to Articles Supplementary
or Certificate of Designation. 5,076 431 62
MuniYield California Insured Fund, Inc.
During the six-month period ended October 31, 2005, MuniYield California
Insured Fund, Inc.'s Common Stock shareholders voted on the following proposal.
Proposal 3 was approved at a shareholders' meeting on June 27, 2005. A
description of the proposal and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
3. To approve an amendment to Articles Supplementary
or Certificate of Designation. 19,830,052 1,695,481 1,341,148
During the six-month period ended October 31, 2005, MuniYield California
Insured Fund, Inc.'s Preferred Stock shareholders (Series A - C) voted on the
following proposals. Proposal 3 was approved at a shareholders' meeting on
June 27, 2005. A description of the proposals and number of shares voted were
as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
3. To approve an amendment to Articles Supplementary
or Certificate of Designation. 8,854 262 67
MuniYield New York Insured Fund, Inc.
During the six-month period ended October 31, 2005, MuniYield New York Insured
Fund, Inc.'s Common Stock shareholders voted on the following proposal.
Proposal 3 was approved at a shareholders' meeting on June 27, 2005. A
description of the proposal and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
3. To approve an amendment to Articles Supplementary
or Certificate of Designation. 19,966,970 1,474,802 1,469,836
During the six-month period ended October 31, 2005, MuniYield New York Insured
Fund, Inc.'s Preferred Stock shareholders (Series A - C) voted on the following
proposals. Proposal 3 was approved at a shareholders' meeting on June 27, 2005.
A description of the proposals and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
3. To approve an amendment to Articles Supplementary
or Certificate of Designation. 9,537 619 192
ANNUAL REPORTS OCTOBER 31, 2005
Important Tax Information
All of the net investment income distributions paid by MuniYield Arizona Fund,
Inc., MuniYield California Fund, Inc., MuniYield California Insured Fund, Inc.,
MuniYield Florida Fund, MuniYield Michigan Insured Fund II, Inc. and MuniYield
New York Insured Fund, Inc. during the taxable year ended October 31, 2005
qualify as tax-exempt interest dividends for federal income tax purposes.
Additionally, the following table summarizes the taxable per share
distributions paid by MuniYield Arizona Fund, Inc. during the year:
Payable Ordinary Long-Term
Date Income Capital Gains
Common Stock Shareholders 12/29/2004 $0.000691 $0.021239
Preferred Stock Shareholders:
Series A 12/16/2004 $0.17 $5.16
Series B 12/14/2004 $0.18 $5.41
Availability of Quarterly Schedule of Investments
The Funds file their complete schedules of portfolio holdings with the
Securities and Exchange Commission ("SEC") for the first and third quarters
of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the
SEC's Web site at http://www.sec.gov. The Funds' Forms N-Q may also be
reviewed and copied at the SEC's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained
by calling 1-800-SEC-0330.
Electronic Delivery
The Funds offer electronic delivery of communications to their shareholders.
In order to receive this service, you must register your account and provide
us with e-mail information. To sign up for this service, simply access this
Web site at http://www.icsdelivery.com/live and follow the instructions. When
you visit this site, you will obtain a personal identification number (PIN).
You will need this PIN should you wish to update your e-mail address, choose
to discontinue this service and/or make any other changes to the service.
This service is not available for certain retirement accounts at this time.
ANNUAL REPORTS OCTOBER 31, 2005
Officers and Directors or Trustees
Number of
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director or Director or
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Interested Director or Trustee
Robert C. Doll, Jr.* President 2005 to President of the MLIM/FAM-advised funds since 131 Funds None
P.O. Box 9011 and present 2005; President of MLIM and FAM since 2001; 177 Portfolios
Princeton, Director Co-Head (Americas Region) thereof from 2000
NJ 08543-9011 or Trustee to 2001 and Senior Vice President from 1999
Age: 51 to 2001; President and Director of Princeton
Services, Inc. ("Princeton Services") since 2001;
President of Princeton Administrators, L.P.
("Princeton Administrators") since 2001; Chief
Investment Officer of OppenheimerFunds, Inc.
in 1999 and Executive Vice President thereof
from 1991 to 1999.
* Mr. Doll is a director, trustee or member of an advisory board of certain other
investment companies for which MLIM or FAM acts as investment adviser. Mr. Doll
is an "interested person," as described in the Investment Company Act, of the
Fund based on his current positions with MLIM, FAM, Princeton Services and
Princeton Administrators. Directors or Trustees serve until their resignation,
removal or death, or until December 31 of the year in which they turn 72. As Fund
President, Mr. Doll serves at the pleasure of the Board of Directors or Trustees.
Independent Directors or Trustees*
James H. Bodurtha** Director 1995 to Director, The China Business Group, Inc. since 39 Funds None
P.O. Box 9095 or Trustee present 1996 and Executive Vice President thereof from 59 Portfolios
Princeton, 1996 to 2003; Chairman of the Board, Berkshire
NJ 08543-9095 Holding Corporation since 1980; Partner, Squire,
Age: 61 Sanders & Dempsey from 1980 to 1993.
Kenneth A. Froot Director 2005 to Professor, Harvard University since 1992; 39 Funds None
P.O. Box 9095 or Trustee present Professor, Massachusetts Institute of 59 Portfolios
Princeton, Technology from 1986 to 1992.
NJ 08543-9095
Age: 48
Joe Grills** Director 2002 to Member of the Committee of Investment of 39 Funds Kimco Realty
P.O. Box 9095 or Trustee present Employee Benefit Assets of the Association of 59 Portfolios Corporation
Princeton, Financial Professionals ("CIEBA") since 1986;
NJ 08543-9095 Member of CIEBA's Executive Committee since
Age: 70 1988 and its Chairman from 1991 to 1992;
Assistant Treasurer of International Business
Machines Corporation ("IBM") and Chief
Investment Officer of IBM Retirement Funds from
1986 to 1993; Member of the Investment Advisory
Committee of the State of New York Common
Retirement Fund since 1989; Member of the
Investment Advisory Committee of the Howard
Hughes Medical Institute from 1997 to 2000;
Director, Duke University Management Company
from 1992 to 2004, Vice Chairman thereof from
1998 to 2004, and Director Emeritus thereof since
2004; Director, LaSalle Street Fund from 1995 to
2001; Director, Kimco Realty Corporation since 1997;
Member of the Investment Advisory Committee of
the Virginia Retirement System since 1998, Vice
Chairman thereof from 2002 to 2005, and
Chairman thereof since 2005; Director, Montpelier
Foundation since 1998 and its Vice Chairman since
2000; Member of the Investment Committee of the
Woodberry Forest School since 2000; Member of
the Investment Committee of the National Trust
for Historic Preservation since 2000.
ANNUAL REPORTS OCTOBER 31, 2005
Officers and Directors or Trustees (continued)
Number of
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director or Director or
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Independent Directors or Trustees* (concluded)
Herbert I. London Director 1992 (MYC, John M. Olin Professor of Humanities, New 39 Funds None
P.O. Box 9095 or Trustee MCA, MYF, York University since 1993 and Professor 59 Portfolios
Princeton, MYM & thereof since 1980; President, Hudson Institute
NJ 08543-9095 MYN) and since 1997 and Trustee thereof since 1980;
Age: 66 1993 (MZA) Dean, Gallatin Division of New York University
to present from 1976 to 1993; Distinguished Fellow, Herman
Kahn Chair, Hudson Institute from 1984 to 1985;
Director, Damon Corp. from 1991 to 1995;
Overseer, Center for Naval Analyses from 1983
to 1993.
Roberta Cooper Ramo Director 2001 to Shareholder, Modrall, Sperling, Roehl, 39 Funds None
P.O. Box 9095 or Trustee present Harris & Sisk, P.A. since 1993; President, 59 Portfolios
Princeton, American Bar Association from 1995 to 1996
NJ 08543-9095 and Member of the Board of Governors thereof
Age: 63 from 1994 to 1997; Shareholder, Poole, Kelly
and Ramo, Attorneys at Law P.C. from 1977 to
1993; Director of ECMC Group (service provider
to students, schools and lenders) since 2001;
Director, United New Mexico Bank (now Wells
Fargo) from 1983 to 1988; Director, First
National Bank of New Mexico (now Wells Fargo)
from 1975 to 1976; Vice President, American Law
Institute since 2004.
Robert S. Salomon, Jr. Director 2002 to Principal of STI Management (investment 39 Funds None
P.O. Box 9095 or Trustee present adviser) since 1994; Chairman and CEO of 59 Portfolios
Princeton, Salomon Brothers Asset Management Inc.
NJ 08543-9095 from 1992 to 1995; Chairman of Salomon
Age: 68 Brothers Equity Mutual Funds from 1992 to
1995; regular columnist with Forbes Magazine
from 1992 to 2002; Director of Stock Research
and U.S. Equity Strategist at Salomon Brothers
Inc. from 1975 to 1991; Trustee, Commonfund
from 1980 to 2001.
Stephen B. Swensrud Director 2002 to Chairman of Fernwood Advisors, Inc. 40 Funds None
P.O. Box 9095 or Trustee present (investment adviser) since 1996; Principal, 60 Portfolios
Princeton, Fernwood Associates (financial consultants)
NJ 08543-9095 since 1975; Chairman of R.P.P. Corporation
Age: 72 (manufacturing company) since 1978; Director
of International Mobile Communications,
Inc. (telecommunications) since 1998.
* Directors or Trustees serve until their resignation, removal or death, or until December 31
of the year in which they turn 72.
** Chairman of the Board and the Audit Committee.
ANNUAL REPORTS OCTOBER 31, 2005
Officers and Directors or Trustees (concluded)
Position(s) Length of
Held with Time
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years
Fund Officers*
Donald C. Burke Vice 1993 to First Vice President of MLIM and FAM since 1997 and Treasurer thereof since 1999;
P.O. Box 9011 President present Senior Vice President and Treasurer of Princeton Services since 1999 and Director
Princeton, and and since 2004; Vice President of FAM Distributors, Inc. ("FAMD") since 1999; Vice
NJ 08543-9011 Treasurer 1999 to President of MLIM and FAM from 1990 to 1997; Director of Taxation of MLIM from
Age: 45 present 1990 to 2001; Vice President, Treasurer and Secretary of the IQ Funds since 2004.
Kenneth A. Jacob Senior 2002 to Managing Director of MLIM since 2000; Director (Municipal Tax-Exempt Fund
P.O. Box 9011 Vice present Management) of MLIMfrom 1997 to 2000.
Princeton, President
NJ 08543-9011
Age: 54
John M. Loffredo Senior 2002 to Managing Director of MLIM since 2000; Director (Municipal Tax-Exempt Fund
P.O. Box 9011 Vice present Management) of MLIMfrom 1997 to 2000.
Princeton, President
NJ 08543-9011
Age: 41
Timothy T. Browse Vice 2004 (MYN) Vice President (Municipal Tax-Exempt Fund Management) of MLIM since 2004; Vice
P.O. Box 9011 President to present President, portfolio manager and team leader of the Municipal Investments Team
Princeton, with Lord Abbett & Co. from 2000 to 2003; Vice President and portfolio manager
NJ 08543-9011 in the municipal fund management group of Eaton Vance Management, Inc. from 1992
Age: 46 to 2000.
Michael A. Kalinoski Vice 1999 (MZA) Vice President (Municipal Tax-Exempt Fund Management) of MLIM since 1999.
P.O. Box 9011 President to present
Princeton,
NJ 08543-9011
Age: 35
Walter C. O'Connor Vice 1995 (MYC) Managing Director (Municipal Tax-Exempt Fund Management) of MLIM since 2003;
P.O. Box 9011 President and 2002 Director of MLM from 2000 to 2003; Vice President of MLIM from 1993 to 2000.
Princeton, (MCA) to
NJ 08543-9011 present
Age: 44
Robert D. Sneeden Vice 1998 (MYF) Vice President (Municipal Tax-Exempt Fund Management) of MLIM since 1998;
P.O. Box 9011 President to present Assistant Vice President of MLIM from 1994 to 1998.
Princeton,
NJ 08543-9011
Age: 52
Fred K. Stuebe Vice 1995 (MYM) Director (Municipal Tax-Exempt Fund Management) of MLIM since 2000; Vice
P.O. Box 9011 President to present President of MLIM from 1994 to 2000.
Princeton,
NJ 08543-9011
Age: 55
Jeffrey Hiller Chief 2004 to Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President
P.O. Box 9011 Compliance present and Chief Compliance Officer of MLIM (Americas Region) since 2004; Chief
Princeton, Officer Compliance Officer of the IQ Funds since 2004; Global Director of Compliance at
NJ 08543-9011 Morgan Stanley Investment Management from 2002 to 2004; Managing Director and
Age: 54 Global Director of Compliance at Citigroup Asset Management from 2000 to 2002;
Chief Compliance Officer at Soros Fund Management in 2000; Chief Compliance
Officer at Prudential Financial from 1995 to 2000; Senior Counsel in the
Commission's Division of Enforcement in Washington, D.C. from 1990 to 1995.
Alice A. Pellegrino Secretary 2004 to Director (Legal Advisory) of MLIM since 2002; Vice President of MLIM from 1999
P.O. Box 9011 present to 2002; Attorney associated with MLIM since 1997; Secretary of MLIM, FAM, FAMD
Princeton, and Princeton Services since 2004.
NJ 08543-9011
Age: 45
* Officers of the Funds serve at the pleasure of the Board of Directors or Trustees.
ANNUAL REPORTS OCTOBER 31, 2005
Investment Objectives
AMEX Symbol MuniYield Arizona Fund, Inc. seeks to provide shareholders with as
MZA high a level of current income exempt from federal and Arizona
income taxes as is consistent with its investment policies and
prudent investment management by investing primarily in a
portfolio of long-term, investment grade municipal obligations the
interest on which, in the opinion of bond counsel to the issuer,
is exempt from federal and Arizona income taxes.
NYSE Symbol MuniYield California Fund, Inc. seeks to provide shareholders with
MYC as high a level of current income exempt from federal and
California income taxes as is consistent with its investment
policies and prudent investment management by investing primarily
in a portfolio of long-term municipal obligations the interest on
which, in the opinion of bond counsel to the issuer, is exempt
from federal and California income taxes.
NYSE Symbol MuniYield California Insured Fund, Inc. seeks to provide
MCA shareholders with as high a level of current income exempt from
federal and California income taxes as is consistent with its
investment policies and prudent investment management by investing
primarily in a portfolio of long-term, investment grade municipal
obligations the interest on which, in the opinion of bond counsel
to the issuer, is exempt from federal and California income taxes.
NYSE Symbol MuniYield Florida Fund seeks to provide shareholders with as high
MYF a level of current income exempt from federal income taxes as is
consistent with its investment policies and prudent investment
management by investing primarily in a portfolio of long-term
municipal obligations the interest on which, in the opinion of
bond counsel to the issuer, is exempt from federal income taxes
and which enables shares of the Fund to be exempt from Florida
intangible personal property taxes.
NYSE Symbol MuniYield Michigan Insured Fund II, Inc. seeks to provide
MYM shareholders with as high a level of current income exempt from
federal and Michigan income taxes as is consistent with its
investment policies and prudent investment management by investing
primarily in a portfolio of long-term municipal obligations the
interest on which, in the opinion of bond counsel to the issuer,
is exempt from federal and Michigan income taxes.
NYSE Symbol MuniYield New York Insured Fund, Inc. seeks to provide shareholders
MYN with as high a level of current income exempt from federal income
tax and New York State and New York City personal income taxes as
is consistent with its investment policies and prudent investment
management by investing primarily in a portfolio of long-term
municipal obligations the interest on which, in the opinion of
bond counsel to the issuer, is exempt from federal income tax and
New York State and New York City personal income taxes.
Transfer Agents and Custodians
MuniYield Arizona Fund, Inc.,
MuniYield California Fund, Inc.,
MuniYield Florida Fund,
MuniYield Michigan Insured Fund II, Inc. and
MuniYield New York Insured Fund, Inc.
Transfer Agents
Common Stock/Shares:
The Bank of New York
101 Barclay Street - 11 East
New York, NY 10286
Preferred Stock/Shares:
The Bank of New York
101 Barclay Street - 7 West
New York, NY 10286
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
MuniYield California Insured Fund, Inc.
Transfer Agents
Common Stock:
Equiserve Trust Company N.A.
(c/o Computershare
Investor Services)
P.O. Box 43010
Providence, RI 02940-3010
1-800-426-5523
Preferred Stock:
The Bank of New York
101 Barclay Street - 7 West
New York, NY 10286
Custodian
State Street Bank and
Trust Company
P.O. Box 351
Boston, MA 02101
ANNUAL REPORTS OCTOBER 31, 2005
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as
of the end of the period covered by this report, that applies to
the registrant's principal executive officer, principal financial
officer and principal accounting officer, or persons performing
similar functions. A copy of the code of ethics is available
without charge upon request by calling toll-free 1-800-MER-FUND
(1-800-637-3863).
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors has determined that (i) the registrant has the following
audit committee financial experts serving on its audit committee
and (ii) each audit committee financial expert is independent: (1)
Joe Grills, (2) Robert S. Salomon, Jr., and (3) Stephen B.
Swensrud.
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending October 31, 2005 - $25,000
Fiscal Year Ending October 31, 2004 - $24,000
(b) Audit-Related Fees -
Fiscal Year Ending October 31, 2005 - $19,900
Fiscal Year Ending October 31, 2004 - $3,000
The nature of the services include assurance and related services
reasonably related to the performance of the audit of financial
statements not included in Audit Fees, and services rendered in
connection with the registration and issuance of a new series of
AMPS.
(c) Tax Fees - Fiscal Year Ending October 31, 2005 - $5,700
Fiscal Year Ending October 31, 2004 - $5,610
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ending October 31, 2005 - $0
Fiscal Year Ending October 31, 2004 - $0
(e)(1) The registrant's audit committee (the "Committee") has
adopted policies and procedures with regard to the pre-approval of
services. Audit, audit-related and tax compliance services
provided to the registrant on an annual basis require specific pre-
approval by the Committee. The Committee also must approve other
non-audit services provided to the registrant and those non-audit
services provided to the registrant's affiliated service providers
that relate directly to the operations and the financial reporting
of the registrant. Certain of these non-audit services that the
Committee believes are a) consistent with the SEC's auditor
independence rules and b) routine and recurring services that will
not impair the independence of the independent accountants may be
approved by the Committee without consideration on a specific case-
by-case basis ("general pre-approval"). However, such services
will only be deemed pre-approved provided that any individual
project does not exceed $5,000 attributable to the registrant or
$50,000 for all of the registrants the Committee oversees. Any
proposed services exceeding the pre-approved cost levels will
require specific pre-approval by the Committee, as will any other
services not subject to general pre-approval (e.g., unanticipated
but permissible services). The Committee is informed of each
service approved subject to general pre-approval at the next
regularly scheduled in-person board meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending October 31, 2005 - $6,277,749
Fiscal Year Ending October 31, 2004 - $13,270,096
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling,
controlled by, or under common control with the investment adviser
that provides ongoing services to the registrant that were not pre-
approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal
accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,227,000, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals
are members of the registrant's separately-designated standing
audit committee established in accordance with Section 3(a)(58)(A)
of the Exchange Act (15 U.S.C. 78c(a)(58)(A)):
James H. Bodurtha
Kenneth A. Froot (as of June 1, 2005)
Joe Grills
Herbert I. London
Roberta Cooper Ramo
Robert S. Salomon, Jr.
Stephen B. Swensrud
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies -
Proxy Voting Policies and Procedures
Each Fund's Board of Directors/Trustees has delegated to Merrill
Lynch Investment Managers, L.P. and/or Fund Asset Management, L.P.
(the "Investment Adviser") authority to vote all proxies relating
to the Fund's portfolio securities. The Investment Adviser has
adopted policies and procedures ("Proxy Voting Procedures") with
respect to the voting of proxies related to the portfolio
securities held in the account of one or more of its clients,
including a Fund. Pursuant to these Proxy Voting Procedures, the
Investment Adviser's primary objective when voting proxies is to
make proxy voting decisions solely in the best interests of each
Fund and its shareholders, and to act in a manner that the
Investment Adviser believes is most likely to enhance the economic
value of the securities held by the Fund. The Proxy Voting
Procedures are designed to ensure that the Investment Adviser
considers the interests of its clients, including the Funds, and
not the interests of the Investment Adviser, when voting proxies
and that real (or perceived) material conflicts that may arise
between the Investment Adviser's interest and those of the
Investment Adviser's clients are properly addressed and resolved.
In order to implement the Proxy Voting Procedures, the Investment
Adviser has formed a Proxy Voting Committee (the "Committee"). The
Committee is comprised of the Investment Adviser's Chief Investment
Officer (the "CIO"), one or more other senior investment
professionals appointed by the CIO, portfolio managers and
investment analysts appointed by the CIO and any other personnel
the CIO deems appropriate. The Committee will also include two non-
voting representatives from the Investment Adviser's Legal
department appointed by the Investment Adviser's General Counsel.
The Committee's membership shall be limited to full-time employees
of the Investment Adviser. No person with any investment banking,
trading, retail brokerage or research responsibilities for the
Investment Adviser's affiliates may serve as a member of the
Committee or participate in its decision making (except to the
extent such person is asked by the Committee to present information
to the Committee, on the same basis as other interested
knowledgeable parties not affiliated with the Investment Adviser
might be asked to do so). The Committee determines how to vote the
proxies of all clients, including a Fund, that have delegated proxy
voting authority to the Investment Adviser and seeks to ensure that
all votes are consistent with the best interests of those clients
and are free from unwarranted and inappropriate influences. The
Committee establishes general proxy voting policies for the
Investment Adviser and is responsible for determining how those
policies are applied to specific proxy votes, in light of each
issuer's unique structure, management, strategic options and, in
certain circumstances, probable economic and other anticipated
consequences of alternate actions. In so doing, the Committee may
determine to vote a particular proxy in a manner contrary to its
generally stated policies. In addition, the Committee will be
responsible for ensuring that all reporting and recordkeeping
requirements related to proxy voting are fulfilled.
The Committee may determine that the subject matter of a recurring
proxy issue is not suitable for general voting policies and
requires a case-by-case determination. In such cases, the
Committee may elect not to adopt a specific voting policy
applicable to that issue. The Investment Adviser believes that
certain proxy voting issues require investment analysis - such as
approval of mergers and other significant corporate transactions -
akin to investment decisions, and are, therefore, not suitable for
general guidelines. The Committee may elect to adopt a common
position for the Investment Adviser on certain proxy votes that are
akin to investment decisions, or determine to permit the portfolio
manager to make individual decisions on how best to maximize
economic value for a Fund (similar to normal buy/sell investment
decisions made by such portfolio managers). While it is expected
that the Investment Adviser will generally seek to vote proxies
over which the Investment Adviser exercises voting authority in a
uniform manner for all the Investment Adviser's clients, the
Committee, in conjunction with a Fund's portfolio manager, may
determine that the Fund's specific circumstances require that its
proxies be voted differently.
To assist the Investment Adviser in voting proxies, the Committee
has retained Institutional Shareholder Services ("ISS"). ISS is an
independent adviser that specializes in providing a variety of
fiduciary-level proxy-related services to institutional investment
managers, plan sponsors, custodians, consultants, and other
institutional investors. The services provided to the Investment
Adviser by ISS include in-depth research, voting recommendations
(although the Investment Adviser is not obligated to follow such
recommendations), vote execution, and recordkeeping. ISS will also
assist the Fund in fulfilling its reporting and recordkeeping
obligations under the Investment Company Act.
The Investment Adviser's Proxy Voting Procedures also address
special circumstances that can arise in connection with proxy
voting. For instance, under the Proxy Voting Procedures, the
Investment Adviser generally will not seek to vote proxies related
to portfolio securities that are on loan, although it may do so
under certain circumstances. In addition, the Investment Adviser
will vote proxies related to securities of foreign issuers only on
a best efforts basis and may elect not to vote at all in certain
countries where the Committee determines that the costs associated
with voting generally outweigh the benefits. The Committee may at
any time override these general policies if it determines that such
action is in the best interests of a Fund.
From time to time, the Investment Adviser may be required to vote proxies in
respect of an issuer where an affiliate of the Investment Adviser (each, an
"Affiliate"), or a money management or other client of the Investment Adviser
(each, a "Client") is involved. The Proxy Voting Procedures and the Investment
Adviser's adherence to those procedures are designed to address such conflicts
of interest. The Committee intends to strictly adhere to the Proxy Voting
Procedures in all proxy matters, including matters involving Affiliates and
Clients. If, however, an issue representing a non-routine matter that is
material to an Affiliate or a widely known Client is involved such that the
Committee does not reasonably believe it is able to follow its guidelines (or
if the particular proxy matter is not addressed by the guidelines) and vote
impartially, the Committee may, in its discretion for the purposes of ensuring
that an independent determination is reached, retain an independent fiduciary
to advise the Committee on how to vote or to cast votes on behalf of the
Investment Adviser's clients.
In the event that the Committee determines not to retain an
independent fiduciary, or it does not follow the advice of such an
independent fiduciary, the powers of the Committee shall pass to a
subcommittee, appointed by the CIO (with advice from the Secretary
of the Committee), consisting solely of Committee members selected
by the CIO. The CIO shall appoint to the subcommittee, where
appropriate, only persons whose job responsibilities do not include
contact with the Client and whose job evaluations would not be
affected by the Investment Adviser's relationship with the Client
(or failure to retain such relationship). The subcommittee shall
determine whether and how to vote all proxies on behalf of the
Investment Adviser's clients or, if the proxy matter is, in their
judgment, akin to an investment decision, to defer to the
applicable portfolio managers, provided that, if the subcommittee
determines to alter the Investment Adviser's normal voting
guidelines or, on matters where the Investment Adviser's policy is
case-by-case, does not follow the voting recommendation of any
proxy voting service or other independent fiduciary that may be
retained to provide research or advice to the Investment Adviser on
that matter, no proxies relating to the Client may be voted unless
the Secretary, or in the Secretary's absence, the Assistant
Secretary of the Committee concurs that the subcommittee's
determination is consistent with the Investment Adviser's fiduciary
duties
In addition to the general principles outlined above, the
Investment Adviser has adopted voting guidelines with respect to
certain recurring proxy issues that are not expected to involve
unusual circumstances. These policies are guidelines only, and the
Investment Adviser may elect to vote differently from the
recommendation set forth in a voting guideline if the Committee
determines that it is in a Fund's best interest to do so. In
addition, the guidelines may be reviewed at any time upon the
request of a Committee member and may be amended or deleted upon
the vote of a majority of Committee members present at a Committee
meeting at which there is a quorum.
The Investment Adviser has adopted specific voting guidelines with
respect to the following proxy issues:
* Proposals related to the composition of the Board of Directors of issuers
other than investment companies. As a general matter, the Committee
believes that a company's Board of Directors (rather than shareholders) is
most likely to have access to important, nonpublic information regarding a
company's business and prospects, and is therefore best-positioned to set
corporate policy and oversee management. The Committee, therefore,
believes that the foundation of good corporate governance is the election
of qualified, independent corporate directors who are likely to diligently
represent the interests of shareholders and oversee management of the
corporation in a manner that will seek to maximize shareholder value over
time. In individual cases, the Committee may look at a nominee's history
of representing shareholder interests as a director of other companies or
other factors, to the extent the Committee deems relevant.
* Proposals related to the selection of an issuer's independent auditors. As
a general matter, the Committee believes that corporate auditors have a
responsibility to represent the interests of shareholders and provide an
independent view on the propriety of financial reporting decisions of
corporate management. While the Committee will generally defer to a
corporation's choice of auditor, in individual cases, the Committee may
look at an auditors' history of representing shareholder interests as
auditor of other companies, to the extent the Committee deems relevant.
* Proposals related to management compensation and employee benefits. As a
general matter, the Committee favors disclosure of an issuer's compensation
and benefit policies and opposes excessive compensation, but believes that
compensation matters are normally best determined by an issuer's board of
directors, rather than shareholders. Proposals to "micro-manage" an
issuer's compensation practices or to set arbitrary restrictions on
compensation or benefits will, therefore, generally not be supported.
* Proposals related to requests, principally from management, for approval of
amendments that would alter an issuer's capital structure. As a general
matter, the Committee will support requests that enhance the rights of
common shareholders and oppose requests that appear to be unreasonably
dilutive.
* Proposals related to requests for approval of amendments to an issuer's
charter or by-laws. As a general matter, the Committee opposes poison pill
provisions.
* Routine proposals related to requests regarding the formalities of
corporate meetings.
* Proposals related to proxy issues associated solely with holdings of
investment company shares. As with other types of companies, the Committee
believes that a fund's Board of Directors (rather than its shareholders) is
best-positioned to set fund policy and oversee management. However, the
Committee opposes granting Boards of Directors authority over certain
matters, such as changes to a fund's investment objective, that the
Investment Company Act envisions will be approved directly by shareholders.
* Proposals related to limiting corporate conduct in some manner that relates
to the shareholder's environmental or social concerns. The Committee
generally believes that annual shareholder meetings are inappropriate
forums for discussion of larger social issues, and opposes shareholder
resolutions "micromanaging" corporate conduct or requesting release of
information that would not help a shareholder evaluate an investment in the
corporation as an economic matter. While the Committee is generally
supportive of proposals to require corporate disclosure of matters that
seem relevant and material to the economic interests of shareholders, the
Committee is generally not supportive of proposals to require disclosure of
corporate matters for other purposes.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
as of October 31, 2005.
(a)(1) Mr. Michael A. Kalinoski is primarily responsible for the
day-to-day management of the registrant's portfolio
("Portfolio Manager"). Mr. Kalinoski has been a portfolio
manager and Vice President of MLIM since 1999 and has 12
years experience investing in Municipal Bonds as a
portfolio manager on behalf of registered investment
companies. He has been a Vice President and portfolio
manager of Fund since 1999.
(a)(2) As of October 31, 2005:
(iii) Number of Other Accounts and
(ii) Number of Other Accounts Managed Assets for Which Advisory Fee is
and Assets by Account Type Performance-Based
Other Other
(i) Name of Registered Other Pooled Registered Other Pooled
Portfolio Investment Investment Other Investment Investment Other
Manager Companies Vehicles Accounts Companies Vehicles Accounts
Michael A.
Kalinoski 3 0 0 0 0 0
$ 1,688,420,530 $ 0 $ 0 $ 0 $ 0 $ 0
(iv) Potential Material Conflicts of Interest
Real, potential or apparent conflicts of interest may arise when a
portfolio manager has day-to-day portfolio management responsibilities with
respect to more than one fund or account, including the following:
Certain investments may be appropriate for the Fund and also for
other clients advised by the Investment. Adviser and its affiliates, including
other client accounts managed by the Fund's portfolio management team.
Investment decisions for the Fund and other clients are made with a view to
achieving their respective investment objectives and after consideration of
such factors as their current holdings, availability of cash for investment and
the size of their investments generally. Frequently, a particular security may
be bought or sold for only one client or in different amounts and at different
times for more than one but less than all clients. Likewise, because clients of
the Investment Adviser and its affiliates may have differing investment
strategies, a particular security may be bought for one or more clients when
one or more other clients are selling the security. The investment results for
the Fund may differ from the results achieved by other clients of the
Investment Adviser and its affiliates and results among clients may differ. In
addition, purchases or sales of the same security may be made for two or more
clients on the same day. In such event, such transactions will be allocated
among the clients in a manner believed by the Investment Adviser and its
affiliates to be equitable to each. The Investment Adviser will not determine
allocations based on whether it receives a performance based fee from the
client. In some cases, the allocation procedure could have an adverse effect on
the price or amount of the securities purchased or sold by the Fund. Purchase
and sale orders for the Fund may be combined with those of other clients of the
Investment Adviser and its affiliates in the interest of achieving the most
favorable net results to the Fund.
To the extent that the Fund's portfolio management team has
responsibilities for managing accounts in addition to the Fund, a portfolio
manager will need to divide his time and attention among relevant accounts.
In some cases, a real, potential or apparent conflict may also arise
where (i) the Investment Adviser may have an incentive, such as a performance
based fee, in managing one account and not with respect to other accounts it
manages or (ii) where a member of the Fund's portfolio management team owns an
interest in one fund or account he or she manages and not another.
(a)(3) As of October 31, 2005:
Portfolio Manager Compensation
The Portfolio Manager Compensation Program of MLIM and its
affiliates, including the Investment Adviser, is critical to MLIM's ability to
attract and retain the most talented asset management professionals. This
program ensures that compensation is aligned with maximizing investment returns
and it provides a competitive pay opportunity for competitive performance.
Compensation Program
The elements of total compensation for MLIM and its affiliates
portfolio managers are a fixed base salary, annual performance-based cash and
stock compensation (cash and stock bonus) and other benefits. MLIM has balanced
these components of pay to provide portfolio managers with a powerful incentive
to achieve consistently superior investment performance. By design, portfolio
manager compensation levels fluctuate - both up and down - with the relative
investment performance of the portfolios that they manage.
Base Salary
Under the MLIM approach, like that of many asset management firms,
base salaries represent a relatively small portion of a portfolio manager's
total compensation. This approach serves to enhance the motivational value of
the performance-based (and therefore variable) compensation elements of the
compensation program.
Performance-Based Compensation
MLIM believes that the best interests of investors are served by
recruiting and retaining exceptional asset management talent and managing their
compensation within a consistent and disciplined framework that emphasizes pay
for performance in the context of an intensely competitive market for talent.
To that end, MLIM and its affiliates portfolio manager incentive compensation
is based on a formulaic compensation program. MLIM's formulaic portfolio
manager compensation program includes: investment performance relative to a
subset of general closed-end, single-state municipal debt funds over 1-, 3- and
5-year performance periods and a measure of operational efficiency. Portfolio
managers are compensated based on the pre-tax performance of the products they
manage. If a portfolio manager's tenure is less than 5 years, performance
periods will reflect time in position. Portfolio managers are compensated based
on products they manage. A discretionary element of portfolio manager
compensation may include consideration of: financial results, expense control,
profit margins, strategic planning and implementation, quality of client
service, market share, corporate reputation, capital allocation, compliance and
risk control, leadership, workforce diversity, supervision, technology and
innovation. MLIM and its affiliates also consider the extent to which
individuals exemplify and foster ML & Co.'s principles of client focus, respect
for the individual, teamwork, responsible citizenship and integrity. All
factors are considered collectively by MLIM management.
Cash Bonus
Performance-based compensation is distributed to portfolio managers
in a combination of cash and stock. Typically, the cash bonus, when combined
with base salary, represents more than 60% of total compensation for portfolio
managers.
Stock Bonus
A portion of the dollar value of the total annual performance-based
bonus is paid in restricted shares of ML & Co. stock. Paying a portion of
annual bonuses in stock puts compensation earned by a portfolio manager for a
given year "at risk" based on the company's ability to sustain and improve its
performance over future periods. The ultimate value of stock bonuses is
dependent on future ML & Co. stock price performance. As such, the stock bonus
aligns each portfolio manager's financial interests with those of the ML & Co.
shareholders and encourages a balance between short-term goals and long-term
strategic objectives. Management strongly believes that providing a significant
portion of competitive performance-based compensation in stock is in the best
interests of investors and shareholders. This approach ensures that portfolio
managers participate as shareholders in both the "downside risk" and "upside
opportunity" of the company's performance. Portfolio managers therefore have a
direct incentive to protect ML & Co.'s reputation for integrity.
Other Compensation Programs
Portfolio managers who meet relative investment performance and
financial management objectives during a performance year are eligible to
participate in a deferred cash program. Awards under this program are in the
form of deferred cash that may be benchmarked to a menu of MLIM mutual funds
(including their own fund) during a five-year vesting period. The deferred cash
program aligns the interests of participating portfolio managers with the
investment results of MLIM products and promotes continuity of successful
portfolio management teams.
Other Benefits
Portfolio managers are also eligible to participate in broad-based
plans offered generally to employees of ML & Co. and its affiliates, including
broad-based retirement, 401(k), health, and other employee benefit plans.
(a)(4) Beneficial Ownership of Securities. As of October 31,
2005, Mr. Kalinoski does not beneficially own any stock
issued by the Fund.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not
Applicable
Item 11 - Controls and Procedures
11(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others
particularly during the period in which this report is being
prepared. The registrant's certifying officers have determined
that the registrant's disclosure controls and procedures are
effective based on our evaluation of these controls and procedures
as of a date within 90 days prior to the filing date of this
report.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal half-
year of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
MuniYield Arizona Fund, Inc.
By: /s/ Robert C. Doll, Jr.
---------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
MuniYield Arizona Fund, Inc.
Date: December 16, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: /s/ Robert C. Doll, Jr.
---------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
MuniYield Arizona Fund, Inc.
Date: December 16, 2005
By: /s/ Donald C. Burke
---------------------------
Donald C. Burke,
Chief Financial Officer of
MuniYield Arizona Fund, Inc.
Date: December 16, 2005