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: 811-07080

 

Name of Fund:   BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer,
BlackRock MuniYield Michigan Quality Fund, Inc., 55 East 52nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 07/31/2021

Date of reporting period: 07/31/2021


Item 1 – Report to Stockholders

(a) The Report to Shareholders is attached herewith.


 

LOGO   JULY 31, 2021

 

  

2021 Annual Report

 

 

BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

BlackRock MuniYield Pennsylvania Quality Fund (MPA)

 

 

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


The Markets in Review

Dear Shareholder,

The 12-month reporting period as of July 31, 2021 was a remarkable period of adaptation and recovery, as the global economy dealt with the implications of the coronavirus (or “COVID-19”) pandemic. The United States, along with most of the world, began the reporting period emerging from a severe recession, prompted by pandemic-related restrictions that disrupted many aspects of daily life. However, easing restrictions and robust government intervention led to a strong rebound, and the economy grew at a significant pace for the reporting period, eventually regaining the output lost from the pandemic.

Equity prices rose with the broader economy, as strong fiscal and monetary support, as well as the development of vaccines, made investors increasingly optimistic about the economic outlook. The implementation of mass vaccination campaigns and passage of two additional fiscal stimulus packages further boosted stocks, and many equity indices neared or surpassed all-time highs late in the reporting period. In the United States, returns of small-capitalization stocks, which benefited the most from the resumption of in-person activities, outpaced large-capitalization stocks. International equities also gained, as both developed and emerging markets rebounded substantially.

The 10-year U.S. Treasury yield (which is inversely related to bond prices) had fallen sharply prior to the beginning of the reporting period, which meant bonds were priced for extreme risk avoidance and economic disruption. Despite expectations of doom and gloom, the economy expanded rapidly, stoking inflation concerns in early 2021, which led to higher yields and a negative overall return for most U.S. Treasuries. In the corporate bond market, support from the U.S. Federal Reserve (the “Fed”) assuaged credit concerns and led to solid returns for high-yield corporate bonds, although investment-grade corporates declined slightly.

The Fed remained committed to accommodative monetary policy by maintaining near zero interest rates and by reiterating that inflation could exceed its 2% target for a sustained period without triggering a rate increase. In response to rising inflation late in the period, the Fed changed its market guidance, raising the likelihood of less bond purchasing and the possibility of higher rates in 2023.

Looking ahead, we believe that the global expansion will continue to broaden as Europe and other developed market economies gain momentum, although the Delta variant remains a threat, particularly in emerging markets. While we expect inflation to remain elevated in the medium-term as the expansion continues, we believe the recent uptick owes more to temporary supply disruptions than a lasting change in fundamentals. The change in Fed policy also means that moderate inflation is less likely to be followed by interest rate hikes that could threaten the economic expansion.

Overall, we favor a moderately positive stance toward risk, with an overweight in equities. Sectors that are better poised to manage the transition to a lower-carbon world, such as technology and healthcare, are particularly attractive in the long-term. U.S. small-capitalization stocks and European equities are likely to benefit from the continuing vaccine-led restart. We are underweight long-term credit, but inflation-protected U.S. Treasuries, Asian fixed income, and Chinese government bonds offer potential opportunities. We believe that international diversification and a focus on sustainability can help provide portfolio resilience, and the disruption created by the coronavirus appears to be accelerating the shift toward sustainable investments.

In this environment, our view is that investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today’s markets.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of July 31, 2021
     6-Month    12-Month

U.S. large cap equities
(S&P 500® Index)

  19.19%   36.45%

U.S. small cap equities
(Russell 2000® Index)

  7.86   51.97  

International equities
(MSCI Europe, Australasia, Far East Index)

  10.83     30.31  

Emerging market equities
(MSCI Emerging Markets Index)

  (2.76)   20.64  

3-month Treasury bills
(ICE BofA 3-Month U.S. Treasury Bill Index)

  0.02   0.08

U.S. Treasury securities
(ICE BofA 10-Year U.S. Treasury Index)

  (0.59)   (5.12)

U.S. investment grade bonds
(Bloomberg Barclays U.S. Aggregate Bond Index)

  0.21   (0.70)

Tax-exempt municipal bonds
(S&P Municipal Bond Index)

  1.38   3.47

U.S. high yield bonds
(Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index)

  3.66   10.62  
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
 

 

 

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Table of Contents

 

     

Page

 

 

The Markets in Review

     2  

Annual Report:

  

Municipal Market Overview

     4  

The Benefits and Risks of Leveraging

     5  

Derivative Financial Instruments

     5  

Fund Summary

     6  

Financial Statements:

  

Schedules of Investments

     18  

Statements of Assets and Liabilities

     39  

Statements of Operations

     40  

Statements of Changes in Net Assets

     41  

Statements of Cash Flows

     43  

Financial Highlights

     44  

Notes to Financial Statements

     48  

Report of Independent Registered Public Accounting Firm

     59  

Disclosure of Investment Advisory Agreements

     60  

Investment Objectives, Policies and Risks

     64  

Automatic Dividend Reinvestment Plan

     74  

Director and Officer Information

     75  

Additional Information

     79  

Glossary of Terms Used in this Report

     83  

 

 

  3


Municipal Market Overview  For the Reporting Period Ended July 31, 2021

 

Municipal Market Conditions

Municipal bonds posted positive total returns during the period despite rising interest rates as the economy normalized from the pandemic-induced economic shutdown. The asset class benefited from favorable supply and demand dynamics and improved credit fundamentals amid considerable fiscal stimulus and a quicker-than-expected rebound in state and local government revenues. As a result, municipal bonds generated substantial excess returns versus duration-matched U.S. Treasuries, and longer duration and lower credit quality strategies outperformed. Despite broad strength, the market contended with brief periods of volatility surrounding U.S. election uncertainty as well as a temporary valuation-based market correction in late February.

 

Technical support was strong throughout the period as robust demand outpaced supply. During the 12 months ended July 31, 2021, municipal bond funds experienced net inflows totaling $98 billion, with January 2021 producing the largest monthly net inflow on record (based on data from the Investment Company Institute). For the same period, the market absorbed $471 billion in issuance, notably elevated compared to the $450 billion issued during the prior       

 

S&P Municipal Bond Index

    Total Returns as of July 31, 2021        

      6 months: 1.38%

    12 months: 3.47%

12-month period. However, taxable municipal issuance, which typically draws a different and
unique buyer base, was proportionally elevated, making supply less onerous on the
traditional tax-exempt market.

A Closer Look at Yields

 

 

LOGO  

 

  

  

From July 31, 2020 to July 31, 2021, yields on AAA-rated 30-year municipal bonds increased by 2 basis points (“bps”) from 1.37% to 1.39%, while ten-year rates increased by 17 bps from 0.65% to 0.82% and five-year rates increased by 13 bps from 0.23% to 0.36% (as measured by Thomson Municipal Market Data). As a result, the municipal yield curve steepened over the 12-month period with the spread between two- and 30-year maturities steepening by 9 bps, led by 24 bps of steepening between two- and ten-year maturities.

 

Consistent municipal outperformance has resulted in stretched valuations. After dislocating at the height of the pandemic, municipal-to-U.S. Treasury ratios posted all-time lows in February 2021 and remained well below historical averages.

Financial Conditions of Municipal Issuers

The COVID-19 pandemic has been an unprecedented shock to the system impacting nearly every sector in the municipal market. Fortunately, most states and municipalities were in excellent fiscal health before the crisis, and the federal government delivered another $350 billion injection. Direct state and local government aid has provided additional support to own-source government tax receipts, which continue to outperform the dire predictions made in early 2020. Essential public services such as power, water, and sewer remain protected segments. State housing authority bonds, flagship universities, and strong national and regional health systems have absorbed the impact of the economic shock. While some segments still confront financial pressures, the combination of new federal stimulus and vaccine distribution is boosting economic activity and, consequently, increasing revenue receipts in these sectors as well. Critical providers (safety net hospitals, mass transit systems, airports) with limited resources may still experience fiscal strain but the additional aid and the re-opening of the economy will continue to support operating results in the second half of 2021, despite the surging delta variant of the coronavirus. BlackRock anticipates that a small subset of the market, mainly non-rated stand-alone projects, will remain susceptible to credit deterioration. However, the risk of new mandated lockdowns is significantly diminished, and we expect limited impact on the high fundamental quality of state and local governments as well as essential service providers. While credit fundamentals have improved noticeably across the municipal space, BlackRock advocates careful credit selection as the market must still navigate near-term uncertainty.

The opinions expressed are those of BlackRock as of July 31, 2021 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of any individual holdings or market sectors. Investing involves risk including loss of principal. Bond values fluctuate in price so the value of your investment can go down depending on market conditions. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to Alternative Minimum Tax (“AMT”). Capital gains distributions, if any, are taxable.

The S&P Municipal Bond Index, a broad, market value-weighted index, seeks to measure the performance of the U.S. municipal bond market. All bonds in the index are exempt from U.S. federal income taxes or subject to the AMT. Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index.

 

 

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The Benefits and Risks of Leveraging

 

The Funds may utilize leverage to seek to enhance the distribution rate on, and net asset value (“NAV”) of, their common shares (“Common Shares”). However, there is no guarantee that these objectives can be achieved in all interest rate environments.

In general, the concept of leveraging is based on the premise that the financing cost of leverage, which is based on short-term interest rates, is normally lower than the income earned by a Fund on its longer-term portfolio investments purchased with the proceeds from leverage. To the extent that the total assets of each Fund (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Fund’s shareholders benefit from the incremental net income. The interest earned on securities purchased with the proceeds from leverage (after paying the leverage costs) is paid to shareholders in the form of dividends, and the value of these portfolio holdings (less the leverage liability) is reflected in the per share NAV.

To illustrate these concepts, assume a Fund’s Common Shares capitalization is $100 million and it utilizes leverage for an additional $30 million, creating a total value of $130 million available for investment in longer-term income securities. If prevailing short-term interest rates are 3% and longer-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, a Fund’s financing costs on the $30 million of proceeds obtained from leverage are based on the lower short-term interest rates. At the same time, the securities purchased by a Fund with the proceeds from leverage earn income based on longer-term interest rates. In this case, a Fund’s financing cost of leverage is significantly lower than the income earned on a Fund’s longer-term investments acquired from such leverage proceeds, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.

However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed a Fund’s return on assets purchased with leverage proceeds, income to shareholders is lower than if a Fund had not used leverage. Furthermore, the value of the Funds’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the amount of each Fund’s obligations under its respective leverage arrangement generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Funds’ NAVs positively or negatively. Changes in the future direction of interest rates are very difficult to predict accurately, and there is no assurance that a Fund’s intended leveraging strategy will be successful.

The use of leverage also generally causes greater changes in each Fund’s NAV, market price and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the NAV and market price of a Fund’s Common Shares than if the Fund were not leveraged. In addition, each Fund may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause the Fund to incur losses. The use of leverage may limit a Fund’s ability to invest in certain types of securities or use certain types of hedging strategies. Each Fund incurs expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares. Moreover, to the extent the calculation of each Fund’s investment advisory fees includes assets purchased with the proceeds of leverage, the investment advisory fees payable to the Funds’ investment adviser will be higher than if the Funds did not use leverage.

To obtain leverage, each Fund has issued Variable Rate Demand Preferred Shares (“VRDP Shares”) or Variable Rate Muni Term Preferred Shares (“VMTP Shares”) (collectively, “Preferred Shares”) and/or leveraged its assets through the use of tender option bond trusts (“TOB Trusts”) as described in the Notes to Financial Statements.

Under the Investment Company Act of 1940, as amended (the “1940 Act”), each Fund is permitted to issue debt up to 33 1/3% of its total managed assets or equity securities (e.g., Preferred Shares) up to 50% of its total managed assets. A Fund may voluntarily elect to limit its leverage to less than the maximum amount permitted under the 1940 Act. In addition, a Fund may also be subject to certain asset coverage, leverage or portfolio composition requirements imposed by the Preferred Shares’ governing instruments or by agencies rating the Preferred Shares, which may be more stringent than those imposed by the 1940 Act.

If a Fund segregates or designates on its books and records cash or liquid assets having a value not less than the value of a Fund’s obligations under the TOB Trust (including accrued interest), then the TOB Trust is not considered a senior security and is not subject to the foregoing limitations and requirements imposed by the 1940 Act.

Derivative Financial Instruments

The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

 

 

T H E   B E N E F I T S   A N D   R I S K S   O F   L E V E R A G I N G   /   D E R I V A T I V E   F I N A N C I A L   I N S T R U M E N T S

  5


Fund Summary  as of July 31, 2021    BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

 

Investment Objective

BlackRock MuniHoldings California Quality Fund, Inc.’s (MUC) (the “Fund”) investment objective is to provide shareholders with current income exempt from U.S. federal income taxes and California personal income taxes. The Fund seeks to achieve its investment objective by investing primarily in municipal obligations exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax) and California personal income taxes. Under normal market conditions, the Fund invests at least 80% of its assets in investment grade municipal obligations with remaining maturities of one year or more at the time of investment. The municipal obligations in which the Fund primarily invests are either rated investment grade quality, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of investment. The Fund may invest up to 20% of its managed assets in securities that are rated below investment grade, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of purchase. The Fund may invest directly in securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

Fund Information

 

Symbol on New York Stock Exchange

  MUC

Initial Offering Date

    February 27, 1998  

Yield on Closing Market Price as of July 31, 2021 ($16.09)(a)

  4.10%

Tax Equivalent Yield(b)

  8.93%

Current Monthly Distribution per Common Share(c)

  $0.0550

Current Annualized Distribution per Common Share(c)

  $0.6600

Leverage as of July 31, 2021(d)

  38%

 

  (a) 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance is not an indication of future results.

 
  (b) 

Tax equivalent yield assumes the maximum marginal U.S. federal and state tax rate of 54.1%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 
  (c) 

The distribution rate is not constant and is subject to change.

 
  (d) 

Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments.

 

Market Price and Net Asset Value Per Share Summary

 

     07/31/21      07/31/20      Change        High      Low  

Closing Market Price

  $ 16.09      $ 14.67        9.68      $   16.22        $   13.89  

Net Asset Value

    16.16        15.95        1.32        16.24        15.50  

TOTAL RETURN BASED ON A $10,000 INVESTMENT

 

LOGO

 

(a) 

Represents the Fund’s closing market price on the NYSE and reflects the reinvestment of dividends and/or distributions at actual reinvestment prices.

(b) 

A broad, market value-weighted index that seeks to measure the performance of the U.S. municipal bond market.

 

 

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Fund Summary  as of July 31, 2021 (continued)    BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

 

Performance Summary for the Period Ended July 31, 2021

Returns for the period ended July 31, 2021 were as follows:

 

    Average Annual Total Returns  
     1 Year      5 Years      10 Years  

Fund at NAV(a)(b)

    5.78      4.14      6.60

Fund at Market Price(a)(b)

    14.52        4.34        7.42  

Lipper California Municipal Debt Funds at NAV(c)

    5.82        4.23        7.01  

Lipper California Municipal Debt Funds at Market Price(c)

    11.62        3.53        7.64  

S&P® Municipal Bond Index

    3.47        3.34        4.29  

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. Performance results reflect the Fund’s use of leverage.

 
  (b) 

The Fund’s discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not an indication of future results.

More information about the Fund’s historical performance can be found in the “Closed End Funds” section of blackrock.com.

The following discussion relates to the Fund’s absolute performance based on NAV:

Despite rising yields (and falling prices) for U.S. Treasuries, municipal bonds produced healthy gains in the past 12 months. Tax-exempt bonds continued to rally off of their pandemic-driven lows due to the release of multiple coronavirus vaccines, better-than-expected growth, improving municipal finances and robust investor demand. The prospect of substantial fiscal stimulus and higher taxes were additional tailwinds for the market. These factors led to a decline in yield spreads versus U.S. Treasuries, fueling positive returns for municipal debt.

Following the outbreak of the pandemic in early 2020, the consensus expectation was that state and local issuers in California would be challenged by a sizable decline in revenues. Instead, the state’s credit rating stabilized at a strong AA level, reflecting its diversified economy, rising property values and strong performance for the equity market. The outward migration of residents and businesses looking to flee the state’s higher taxes did not result in credit deterioration. Instead, many wealthy residents looked to reduce their tax burdens by purchasing tax-exempt California municipal bonds of all credit qualities. The resulting record inflows into municipal bond funds created a dramatic imbalance in demand relative to the available supply of securities. In this favorable environment, yields declined (as prices rose) and yield spreads tightened significantly.

Positions in bonds with maturities of 20 years and above benefited performance, as longer-term debt outpaced short-term issues. The Fund was also helped by its positions in high yield and BBB rated securities, particularly its holdings in the tobacco sector and Puerto Rico sales tax debt.

The Fund’s use of leverage, which augmented income and amplified the effect of rising prices, was a further contributor. The Fund actively sought to manage interest rate risk using U.S. Treasury futures. Since Treasury yields rose, as prices fell, this strategy contributed to results.

Reinvestment risk remained a headwind since the proceeds from bonds that matured or were called needed to be reinvested at lower yields compared with bonds that were issued when yields were higher.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

F U N D   S U M M A R Y

  7


Fund Summary  as of July 31, 2021 (continued)    BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

 

Overview of the Fund’s Total Investments

 

SECTOR ALLOCATION

 

Sector(a)(b)   07/31/21     07/31/20  

County/City/Special District/School District

    38     36

Health

    19       18  

Transportation

    13       14  

Education

    9       9  

Utilities

    8       11  

Tobacco

    5       5  

Housing

    4       2  

State

    4       5  

Corporate

    (c)      (c) 

CALL/MATURITY SCHEDULE

 

Calendar Year Ended December 31,(a)(d)   Percentage  

2021

    2

2022

    2  

2023

    3  

2024

    3  

2025

    3  

CREDIT QUALITY ALLOCATION

 

Credit Rating(a)(e)   07/31/21     07/31/20  

AAA/Aaa

    14     14

AA/Aa

    54       56  

A

    17       18  

BBB/Baa

    3       2  

BB/Ba

    1       1  

B

    (c)      (c) 

N/R(f)

    11       9  
 

 

(a) 

Excludes short-term securities.

(b) 

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

(c) 

Rounds to less than 1% of total investments.

(d) 

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

(e) 

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P Global Ratings or Moody’s Investors Service, Inc. if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

(f) 

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of July 31, 2021 and July 31, 2020, the market value of unrated securities deemed by the investment adviser to be investment grade each represents less than 1% of the Fund’s total investments.

 

 

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Fund Summary  as of July 31, 2021    BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

 

Investment Objective

BlackRock MuniHoldings New Jersey Quality Fund, Inc.’s (MUJ) (the “Fund”) investment objective is to provide shareholders with current income exempt from U.S. federal income tax and New Jersey personal income taxes. The Fund seeks to achieve its investment objective by investing primarily in long-term, investment grade municipal obligations exempt from U.S federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax) and New Jersey personal income taxes. The municipal obligations in which the Fund primarily invests are either rated investment grade quality, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of investment. Under normal market conditions, the Fund invests at least 80% of its assets in municipal obligations with remaining maturities of one year or more at the time of investment. The Fund may invest up to 20% of its managed assets in securities that are rated below investment grade, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of purchase. The Fund may invest directly in securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

Fund Information

 

Symbol on New York Stock Exchange

  MUJ

Initial Offering Date

    March 11, 1998  

Yield on Closing Market Price as of July 31, 2021 ($15.63)(a)

  4.84%

Tax Equivalent Yield(b)

  9.99%

Current Monthly Distribution per Common Share(c)

  $0.0630

Current Annualized Distribution per Common Share(c)

  $0.7560

Leverage as of July 31, 2021(d)

  38%

 

  (a) 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance is not an indication of future results.

 
  (b) 

Tax equivalent yield assumes the maximum marginal U.S. federal and state tax rate of 51.55%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 
  (c) 

The distribution rate is not constant and is subject to change.

 
  (d) 

Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments.

 

Market Price and Net Asset Value Per Share Summary

 

     07/31/21      07/31/20      Change      High      Low  

Closing Market Price

  $ 15.63      $ 14.21        9.99      $   16.06        $   13.52  

Net Asset Value

    16.29        15.83        2.91        16.37        15.50  

TOTAL RETURN BASED ON A $10,000 INVESTMENT

 

LOGO

 

(a) 

Represents the Fund’s closing market price on the NYSE and reflects the reinvestment of dividends and/or distributions at actual reinvestment prices.

(b) 

A broad, market value-weighted index that seeks to measure the performance of the U.S. municipal bond market.

 

 

F U N D   S U M M A R Y

  9


Fund Summary  as of July 31, 2021 (continued)    BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

 

Performance Summary for the Period Ended July 31, 2021

Returns for the period ended July 31, 2021 were as follows:

 

    Average Annual Total Returns  
     1 Year      5 Years      10 Years  

Fund at NAV(a)(b)

    8.22      4.86      6.76

Fund at Market Price(a)(b)

    15.67        4.54        7.06  

Lipper New Jersey Municipal Debt Funds at NAV(c)

    7.75        4.58        6.50  

Lipper New Jersey Municipal Debt Funds at Market Price(c)

    16.76        4.44        7.33  

S&P® Municipal Bond Index

    3.47        3.34        4.29  

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. Performance results reflect the Fund’s use of leverage.

 
  (b) 

The Fund’s discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not an indication of future results.

More information about the Fund’s historical performance can be found in the “Closed End Funds” section of blackrock.com.

The following discussion relates to the Fund’s absolute performance based on NAV:

Despite rising yields (and falling prices) for U.S. Treasuries, municipal bonds produced healthy gains in the past 12 months. Tax-exempt bonds continued to rally off of their pandemic-driven lows due to the release of multiple coronavirus vaccines, better-than-expected growth, improving municipal finances and robust investor demand. The prospect of substantial fiscal stimulus and higher taxes were additional tailwinds for the market. These factors led to a decline in yield spreads versus U.S. Treasuries, fueling positive returns for municipal debt.

New Jersey outperformed the broader national market in the period, as fundamentals strengthened due in large part to the American Rescue Plan and the fact that revenues came in higher than originally projected in the early days of the pandemic. The state recently announced an estimated $10 billion surplus at fiscal year-end 2021 (June 30) due to $4 billion in better-than-expected state tax collections and an allocation of $6 billion in aid from the federal American Rescue Plan.

Holdings in the state tax-backed sector made the largest contribution to performance, led by Puerto Rico. Revenue sectors, including transportation, also experienced meaningful price appreciation.

Positions in lower-rated issues, especially in the BBB category, outpaced higher-rated securities. Longer-dated securities—particularly those with maturities of 20 years and above—delivered strong returns, as well.

The Fund’s use of leverage, which augmented income and amplified the effect of rising prices, was a further contributor. The Fund actively sought to manage interest rate risk using U.S. Treasury futures. Since Treasury yields rose, as prices fell, this strategy contributed to results.

Reinvestment risk remained a headwind since the proceeds from bonds that matured or were called needed to be reinvested at lower yields compared to those issued when yields were higher.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

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Fund Summary  as of July 31, 2021 (continued)    BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

 

Overview of the Fund’s Total Investments

 

SECTOR ALLOCATION

 

Sector(a)(b)   07/31/21     07/31/20  

State

    28     19

Transportation

    27       29  

Education

    15       15  

County/City/Special District/School District

    10       12  

Health

    6       9  

Utilities

    5       8  

Housing

    4       4  

Tobacco

    4       3  

Corporate

    1       1  

CALL/MATURITY SCHEDULE

 

Calendar Year Ended December 31,(a)(c)   Percentage  

2021

    2

2022

    2  

2023

    8  

2024

    8  

2025

    4  

CREDIT QUALITY ALLOCATION

 

Credit Rating(a)(d)   07/31/21     07/31/20  

AAA/Aaa

    5     6

AA/Aa

    36       37  

A

    22       18  

BBB/Baa

    31       30  

BB/Ba

    3       3  

B

    (e)       

N/R(f)

    3       6  
 

 

(a) 

Excludes short-term securities.

(b) 

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

(c) 

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

(d) 

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P Global Ratings or Moody’s Investors Service, Inc. if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

(e) 

Rounds to less than 1% of total investments.

(f) 

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of July 31, 2021 and July 31, 2020, the market value of unrated securities deemed by the investment adviser to be investment grade each represents less than 1% of the Fund’s total investments.

 

 

F U N D   S U M M A R Y

  11


Fund Summary  as of July 31, 2021    BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

Investment Objective

BlackRock MuniYield Michigan Quality Fund, Inc.’s (MIY) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from U.S. federal and Michigan income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax) and Michigan income taxes. Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of investment. The Fund may invest up to 20% of its managed assets in securities that are rated below investment grade, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of purchase. The Fund may invest directly in securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

Fund Information

 

Symbol on New York Stock Exchange

  MIY

Initial Offering Date

    October 30, 1992  

Yield on Closing Market Price as of July 31, 2021 ($15.80)(a)

  4.25%

Tax Equivalent Yield(b)

  7.73%

Current Monthly Distribution per Common Share(c)

  $0.0560

Current Annualized Distribution per Common Share(c)

  $0.6720

Leverage as of July 31, 2021(d)

  37%

 

  (a) 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance is not an indication of future results.

 
  (b) 

Tax equivalent yield assumes the maximum marginal U.S. federal and state tax rate of 45.05%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 
  (c) 

The distribution rate is not constant and is subject to change.

 
  (d) 

Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging.

 

Market Price and Net Asset Value Per Share Summary

 

     07/31/21      07/31/20      Change      High      Low  

Closing Market Price

  $ 15.80      $ 14.24        10.96      $   15.80        $   13.53  

Net Asset Value

    16.04        15.88        1.01        16.16        15.52  

TOTAL RETURN BASED ON A $10,000 INVESTMENT

 

LOGO

 

(a) 

Represents the Fund’s closing market price on the NYSE and reflects the reinvestment of dividends and/or distributions at actual reinvestment prices.

(b) 

A broad, market value-weighted index that seeks to measure the performance of the U.S. municipal bond market.

 

 

12  

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Fund Summary  as of July 31, 2021 (continued)    BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

Performance Summary for the Period Ended July 31, 2021

Returns for the period ended July 31, 2021 were as follows:

 

    Average Annual Total Returns  
     1 Year      5 Years      10 Years  

Fund at NAV(a)(b)

    5.61      4.52      6.63

Fund at Market Price(a)(b)

    16.02        5.50        7.42  

Lipper Other States Municipal Debt Funds at NAV(c)

    5.78        3.85        5.53  

Lipper Other States Municipal Debt Funds at Market Price(c)

    13.91        3.85        6.44  

S&P® Municipal Bond Index

    3.47        3.34        4.29  

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. Performance results reflect the Fund’s use of leverage.

 
  (b) 

The Fund’s discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not an indication of future results.

More information about the Fund’s historical performance can be found in the “Closed End Funds” section of blackrock.com.

The following discussion relates to the Fund’s absolute performance based on NAV:

Despite rising yields (and falling prices) for U.S. Treasuries, municipal bonds produced healthy gains in the past 12 months. Tax-exempt bonds continued to rally off of their pandemic-driven lows due to the release of multiple coronavirus vaccines, better-than-expected growth, improving municipal finances and robust investor demand. The prospect of substantial fiscal stimulus and higher taxes were additional tailwinds for the market. These factors led to a decline in yield spreads versus U.S. Treasuries, fueling positive returns for municipal debt.

Michigan’s economy has improved and diversified since the recession of the late 2000s, albeit with continued dependance on the auto industry. While COVID-19 disrupted economic progress, Michigan’s unemployment rate has since improved, and net migration has stayed positive. The state’s rainy-day fund, after declining due to the revenue shortfall caused by the pandemic, has recovered and is projected to recapture its pre-coronavirus levels in the 2021 fiscal year.

The Fund’s positions in sectors that were most affected by COVID-19 in early 2020—including education and health care—contributed strongly to performance as yield spreads narrowed considerably. Within the state tax-backed segment, Puerto Rico sales tax securities performed particularly well. The Fund’s holdings in lower-rated bonds also aided performance amid investors’ ongoing search for yield.

The Fund’s use of leverage, which augmented income and amplified the effect of rising prices, was a further contributor. Holdings on both the longer and front ends of the municipal yield curve aided performance as these areas performed the best. Conversely, positions in intermediate-term debt detracted, since yields rose in this area. The ongoing loss of higher-yielding bonds due to calls and maturities also detracted by leading to a reduction in income.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

F U N D   S U M M A R Y

  13


Fund Summary  as of July 31, 2021 (continued)    BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

Overview of the Fund’s Total Investments

 

SECTOR ALLOCATION

 

Sector(a)(b)   07/31/21     07/31/20  

Education

    28     24

Health

    21       22  

State

    16       18  

County/City/Special District/School District

    16       16  

Utilities

    7       10  

Housing

    5       4  

Transportation

    4       4  

Corporate

    2       2  

Tobacco

    1        

CALL/MATURITY SCHEDULE

 

Calendar Year Ended December 31,(a)(c)   Percentage  

2021

    1

2023

    3  

2024

    5  

2025

    2  

2026

    4  

CREDIT QUALITY ALLOCATION

 

Credit Rating(a)(d)   07/31/21     07/31/20  

AAA/Aaa

    2     2

AA/Aa

    61       63  

A

    28       26  

BBB/Baa

    4       4  

BB/Ba

    (e)       

N/R(f)

    5       5  
 

 

(a) 

Excludes short-term securities.

(b) 

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

(c) 

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

(d) 

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P Global Ratings or Moody’s Investors Service, Inc. if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

(e) 

Rounds to less than 1% of total investments.

(f) 

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of July 31, 2021 and July 31, 2020, the market value of unrated securities deemed by the investment adviser to be investment grade each represents less than 1% of the Fund’s total investments.

 

 

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Fund Summary  as of July 31, 2021    BlackRock MuniYield Pennsylvania Quality Fund (MPA)

 

Investment Objective

BlackRock MuniYield Pennsylvania Quality Fund’s (MPA) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from U.S. federal and Pennsylvania income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax) and Pennsylvania income taxes. Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of investment. The Fund may invest up to 20% of its managed assets in securities that are rated below investment grade, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of purchase. The Fund may invest directly in securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

Fund Information

 

Symbol on New York Stock Exchange

  MPA

Initial Offering Date

    October 30, 1992  

Yield on Closing Market Price as of July 31, 2021 ($16.23)(a)

  4.07%

Tax Equivalent Yield(b)

  7.25%

Current Monthly Distribution per Common Share(c)

  $0.0550

Current Annualized Distribution per Common Share(c)

  $0.6600

Leverage as of July 31, 2021(d)

  36%

 

  (a) 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance is not an indication of future results.

 
  (b) 

Tax equivalent yield assumes the maximum marginal U.S. federal and state tax rate of 43.87%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 
  (c) 

The distribution rate is not constant and is subject to change.

 
  (d) 

Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of its accrued liabilities. Does not reflect derivatives or other instruments that may give rise to economic leverage. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging and Derivative Financial Instruments.

 

Market Price and Net Asset Value Per Share Summary

 

     07/31/21      07/31/20      Change      High      Low  

Closing Market Price

  $ 16.23      $ 14.09        15.19      $   16.25        $   13.60  

Net Asset Value

    16.64        16.09        3.42        16.66        15.66  

TOTAL RETURN BASED ON A $10,000 INVESTMENT

 

LOGO

 

(a) 

Represents the Fund’s closing market price on the NYSE and reflects the reinvestment of dividends and/or distributions at actual reinvestment prices.

(b) 

A broad, market value-weighted index that seeks to measure the performance of the U.S. municipal bond market.

 

 

F U N D   S U M M A R Y

  15


Fund Summary  as of July 31, 2021 (continued)    BlackRock MuniYield Pennsylvania Quality Fund (MPA)

 

Performance Summary for the Period Ended July 31, 2021

Returns for the period ended July 31, 2021 were as follows:

 

    Average Annual Total Returns  
     1 Year      5 Years      10 Years  

Fund at NAV(a)(b)

    8.09      4.65      6.59

Fund at Market Price(a)(b)

    20.40        5.00        7.08  

Lipper Pennsylvania Municipal Debt Funds at NAV(c)

    7.66        4.18        6.12  

Lipper Pennsylvania Municipal Debt Funds at Market Price(c)

    15.18        4.60        6.84  

S&P® Municipal Bond Index

    3.47        3.34        4.29  

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices. Performance results reflect the Fund’s use of leverage.

 
  (b) 

The Fund’s discount to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not an indication of future results.

More information about the Fund’s historical performance can be found in the “Closed End Funds” section of blackrock.com.

The following discussion relates to the Fund’s absolute performance based on NAV:

Despite rising yields (and falling prices) for U.S. Treasuries, municipal bonds produced healthy gains in the past 12 months. Tax-exempt bonds continued to rally off of their pandemic-driven lows due to the release of multiple coronavirus vaccines, better-than-expected growth, improving municipal finances and robust investor demand. The prospect of substantial fiscal stimulus and higher taxes were additional tailwinds for the market. These factors led to a decline in yield spreads versus U.S. Treasuries, fueling positive returns for municipal debt. Pennsylvania outperformed the broader national market in the period, as fundamentals strengthened due in large part to the American Rescue Plan and the fact that revenues came in higher than originally projected in the early days of the pandemic.

The Fund benefited from its positions in the education and state tax-backed sectors. Puerto Rico was a particularly strong contributor in the latter category. Positions in lower-rated issues, especially in the BBB and non-rated categories, outpaced higher-rated securities. This trend was partially a reflection of federal aid packages that supported the financial system and helped municipalities better navigate the pandemic.

The Fund’s use of leverage, which augmented income and amplified the effect of rising prices, was a further contributor. The Fund actively sought to manage interest rate risk using U.S. Treasury futures. Since Treasury yields rose, as prices fell, this strategy contributed to results.

Reinvestment risk remained a headwind since the proceeds from bonds that matured or were called needed to be reinvested at lower yields compared to those issued when yields were higher.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

16  

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Fund Summary  as of July 31, 2021 (continued)    BlackRock MuniYield Pennsylvania Quality Fund (MPA)

 

Overview of the Fund’s Total Investments

 

SECTOR ALLOCATION

 

Sector(a)(b)   07/31/21     07/31/20  

Health

    27     19

County/City/Special District/School District

    18       18  

Education

    18       24  

Transportation

    11       12  

State

    10       12  

Utilities

    10       6  

Tobacco

    3       3  

Housing

    2       4  

Corporate

    1       2  

CALL/MATURITY SCHEDULE

 

Calendar Year Ended December 31,(a)(c)   Percentage  

2021

    2

2022

    4  

2023

    2  

2024

    6  

2025

    9  

CREDIT QUALITY ALLOCATION

 

Credit Rating(a)(d)   07/31/21     07/31/20  

AAA/Aaa

    %(e)      3

AA/Aa

    49       46  

A

    29       27  

BBB/Baa

    6       8  

BB/Ba

    3       3  

B

    1       1  

CCC/Caa

    1        

N/R(f)

    11       12  
 

 

(a) 

Excludes short-term securities.

(b) 

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

(c) 

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

(d) 

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P Global Ratings or Moody’s Investors Service, Inc. if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

(e) 

Rounds to less than 1% of total investments.

(f) 

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of July 31, 2021 and July 31, 2020, the market value of unrated securities deemed by the investment adviser to be investment grade represents 2% and 2%, respectively, of the Fund’s total investments.

 

 

F U N D   S U M M A R Y

  17


Schedule of Investments

July 31, 2021

  

BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  

Municipal Bonds

 

California — 103.3%

 

Corporate — 0.3%  

California Municipal Finance Authority, RB, Series A, AMT, 4.00%, 07/15/29

  $ 1,920     $ 2,238,336  
   

 

 

 
County/City/Special District/School District — 37.8%  

California Municipal Finance Authority, RB, 5.00%, 06/01/43

    2,000       2,505,900  

California Statewide Communities Development Authority, SAB

   

Series B, 4.00%, 09/02/40

    605       660,448  

Series B, 4.00%, 09/02/50

    735       797,137  

Series C, 4.00%, 09/02/40

    2,160       2,362,565  

Series C, 4.00%, 09/02/50

    1,550       1,679,285  

California Statewide Communities Development Authority, SAB, S/F Housing

   

5.00%, 09/02/39

    535       665,738  

5.00%, 09/02/40

    400       492,600  

5.00%, 09/02/44

    615       756,013  

5.00%, 09/02/49

    900       1,090,017  

4.00%, 09/02/50

    320       355,258  

5.00%, 09/02/50

    320       388,157  

Series C, 5.00%, 09/02/44

    130       159,808  

Series C, 5.00%, 09/02/49

    640       774,995  

California Statewide Communities Development Authority, ST

   

4.00%, 09/01/41

    295       342,312  

4.00%, 09/01/51

    565       643,558  

Centinela Valley Union High School District, GO, Series A, 5.75%, 08/01/21(a)

    9,120       9,120,000  

Chabot-Las Positas Community College District, GO, Series A, 4.00%, 08/01/47

    1,500       1,726,455  

Chaffey Joint Union High School District, GO, CAB(b)

   

Series C, 0.00%, 08/01/32

    250       189,768  

Series C, 0.00%, 08/01/33

    500       363,265  

Series C, 0.00%, 08/01/34

    510       354,430  

Series C, 0.00%, 08/01/35

    545       362,403  

Series C, 0.00%, 08/01/36

    500       317,720  

Series C, 0.00%, 08/01/37

    650       394,700  

Series C, 0.00%, 08/01/38

    625       363,150  

Series C, 0.00%, 08/01/39

    750       416,348  

Series C, 0.00%, 08/01/40

    1,855       984,448  

Series C, 0.00%, 08/01/41

    305       154,760  

Series C, 0.00%, 02/01/42

    350       173,453  

ChiNo.Valley Unified School District, GO, Series B, 5.00%, 08/01/55

    1,285       1,638,465  

City of Dixon California, ST, 4.00%, 09/01/45

    535       616,373  

City of Roseville California, ST, 4.00%, 09/01/50

    365       413,439  

City of Sacramento California Transient Occupancy Tax Revenue, RB, Series A, 5.00%, 06/01/43

    1,230       1,477,906  

Coronado Community Development Agency Successor Agency, Refunding TA, Series A, 5.00%, 09/01/33

    1,785       2,093,091  

County of Santa Clara California, GO, Series B, 4.00%, 08/01/43

    10,225       10,581,034  

El Dorado Irrigation District, Refunding RB, Series A, (AGM), 5.25%, 03/01/24(a)

    10,000       11,316,300  

Elk Grove Unified School District, GO, 4.00%, 08/01/46

    10,000       11,385,500  
Security   Par
(000)
    Value  
County/City/Special District/School District (continued)  

Fremont Union High School District, Refunding GO, 4.00%, 08/01/40

  $ 2,500     $ 2,766,250  

Garden Grove Unified School District, GO, Series C, 5.25%, 08/01/23(a)

    5,500       6,066,280  

Gavilan Joint Community College District, GO(a)

   

Series D, 5.50%, 08/01/21

    2,170       2,170,000  

Series D, 5.75%, 08/01/21

    8,400       8,400,000  

Glendale Community College District, GO, Series A, 4.00%, 08/01/46

    8,000       9,366,800  

Hayward Unified School District, GO, Series A, (BAM), 4.00%, 08/01/48

    2,000       2,315,500  

Kern Community College District, GO(a)

   

Series C, 5.25%, 11/01/23

    5,715       6,368,510  

Series C, 5.75%, 11/01/23

    12,085       13,602,272  

Los Alamitos Unified School District, Refunding GO, 5.25%, 08/01/23

    3,700       4,080,952  

Los Angeles County Facilities, Inc., RB, Series A, 5.00%, 12/01/51

    18,270       22,853,212  

Los Angeles County Metropolitan Transportation Authority, Refunding RB, Series A, 5.00%, 07/01/44

    2,000       2,547,560  

Los Angeles County Public Works Financing Authority, Refunding RB, Series D, 5.00%, 12/01/45

    1,430       1,679,978  

Mount San Jacinto Community College District, GO, Series A, 5.00%, 08/01/35

    3,565       4,202,458  

Natomas Unified School District, GO, (BAM), 4.00%, 08/01/42

    5,000       5,663,400  

Orange County Community Facilities District, ST 4.00%, 08/15/40

    345       398,082  

4.00%, 08/15/50

    320       365,795  

Rio Elementary School District, GO, Series A, (AGM), 5.25%, 08/15/25(a)

    5,865       7,019,291  

Riverside County Public Financing Authority, Refunding TA, Series A, (BAM), 4.00%, 10/01/40

    4,045       4,660,811  

San Benito High School District, GO, 4.00%, 08/01/48

    5,000       5,760,050  

San Bernardino County Transportation Authority, RB, Series A, 5.25%, 03/01/40

    4,545       5,114,625  

San Diego Unified School District, GO, Series B, 3.25%, 07/01/48

    6,000       6,546,720  

San Diego Unified School District, GO, CAB(b)

   

Series K-2, 0.00%, 07/01/38

    2,755       1,641,236  

Series K-2, 0.00%, 07/01/39

    3,340       1,904,401  

Series K-2, 0.00%, 07/01/40

    4,285       2,339,096  

San Jose Financing Authority, RB, 5.75%, 05/01/42

    4,500       4,517,010  

San Jose Financing Authority, Refunding RB, Series A, 5.00%, 06/01/23(a)

    5,800       6,316,084  

San Luis Obispo County Community College District, Refunding GO, Series B, 4.00%, 08/01/43

    3,555       4,223,909  

San Marcos Redevelopment Agency Successor Agency, Refunding TA

   

Series A, 5.00%, 10/01/32

    1,700       2,011,253  

Series A, 5.00%, 10/01/33

    1,125       1,329,952  

Santa Clara Unified School District, GO, 4.00%, 07/01/48

    10,000       11,430,400  

Santa Clarita Community College District, Refunding GO, 4.00%, 08/01/46

    10,000       11,494,000  

Washington Township Health Care District, GO, Series B, 5.50%, 08/01/38

    1,625       1,864,980  
 

 

 

18  

2 0 2 1   B L A C K R O C K   A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
County/City/Special District/School District (continued)  

West Contra Costa Unified School District, GO(a)

   

Series A, (AGM), 5.25%, 08/01/21

  $ 5,390     $ 5,390,000  

Series A, 5.50%, 08/01/23

    2,500       2,769,850  

Series B, 5.50%, 08/01/23

    3,195       3,539,868  
   

 

 

 
      250,837,384  
Education — 10.5%  

California Educational Facilities Authority, RB, Series V-1, 5.00%, 05/01/49

    5,800       9,394,550  

California Enterprise Development Authority, RB

   

Series A, 5.00%, 08/01/50

    650       797,290  

Series A, 5.00%, 08/01/57

    600       735,210  

California Enterprise Development Authority, Refunding RB(c)

   

4.00%, 06/01/51

    625       711,488  

4.00%, 06/01/61

    345       388,970  

California Municipal Finance Authority, RB 6.00%, 01/01/22(a)

    2,750       2,817,072  

Series A, 5.50%, 08/01/34(c)

    250       271,180  

Series A, 5.00%, 10/01/39(c)

    285       327,573  

Series A, 5.00%, 10/01/49(c)

    480       539,731  

Series A, 5.00%, 10/01/57(c)

    940       1,046,981  

California Municipal Finance Authority, Refunding RB

   

5.00%, 08/01/39

    1,105       1,261,678  

Series B, 5.00%, 01/01/42

    1,750       2,072,648  

California School Finance Authority, RB(c)
5.00%, 06/01/40

    355       404,654  

5.00%, 06/01/50

    555       620,046  

5.00%, 06/01/59

    885       980,173  

Series A, 5.00%, 07/01/49

    850       1,050,643  

Series A, 5.00%, 06/01/58

    4,135       4,557,089  

Series A, 5.00%, 07/01/59

    1,380       1,576,277  

Series A, 4.00%, 06/01/61

    850       901,485  

Series B, 4.00%, 07/01/45

    560       560,465  

Hastings Campus Housing Finance Authority, RB

   

Series A, 5.00%, 07/01/45

    785       956,012  

Series A, 5.00%, 07/01/61

    4,720       5,625,532  

University of California, RB, Series M, 5.00%, 05/15/47

    15,000       18,478,800  

University of California, Refunding RB

   

Series AO, 5.00%, 05/15/40

    5,430       6,353,914  

Series AZ, 4.00%, 05/15/48

    6,000       7,054,860  
   

 

 

 
      69,484,321  
Health — 13.9%  

California Health Facilities Financing Authority, RB 4.00%, 11/15/47

    825       947,653  

Series A, 5.00%, 11/15/35

    1,960       2,451,686  

Series A, 4.00%, 11/15/42

    450       524,232  

California Health Facilities Financing Authority, Refunding RB

   

Series A, 5.00%, 10/01/24(a)

    4,745       5,464,057  

Series A, 5.00%, 07/01/37

    10,000       10,880,500  

Series A, 5.00%, 10/01/38

    6,225       7,098,554  

Series A, 5.25%, 11/01/41

    8,000       8,101,200  

Series B, 5.00%, 11/15/26(a)

    3,385       4,191,205  

Series B, 5.00%, 11/15/46

    4,910       5,946,648  

California Municipal Finance Authority, Refunding RB

   

Series A, 5.00%, 02/01/37

    3,110       3,785,368  

Series A, 5.00%, 11/01/39(c)

    250       289,803  

Series A, 5.00%, 02/01/42

    5,250       6,372,607  
Security   Par
(000)
    Value  
Health (continued)  

California Municipal Finance Authority, Refunding RB (continued)

   

Series A, 5.00%, 11/01/49(c)

  $ 280     $ 319,329  

California Public Finance Authority, RB(c) 5.00%, 11/15/36

    150       177,785  

5.00%, 11/15/46

    150       174,441  

5.00%, 11/15/51

    150       173,802  

5.00%, 11/15/56

    150       173,168  

California Statewide Communities Development Authority, RB

   

4.00%, 08/01/45

    2,500       2,621,975  

4.00%, 07/01/48

    2,220       2,475,522  

California Statewide Communities Development Authority, Refunding RB

   

5.00%, 12/01/21(a)

    6,235       6,335,633  

4.00%, 04/01/42

    3,005       3,325,183  

4.00%, 04/01/47

    2,655       2,895,915  

5.00%, 04/01/47

    2,995       3,497,351  

Series A, 5.00%, 08/15/51

    1,635       1,961,199  

Series A, 5.00%, 12/01/53

    1,000       1,233,430  

Series A, 4.00%, 12/01/57

    3,250       3,428,522  

Series A, 5.00%, 12/01/57

    1,750       2,164,382  

Regents of the University of California Medical Center Pooled Revenue, Refunding RB, Series L, 5.00%, 05/15/47

    4,000       4,790,360  
   

 

 

 
      91,801,510  
Housing — 6.6%  

California Community Housing Agency, RB, M/F Housing(c)

   

4.00%, 08/01/46

    860       962,804  

3.00%, 08/01/56

    1,560       1,628,609  

Series A, 5.00%, 04/01/49

    3,840       4,400,909  

Series A, 4.00%, 02/01/56

    4,615       5,047,420  

California Housing Finance, RB, M/F Housing

   

Series 2, Class A, 4.00%, 03/20/33

    4,030       4,793,753  

Series 2021-1, Class A, 3.50%, 11/20/35

    2,344       2,792,067  

Series A, 4.25%, 01/15/35

    933       1,156,256  

CSCDA Community Improvement Authority, RB, M/F Housing(c)

   

2.65%, 12/01/46

    1,825       1,887,561  

4.00%, 07/01/56

    1,490       1,627,214  

4.00%, 08/01/56

    1,905       2,126,133  

3.00%, 12/01/56

    1,500       1,557,390  

Series A, 5.00%, 07/01/51

    1,325       1,571,848  

Series A-2, 4.00%, 09/01/56

    2,700       3,022,191  

Freddie Mac Multifamily ML Certificates, RB, M/F Housing, Series CA, Class A, 3.35%, 11/25/33

    9,634       11,030,475  
   

 

 

 
      43,604,630  
State — 1.5%  

California State Public Works Board, RB, Series I, 5.50%, 11/01/33

    2,015       2,249,526  

California State Public Works Board, Refunding RB, Series C, 5.75%, 10/01/31

    1,205       1,216,001  

City of Roseville California, ST, 4.00%, 09/01/45

    100       113,517  

State of California, Refunding GO, 5.00%, 08/01/45

    5,690       6,641,539  
   

 

 

 
      10,220,583  

 

 

 

 

S C H E D U L E  O F  I N V E S T M E N T S

  19


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Tobacco — 7.3%  

California County Tobacco Securitization Agency, Refunding RB

   

4.00%, 06/01/49

  $ 320     $ 380,874  

Series A, 4.00%, 06/01/49

    465       554,833  

California County Tobacco Securitization Agency, Refunding RB, CAB(b)

   

0.00%, 06/01/55

    3,185       804,690  

Series B-2, Subordinate, 0.00%, 06/01/55

    4,780       974,260  

Golden State Tobacco Securitization Corp., Refunding RB

   

Series A, (AGM-CR SAP), 5.00%, 06/01/40

    9,765       11,380,717  

Series A-1, 5.00%, 06/01/31

    7,560       9,505,566  

Series A-1, 3.50%, 06/01/36

    6,930       7,057,304  

Series A-1, 5.00%, 06/01/47

    11,350       11,731,474  

Series A-2, 5.00%, 06/01/47

    1,645       1,700,288  

Tobacco Securitization Authority of Southern California, Refunding RB, 5.00%, 06/01/48

    1,130       1,385,391  

Tobacco Securitization Authority of Southern California, Refunding RB, CAB, 0.00%, 06/01/54(b)

    13,750       2,736,250  
   

 

 

 
      48,211,647  
Transportation — 15.4%  

Alameda Corridor Transportation Authority, Refunding RB, Series B, Sub Lien, 5.00%, 10/01/35

    1,500       1,793,025  

Bay Area Toll Authority, Refunding RB, 4.00%, 04/01/42

    5,000       5,777,850  

California Municipal Finance Authority, ARB, AMT, Senior Lien, 4.00%, 12/31/47

    13,915       15,704,052  

City of Los Angeles Department of Airports, ARB

   

Series A, AMT, 5.00%, 05/15/40

    3,830       4,433,148  

Series D, AMT, 5.00%, 05/15/35

    2,000       2,322,440  

Series D, AMT, 5.00%, 05/15/36

    1,500       1,740,630  

Sub-Series A, AMT, 5.00%, 05/15/47

    6,725       8,124,809  

City of Los Angeles Department of Airports, Refunding ARB, 5.00%, 05/15/43

    7,000       9,107,840  

County of Sacramento California Airport System Revenue, Refunding RB

   

Series A, 5.00%, 07/01/41

    2,500       3,013,550  

Sub-Series B, 5.00%, 07/01/41

    1,250       1,514,700  

Norman Y Mineta San Jose International Airport SJC, Refunding RB

   

Series A, AMT, 5.00%, 03/01/41

    3,075       3,701,377  

Series A, AMT, 5.00%, 03/01/47

    11,770       14,027,486  

Port of Los Angeles, Refunding ARB, Series A, AMT, 5.00%, 08/01/44

    500       563,170  

San Diego County Regional Airport Authority, Refunding ARB, Series A, 5.00%, 07/01/42

    4,275       5,293,903  

San Francisco City & County Airport Comm-San Francisco International Airport, Refunding ARB

   

Series A, AMT, 5.00%, 05/01/29

    6,435       6,660,354  

Series A, AMT, 5.00%, 05/01/44

    5,000       6,236,250  

Series A, AMT, 5.00%, 05/01/47

    5,000       6,020,550  

Series B, AMT, 5.00%, 05/01/41

    5,000       5,932,850  
   

 

 

 
      101,967,984  
Utilities — 10.0%  

City of Riverside California Electric Revenue, Refunding RB, Series A, 5.00%, 10/01/43

    3,500       4,463,060  
Security   Par
(000)
    Value  
Utilities (continued)  

City of San Francisco California Public Utilities Commission Water Revenue, RB, Series A, 5.00%, 11/01/39

  $ 5,245     $ 6,130,933  

East Bay Municipal Utility District Water System Revenue, RB

   

Series A, 4.00%, 06/01/45

    4,585       5,331,209  

Series A, 5.00%, 06/01/49

    11,190       14,359,344  

Los Angeles Department of Water, RB, Series A, 5.00%, 07/01/42

    8,825       10,840,718  

San Diego Public Facilities Financing Authority, Refunding RB, Series A, Subordinate, 5.00%, 08/01/43

    9,655       12,134,597  

San Francisco City & County Public Utilities Commission Wastewater Revenue, Refunding RB, Series B, 4.00%, 10/01/42

    3,000       3,124,590  

San Juan Water District, Refunding RB, Series A, 5.25%, 02/01/33

    7,325       7,512,300  

San Mateo Foster City Public Financing Authority, RB, 4.00%, 08/01/44

    2,000       2,398,000  
   

 

 

 
      66,294,751  
   

 

 

 

Total Municipal Bonds in California

      684,661,146  

Puerto Rico — 4.7%

   
State — 4.7%            

Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB

   

Series A-1, Restructured, 4.75%, 07/01/53

    8,317       9,567,461  

Series A-1, Restructured, 5.00%, 07/01/58

    11,280       13,142,667  

Series A-2, Restructured, 4.33%, 07/01/40

    2,677       3,040,671  

Series A-2, Restructured, 4.78%, 07/01/58

    553       635,839  

Series B-1, Restructured, 4.75%, 07/01/53

    848       975,497  

Series B-2, Restructured, 4.78%, 07/01/58

    822       945,637  

Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB, CAB, Series A-1, Restructured, 0.00%, 07/01/46(b)

    8,705       2,908,166  
   

 

 

 

Total Municipal Bonds in Puerto Rico

      31,215,938  
   

 

 

 

Total Municipal Bonds — 108.0%
(Cost: $642,530,857)

      715,877,084  
   

 

 

 

Municipal Bonds Transferred to Tender Option Bond Trusts(d)

 

California — 48.9%  
County/City/Special District/School District — 21.5%  

Foothill-De Anza Community College District, GO, Series C, 5.00%, 08/01/40

    40,000       40,000,000  

Palomar Community College District, GO, Series C, 5.00%, 08/01/25(a)

    15,140       17,972,543  

Riverside County Public Financing Authority, RB, 5.25%, 11/01/45

    10,000       11,869,999  

Sacramento Area Flood Control Agency, Refunding SAB, Series A, 5.00%, 10/01/43

    9,990       12,068,619  

San Luis Obispo County Community College District, Refunding GO, Series A, 4.00%, 08/01/40

    6,585       7,486,879  

San Mateo County Community College District, GO, Series A, 5.00%, 09/01/25(a)

    17,615       20,971,001  
 

 

 

20  

2 0 2 1   B L A C K R O C K   A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
County/City/Special District/School District (continued)  

Southwestern Community College District, GO, Series D, 5.00%, 08/01/25(a)

  $ 10,820     $ 12,844,314  

West Valley-Mission Community College District, GO, Series B, 4.00%, 08/01/40

    17,000       19,336,650  
   

 

 

 
      142,550,005  
Education — 3.6%  

California State University, Refunding RB, Series A, 5.00%, 11/01/43

    6,001       7,106,850  

University of California, RB, Series AM, 5.25%, 05/15/44

    10,210       11,593,710  

University of California, Refunding RB, Series AF, 5.00%, 05/15/39

    5,000       5,421,900  
   

 

 

 
      24,122,460  
Health — 15.7%  

California Health Facilities Financing Authority, RB

   

5.00%, 11/15/49(e)

    5,000       5,961,300  

5.00%, 11/15/56

    6,000       7,470,000  

Series A, 5.00%, 08/15/23(a)

    14,520       15,969,241  

Series B, 5.00%, 08/15/55

    4,500       5,429,835  

California Health Facilities Financing Authority, Refunding RB

   

Series A, 5.00%, 08/15/25(a)

    19,425       23,090,487  

Series A, 4.00%, 10/01/47

    4,997       5,670,401  

Sub-Series A-2, 4.00%, 11/01/44

    17,720       20,612,258  

California Statewide Communities Development Authority, RB, Series A, 5.00%, 04/01/42

    19,070       19,663,649  
   

 

 

 
      103,867,171  
Transportation — 5.7%  

Bay Area Toll Authority, Refunding RB, 4.00%, 04/01/49(e)

    10,005       11,451,823  

City of Los Angeles Department of Airports, ARB

   

Series A, AMT, 5.00%, 05/15/40

    5,500       6,366,140  

Series B, AMT, 5.00%, 05/15/41

    3,645       4,339,706  

Series D, AMT, 5.00%, 05/15/41

    13,332       15,422,777  
   

 

 

 
      37,580,446  
Utilities — 2.4%  

City of Los Angeles California Wastewater System Revenue, RB, Series A, 5.00%, 06/01/44

    13,790       16,081,484  
   

 

 

 

Total Municipal Bonds in California

 

    324,201,566  
   

 

 

 

Total Municipal Bonds Transferred to Tender Option
Bond Trusts — 48.9%
(Cost: $297,728,507)

 

    324,201,566  
   

 

 

 

Total Long-Term Investments — 156.9%
(Cost: $940,259,364)

 

    1,040,078,650  
   

 

 

 
Security   Shares     Value  
Short-Term Securities  
Money Market Funds — 2.9%  

BlackRock Liquidity Funds California Money Fund, Institutional Class, 0.01%(f)(g)

    19,379,575     $ 19,391,202  
   

 

 

 

Total Short-Term Securities — 2.9%
(Cost: $19,383,437)

 

    19,391,202  
   

 

 

 

Total Investments — 159.8%
(Cost: $959,642,801)

 

    1,059,469,852  

Other Assets Less Liabilities — 1.5%

 

    9,610,086  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (23.0)%

 

    (152,188,225

VMTP Shares at Liquidation Value — (38.3)%

 

    (254,000,000
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 662,891,713  
   

 

 

 

 

(a) 

U.S. Government securities held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

(b) 

Zero-coupon bond.

(c) 

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(d) 

Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details.

(e) 

All or a portion of the security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between April 1, 2025 to May 15, 2025, is $10,754,131. See Note 4 of the Notes to Financial Statements for details.

(f) 

Affiliate of the Fund.

(g) 

Annualized 7-day yield as of period end.

 

 

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

S C H E D U L E  O F  I N V E S T M E N T S

  21


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2021 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliated Issuer    Value at
07/31/20
     Purchases
at Cost
     Proceeds
from Sales
     Net
Realized
Gain (Loss)
     Change in
Unrealized
Appreciation
(Depreciation)
     Value at
07/31/21
     Shares
Held at
07/31/21
     Income      Capital Gain
Distributions
from
Underlying
Funds
 

BlackRock Liquidity Funds California Money Fund, Institutional Class

   $ 1,871,730      $ 17,508,920 (a)     $      $ 2,710      $ 7,842      $ 19,391,202        19,379,575      $ 2,216      $  
           

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 

 

  (a) 

Represents net amount purchased (sold).

 

Derivative Financial Instruments Categorized by Risk Exposure

For the year ended July 31, 2021, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from

 

                 

Futures contracts

   $      $      $      $      $ 1,456,642      $      $ 1,456,642  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts

        

Average notional value of contracts — short

   $ 16,960,281  

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.

 

      Level 1        Level 2        Level 3        Total  

Assets

                 

Investments

                 

Long-Term Investments

                 

Municipal Bonds

   $        $ 715,877,084        $        $ 715,877,084  

Municipal Bonds Transferred to Tender Option Bond Trusts

              324,201,566                   324,201,566  

Short-Term Securities

                 

Money Market Funds

     19,391,202                            19,391,202  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $      19,391,202        $ 1,040,078,650        $             —        $ 1,059,469,852  
  

 

 

      

 

 

      

 

 

      

 

 

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the fair value hierarchy as follows:

 

      Level 1        Level 2        Level 3        Total  

Liabilities

                 

TOB Trust Certificates

   $        $ (152,144,550      $        $ (152,144,550

VMTP Shares at Liquidation Value

              (254,000,000                 (254,000,000
  

 

 

      

 

 

      

 

 

      

 

 

 
   $             —        $ (406,144,550      $             —        $ (406,144,550
  

 

 

      

 

 

      

 

 

      

 

 

 

See notes to financial statements.

 

 

22  

2 0 2 1   B L A C K R O C K   A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Schedule of Investments

July 31, 2021

  

BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  

Municipal Bonds

 

Guam — 0.2%

 

Utilities — 0.2%  

Guam Government Waterworks Authority, RB, Series A, 5.00%, 01/01/50

  $ 1,015     $ 1,255,281  
   

 

 

 

New Jersey — 119.2%

 

Corporate — 1.5%  

New Jersey Economic Development Authority, RB(a)

   

Series A, (NPFGC), 5.25%, 07/01/25

    535       637,634  

Series A, (NPFGC), 5.25%, 07/01/26

    1,415       1,746,195  

New Jersey Economic Development Authority, Refunding RB

   

3.38%, 04/01/38

    2,230       2,334,342  

3.50%, 04/01/42

    1,675       1,752,016  

Series A, AMT, 2.20%, 10/01/39(b)

    850       908,472  
   

 

 

 
      7,378,659  
County/City/Special District/School District — 10.3%  

Casino Reinvestment Development Authority, Inc., Refunding RB

   

5.25%, 11/01/39

    11,130       12,460,146  

5.25%, 11/01/44

    3,755       4,158,287  

City of Bayonne New Jersey, Refunding GO, (BAM SAW), 5.00%, 07/01/26(c)

    3,340       4,088,995  

County of Essex New Jersey, GO, Series B, (SCH BD RES FD), 3.00%, 09/01/46

    1,700       1,771,672  

Essex County Improvement Authority, RB, (GTD), 4.00%, 11/01/49

    575       654,833  

Essex County Improvement Authority, Refunding RB

   

(NPFGC GTD), 5.50%, 10/01/27

    250       324,848  

(NPFGC GTD), 5.50%, 10/01/28

    4,840       6,479,502  

Ewing Township Board of Education, GO 4.00%, 07/15/38

    1,470       1,742,567  

4.00%, 07/15/39

    1,330       1,573,829  

Hudson County Improvement Authority, RB, 4.00%, 10/01/51

    2,800       3,347,344  

Hudson County Improvement Authority, RB, CAB, Series A-1, (NPFGC GTD), 0.00%, 12/15/32(d)

    1,000       823,060  

Mercer County Refunding GO, 2.38%, 02/15/30

    1,640       1,784,468  

New Jersey Economic Development Authority, RB 5.00%, 06/15/23(c)

    3,065       3,344,405  

Series KK, 5.00%, 09/01/22(c)

    325       342,193  

Series QQQ, 4.00%, 06/15/50

    2,070       2,439,785  

Newark Board of Education Refunding GO

   

(BAM SCH BD RES FD), 3.00%, 07/15/38

    700       768,131  

(BAM SCH BD RES FD), 3.00%, 07/15/39

    120       131,474  

(BAM SCH BD RES FD), 3.00%, 07/15/41

    1,500       1,638,030  

Newark Board of Education, Refunding GO, Sustainability Bonds, (BAM), 3.00%, 07/15/42

    485       527,995  

Township of Irvington New Jersey, Refunding GO, Series A, (AGM), 5.00%, 07/15/33

    1,175       1,325,271  

Union County Utilities Authority, Refunding RB, Series A, AMT, (GTD), 5.25%, 12/01/31

    650       660,263  
   

 

 

 
      50,387,098  
Education — 16.8%  

Atlantic County Improvement Authority, RB, Series A, (AGM), 4.00%, 07/01/46

    1,300       1,429,649  

Gloucester County Improvement Authority, RB 5.00%, 07/01/44

    1,985       2,294,839  

(BAM), 4.00%, 07/01/46

    465       547,258  
Security   Par
(000)
    Value  
Education (continued)  

Gloucester County Improvement Authority, RB (continued)

   

(BAM), 4.00%, 07/01/51

  $ 645     $ 756,940  

Series A, 5.00%, 07/01/31

    1,950       2,272,939  

Series A, 5.00%, 07/01/32

    1,775       2,067,396  

Series A, 5.00%, 07/01/33

    2,250       2,618,775  

Series A, 5.00%, 07/01/34

    1,200       1,395,744  

New Jersey Economic Development Authority, RB

   

Series A, 5.00%, 01/01/35

    2,000       2,147,020  

Series A, 5.00%, 07/01/38

    190       227,033  

Series A, 5.00%, 07/01/47

    795       853,345  

Series A, 5.00%, 01/01/48

    2,000       2,115,380  

Series A, 5.00%, 07/01/50

    495       579,828  

Series A, 5.25%, 11/01/54(e)

    2,235       2,419,767  

Series WW, 5.25%, 06/15/25(c)

    460       548,196  

New Jersey Economic Development Authority, Refunding RB

   

(AGM), 5.00%, 06/01/37

    3,990       4,803,481  

(AGM), 5.00%, 06/01/42

    810       968,485  

New Jersey Educational Facilities Authority, RB

   

Series A, 5.00%, 07/01/45

    1,345       1,717,161  

Series C, (AGM), 3.25%, 07/01/49

    585       626,593  

Series C, (AGM), 4.00%, 07/01/50

    495       565,300  

New Jersey Educational Facilities Authority, Refunding RB

   

Series A, (BAM), 5.00%, 07/01/28

    1,135       1,353,068  

Series A, 5.00%, 07/01/39

    15,555       17,453,488  

Series A, 5.00%, 07/01/44

    3,540       3,961,862  

Series A, 4.00%, 07/01/47

    1,145       1,305,163  

Series D, 5.00%, 07/01/38

    500       541,810  

Series D, 5.00%, 07/01/43

    600       648,504  

New Jersey Higher Education Student Assistance Authority Refunding RB, Series B, AMT, 3.00%, 12/01/32

    3,435       3,657,382  

New Jersey Higher Education Student Assistance Authority, RB

   

Series 1A, AMT, 4.00%, 12/01/28

    385       400,643  

Series 1A, AMT, 4.50%, 12/01/28

    1,015       1,062,928  

Series 1A, AMT, 4.00%, 12/01/29

    255       265,312  

Series 1A, AMT, 4.50%, 12/01/29

    1,280       1,340,186  

Series 1A, AMT, 4.63%, 12/01/30

    1,255       1,315,842  

Series 1A, AMT, 4.00%, 12/01/31

    410       426,425  

Series 1A, AMT, 4.13%, 12/01/35

    250       257,928  

Series 1A-1, AMT, 4.00%, 12/01/29

    2,185       2,334,651  

Series 1A-1, AMT, 4.25%, 12/01/32

    790       847,472  

Series 1A-1, AMT, 4.50%, 12/01/36

    690       735,098  

Sub-Series C, AMT, 4.00%, 12/01/48

    1,760       1,934,874  

New Jersey Higher Education Student Assistance Authority, Refunding RB

   

1st Series, AMT, 5.50%, 12/01/26

    585       592,792  

Series 1, AMT, 5.38%, 12/01/24

    485       491,266  

New Jersey Institute of Technology, RB, Series A, 5.00%, 07/01/45

    7,500       8,688,075  

Rutgers The State University of New Jersey, Refunding RB, Series L, 5.00%, 05/01/23(c)

    1,565       1,698,948  
   

 

 

 
      82,268,846  
Health — 7.7%  

Camden County Improvement Authority, Refunding RB, 5.00%, 02/15/33

    2,000       2,216,720  
 

 

 

S C H E D U L E  O F  I N V E S T M E N T S

  23


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Health (continued)  

Middlesex County Improvement Authority, RB, AMT, (AMBAC), 5.50%, 09/01/30

  $ 490     $ 491,573  

New Jersey Economic Development Authority, Refunding RB

   

5.00%, 01/01/34

    675       806,719  

5.00%, 01/01/39

    675       804,452  

New Jersey Health Care Facilities Financing Authority, RB

   

5.00%, 07/01/42

    2,270       2,782,044  

4.00%, 07/01/44

    2,175       2,548,969  

Series A, 5.50%, 07/01/43

    7,105       7,776,778  

New Jersey Health Care Facilities Financing Authority, Refunding RB

   

5.00%, 07/01/25

    1,000       1,044,390  

5.00%, 07/01/26

    3,720       3,885,019  

5.00%, 07/01/28

    3,000       3,335,760  

5.00%, 07/01/29

    715       795,044  

5.00%, 07/01/34

    1,330       1,607,544  

5.00%, 07/01/39

    1,825       2,196,150  

4.00%, 07/01/41

    1,600       1,761,488  

Series A, 4.00%, 07/01/43

    1,865       2,115,563  

Series A, 5.00%, 07/01/43

    3,080       3,701,914  
   

 

 

 
      37,870,127  
Housing — 6.9%  

New Jersey Housing & Mortgage Finance Agency, RB, Series A, (AGM), 5.00%, 05/01/27

    2,260       2,266,238  

New Jersey Housing & Mortgage Finance Agency, RB, M/F Housing, Series A, 4.55%, 11/01/43

    4,710       4,738,731  

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series B, 4.50%, 10/01/21(c)

    4,855       4,889,519  

New Jersey Housing & Mortgage Finance Agency, RB, Social Bonds(f)

   

Series H, 2.15%, 10/01/41

    1,710       1,703,399  

Series H, 2.30%, 10/01/46

    1,285       1,279,577  

Series H, 2.40%, 04/01/52

    1,285       1,279,140  

New Jersey Housing & Mortgage Finance Agency, Refunding RB

   

Series 2, AMT, 4.60%, 11/01/38

    3,120       3,235,503  

Series 2, AMT, 4.75%, 11/01/46

    3,795       3,906,270  

New Jersey Housing & Mortgage Finance Agency, Refunding RB, M/F Housing

   

Series A, (HUD SECT 8), 2.45%, 11/01/45

    475       475,988  

Series A, 4.00%, 11/01/48

    370       404,684  

Series A, (HUD SECT 8), 2.55%, 11/01/50

    430       431,238  

Series A, 4.10%, 11/01/53

    220       239,811  

Series A, (HUD SECT 8), 2.63%, 11/01/56

    430       432,782  

Series D, AMT, 4.25%, 11/01/37

    490       532,855  

Series D, AMT, 4.35%, 11/01/42

    1,000       1,081,640  

New Jersey Housing & Mortgage Finance Agency, Refunding RB, S/F Housing

   

Series A, 3.75%, 10/01/35

    3,575       3,956,667  

Series E, 2.25%, 10/01/40

    1,615       1,642,229  

Series E, 2.40%, 10/01/45

    1,245       1,264,721  
   

 

 

 
      33,760,992  
State — 33.5%  

Garden State Preservation Trust, RB, CAB(d)

   

Series B, (AGM), 0.00%, 11/01/23

    15,725       15,570,109  

Series B, (AGM), 0.00%, 11/01/25

    10,000       9,590,000  

Garden State Preservation Trust, Refunding RB, Series C, (AGM), 5.25%, 11/01/21

    7,705       7,798,616  
Security   Par
(000)
    Value  
State (continued)  

New Jersey Economic Development Authority, RB 4.00%, 06/15/49

  $ 2,930     $ 3,390,186  

Series A, (NPFGC), 5.25%, 07/01/24

    1,785       2,040,416  

Series A, (NPFGC), 5.25%, 07/01/25

    4,465       5,306,652  

Series A, (NPFGC), 5.25%, 07/01/26

    7,415       9,084,784  

Series B, 5.00%, 06/15/43

    1,235       1,527,300  

Series EEE, 5.00%, 06/15/43

    5,395       6,701,723  

Series WW, 5.25%, 06/15/33

    380       445,447  

Series WW, 5.00%, 06/15/34

    5,500       6,389,460  

Series WW, 5.00%, 06/15/36

    3,115       3,612,528  

Series WW, 5.25%, 06/15/40

    7,915       9,200,475  

New Jersey Economic Development Authority, Refunding RB

   

5.00%, 06/15/24

    5,000       5,195,350  

5.00%, 06/15/26

    1,250       1,298,800  

5.00%, 06/15/28

    2,430       2,510,579  

5.00%, 06/15/29

    3,195       3,319,637  

4.00%, 07/01/46

    2,770       3,187,882  

Series N-1, (AMBAC), 5.50%, 09/01/26

    800       991,240  

Series N-1, (NPFGC), 5.50%, 09/01/27

    1,000       1,274,500  

Series NN, 5.00%, 03/01/29

    5,000       5,372,150  

Sub-Series A, 4.00%, 07/01/32

    5,000       5,653,050  

Sub-Series A, 5.00%, 07/01/33

    3,875       4,617,799  

Sub-Series A, 4.00%, 07/01/34

    7,300       8,207,536  

New Jersey Educational Facilities Authority, RB

   

Series A, 4.00%, 09/01/28

    9,705       10,756,925  

Series A, 5.00%, 09/01/33

    5,370       6,089,311  

New Jersey Sports & Exposition Authority, Refunding RB, (NPFGC), 5.50%, 03/01/22(a)

    4,200       4,329,990  

South Jersey Port Corp., ARB

   

Series B, AMT, 5.00%, 01/01/42

    3,000       3,566,400  

Series B, AMT, 5.00%, 01/01/48

    1,500       1,769,760  

State of New Jersey, GO

   

2.00%, 06/01/32

    1,900       1,972,238  

2.00%, 06/01/37

    3,225       3,227,741  

Series A, 4.00%, 06/01/32

    7,755       10,046,680  
   

 

 

 
      164,045,264  
Tobacco — 5.4%  

Tobacco Settlement Financing Corp., Refunding RB

   

Series A, 5.00%, 06/01/46

    3,000       3,619,950  

Series A, 5.25%, 06/01/46

    1,960       2,406,488  

Sub-Series B, 5.00%, 06/01/46

    17,315       20,738,349  
   

 

 

 
      26,764,787  
Transportation — 30.0%  

New Brunswick Parking Authority, Refunding RB, Series B, (AGM MUN GOVT GTD), 3.00%, 09/01/39

    2,500       2,636,925  

New Jersey Economic Development Authority, RB

   

AMT, 5.13%, 01/01/34

    2,290       2,514,237  

AMT, 5.38%, 01/01/43

    7,730       8,495,193  

New Jersey Transportation Trust Fund Authority, RB

   

Series A, (NPFGC), 5.75%, 06/15/24

    1,205       1,391,944  

Series A, 5.00%, 06/15/30

    2,250       2,684,813  

Series A, 5.00%, 06/15/42

    5,000       5,206,400  

Series AA, 5.00%, 06/15/33

    3,000       3,127,560  

Series AA, 5.25%, 06/15/33

    5,690       6,201,474  

Series AA, 5.25%, 06/15/34

    1,305       1,528,455  

Series AA, 5.00%, 06/15/38

    2,340       2,623,912  

Series AA, 4.00%, 06/15/50

    6,300       7,409,241  

Series B, 5.00%, 06/15/33

    1,340       1,684,996  
 

 

 

24  

2 0 2 1   B L A C K R O C K   A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Transportation (continued)  

New Jersey Transportation Trust Fund Authority, RB (continued)

   

Series BB, 4.00%, 06/15/50

  $ 3,325     $ 3,814,074  

Series D, 5.00%, 06/15/32

    3,300       3,781,536  

New Jersey Transportation Trust Fund Authority, RB, CAB(d)

   

Series A, 0.00%, 12/15/35

    6,000       4,463,940  

Series C, (AGM), 0.00%, 12/15/32

    8,800       7,199,280  

Series C, (AMBAC), 0.00%, 12/15/35

    4,160       3,161,725  

Series C, (AMBAC), 0.00%, 12/15/36

    7,210       5,332,155  

New Jersey Transportation Trust Fund Authority, Refunding RB

   

4.00%, 12/15/39

    165       193,015  

Series A, 5.00%, 06/15/26

    400       482,824  

Series A, 5.00%, 06/15/31

    7,480       9,026,722  

Series A, 5.00%, 06/15/32

    750       1,001,108  

Series A, 5.00%, 12/15/32

    4,285       5,396,786  

Series A, 4.00%, 06/15/34

    1,950       2,380,580  

Series A, 4.00%, 06/15/35

    2,950       3,583,778  

Series A, 5.00%, 12/15/35

    1,095       1,369,265  

New Jersey Turnpike Authority, RB

   

Series A1, 5.00%, 01/01/35

    1,440       1,764,086  

Series E, 5.00%, 01/01/45

    8,000       9,144,240  

New Jersey Turnpike Authority, Refunding RB

   

Series A, (AGM), 5.25%, 01/01/29

    4,000       5,302,200  

Series A, (BHAC-CR AGM), 5.25%, 01/01/29

    500       662,775  

Series A, (AGM), 5.25%, 01/01/30

    4,000       5,427,880  

Series B, 5.00%, 01/01/34

    2,300       2,885,787  

Series B, 5.00%, 01/01/40

    5,740       7,168,399  

Series G, 5.00%, 01/01/36

    5,000       6,251,500  

Series G, 4.00%, 01/01/43

    3,320       3,842,601  

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 206th Series, AMT, 5.00%, 11/15/47

    3,475       4,244,643  

South Jersey Transportation Authority, RB, Series A, 5.00%, 11/01/45

    2,865       3,635,456  
   

 

 

 
      147,021,505  
Utilities — 7.1%  

Essex County Utilities Authority, Refunding RB, (AGC GTD), 4.13%, 04/01/22

    2,000       2,004,740  

New Jersey Infrastructure Bank, RB 2.00%, 09/01/42

    1,320       1,326,653  

2.00%, 09/01/43

    915       919,694  

2.25%, 09/01/50

    2,245       2,269,470  

Passaic Valley Sewerage Commission, Refunding RB

   

Series J, (AGM), 3.00%, 12/01/40

    1,140       1,237,744  

Series J, (AGM), 3.00%, 12/01/41

    1,170       1,268,081  

Series J, (AGM), 3.00%, 12/01/42

    1,190       1,286,997  

Series J, (AGM), 3.00%, 12/01/43

    1,220       1,316,575  

Series J, (AGM), 3.00%, 12/01/44

    1,250       1,346,388  

Series J, (AGM), 3.00%, 12/01/45

    1,275       1,371,568  

Rahway Valley Sewerage Authority, RB, CAB(d)

   

Series A, (NPFGC), 0.00%, 09/01/26

    4,100       3,910,457  

Series A, (NPFGC), 0.00%, 09/01/28

    6,600       6,056,028  
Security   Par
(000)
    Value  
Utilities (continued)  

Rahway Valley Sewerage Authority, RB, CAB(d) (continued)

   

Series A, (NPFGC), 0.00%, 09/01/29

  $ 9,650     $ 8,626,521  

Series A, (NPFGC), 0.00%, 09/01/33

    2,350       1,889,658  
   

 

 

 
      34,830,574  
   

 

 

 

Total Municipal Bonds in New Jersey

 

    584,327,852  

New York — 5.6%

 

Transportation — 5.6%  

Port Authority of New York & New Jersey, ARB

   

Consolidated, 93rd Series, 6.13%, 06/01/94

    1,000       1,162,220  

Consolidated, 218th Series, AMT, 4.00%, 11/01/34

    1,640       1,972,543  

Consolidated, 218th Series, AMT, 4.00%, 11/01/47

    2,485       2,875,766  

Consolidated, 221st Series, AMT, 4.00%, 07/15/45

    2,165       2,542,749  

Port Authority of New York & New Jersey, Refunding ARB

   

Consolidated, 206th Series, AMT, 5.00%, 11/15/42

    3,110       3,815,472  

Series 178th, AMT, 5.00%, 12/01/33

    4,005       4,422,201  

Series 223, AMT, 4.00%, 07/15/51

    2,960       3,494,606  

Port Authority of New York & New Jersey, Refunding RB

   

Consolidated, 200th Series, 5.00%, 09/01/36

    3,090       4,017,896  

Consolidated, 212th Series, 4.00%, 09/01/37

    2,460       2,978,470  
   

 

 

 

Total Municipal Bonds in New York

 

    27,281,923  

Pennsylvania — 2.6%

 

Transportation — 2.6%  

Delaware River Port Authority Refunding RB, 5.00%, 01/01/27

    785       838,733  

Delaware River Port Authority, RB 5.00%, 01/01/29

    2,000       2,226,160  

5.00%, 01/01/37

    8,830       9,785,848  
   

 

 

 

Total Municipal Bonds in Pennsylvania

 

    12,850,741  

Puerto Rico — 4.7%

 

State — 4.7%  

Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB

   

Series A-1, Restructured, 4.75%, 07/01/53

    583       670,654  

Series A-1, Restructured, 5.00%, 07/01/58

    3,462       4,033,680  

Series A-2, Restructured, 4.33%, 07/01/40

    11,732       13,325,792  

Series A-2, Restructured, 4.78%, 07/01/58

    878       1,009,525  

Series B-1, Restructured, 4.75%, 07/01/53

    638       733,923  

Series B-2, Restructured, 4.78%, 07/01/58

    618       710,953  

Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB, CAB, Series A-1, Restructured, 0.00%, 07/01/46(d)

    7,564       2,526,981  
   

 

 

 

Total Municipal Bonds in Puerto Rico

 

    23,011,508  
   

 

 

 

Total Municipal Bonds — 132.3%
(Cost: $580,409,396)

 

    648,727,305  
   

 

 

 

Municipal Bonds Transferred to Tender Option Bond Trusts(g)

 

New Jersey — 21.1%

 

County/City/Special District/School District — 5.9%  

Hudson County Improvement Authority, RB, 5.25%, 05/01/51

    3,120       3,735,482  
 

 

 

S C H E D U L E  O F  I N V E S T M E N T S

  25


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
County/City/Special District/School District (continued)  

Union County Utilities Authority, Refunding RB

   

Series A, 5.00%, 06/15/41

  $ 7,573     $ 7,598,308  

Series A, AMT, 5.25%, 12/01/31

    17,300       17,573,167  
   

 

 

 
      28,906,957  
Education — 7.1%  

New Jersey Economic Development Authority, Refunding RB

   

AMT, 3.00%, 08/01/41

    9,749       9,920,422  

AMT, 3.00%, 08/01/43(h)

    14,021       14,267,573  

Rutgers The State University of New Jersey, Refunding RB, Series L, 5.00%, 05/01/23(c)

    10,000       10,849,900  
   

 

 

 
      35,037,895  
Health — 1.4%  

New Jersey Health Care Facilities Financing Authority, RB, 4.00%, 07/01/47

    6,133       6,996,516  
   

 

 

 
State — 4.7%  

Garden State Preservation Trust, RB, Series A, 5.75%, 11/01/28

    12,460       15,665,958  

New Jersey Economic Development Authority, Refunding RB, Series NN, 5.00%, 03/01/29(h)

    6,698       7,196,718  
   

 

 

 
      22,862,676  
Transportation — 2.0%  

New Jersey Turnpike Authority, RB, Series A, 5.00%, 07/01/22(c)(h)

    9,300       9,716,082  
   

 

 

 

Total Municipal Bonds in New Jersey

 

    103,520,126  
   

 

 

 
New York — 2.1%  
Transportation — 2.1%  

Port Authority of New York & New Jersey, Refunding ARB, AMT, Consolidated, 169th Series, 5.00%, 10/15/41

    10,000       10,091,000  
   

 

 

 

Total Municipal Bonds Transferred to Tender Option Bond Trusts — 23.2%
(Cost: $107,642,433)

 

    113,611,126  
   

 

 

 

Total Long-Term Investments — 155.5%
(Cost: $688,051,829)

 

    762,338,431  
   

 

 

 
Short-Term Securities  
Commercial Paper — 1.0%  

Port Authority of New York & New Jersey, Refunding ARB, 0.16%, 10/01/21

    5,100       5,100,419  
   

 

 

 
      5,100,419  
   

 

 

 
Security       
Shares
    Value  
Money Market Funds — 4.6%            

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.01%(i)(j)

    22,332,938     $ 22,337,405  
   

 

 

 

Total Short-Term Securities — 5.6%
(Cost: $27,437,405)

 

    27,437,824  
   

 

 

 

Total Investments — 161.1%
(Cost: $715,489,234)

 

    789,776,255  

Liabilities in Excess of Other Assets — (0.2)%

 

    (1,435,000

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (12.6)%

 

    (61,552,078

VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (48.3)%

 

    (236,685,959
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 490,103,218  
   

 

 

 

 

(a) 

Security is collateralized by municipal bonds or U.S. Treasury obligations.

(b) 

Variable rate security. Interest rate resets periodically. The rate shown is the effective interest rate as of period end. Security description also includes the reference rate and spread if published and available.

(c) 

U.S. Government securities held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

(d) 

Zero-coupon bond.

(e)

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(f)

When-issued security.

(g) 

Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details.

(h) 

All or a portion of the security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between January 1, 2022 to February 1, 2037, is $24,100,690. See Note 4 of the Notes to Financial Statements for details.

(i)

Affiliate of the Fund.

(j) 

Annualized 7-day yield as of period end.

 

 

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

26  

2 0 2 1   B L A C K R O C K   A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2021 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliated Issuer   Value at
07/31/20
    Purchases
at Cost
    Proceeds
from Sales
    Net
Realized
Gain (Loss)
    Change in
Unrealized
Appreciation
(Depreciation)
    Value at
07/31/21
    Shares
Held at
07/31/21
    Income     Capital Gain
Distributions
from
Underlying
Funds
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

  $ 871,428     $ 21,465,717 (a)    $     $ 625     $ (365   $ 22,337,405       22,332,938     $ 854     $  
       

 

 

   

 

 

   

 

 

     

 

 

   

 

 

 

 

  (a) 

Represents net amount purchased (sold).

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Description    Number of
Contracts
       Expiration
Date
       Notional
Amount (000)
       Value/
Unrealized
Appreciation
(Depreciation)
 

Short Contracts

                 

10-Year U.S. Treasury Note

     111          09/21/21        $ 14,933        $ (281,534

U.S. Long Bond

     52          09/21/21          8,578          (450,231

5-Year U.S. Treasury Note

     100          09/30/21          12,448          (116,602
                 

 

 

 
                  $ (848,367
                 

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Liabilities — Derivative Financial Instruments

                    

Futures contracts

                    

Unrealized depreciation on futures contracts(a)

   $      $      $      $      $ 848,367      $      $ 848,367  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Net cumulative unrealized appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss).

 

For the year ended July 31, 2021, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from

                    

Futures contracts

   $      $      $      $      $ 886,497      $      $ 886,497  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
Net Change in Unrealized Appreciation (Depreciation) on                                                 

Futures contracts

   $      $      $      $      $ (848,367    $      $ (848,367
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts        

Average notional value of contracts — short

   $ 28,182,008  

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

 

S C H E D U L E  O F  I N V E S T M E N T S

  27


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.

 

      Level 1        Level 2        Level 3        Total  

Assets

                 

Investments

                 

Long-Term Investments

                 

Municipal Bonds

   $        $ 648,727,305        $        $ 648,727,305  

Municipal Bonds Transferred to Tender Option Bond Trusts

              113,611,126                   113,611,126  

Short-Term Securities

                 

Commercial Paper

              5,100,419                   5,100,419  

Money Market Funds

     22,337,405                            22,337,405  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $   22,337,405        $ 767,438,850        $        $ 789,776,255  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(a)

                 

Liabilities

                 

Interest Rate Contracts

   $ (848,367      $        $             —        $ (848,367
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the fair value hierarchy as follows:

 

      Level 1        Level 2        Level 3        Total  

Liabilities

                 

TOB Trust Certificates

   $        $ (61,534,134      $        $ (61,534,134

VRDP Shares at Liquidation Value

              (237,100,000                 (237,100,000
  

 

 

      

 

 

      

 

 

      

 

 

 
   $             —        $ (298,634,134      $             —        $ (298,634,134
  

 

 

      

 

 

      

 

 

      

 

 

 

See notes to financial statements.

 

 

28  

2 0 2 1   B L A C K R O C K   A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Schedule of Investments

July 31, 2021

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  

Municipal Bonds

   

Michigan — 134.1%

   
Corporate — 3.3%            

Monroe County Economic Development Corp., Refunding RB, Series AA, (NPFGC), 6.95%, 09/01/22

  $ 14,500     $ 15,541,535  
   

 

 

 
County/City/Special District/School District — 24.6%  

Battle Creek School District, Refunding GO, (Q-SBLF), 5.00%, 05/01/37

    1,170       1,401,719  

Berkley School District, GO, (Q-SBLF), 5.00%, 05/01/35

    2,965       3,441,327  

Byron Center Public Schools, GO

   

Series I, (Q-SBLF), 5.00%, 05/01/43

    4,475       5,465,810  

Series I, (Q-SBLF), 5.00%, 05/01/47

    740       898,952  

Columbia School District, GO, (Q-SBLF), 5.00%, 11/01/23(a)

    5,185       5,754,261  

County of Saginaw Michigan, GO, 4.00%, 11/01/42

    2,000       2,302,660  

Dearborn Brownfield Redevelopment Authority, GO, Series A, (AGC), 5.50%, 05/01/39

    5,300       5,319,133  

Dearborn School District, GO

   

Series A, (Q-SBLF), 5.00%, 11/01/23(a)

    1,500       1,664,685  

Series A, (Q-SBLF), 5.00%, 05/01/33

    1,600       1,764,160  

Series A, (Q-SBLF), 5.00%, 05/01/34

    1,200       1,322,508  

Dowagiac Union School District, GO, (Q-SBLF), 5.00%, 05/01/41

    1,140       1,358,321  

East Lansing School District, GO, Series I, (Q-SBLF), 5.00%, 05/01/42

    1,000       1,222,610  

Farmington Public School District, Refunding GO

   

(AGM), 5.00%, 05/01/33

    1,500       1,748,505  

(AGM), 5.00%, 05/01/34

    1,500       1,747,320  

(AGM), 5.00%, 05/01/35

    1,000       1,164,140  

Fraser Public School District, Refunding GO

   

(Q-SBLF), 5.00%, 05/01/43

    2,000       2,440,220  

(Q-SBLF), 5.00%, 05/01/47

    3,225       3,914,150  

Gibraltar School District, GO, (Q-SBLF), 5.00%, 05/01/36

    750       944,220  

Grandville Public Schools, GO

   

Series I, (AGM), 4.00%, 05/01/38

    910       1,094,803  

Series II, (AGM), 5.00%, 05/01/40

    3,250       3,749,947  

Gull Lake Community School District, GO, Series I, (Q-SBLF), 5.00%, 05/01/45

    4,000       5,023,520  

Hudsonville Public Schools, GO

   

Series I, (Q-SBLF), 4.00%, 05/01/43

    1,875       2,228,756  

Series I, (Q-SBLF), 4.00%, 05/01/44

    1,950       2,313,889  

Series I, (Q-SBLF), 4.00%, 05/01/45

    2,040       2,418,808  

Jackson Public Schools, GO, (Q-SBLF), 5.00%, 05/01/42

    4,000       4,992,520  

Kentwood Public Schools, GO

   

5.00%, 05/01/41

    1,120       1,339,027  

5.00%, 05/01/44

    1,815       2,163,081  

Livonia Public Schools, GO, Series I, (AGM), 5.00%, 05/01/23(a)

    5,000       5,429,200  

Mattawan Consolidated School District, GO, Series I, (Q-SBLF), 5.00%, 05/01/25(a)

    3,375       3,971,734  

Michigan Finance Authority, RB

   

5.00%, 11/01/34

    215       271,683  

5.00%, 11/01/38

    2,500       3,149,175  

5.00%, 11/01/43

    4,000       5,020,080  

Series H-1, 5.00%, 10/01/39(a)

    5,400       6,145,686  
Security   Par
(000)
    Value  
County/City/Special District/School District (continued)            

Mona Shores Public Schools, GO

   

Series I, (Q-SBLF), 5.00%, 05/01/42

  $ 1,000     $ 1,275,800  

Series I, (Q-SBLF), 5.00%, 05/01/43

    1,025       1,306,691  

Series I, (Q-SBLF), 5.00%, 05/01/44

    1,525       1,942,393  

Swartz Creek Community Schools, GO, (Q-SBLF), 5.00%, 05/01/44

    4,270       5,386,818  

Troy School District, GO, (Q-SBLF), 5.00%, 11/01/23(a)

    2,000       2,219,580  

Walled Lake Consolidated School District, GO, (Q-SBLF), 5.00%, 11/01/23(a)

    7,010       7,779,628  

Zeeland Public Schools, GO

   

Series A, (AGM), 5.00%, 05/01/25(a)

    2,000       2,353,510  

Series A, (AGM), 5.00%, 05/01/33

    1,000       1,162,240  
   

 

 

 
      116,613,270  
Education — 30.1%            

Grand Valley State University, RB, 5.00%, 12/01/43

    1,600       1,984,064  

Lake Superior State University, RB, (AGM), 5.00%, 01/15/48

    3,750       4,570,575  

Michigan Finance Authority, Refunding RB 4.00%, 02/01/29

    700       776,783  

5.00%, 02/01/33

    830       952,359  

4.00%, 12/01/33

    1,720       1,843,204  

5.00%, 12/01/36

    1,550       1,693,452  

5.00%, 09/01/40

    1,000       1,151,220  

5.00%, 12/01/40

    2,900       3,114,310  

5.00%, 12/01/45

    4,400       4,700,344  

4.00%, 09/01/46

    1,750       2,046,835  

Series 25-A, AMT, 4.00%, 11/01/29

    5,900       6,148,154  

Series 25-A, AMT, 4.00%, 11/01/30

    2,850       2,969,301  

Series 25-A, AMT, 4.00%, 11/01/31

    3,150       3,281,166  

Michigan State University, Refunding RB, Series A, 5.00%, 08/15/38

    10,000       10,940,500  

Michigan Technological University, RB, Series A, 5.00%, 10/01/45

    1,800       2,102,544  

Michigan Technological University, Refunding RB 5.00%, 10/01/31

    1,080       1,473,617  

5.00%, 10/01/32

    1,250       1,697,112  

5.00%, 10/01/33

    1,325       1,790,234  

5.00%, 10/01/34

    1,400       1,881,964  

Oakland University, RB

   

5.00%, 03/01/32

    400       411,152  

5.00%, 03/01/41

    3,635       4,316,781  

Series A, 5.00%, 03/01/38

    5,490       5,886,598  

Series A, 5.00%, 03/01/43

    16,845       18,027,182  

University of Michigan, RB, Series A, 5.00%, 04/01/39

    3,425       3,843,090  

Wayne State University, RB, Series A, 5.00%, 11/15/40

    13,000       14,341,470  

Western Michigan University, RB, Series A, (AGM), 5.00%, 11/15/51

    5,000       6,397,850  

Western Michigan University, Refunding RB 5.25%, 11/15/21(a)

    3,500       3,551,380  

(AGM), 5.00%, 11/15/23(a)

    1,750       1,945,317  

5.25%, 11/15/23(a)

    8,475       9,469,202  

(AGM), 5.25%, 11/15/23(a)

    1,000       1,117,310  

5.00%, 11/15/44

    5,650       7,176,121  

5.00%, 11/15/49

    8,680       11,024,815  
   

 

 

 
      142,626,006  
Health — 33.1%            

Grand Traverse County Hospital Finance Authority, RB

 

 

Series A, 5.00%, 07/01/44

    4,230       4,754,012  

Series A, 5.00%, 07/01/47

    2,200       2,469,082  

Series A, 5.00%, 07/01/49

    2,610       3,244,204  
 

 

 

S C H E D U L E  O F  I N V E S T M E N T S

  29


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Health (continued)            

Grand Traverse County Hospital Finance Authority, RB (continued)

   

Series B, 4.00%, 07/01/49

  $ 2,000     $ 2,305,840  

Grand Traverse County Hospital Finance Authority, Refunding RB

   

5.00%, 07/01/32

    2,135       2,899,415  

5.00%, 07/01/33

    1,125       1,520,831  

5.00%, 07/01/34

    1,180       1,587,619  

Kalamazoo Economic Development Corp., Refunding RB

   

5.00%, 05/15/32

    865       970,271  

5.00%, 05/15/42

    425       468,486  

Kent Hospital Finance Authority, Refunding RB, Series A, 5.00%, 11/15/21(a)

    7,500       7,604,850  

Kentwood Economic Development Corp., RB, 4.00%, 11/15/45

    750       837,390  

Kentwood Economic Development Corp., Refunding RB, 5.00%, 11/15/41

    2,335       2,730,479  

Michigan Finance Authority, RB

   

5.00%, 11/15/36

    2,500       2,648,450  

Series S, 4.00%, 11/01/46

    1,025       1,143,808  

Michigan Finance Authority, Refunding RB 5.00%, 12/01/21(a)

    16,690       16,959,877  

5.00%, 06/01/24(a)

    1,500       1,705,155  

5.00%, 11/01/32

    4,000       4,237,080  

5.00%, 11/15/37

    3,000       3,647,370  

5.00%, 11/15/41

    1,000       1,205,420  

5.00%, 11/15/45

    3,750       4,327,350  

5.00%, 12/01/45(a)

    19,735       23,642,897  

4.00%, 11/15/46

    8,500       9,578,140  

Series S, 5.00%, 05/15/32

    1,000       1,158,040  

Series S, 5.00%, 05/15/33

    2,000       2,314,320  

Series S, 5.00%, 05/15/34

    6,500       7,515,690  

Series S, 5.00%, 05/15/35

    4,945       5,713,156  

Michigan State Hospital Finance Authority, Refunding RB

   

Series A, 5.00%, 06/01/35

    2,250       2,334,398  

Series C, 4.00%, 06/01/22(a)

    5,300       5,472,303  

Michigan Strategic Fund, Refunding RB, 5.00%, 11/15/43

    1,220       1,411,516  

Royal Oak Hospital Finance Authority, Refunding RB, Series D, 5.00%, 09/01/39

    27,365       30,482,694  
   

 

 

 
      156,890,143  
Housing — 7.0%            

Michigan State Housing Development Authority, RB, M/F Housing

   

Series A, 4.45%, 10/01/34

    1,000       1,058,500  

Series A, 4.63%, 10/01/39

    3,490       3,681,217  

Series A, 4.30%, 10/01/40

    3,320       3,614,119  

Series A, 4.00%, 10/01/43

    7,420       8,208,672  

Series A, 4.75%, 10/01/44

    5,000       5,232,150  

Series A, 2.45%, 10/01/46

    5,000       4,966,900  

AMT, (GNMA), 4.75%, 04/20/37

    2,910       2,913,957  

Michigan State Housing Development Authority, RB, S/F Housing, Series A, 4.00%, 12/01/44

    3,390       3,574,382  
   

 

 

 
      33,249,897  
Security   Par
(000)
    Value  
State — 19.4%            

Flint Economic Development Corp., RB, 5.25%, 10/01/41

  $ 4,950     $ 4,989,600  

Michigan Finance Authority, RB

   

Series F, 5.00%, 04/01/31

    1,000       1,007,880  

Series F, 5.25%, 10/01/41

    8,595       8,663,760  

Michigan State Building Authority, Refunding RB

   

Series I, 5.00%, 04/15/41

    4,750       5,678,768  

Series I, 4.00%, 10/15/46

    5,000       6,084,500  

Series I-A, 5.50%, 10/15/21(a)

    2,000       2,021,720  

Michigan Strategic Fund, RB

   

Series A, 5.25%, 10/15/40

    3,000       3,542,100  

AMT, (AGM), 4.25%, 12/31/38

    14,000       16,766,120  

AMT, 5.00%, 12/31/43

    15,000       18,250,650  

Michigan Strategic Fund, Refunding RB, 5.25%, 10/15/31

    7,000       7,071,610  

State of Michigan Trunk Line Revenue, RB 5.00%, 11/15/33

    3,000       3,041,790  

5.00%, 11/15/36

    5,345       5,418,814  

Series B, 4.00%, 11/15/45

    5,000       6,044,000  

State of Michigan, COP, (AMBAC), 0.00%, 06/01/22(b)(c)

    3,000       2,991,570  
   

 

 

 
      91,572,882  
Tobacco — 1.8%            

Michigan Finance Authority, Refunding RB, Series A, Class 1, 4.00%, 06/01/40

    1,250       1,499,162  

Michigan Finance Authority, Refunding RB, CAB, Series B-2, Class 2, 0.00%, 06/01/65(c)

    50,000       6,795,000  
   

 

 

 
      8,294,162  
Transportation — 6.6%            

Wayne County Airport Authority, ARB

   

Series A, 5.00%, 12/01/42

    1,000       1,244,480  

Series A, 5.00%, 12/01/46

    2,000       2,651,240  

Series D, 5.00%, 12/01/35

    3,850       4,578,574  

Series D, 5.00%, 12/01/45

    7,500       8,842,650  

Series B, AMT, 5.00%, 12/01/42

    1,000       1,222,350  

Series B, AMT, 5.00%, 12/01/47

    1,250       1,521,938  

Series C, AMT, 5.00%, 12/01/39

    1,475       1,679,361  

Wayne County Airport Authority, Refunding ARB, Series F, AMT, 5.00%, 12/01/34

    8,000       9,432,480  
   

 

 

 
      31,173,073  
Utilities — 8.2%            

City of Detroit Michigan Sewage Disposal System Revenue, Refunding RB, Series A, Senior Lien, 5.25%, 07/01/22(a)

    2,655       2,780,369  

City of Detroit Michigan Water Supply System Revenue, RB, Series A, Senior Lien, (NPFGC), 5.00%, 07/01/34

    10       10,033  

City of Grand Rapids Michigan Sanitary Sewer System Revenue, Refunding RB, Series A, (NPFGC), 5.50%, 01/01/22

    280       286,121  

City of Port Huron Michigan Water Supply System Revenue, RB

   

5.25%, 10/01/31

    500       503,895  

5.63%, 10/01/40

    1,500       1,512,270  

Downriver Utility Wastewater Authority, Refunding RB, (AGM), 5.00%, 04/01/43

    1,000       1,208,710  

Great Lakes Water Authority Water Supply System Revenue, RB, Series B, 2nd Lien, 5.00%, 07/01/46

    10,000       11,826,100  
 

 

 

30  

2 0 2 1   B L A C K R O C K   A N N U A L   R E P O R T   T O   S H A R E H O L D E R S


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Utilities (continued)            

Karegnondi Water Authority, Refunding RB 5.00%, 11/01/41

  $ 2,750     $ 3,401,063  

5.00%, 11/01/45

    3,000       3,710,040  

Michigan Finance Authority, Refunding RB

   

Series D-1, 5.00%, 07/01/34

    2,000       2,339,180  

Series D-1, 5.00%, 07/01/35

    750       876,540  

Series C-3, Senior Lien, (AGM), 5.00%, 07/01/31

    1,000       1,131,110  

Series C-3, Senior Lien, (AGM), 5.00%, 07/01/32

    5,250       5,934,495  

Series C-3, Senior Lien, (AGM), 5.00%, 07/01/33

    3,000       3,388,890  
   

 

 

 
      38,908,816  
   

 

 

 

Total Municipal Bonds in Michigan

      634,869,784  
Puerto Rico — 4.6%            
State — 4.6%            

Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB

   

Series A-1, Restructured, 4.75%, 07/01/53

    534       614,287  

Series A-1, Restructured, 5.00%, 07/01/58

    825       961,232  

Series A-2, Restructured, 4.33%, 07/01/40

    1,109       1,259,658  

Series A-2, Restructured, 4.78%, 07/01/58

    103       118,429  

Series B-1, Restructured, 4.75%, 07/01/53

    616       708,616  

Series B-1, Restructured, 5.00%, 07/01/58

    7,451       8,673,634  

Series B-2, Restructured, 4.33%, 07/01/40

    5,880       6,675,035  

Series B-2, Restructured, 4.78%, 07/01/58

    597       686,795  

Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB, CAB, Series A-1, Restructured, 0.00%, 07/01/46(c)

    6,295       2,103,034  
   

 

 

 

Total Municipal Bonds in Puerto Rico

      21,800,720  
   

 

 

 

Total Municipal Bonds — 138.7%
(Cost: $603,186,675)

      656,670,504  
   

 

 

 

Municipal Bonds Transferred to Tender Option Bond Trusts(d)

 

Michigan — 17.2%

   
Education — 13.2%            

Eastern Michigan University, RB, Series A, 4.00%, 03/01/44

    10,000       11,612,600  

Michigan Finance Authority, RB, Series A, 5.00%, 11/01/44

    10,002       11,746,220  

Michigan Finance Authority, Refunding RB, AMT, Series 25-A, 4.00%, 11/01/28

    8,750       9,120,035  

Michigan State University, Refunding RB, Series B, 5.00%, 02/15/44(e)

    5,750       7,328,719  

University of Michigan, Refunding RB, 5.00%, 04/01/46

    10,000       11,981,701  

Wayne State University, RB, Series A, 5.00%, 11/15/43(e)

    8,530       10,791,557  
   

 

 

 
      62,580,832  
Security   Par
(000)
    Value  
State — 1.3%            

Michigan State Building Authority, Refunding RB, Series I, 5.00%, 10/15/45

  $ 5,150     $ 6,055,988  
   

 

 

 
Utilities — 2.7%            

Lansing Board of Water & Light, Refunding RB, Series A, 5.00%, 07/01/44

    10,000       12,737,796  
   

 

 

 

Total Municipal Bonds in Michigan

      81,374,616  
   

 

 

 

Total Municipal Bonds Transferred to Tender Option Bond Trusts — 17.2%
(Cost: $73,130,361)

      81,374,616  
   

 

 

 

Total Long-Term Investments — 155.9%
(Cost: $676,317,036)

      738,045,120  
   

 

 

 
     Shares         
Short-Term Securities            
Money Market Funds — 0.6%            

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.01%(f)(g)

    2,854,205       2,854,776  
   

 

 

 

Total Short-Term Securities — 0.6%
(Cost: $2,853,807)

      2,854,776  
   

 

 

 

Total Investments — 156.5%
(Cost: $679,170,843)

      740,899,896  

Other Assets Less Liabilities — 1.1%

      5,351,746  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (8.7)%

 

    (41,281,586

VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (48.9)%

 

    (231,506,549
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 473,463,507  
   

 

 

 

 

(a) 

U.S. Government securities held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

(b) 

Security is collateralized by municipal bonds or U.S. Treasury obligations.

(c) 

Zero-coupon bond.

(d) 

Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details.

(e) 

All or a portion of the security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between November 15, 2026 to February 15, 2027, is $9,881,917. See Note 4 of the Notes to Financial Statements for details.

(f) 

Affiliate of the Fund.

(g) 

Annualized 7-day yield as of period end.

 

 

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

S C H E D U L E  O F  I N V E S T M E N T S

  31


Schedule of Investments  (continued)

July 31, 2021

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2021 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliated Issuer    Value at
07/31/20
     Purchases
at Cost
     Proceeds
from Sales
     Net
Realized
Gain (Loss)
     Change in
Unrealized
Appreciation
(Depreciation)
     Value at
07/31/21
     Shares
Held at
07/31/21
     Income      Capital Gain
Distributions
from
Underlying
Funds
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

   $ 3,877,972      $      $ (1,023,485 )(a)     $ 775      $ (486    $ 2,854,776        2,854,205      $ 395      $  
           

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 

 

  (a) 

Represents net amount purchased (sold).

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.

 

      Level 1        Level 2        Level 3        Total  

Assets

                 

Investments

                 

Long-Term Investments

                 

Municipal Bonds

   $        $ 656,670,504        $        $ 656,670,504  

Municipal Bonds Transferred to Tender Option Bond Trusts

              81,374,616                   81,374,616  

Short-Term Securities

                 

Money Market Funds

     2,854,776                            2,854,776  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $     2,854,776        $ 738,045,120        $             —        $ 740,899,896  
  

 

 

      

 

 

      

 

 

      

 

 

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the fair value hierarchy as follows: