|
|
|
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock MuniYield
Quality Fund III,
Inc. (MYI)
|
|
Increase (Decrease) in Net Assets Applicable to Common Shareholders:
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended
July 31,
2013
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
30,364,080
|
|
|
$
|
60,108,473
|
|
Net realized gain (loss)
|
|
|
(7,408,436
|
)
|
|
|
2,008,051
|
|
Net change in unrealized appreciation/depreciation
|
|
|
35,415,907
|
|
|
|
(116,972,196
|
)
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations
|
|
|
58,371,551
|
|
|
|
(54,855,672
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends to Common Shareholders From
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(29,316,537
|
)
|
|
|
(58,782,268
|
)
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Share Transactions
|
|
|
|
|
|
|
|
|
Reinvestment of common dividends
|
|
|
|
|
|
|
3,428,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets Applicable to Common Shareholders
|
|
|
|
|
|
|
|
|
Total increase (decrease) in net assets applicable to Common Shareholders
|
|
|
29,055,014
|
|
|
|
(110,209,470
|
)
|
Beginning of period
|
|
|
925,812,198
|
|
|
|
1,036,021,668
|
|
|
|
|
|
|
End of period
|
|
$
|
954,867,212
|
|
|
$
|
925,812,198
|
|
|
|
|
|
|
Undistributed net investment income, end of period
|
|
$
|
17,325,877
|
|
|
$
|
16,278,334
|
|
|
|
|
|
|
1
Determined in accordance with federal income tax
regulations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
46
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended January 31, 2014 (Unaudited)
|
|
BlackRock
MuniHoldings
Quality
Fund II, Inc.
(MUE)
|
|
|
BlackRock
MuniYield
California
Quality
Fund,
Inc.
(MCA)
|
|
|
BlackRock
MuniYield
Michigan
Quality
Fund II, Inc.
(MYM)
|
|
|
BlackRock
MuniYield
New York
Quality
Fund, Inc.
(MYN)
|
|
|
BlackRock
MuniYield
Quality
Fund III, Inc.
(MYI)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Provided by Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase in net assets resulting from operations
|
|
$
|
18,852,014
|
|
|
$
|
38,470,078
|
|
|
$
|
8,408,950
|
|
|
$
|
29,408,281
|
|
|
$
|
58,371,551
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used For) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in interest receivable
|
|
|
(144,477
|
)
|
|
|
(175,150
|
)
|
|
|
(142,842
|
)
|
|
|
135,721
|
|
|
|
(2,828
|
)
|
Increase in cash pledged for financial futures contracts
|
|
|
(434,000
|
)
|
|
|
(514,000
|
)
|
|
|
(54,000
|
)
|
|
|
(720,000
|
)
|
|
|
|
|
Increase in prepaid expenses
|
|
|
(16,161
|
)
|
|
|
(21,571
|
)
|
|
|
(12,862
|
)
|
|
|
(21,096
|
)
|
|
|
(30,281
|
)
|
Decrease in investment advisory fees payable
|
|
|
(816
|
)
|
|
|
(5,762
|
)
|
|
|
(3,886
|
)
|
|
|
(12,677
|
)
|
|
|
(8,847
|
)
|
Decrease in interest expense and fees payable
|
|
|
(12,382
|
)
|
|
|
(55,725
|
)
|
|
|
(2,414
|
)
|
|
|
(29,559
|
)
|
|
|
(39,355
|
)
|
Decrease in other accrued expenses payable
|
|
|
(35,590
|
)
|
|
|
(39,479
|
)
|
|
|
(19,510
|
)
|
|
|
(38,187
|
)
|
|
|
(54,712
|
)
|
Increase in variation margin payable on financial futures contracts
|
|
|
83,718
|
|
|
|
94,999
|
|
|
|
8,906
|
|
|
|
130,623
|
|
|
|
|
|
Increase (decrease) in Officers and Directors fees payable
|
|
|
(1,846
|
)
|
|
|
4,569
|
|
|
|
(1,007
|
)
|
|
|
4,610
|
|
|
|
8,162
|
|
Net realized gain on investments
|
|
|
7,472,132
|
|
|
|
435,183
|
|
|
|
5,854,835
|
|
|
|
13,632,994
|
|
|
|
7,408,436
|
|
Net unrealized gain (loss) on investments
|
|
|
(17,063,022
|
)
|
|
|
(24,086,655
|
)
|
|
|
(9,463,482
|
)
|
|
|
(27,864,110
|
)
|
|
|
(35,415,907
|
)
|
Amortization of premium and accretion of discount on investments
|
|
|
878,625
|
|
|
|
1,932,409
|
|
|
|
253,912
|
|
|
|
1,000,393
|
|
|
|
(1,257,396
|
)
|
Amortization of deferred offering costs
|
|
|
38,245
|
|
|
|
2,755
|
|
|
|
2,457
|
|
|
|
3,193
|
|
|
|
3,638
|
|
Proceeds from sales of long-term investments
|
|
|
124,269,704
|
|
|
|
85,314,299
|
|
|
|
21,380,034
|
|
|
|
104,855,237
|
|
|
|
142,009,186
|
|
Purchases of long-term investments
|
|
|
(116,967,803
|
)
|
|
|
(64,801,564
|
)
|
|
|
(12,822,511
|
)
|
|
|
(91,652,643
|
)
|
|
|
(120,587,099
|
)
|
Net proceeds from sales (purchases) of short-term securities
|
|
|
11,132,734
|
|
|
|
(8,068,285
|
)
|
|
|
(2,539,386
|
)
|
|
|
13,773,818
|
|
|
|
(5,079,053
|
)
|
|
|
|
|
|
Cash provided by operating activities
|
|
|
28,051,075
|
|
|
|
28,486,101
|
|
|
|
10,847,194
|
|
|
|
42,606,598
|
|
|
|
45,325,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Used for Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receipts from TOB trust certificates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,170,000
|
|
Payments for TOB trust certificates
|
|
|
(18,518,856
|
)
|
|
|
(12,790,001
|
)
|
|
|
(5,851,207
|
)
|
|
|
(25,769,142
|
)
|
|
|
(19,161,563
|
)
|
Cash dividends paid to Common Shareholders
|
|
|
(9,523,947
|
)
|
|
|
(15,684,873
|
)
|
|
|
(4,990,599
|
)
|
|
|
(16,824,930
|
)
|
|
|
(29,316,537
|
)
|
Decrease in bank overdraft
|
|
|
(8,272
|
)
|
|
|
(11,227
|
)
|
|
|
(5,388
|
)
|
|
|
(12,526
|
)
|
|
|
(17,395
|
)
|
|
|
|
|
|
Cash used for financing activities
|
|
|
(28,051,075
|
)
|
|
|
(28,486,101
|
)
|
|
|
(10,847,194
|
)
|
|
|
(42,606,598
|
)
|
|
|
(45,325,495
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at beginning of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for interest and fees
|
|
$
|
930,318
|
|
|
$
|
1,442,970
|
|
|
$
|
488,014
|
|
|
$
|
1,629,210
|
|
|
$
|
2,699,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
47
|
|
|
|
Financial Highlights
|
|
BlackRock MuniHoldings Quality Fund II, Inc. (MUE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
13.27
|
|
|
$
|
15.18
|
|
|
$
|
13.07
|
|
|
$
|
13.57
|
|
|
$
|
12.27
|
|
|
$
|
12.84
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.41
|
|
|
|
0.81
|
|
|
|
0.86
|
|
|
|
0.89
|
|
|
|
0.92
|
|
|
|
0.90
|
|
Net realized and unrealized gain (loss)
|
|
|
0.42
|
|
|
|
(1.87
|
)
|
|
|
2.14
|
|
|
|
(0.49
|
)
|
|
|
1.26
|
|
|
|
(0.71
|
)
|
Dividends to AMPS shareholders from net investment income
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
(0.02
|
)
|
|
|
(0.02
|
)
|
|
|
(0.12
|
)
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
0.83
|
|
|
|
(1.06
|
)
|
|
|
2.99
|
|
|
|
0.38
|
|
|
|
2.16
|
|
|
|
0.07
|
|
|
|
|
|
|
Dividends to Common Shareholders from net investment income
|
|
|
(0.42
|
)
|
|
|
(0.85
|
)
2
|
|
|
(0.88
|
)
2
|
|
|
(0.88
|
)
2
|
|
|
(0.86
|
)
2
|
|
|
(0.64
|
)
2
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
13.68
|
|
|
$
|
13.27
|
|
|
$
|
15.18
|
|
|
$
|
13.07
|
|
|
$
|
13.57
|
|
|
$
|
12.27
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
12.66
|
|
|
$
|
12.32
|
|
|
$
|
15.55
|
|
|
$
|
12.46
|
|
|
$
|
14.26
|
|
|
$
|
11.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
6.70%
4
|
|
|
|
(7.41)%
|
|
|
|
23.64%
|
|
|
|
3.19%
|
|
|
|
18.04%
|
|
|
|
1.58%
|
|
|
|
|
|
|
Based on market price
|
|
|
6.36%
4
|
|
|
|
(16.08)%
|
|
|
|
32.85%
|
|
|
|
(6.38)%
|
|
|
|
33.51%
|
|
|
|
7.24%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common
Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.67%
|
5
|
|
|
1.66%
|
|
|
|
1.52%
|
6
|
|
|
1.30%
|
6
|
|
|
1.28%
|
6
|
|
|
1.66%
|
6
|
|
|
|
|
|
Total expenses after fees waived
|
|
|
1.60%
|
5
|
|
|
1.60%
|
|
|
|
1.46%
|
6
|
|
|
1.23%
|
6
|
|
|
1.15%
|
6
|
|
|
1.45%
|
6
|
|
|
|
|
|
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs
7
|
|
|
0.96%
|
5
|
|
|
0.97%
|
|
|
|
1.00%
|
6,8
|
|
|
1.07%
|
6
|
|
|
0.99%
|
6
|
|
|
1.04%
|
6
|
|
|
|
|
|
Net investment income
|
|
|
6.18%
|
5
|
|
|
5.36%
|
|
|
|
6.05%
|
6
|
|
|
6.93%
|
6
|
|
|
6.92%
|
6
|
|
|
7.61%
|
6
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
0.04%
|
|
|
|
0.17%
|
|
|
|
0.18%
|
|
|
|
1.03%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
6.18%
|
5
|
|
|
5.36%
|
|
|
|
6.01%
|
|
|
|
6.76%
|
|
|
|
6.74%
|
|
|
|
6.58%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
308,035
|
|
|
$
|
298,707
|
|
|
$
|
341,144
|
|
|
$
|
293,356
|
|
|
$
|
303,667
|
|
|
$
|
274,342
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
131,000
|
|
|
$
|
131,000
|
|
|
$
|
131,000
|
|
|
|
|
|
|
VMTP Shares outstanding at $100,000 liquidation value, end of period (000)
|
|
$
|
131,000
|
|
|
$
|
131,000
|
|
|
$
|
131,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
22%
|
|
|
|
40%
|
|
|
|
36%
|
|
|
|
24%
|
|
|
|
20%
|
|
|
|
37%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
80,983
|
|
|
$
|
82,953
|
|
|
$
|
77,357
|
|
|
|
|
|
|
Asset coverage per VMTP Shares at $100,000 liquidation value, end of period
|
|
$
|
335,141
|
|
|
$
|
328,021
|
|
|
$
|
360,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Determined in accordance with federal income tax regulations.
|
3
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
4
|
|
Aggregate total investment return.
|
6
|
|
Do not reflect the effect of dividends to AMPS shareholders.
|
7
|
|
Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.
|
8
|
|
For the year ended July 31, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of
offering costs and remarketing fees was 0.97%.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
48
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Financial Highlights
|
|
BlackRock MuniYield California Quality Fund, Inc.
(MCA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
14.83
|
|
|
$
|
16.60
|
|
|
$
|
14.31
|
|
|
$
|
14.66
|
|
|
$
|
13.43
|
|
|
$
|
13.86
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.44
|
|
|
|
0.88
|
|
|
|
0.90
|
|
|
|
0.91
|
|
|
|
0.87
|
|
|
|
0.86
|
|
Net realized and unrealized gain (loss)
|
|
|
0.68
|
|
|
|
(1.74
|
)
|
|
|
2.28
|
|
|
|
(0.37
|
)
|
|
|
1.15
|
|
|
|
(0.51
|
)
|
Dividends to AMPS Shareholders from net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.02
|
)
|
|
|
(0.03
|
)
|
|
|
(0.12
|
)
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
1.12
|
|
|
|
(0.86
|
)
|
|
|
3.18
|
|
|
|
0.52
|
|
|
|
1.99
|
|
|
|
0.23
|
|
|
|
|
|
|
Dividends to Common Shareholders from net investment income
|
|
|
(0.46
|
)
|
|
|
(0.91
|
)
2
|
|
|
(0.89
|
)
2
|
|
|
(0.87
|
)
2
|
|
|
(0.76
|
)
2
|
|
|
(0.66
|
)
2
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
15.49
|
|
|
$
|
14.83
|
|
|
$
|
16.60
|
|
|
$
|
14.31
|
|
|
$
|
14.66
|
|
|
$
|
13.43
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
14.17
|
|
|
$
|
13.66
|
|
|
$
|
16.59
|
|
|
$
|
13.00
|
|
|
$
|
14.02
|
|
|
$
|
12.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
7.98%
4
|
|
|
|
(5.41)%
|
|
|
|
23.15%
|
|
|
|
4.21%
|
|
|
|
15.69%
|
|
|
|
3.03%
|
|
|
|
|
|
|
Based on market price
|
|
|
7.24%
4
|
|
|
|
(12.83)%
|
|
|
|
35.48%
|
|
|
|
(1.01)%
|
|
|
|
23.00%
|
|
|
|
4.17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common
Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.47%
|
5
|
|
|
1.48%
|
|
|
|
1.62%
|
|
|
|
1.50%
|
6
|
|
|
1.11%
|
6
|
|
|
1.40%
|
6
|
|
|
|
|
|
Total expenses after fees waived and paid indirectly
|
|
|
1.47%
|
5
|
|
|
1.48%
|
|
|
|
1.61%
|
|
|
|
1.49%
|
6
|
|
|
1.10%
|
6
|
|
|
1.38%
|
6
|
|
|
|
|
|
Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs
7
|
|
|
0.93%
|
5
|
|
|
0.92%
|
|
|
|
1.20%
|
8
|
|
|
1.15%
|
6
|
|
|
0.95%
|
6
|
|
|
1.02%
|
6
|
|
|
|
|
|
Net investment income
|
|
|
5.89%
|
5
|
|
|
5.37%
|
|
|
|
5.79%
|
|
|
|
6.49%
|
6
|
|
|
6.10%
|
6
|
|
|
6.60%
|
6
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.16%
|
|
|
|
0.20%
|
|
|
|
0.91%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
5.89%
|
5
|
|
|
5.37%
|
|
|
|
5.79%
|
|
|
|
6.33%
|
|
|
|
5.90%
|
|
|
|
5.69%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
532,803
|
|
|
$
|
510,018
|
|
|
$
|
570,559
|
|
|
$
|
491,798
|
|
|
$
|
503,869
|
|
|
$
|
461,505
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
166,525
|
|
|
$
|
166,525
|
|
|
|
|
|
|
VRDP Shares outstanding at $100,000 liquidation value, end of period (000)
|
|
$
|
166,500
|
|
|
$
|
166,500
|
|
|
$
|
166,500
|
|
|
$
|
166,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
8%
|
|
|
|
25%
|
|
|
|
34%
|
|
|
|
26%
|
|
|
|
30%
|
|
|
|
25%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
100,648
|
|
|
$
|
94,289
|
|
|
|
|
|
|
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period
|
|
$
|
420,002
|
|
|
$
|
406,317
|
|
|
$
|
442,678
|
|
|
$
|
395,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Determined in accordance with federal income tax regulations.
|
3
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
4
|
|
Aggregate total investment return.
|
6
|
|
Do not reflect the effect of dividends to AMPS shareholders.
|
7
|
|
InInterest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.
|
8
|
|
For the years ended July 31, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization
of offering costs, liquidity and remarketing fees was 0.95%.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
49
|
|
|
|
Financial Highlights
|
|
BlackRock MuniYield Michigan Quality Fund II, Inc.
(MYM)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
13.28
|
|
|
$
|
15.14
|
|
|
$
|
13.53
|
|
|
$
|
13.82
|
|
|
$
|
12.87
|
|
|
$
|
13.24
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.40
|
|
|
|
0.81
|
|
|
|
0.80
|
|
|
|
0.86
|
|
|
|
0.91
|
|
|
|
0.93
|
|
Net realized and unrealized gain (loss)
|
|
|
0.29
|
|
|
|
(1.84
|
)
|
|
|
1.68
|
|
|
|
(0.26
|
)
|
|
|
0.90
|
|
|
|
(0.49
|
)
|
Dividends to AMPS shareholders from net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.03
|
)
|
|
|
(0.04
|
)
|
|
|
(0.14
|
)
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
0.69
|
|
|
|
(1.03
|
)
|
|
|
2.48
|
|
|
|
0.57
|
|
|
|
1.77
|
|
|
|
0.30
|
|
|
|
|
|
|
Dividends to Common Shareholders from net investment income
|
|
|
(0.41
|
)
|
|
|
(0.83
|
)
2
|
|
|
(0.87
|
)
2
|
|
|
(0.86
|
)
2
|
|
|
(0.82
|
)
2
|
|
|
(0.67
|
)
2
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
13.56
|
|
|
$
|
13.28
|
|
|
$
|
15.14
|
|
|
$
|
13.53
|
|
|
$
|
13.82
|
|
|
$
|
12.87
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
11.91
|
|
|
$
|
11.64
|
|
|
$
|
14.52
|
|
|
$
|
12.28
|
|
|
$
|
13.67
|
|
|
$
|
11.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
5.78%
4
|
|
|
|
(6.99)%
|
|
|
|
19.01%
|
|
|
|
4.74%
|
|
|
|
14.62%
|
|
|
|
3.81%
|
|
|
|
|
|
|
Based on market price
|
|
|
5.99%
4
|
|
|
|
(14.99)%
|
|
|
|
25.76%
|
|
|
|
(3.89)%
|
|
|
|
26.01%
|
|
|
|
6.34%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common
Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.59%
|
5
|
|
|
1.54%
|
|
|
|
1.71%
|
|
|
|
1.32%
|
6
|
|
|
1.08%
|
6
|
|
|
1.28%
|
6
|
|
|
|
|
|
Total expenses after fees waived
|
|
|
1.59%
|
5
|
|
|
1.54%
|
|
|
|
1.71%
|
|
|
|
1.31%
|
6
|
|
|
1.07%
|
6
|
|
|
1.26%
|
6
|
|
|
|
|
|
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs
7
|
|
|
0.97%
|
5
|
|
|
0.95%
|
|
|
|
1.37%
|
8
|
|
|
1.21%
|
6
|
|
|
1.03%
|
6
|
|
|
1.12%
|
6
|
|
|
|
|
|
Net investment income
|
|
|
6.01%
|
5
|
|
|
5.41%
|
|
|
|
5.56%
|
|
|
|
6.46%
|
6
|
|
|
6.74%
|
6
|
|
|
7.43%
|
6
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.23%
|
|
|
|
0.28%
|
|
|
|
1.15%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
6.01%
|
5
|
|
|
5.41%
|
|
|
|
5.56%
|
|
|
|
6.23%
|
|
|
|
6.46%
|
|
|
|
6.28%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
164,071
|
|
|
$
|
160,634
|
|
|
$
|
183,076
|
|
|
$
|
163,276
|
|
|
$
|
166,773
|
|
|
$
|
155,360
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
87,350
|
|
|
$
|
87,350
|
|
|
|
|
|
|
VRDP Shares outstanding at $100,000 liquidation value, end of period (000)
|
|
$
|
87,300
|
|
|
$
|
87,300
|
|
|
$
|
87,300
|
|
|
$
|
87,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
6%
|
|
|
|
14%
|
|
|
|
19%
|
|
|
|
18%
|
|
|
|
18%
|
|
|
|
9%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
72,733
|
|
|
$
|
69,467
|
|
|
|
|
|
|
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period
|
|
$
|
287,939
|
|
|
$
|
284,002
|
|
|
$
|
309,709
|
|
|
$
|
287,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Determined in accordance with federal income tax regulations.
|
3
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
4
|
|
Aggregate total investment return.
|
6
|
|
Do not reflect the effect of dividends to AMPS shareholders.
|
7
|
|
Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.
|
8
|
|
For the year ended July 31, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of
offering costs, liquidity and remarketing fees was 0.98%.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Financial Highlights
|
|
BlackRock MuniYield New York Quality Fund, Inc.
(MYN)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
13.17
|
|
|
$
|
15.07
|
|
|
$
|
13.44
|
|
|
$
|
13.89
|
|
|
$
|
12.65
|
|
|
$
|
13.16
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.39
|
|
|
|
0.83
|
|
|
|
0.83
|
|
|
|
0.87
|
|
|
|
0.90
|
|
|
|
0.87
|
|
Net realized and unrealized gain (loss)
|
|
|
0.35
|
|
|
|
(1.88
|
)
|
|
|
1.65
|
|
|
|
(0.44
|
)
|
|
|
1.08
|
|
|
|
(0.61
|
)
|
Dividends to AMPS shareholders from net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.03
|
)
|
|
|
(0.04
|
)
|
|
|
(0.13
|
)
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
0.74
|
|
|
|
(1.05
|
)
|
|
|
2.48
|
|
|
|
0.40
|
|
|
|
1.94
|
|
|
|
0.13
|
|
|
|
|
|
|
Dividends to Common Shareholders from net investment income
|
|
|
(0.42
|
)
|
|
|
(0.85
|
)
2
|
|
|
(0.85
|
)
2
|
|
|
(0.85
|
)
2
|
|
|
(0.70
|
)
2
|
|
|
(0.64
|
)
2
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
13.49
|
|
|
$
|
13.17
|
|
|
$
|
15.07
|
|
|
$
|
13.44
|
|
|
$
|
13.89
|
|
|
$
|
12.65
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
12.59
|
|
|
$
|
12.34
|
|
|
$
|
15.11
|
|
|
$
|
12.60
|
|
|
$
|
13.57
|
|
|
$
|
11.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
6.01%
4
|
|
|
|
(7.33)%
|
|
|
|
19.10%
|
|
|
|
3.36%
|
|
|
|
16.15%
|
|
|
|
2.29%
|
|
|
|
|
|
|
Based on market price
|
|
|
5.59%
4
|
|
|
|
(13.40)%
|
|
|
|
27.38%
|
|
|
|
(0.81)%
|
|
|
|
26.36%
|
|
|
|
2.44%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common
Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.54%
|
5
|
|
|
1.53%
|
|
|
|
1.65%
|
|
|
|
1.34%
|
6
|
|
|
1.11%
|
6
|
|
|
1.34%
|
6
|
|
|
|
|
|
Total expenses after fees waived
|
|
|
1.54%
|
5
|
|
|
1.53%
|
|
|
|
1.65%
|
|
|
|
1.33%
|
6
|
|
|
1.10%
|
6
|
|
|
1.32%
|
6
|
|
|
|
|
|
Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs
7
|
|
|
0.93%
|
5
|
|
|
0.91%
|
|
|
|
1.27%
|
8
|
|
|
1.14%
|
6
|
|
|
1.00%
|
6
|
|
|
1.06%
|
6
|
|
|
|
|
|
Net investment income
|
|
|
6.01%
|
5
|
|
|
5.59%
|
|
|
|
5.78%
|
|
|
|
6.55%
|
6
|
|
|
6.69%
|
6
|
|
|
7.11%
|
6
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.21%
|
|
|
|
0.27%
|
|
|
|
1.09%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
6.01%
|
5
|
|
|
5.59%
|
|
|
|
5.78%
|
|
|
|
6.34%
|
|
|
|
6.42%
|
|
|
|
6.02%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
533,965
|
|
|
$
|
521,263
|
|
|
$
|
594,807
|
|
|
$
|
530,058
|
|
|
$
|
547,812
|
|
|
$
|
499,093
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
247,700
|
|
|
$
|
247,700
|
|
|
|
|
|
|
VRDP Shares outstanding at $100,000 liquidation value, end of period (000)
|
|
$
|
247,700
|
|
|
$
|
247,700
|
|
|
$
|
247,700
|
|
|
$
|
247,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
12%
|
|
|
|
10%
|
|
|
|
17%
|
|
|
|
18%
|
|
|
|
7%
|
|
|
|
22%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
80,293
|
|
|
$
|
75,376
|
|
|
|
|
|
|
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period
|
|
$
|
315,569
|
|
|
$
|
310,441
|
|
|
$
|
340,132
|
|
|
$
|
313,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Determined in accordance with federal income tax regulations.
|
3
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
4
|
|
Aggregate total investment return.
|
6
|
|
Do not reflect the effect of dividends to AMPS shareholders.
|
7
|
|
Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.
|
8
|
|
For the year ended July 31, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of
offering costs, liquidity and remarketing fees was 0.92%.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
51
|
|
|
|
Financial Highlights
|
|
BlackRock MuniYield Quality Fund III, Inc. (MYI)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31,
2014
(Unaudited)
|
|
|
Year Ended July 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
13.64
|
|
|
$
|
15.32
|
|
|
$
|
13.19
|
|
|
$
|
13.67
|
|
|
$
|
12.27
|
|
|
$
|
12.86
|
|
|
|
|
|
|
Net investment income
1
|
|
|
0.45
|
|
|
|
0.89
|
|
|
|
0.87
|
|
|
|
0.89
|
|
|
|
0.89
|
|
|
|
0.87
|
|
Net realized and unrealized gain (loss)
|
|
|
0.41
|
|
|
|
(1.70
|
)
|
|
|
2.13
|
|
|
|
(0.48
|
)
|
|
|
1.31
|
|
|
|
(0.66
|
)
|
Dividends to AMPS shareholders from net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.03
|
)
|
|
|
(0.03
|
)
|
|
|
(0.12
|
)
|
|
|
|
|
|
Net increase (decrease) from investment operations
|
|
|
0.86
|
|
|
|
(0.81
|
)
|
|
|
3.00
|
|
|
|
0.38
|
|
|
|
2.17
|
|
|
|
0.09
|
|
|
|
|
|
|
Dividends to Common Shareholders from net investment income
|
|
|
(0.43
|
)
|
|
|
(0.87
|
)
2
|
|
|
(0.87
|
)
2
|
|
|
(0.86
|
)
2
|
|
|
(0.77
|
)
2
|
|
|
(0.68
|
)
2
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
14.07
|
|
|
$
|
13.64
|
|
|
$
|
15.32
|
|
|
$
|
13.19
|
|
|
$
|
13.67
|
|
|
$
|
12.27
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
13.29
|
|
|
$
|
12.80
|
|
|
$
|
15.81
|
|
|
$
|
12.17
|
|
|
$
|
14.17
|
|
|
$
|
12.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return Applicable to Common Shareholders
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on net asset value
|
|
|
6.70%
|
4
|
|
|
(5.66)%
|
|
|
|
23.45%
|
|
|
|
3.22%
|
|
|
|
18.19%
|
|
|
|
1.70%
|
|
|
|
|
|
|
Based on market price
|
|
|
7.40%
|
4
|
|
|
(14.21)%
|
|
|
|
38.08%
|
|
|
|
(8.12)%
|
|
|
|
24.03%
|
|
|
|
5.72%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets Applicable to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1.50%
|
5
|
|
|
1.43%
|
|
|
|
1.57%
|
|
|
|
1.32%
|
6
|
|
|
1.11%
|
6
|
|
|
1.46%
|
6
|
|
|
|
|
|
Total expenses after fees waived and paid indirectly
|
|
|
1.50%
|
5
|
|
|
1.43%
|
|
|
|
1.56%
|
|
|
|
1.32%
|
6
|
|
|
1.11%
|
6
|
|
|
1.45%
|
6
|
|
|
|
|
|
Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs
7
|
|
|
0.93%
|
5
|
|
|
0.89%
|
|
|
|
1.19%
|
8
|
|
|
1.12%
|
6
|
|
|
0.97%
|
6
|
|
|
1.06%
|
6
|
|
|
|
|
|
Net investment income
|
|
|
6.56%
|
5
|
|
|
5.83%
|
|
|
|
6.04%
|
|
|
|
6.85%
|
6
|
|
|
6.73%
|
6
|
|
|
7.52%
|
6
|
|
|
|
|
|
Dividends to AMPS shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.22%
|
|
|
|
0.26%
|
|
|
|
1.04%
|
|
|
|
|
|
|
Net investment income to Common Shareholders
|
|
|
6.56%
|
5
|
|
|
5.83%
|
|
|
|
6.04%
|
|
|
|
6.63%
|
|
|
|
6.47%
|
|
|
|
6.48%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common Shareholders, end of period (000)
|
|
$
|
954,867
|
|
|
$
|
925,812
|
|
|
$
|
1,036,022
|
|
|
$
|
890,985
|
|
|
$
|
920,234
|
|
|
$
|
825,622
|
|
|
|
|
|
|
AMPS outstanding at $25,000 liquidation preference, end of period (000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
356,450
|
|
|
$
|
358,625
|
|
|
|
|
|
|
VRDP Shares outstanding at $100,000 liquidation value, end of period (000)
|
|
$
|
356,400
|
|
|
$
|
356,400
|
|
|
$
|
356,400
|
|
|
$
|
356,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover
|
|
|
8%
|
|
|
|
9%
|
|
|
|
18%
|
|
|
|
12%
|
|
|
|
13%
|
|
|
|
30%
|
|
|
|
|
|
|
Asset coverage per AMPS at $25,000 liquidation preference, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
89,545
|
|
|
$
|
82,559
|
|
|
|
|
|
|
Asset coverage per VRDP Shares at $100,000 liquidation value, end of period
|
|
$
|
367,920
|
|
|
$
|
359,768
|
|
|
$
|
390,691
|
|
|
$
|
349,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Based on average Common Shares outstanding.
|
2
|
|
Determined in accordance with federal income tax regulations.
|
3
|
|
Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different
returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.
|
4
|
|
Aggregate total investment return.
|
6
|
|
Do not reflect the effect of dividends to AMPS shareholders.
|
7
|
|
Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements
for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.
|
8
|
|
For the year ended July 31, 2012, the total expense ratio after fees waived and paid indirectly, excluding interest expense, fees, amortization of
offering costs, liquidity and remarketing fees was 0.90%.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
52
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Notes to Financial Statements
(Unaudited)
|
|
|
1. Organization:
BlackRock MuniHoldings Quality Fund II, Inc. (MUE), BlackRock
MuniYield California Quality Fund, Inc. (MCA), BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM), BlackRock MuniYield New York Quality Fund, Inc. (MYN) and BlackRock MuniYield Quality Fund III, Inc.
(MYI), (collectively, the Funds or individually a Fund), are registered under the 1940 Act, as non-diversified, closed-end management investment companies. The Funds are organized as Maryland corporations. The
Boards of Directors of the Funds are collectively referred to throughout this report as the Board of Directors or the Board, and the directors thereof are collectively referred to throughout this report as
Directors. The Funds determine, and make available for publication the NAVs of their Common Shares on a daily basis.
2.
Significant Accounting Policies:
The Funds financial statements are prepared in conformity with accounting principles generally
accepted in the United States of America (US GAAP), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of
increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Funds:
Valuation: US GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction
between market participants at the measurement date. The Funds determine the fair value of their financial instruments at market value using independent dealers or pricing services under policies approved by the Board. The BlackRock Global Valuation
Methodologies Committee (the Global Valuation Committee) is the committee formed by management to develop global pricing policies and procedures and to provide oversight of the pricing function for the Funds for all financial
instruments.
Municipal investments (including commitments to purchase such investments on a when-issued basis) are valued on the
basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes,
market transactions in comparable investments and information with respect to various relationships between investments. Financial futures contracts traded on exchanges are valued at their last sale price. Short-term securities with remaining
maturities of 60 days or less may be valued at amortized cost, which approximates fair value.
Exchange-traded options are valued at the mean
between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid (long positions) or ask (short positions) price. If no bid or ask
price is available, the prior days price will be used, unless it is determined that the prior days price no longer reflects the fair value of the option. Over-the-counter (OTC) options are valued by an independent pricing
service using a mathematical model, which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.
In the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not
available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (Fair Value Assets). When determining the price for Fair Value
Assets, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive from the current sale of that asset in an arms-length transaction. Fair value determinations shall be based
upon all available factors that the Global Valuation Committee, or its delegate, deems relevant consistent with the principles of fair value measurements, which include the market approach, income approach and/or in the case of recent investments,
the cost approach, as appropriate. The market approach generally consists of using comparable market transactions. The income approach generally is used to discount future cash flows to present value and is adjusted for liquidity as appropriate.
These factors include but are not limited to: (i) attributes specific to the investment or asset; (ii) the principal market for the investment or asset; (iii) the customary participants in the principal market for the investment or
asset; (iv) data assumptions by market participants for the investment or asset, if reasonably available; (v) quoted prices for similar investments or assets in active markets; and (vi) other factors, such as future cash flows,
interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. Due to the inherent uncertainty of valuations of such investments, the fair values may differ
from the values that would have been used had an active market existed. The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments where an active market does not exist, including
regular due diligence of each Funds pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or
stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof on a quarterly basis.
Segregation and Collateralization: In cases where the Funds enter into certain investments (e.g., financial futures contracts), or certain borrowings (e.g.,
TOBs) that would be senior securities for 1940 Act purposes, the Funds may segregate or designate on their books and record cash or liquid securities having a market value at least equal to the amount of the Funds future
obligations under such investments or borrowings. Doing so allows the investment or borrowing to be excluded from treatment as a senior security. Furthermore, if required by an exchange or counterparty agreement, the Funds may be
required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.
Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and
losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on
the accrual basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
53
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. The character and timing of dividends
and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 9.
Income Taxes: It is the Funds policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies and to distribute substantially all of their taxable income to their shareholders. Therefore, no federal income tax provision is required.
Each Fund files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Funds' US federal tax returns remains open for
each of the four years ended July 31, 2013. The statutes of limitations on each Funds state and local tax returns may remain open for an additional year depending upon the jurisdiction.
Management has analyzed tax laws and regulations and their application to the Funds facts and circumstances and does not believe there are any
uncertain tax positions that require recognition of a tax liability.
Deferred Compensation Plan: Under the Deferred Compensation Plan (the
Plan) approved by each Funds Board, the independent Directors (Independent Directors) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent
dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Directors. This has the same economic effect for the Independent Directors as if the Independent Directors had invested the
deferred amounts directly in certain other BlackRock Closed-End Funds.
The Plan is not funded and obligations thereunder represent general
unsecured claims against the general assets of each Fund. Deferred compensation liabilities are included in officers and directors fees payable in the Statements of Assets and Liabilities and will remain as a liability of the Funds until
such amounts are distributed in accordance with the Plan.
Other: Expenses directly related to a Fund are charged to that Fund. Other operating
expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods.
The Funds have
an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodian imposes fees on overdrawn cash
balances, which can be offset by accumulated credits earned or may result in additional custody charges.
3. Securities and Other Investments:
Zero-Coupon Bonds: The Funds may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not
provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.
Forward Commitments and When-Issued Delayed Delivery Securities: The Funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such
transactions normally occurs within a month or more after the purchase or sale commitment is made. The Funds may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell
the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Funds may be required to pay more at settlement than the security is worth. In addition, the Funds are not entitled to any of
the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the
counterparty, the Funds maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Schedules of Investments.
Municipal Bonds Transferred to TOBs: The Funds leverage their assets through the use of TOBs. A TOB is a special purpose entity established by a third party sponsor, into which a fund, or an agent on behalf
of a fund, transfers municipal bonds into a trust (TOB Trust). Other funds managed by the investment advisor may also contribute municipal bonds to a TOB into which a Fund has contributed bonds. A TOB typically issues two classes of
beneficial interests: short-term floating rate certificates (TOB Trust Certificates), which are sold to third party investors, and residual certificates (TOB Residuals), which are generally issued to the participating funds
that contributed the municipal bonds to the TOB Trust. If multiple funds participate in the same TOB, the rights and obligations under the TOB Residual will be shared among the funds ratably in proportion to their participation.
The TOB Residuals held by a Fund include the right of a Fund (1) to cause the holders of a proportional share of the TOB Trust Certificates to tender
their certificates at par plus accrued interest upon the occurrence of certain mandatory tender events defined in the TOB agreements, and (2) to transfer, subject to a specified number of days prior notice, a corresponding share of the
municipal bonds from the TOB to a Fund. The TOB may also be collapsed without the consent of a Fund, as the TOB Residual holder, upon the occurrence of certain termination events as defined in the TOB agreements. Such termination events may include
the bankruptcy or default of the municipal bond, a substantial downgrade in credit quality of the municipal bond, the inability of the TOB to obtain renewal of the liquidity support agreement, a substantial decline in market value of the municipal
bond and a judgment or ruling that interest on the municipal bond is subject to federal income taxation. Upon the occurrence of a termination event, the TOB would generally be liquidated in full with the proceeds typically applied first to any
accrued fees owed to the trustee, remarketing agent and liquidity provider, and then to the holders of the TOB Trust Certificates up to par plus accrued interest owed on the TOB Trust Certificates, with the balance paid out to the TOB Residual
holder. During the six months ended January 31, 2014, no TOBs in which the Funds participated were terminated without the consent of the Funds.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
The cash received by the TOB from the sale of the TOB Trust Certificates, less transaction expenses, is paid to a Fund. The Fund typically invests the cash received in additional municipal bonds. Each
Funds transfer of the municipal bonds to a TOB Trust is accounted for as a secured borrowing; therefore, the municipal bonds deposited into a TOB are presented in the Funds Schedules of Investments and the TOB Trust Certificates are
shown in other liabilities in the Statements of Assets and Liabilities. The carrying amount of the Funds payable to the holder of the TOB Trust Certificates, as reported in Statements of Assets and Liabilities as TOB Trust Certificates,
approximates its fair value.
The Funds may invest in TOBs on either a non-recourse or recourse basis. TOB Trusts are typically supported by a
liquidity facility provided by a bank or other financial institution (the Liquidity Provider) that allows the holders of the TOB Trust Certificates to tender their certificates in exchange for payment from the Liquidity Provider of par
plus accrued interest on any business day prior to the occurrence of the termination events described above. When a Fund invests in TOBS on a non-recourse basis, and the Liquidity Provider is required to make a payment under the liquidity facility
due to a termination event, the Liquidity Provider will typically liquidate all or a portion of the municipal securities held in the TOB Trust and then fund, on a net basis, the balance, if any, of the amount owed under the liquidity facility over
the liquidation proceeds (the Liquidation Shortfall). If a Fund invests in a TOB on a recourse basis, the Fund will typically enter into a reimbursement agreement with the Liquidity Provider where the Fund is required to repay the
Liquidity Provider the amount of any Liquidation Shortfall. As a result, a Fund investing in a recourse TOB will bear the risk of loss with respect to any Liquidation Shortfall. If multiple funds participate in any such TOB, these losses will be
shared ratably, including the maximum potential amounts owed by the Funds at January 31, 2014, in proportion to their participation. The recourse TOB Trusts are identified in the Schedules of Investments including the maximum potential amounts
owed by the Funds at January 31, 2014.
Interest income, including amortization and accretion of premiums and discounts, from the underlying
municipal bonds is recorded by the Funds on an accrual basis. Interest expense incurred on the secured borrowing and other expenses related to remarketing, administration and trustee services to a TOB are shown as interest expense, fees and
amortization of offering costs in the Statements of Operations. The TOB Trust Certificates have interest rates that generally reset weekly and their holders have the option to tender such certificates to the TOB for redemption at par at each reset
date. At January 31, 2014, the aggregate value of the underlying municipal bonds transferred to TOBs, the related liability for TOB Trust Certificates and the range of interest rates on the liability for TOB Trust Certificates were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying
Municipal Bonds
Transferred to
TOBs
|
|
|
Liability
for TOB Trust
Certificates
|
|
|
Range of
Interest Rates
|
|
MUE
|
|
$
|
114,735,762
|
|
|
$
|
61,854,172
|
|
|
|
0.04% - 0.29%
|
|
MCA
|
|
$
|
345,267,531
|
|
|
$
|
164,894,585
|
|
|
|
0.04% - 0.12%
|
|
MYM
|
|
$
|
26,115,198
|
|
|
$
|
13,492,998
|
|
|
|
0.04% - 0.19%
|
|
MYN
|
|
$
|
159,056,376
|
|
|
$
|
84,505,819
|
|
|
|
0.04% - 0.25%
|
|
MYI
|
|
$
|
504,304,727
|
|
|
$
|
271,434,234
|
|
|
|
0.04% - 0.32%
|
|
For the six months ended January 31, 2014, the Funds' average TOB Trust Certificates outstanding and the daily weighted
average interest rate, including fees, were as follows:
|
|
|
|
|
|
|
|
|
|
|
Average TOB Trust
Certificates
Outstanding
|
|
|
Daily Weighted
Average
Interest Rate
|
|
MUE
|
|
$
|
68,622,842
|
|
|
|
0.63
|
%
|
MCA
|
|
$
|
182,222,761
|
|
|
|
0.59
|
%
|
MYM
|
|
$
|
14,995,997
|
|
|
|
0.53
|
%
|
MYN
|
|
$
|
96,279,747
|
|
|
|
0.68
|
%
|
MYI
|
|
$
|
274,899,660
|
|
|
|
0.61
|
%
|
Should short-term interest rates rise, the Funds' investments in TOBs may adversely affect the Funds' net investment income
and dividends to Common Shareholders. Also, fluctuations in the market value of municipal bonds deposited into the TOB Trust may adversely affect the Funds' NAVs per share.
4. Derivative Financial Instruments:
The Funds engage in various portfolio investment strategies
using derivative contracts both to increase the returns of the Funds and/or to economically hedge their exposure to certain risks such as interest rate risk. These contracts may be transacted on an exchange or OTC.
Financial Futures Contracts: The Funds purchase and/or sell financial futures contracts and options on financial futures contracts to gain exposure to, or
economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a
specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the
settlement date.
Upon entering into a financial futures contract, the Funds are required to deposit initial margin with the broker in the form of
cash or securities in an amount that varies depending on a contracts size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Securities deposited as initial margin are
designated on the Schedules of Investments and cash deposited, if any, is recorded on the Statements of Assets and Liabilities as cash pledged for financial futures contracts. Pursuant to the contract, the Funds agree to receive from or pay to the
broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin. Variation margin is recorded by the Funds as unrealized appreciation or depreciation and, if applicable, as a
receivable or payable for variation margin in the Statements of Assets and Liabilities.
When the contract is closed, the Funds record a realized
gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the
price of financial futures contracts, interest rates and the underlying assets.
Options: Certain Funds purchase and write call and put options to
increase or decrease their exposure to underlying instruments (including
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
55
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
interest rate risk and/or, in the case of options written, to generate gains from options premiums. A call option gives the purchaser (holder) of the option the right (but not the obligation) to
buy, and obligates the seller (writer) to sell (when the option is exercised) the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. A put option gives the holder the right to sell and
obligates the writer to buy the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. When the Funds purchase (write) an option, an amount equal to the premium paid (received) by the Funds
is reflected as an asset (liability). The amount of the asset (liability) is subsequently marked-to-market to reflect the current market value of the option purchased (written). When an instrument is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or deducted from) the basis of the instrument acquired or deducted from (or added to) the proceeds of the instrument sold. When an option expires (or the Funds enter into a closing
transaction), the Funds realize a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premiums received or paid). When the Funds write a call
option, such option is covered, meaning that the Funds hold the underlying instrument subject to being called by the option counterparty. When the Funds write a put option, such option is covered by cash in an amount sufficient to cover
the obligation.
In purchasing and writing options, the Funds bear the risk of an unfavorable change in the value of the underlying instrument or
the risk that the Funds may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Funds purchasing or selling a security at a price different from the current market value.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is a summary of the Funds derivative financial instruments
categorized by risk exposure:
|
|
|
|
|
|
|
|
Fair Values of Derivative Financial Instruments as of January 31, 2014
|
|
Derivative Liabilities
|
|
|
|
Value
|
|
|
|
Statements of Assets
and Liabilities
Location
|
|
MUE
|
|
|
MCA
|
|
|
MYM
|
|
|
MYN
|
|
Interest rate contracts
|
|
Net unrealized depreciation
1
|
|
$
|
150,023
|
|
|
$
|
442,900
|
|
|
$
|
26,290
|
|
|
$
|
893,156
|
|
|
1
|
|
Includes cumulative appreciation/depreciation on financial futures contracts as
reported in the Schedules of Investments. Only current days variation margin is reported within the Statements of Assets and Liabilities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Effect of Derivative Financial Instruments in the Statements of
Operations
Six Months Ended January 31, 2014
|
|
|
|
Net Realized Gain From
|
|
|
|
MUE
|
|
|
MCA
|
|
|
MYM
|
|
|
MYN
|
|
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial futures contracts
|
|
$
|
162,228
|
|
|
$
|
32,638
|
|
|
$
|
37,427
|
|
|
$
|
420,474
|
|
|
|
Net Change in Unrealized Appreciation/Depreciation on
|
|
|
|
MUE
|
|
|
MCA
|
|
|
MYM
|
|
|
MYN
|
|
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial futures contracts
|
|
$
|
(150,023
|
)
|
|
$
|
(442,900
|
)
|
|
$
|
(26,290
|
)
|
|
$
|
(893,156
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended January 31, 2014, the average quarterly balances of outstanding derivative financial instruments were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MUE
|
|
|
MCA
|
|
|
MYM
|
|
|
MYN
|
|
Financial future contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of contracts sold
|
|
|
234
|
|
|
|
325
|
|
|
|
30
|
|
|
|
327
|
|
Average notional value of contracts sold
|
|
$
|
29,511,492
|
|
|
$
|
41,134,297
|
|
|
$
|
3,796,641
|
|
|
$
|
3,796,641
|
|
Counterparty Credit Risk: A derivative contract may
suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments,
guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not
have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange-traded futures
with respect to initial and variation margin that is held in a clearing brokers customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or
goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing brokers
customers, potentially resulting in losses to the Funds.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
5. Investment Advisory Agreement and Other Transactions with Affiliates:
The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate, for 1940 Act purposes, of BlackRock, Inc.
(BlackRock).
Each Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the Manager), the
Funds' investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of each Fund's portfolio and provides the necessary personnel,
facilities, equipment and certain other services necessary to the operations of each Fund. For such services, each Fund pays the Manager a monthly fee at an annual rate of each Fund's average daily net assets at the following annual rates:
|
|
|
|
|
MUE
|
|
|
0.55%
|
|
MCA
|
|
|
0.50%
|
|
MYM
|
|
|
0.50%
|
|
MYN
|
|
|
0.50%
|
|
MYI
|
|
|
0.50%
|
|
Average daily net assets are the average daily value of each Funds total assets minus the sum of its accrued
liabilities.
The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the
Manager indirectly through its investment in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with each Fund's investment in other affiliated
investment companies, if any. These amounts are included in fees waived by Manager in the Statements of Operations. For the six months ended January 31, 2014, the amounts waived were as follows:
|
|
|
|
|
MUE
|
|
$
|
694
|
|
MCA
|
|
$
|
1,474
|
|
MYM
|
|
$
|
59
|
|
MYN
|
|
$
|
3,852
|
|
MYI
|
|
$
|
1,139
|
|
The Manager voluntarily agreed to waive MUEs investment advisory fee on the proceeds of Preferred Shares and TOBs that
exceed 35% of total assets minus the sum of its accrued liabilities. This amount is included in fees waived by Manager in the Statements of Operations. For the six months ended January 31, 2014, the waiver was $110,600.
The Manager entered into a sub-advisory agreement with BlackRock Investment Management, LLC (BIM), an affiliate of the Manager. The Manager pays
BIM, for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Fund to the Manager.
Certain
officers and/Directors of the Funds are officers and/or directors of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Funds Chief Compliance Officer, which is included in officer and
directors in the Statements of Operations.
The Funds may purchase securities from, or sell securities to, an affiliated fund provided the
affiliation is solely due to having a common investment adviser, common officers, or common trustees. For the six months ended January 31, 2014, the sale transactions from an affiliated fund in compliance with Rule 17a-7 under the 1940 Act for
MUE were $4,751,574.
6. Purchases and Sales:
Purchases and sales of investments, excluding short-term securities, for the six months ended January 31, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
|
Sales
|
|
MUE
|
|
$
|
106,129,666
|
|
|
$
|
118,502,667
|
|
MCA
|
|
$
|
65,271,089
|
|
|
$
|
85,486,545
|
|
MYM
|
|
$
|
14,526,962
|
|
|
$
|
20,457,956
|
|
MYN
|
|
$
|
102,886,455
|
|
|
$
|
102,247,636
|
|
MYI
|
|
$
|
115,338,051
|
|
|
$
|
141,355,654
|
|
7. Income Tax Information:
As of July 31, 2013, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expires July 31,
|
|
MUE
|
|
|
MCA
|
|
|
MYM
|
|
|
MYN
|
|
|
MYI
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,107,506
|
|
|
$
|
1,213,491
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,979,955
|
|
2016
|
|
|
|
|
|
|
|
|
|
$
|
714,516
|
|
|
|
2,330,288
|
|
|
|
25,066,903
|
|
2017
|
|
$
|
3,385,582
|
|
|
|
|
|
|
|
253,932
|
|
|
|
2,295,738
|
|
|
|
21,251,301
|
|
2018
|
|
|
6,013,130
|
|
|
$
|
4,809,571
|
|
|
|
|
|
|
|
3,370,191
|
|
|
|
26,460,028
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,287,746
|
|
|
|
|
|
No expiration date
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,525,937
|
|
|
|
107,320
|
|
|
|
|
|
|
Total
|
|
$
|
9,398,712
|
|
|
$
|
4,809,571
|
|
|
$
|
968,448
|
|
|
$
|
17,917,406
|
|
|
$
|
80,078,998
|
|
|
|
|
|
|
|
1
|
|
Must be utilized prior to losses subject to expiration.
|
As of January 31, 2014 gross unrealized appreciation and depreciation based on cost for federal income tax purposes were
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MUE
|
|
|
MCA
|
|
|
MYM
|
|
|
MYN
|
|
|
MYI
|
|
Tax cost
|
|
$
|
417,001,908
|
|
|
$
|
661,369,856
|
|
|
$
|
243,780,945
|
|
|
$
|
762,821,627
|
|
|
$
|
1,226,307,621
|
|
|
|
|
|
|
Gross unrealized appreciation
|
|
$
|
26,603,327
|
|
|
$
|
42,168,638
|
|
|
$
|
10,533,265
|
|
|
$
|
31,675,708
|
|
|
$
|
86,045,042
|
|
Gross unrealized depreciation
|
|
|
(2,408,269
|
)
|
|
|
(3,239,741
|
)
|
|
|
(3,491,844
|
)
|
|
|
(6,567,355
|
)
|
|
|
(12,657,931
|
)
|
|
|
|
|
|
Net unrealized appreciation
|
|
$
|
24,195,058
|
|
|
$
|
38,928,897
|
|
|
$
|
7,041,421
|
|
|
$
|
25,108,353
|
|
|
$
|
73,387,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
57
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
8. Concentration, Market and Credit Risk:
MCA, MYM and MYN invest a substantial amount of their
assets in issuers located in a single state or limited number of states. Please see the Schedules of Investments for concentrations in specific states.
Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception
of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.
In the normal course of business, the Funds
invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may
decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic
instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to
or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial
stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties The extent of the
Funds exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.
The Funds may hold a significant amount of bonds subject to calls by the issuers at defined dates and prices. When bonds are called by issuers
and the Funds reinvest the proceeds received, such investments may be in securities with lower yields than the bonds originally held, and correspondingly, could adversely impact the yield and total return performance of a fund.
The Funds invest a significant portion of their assets in fixed income securities and/or uses derivatives tied to the fixed income
markets. See the Schedules of Investments for these securities and/or derivatives. Changes in market interest rates or economic conditions, including the Federal Reserves decision in December 2013 to taper its quantitative
easing policy, may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise.
The Funds may be subject to a greater risk of rising interest rates due to the current period of historically low rates.
As of January 31,
2014, MUE, MYN and MYI invested a significant portion of their assets in securities in the county/city/special district/school district and transportation sectors. MCA invested a significant portion of its assets in securities in the
county/city/special district/school district and utilities sectors. MYM invested a significant portion of its assets in securities in the county/city/special district/school district sector. Changes in economic conditions affecting the
county/city/special district/school district, transportation and utilities sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.
On December 10, 2013, regulators published final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the
"Volcker Rule"), which prohibit banking entities from engaging in proprietary trading of certain instruments and limit such entities' investments in, and relationships with, covered funds, as defined in the rules. Banking entities
subject to the rules are required to fully comply by July 21, 2015. These rules may preclude banking entities and their affiliates from (i) sponsoring TOB trust programs (as such programs are presently structured) and (ii) continuing
relationships with or services for existing TOB trust programs. As a result, TOB trusts may need to be restructured or unwound. There can be no assurances that TOB trusts can be restructured, that new sponsors of TOB trusts will develop, or
that alternative forms of leverage will be available to the Funds. Any alternative forms of leverage may be more or less advantageous to the Funds than existing TOB leverage.
TOB transactions constitute an important component of the municipal bond market. Accordingly, implementation of the Volcker Rule may adversely impact the municipal market, including through reduced
demand for and liquidity of municipal bonds and increased financing costs for municipal issuers. Any such developments could adversely affect the Funds. The ultimate impact of these rules on the TOB market and the overall municipal market
is not yet certain.
9. Capital Share Transactions:
Each Fund is authorized to issue 200 million shares, all of which were initially classified as Common Shares. The par value for each Funds Common Shares is $0.10. The par value for each
Funds Preferred Shares outstanding is $0.10. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without approval of Common Shareholders.
Common Shares
For the periods shown, shares issued and outstanding increased by the following amounts
as a result of dividend reinvestment:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
January 31, 2014
|
|
|
Year Ended
July 31, 2013
|
|
MUE
|
|
|
|
|
|
|
48,061
|
|
MCA
|
|
|
|
|
|
|
35,451
|
|
MYM
|
|
|
|
|
|
|
5,323
|
|
MYN
|
|
|
|
|
|
|
126,457
|
|
MYI
|
|
|
|
|
|
|
221,596
|
|
Preferred Shares
Each
Fund's Preferred Shares rank prior to the Fund's Common Shares as to the payment of dividends by the Fund and distribution of assets upon dissolution or liquidation of the Fund. The 1940 Act prohibits the declaration of any dividend on the
Funds Common Shares or the repurchase of the Funds Common Shares if the Funds fail to maintain the asset coverage of at least 200% of the liquidation preference of the outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
Preferred Shares. In addition, pursuant to the Preferred Shares' governing instrument, the Funds are restricted from declaring and paying dividends on classes of shares ranking junior to or on
parity with the Preferred Shares or repurchasing such shares if the Funds fail to declare and pay dividends on the Preferred Shares, redeem any Preferred Shares required to be redeemed under the Preferred Shares governing instrument or comply with
the basic maintenance amount requirement of the rating agencies then rating the Preferred Shares.
The holders of Preferred Shares have voting
rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, are also entitled to
elect two Directors for each Fund. In addition, the 1940 Act requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a
class would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Funds sub-classification as a closed-end investment company or change its fundamental investment
restrictions or (c) change its business so as to cease to be an investment company.
VRDP Shares
MCA, MYM, MYN and MYI (collectively, the VRDP Funds), have issued Series W-7 VRDP Shares, $100,000 liquidation value per share, in a privately
negotiated offering. The VRDP Shares were offered to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act of 1933, as amended, (the Securities Act) and include a liquidity feature, pursuant to a
liquidity agreement, that allows the holders of VRDP Shares to have their shares purchased by the liquidity provider in the event of a failed remarketing. The VRDP Funds are required to redeem the VRDP Shares owned by the liquidity provider after
six months of continuous, unsuccessful remarketing. Upon the occurrence of the first unsuccessful remarketing, the VRDP Funds are required to segregate liquid assets to fund the redemption. The VRDP Shares are subject to certain restrictions on
transfer.
The VRDP Shares outstanding as of January 31, 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue
Date
|
|
|
Shares
Issued
|
|
|
Aggregate
Principal
|
|
|
Maturity
Date
|
|
MCA
|
|
|
4/21/11
|
|
|
|
1,665
|
|
|
$
|
166,500,000
|
|
|
|
5/01/41
|
|
MYM
|
|
|
5/19/11
|
|
|
|
873
|
|
|
$
|
87,300,000
|
|
|
|
6/01/41
|
|
MYN
|
|
|
4/21/11
|
|
|
|
2,477
|
|
|
$
|
247,700,000
|
|
|
|
5/01/41
|
|
MYI
|
|
|
5/19/11
|
|
|
|
3,564
|
|
|
$
|
356,400,000
|
|
|
|
6/01/41
|
|
Each VRDP Fund entered into a fee agreement with the liquidity provider that required a per annum liquidity fee payable to
the liquidity provider. These fees, if applicable, are shown as liquidity fees in the Statements of Operations.
The fee agreement between each
VRDP Fund and the liquidity provider is scheduled to expire on July 9, 2015 unless renewed or terminated in advance.
In the event the fee
agreement is not renewed or is terminated in advance, and the VRDP Funds do not enter into a fee agreement with an alternate liquidity provider, the VRDP Shares will be subject to mandatory purchase by the liquidity provider prior to the termination
of the fee agreement. The VRDP Funds are required to redeem any VRDP Shares purchased by the liquidity provider six months after the purchase date. Immediately after the purchase of any VRDP Shares by the liquidity provider, the VRDP Funds are
required to begin to segregate liquid assets with the VRDP Funds custodians to fund the redemption. There is no assurance the VRDP Funds will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.
The VRDP Funds are required to redeem their VRDP Shares on the maturity date, unless earlier redeemed or repurchased. Six months prior to the
maturity date, the VRDP Funds are required to begin to segregate liquid assets with the Funds custodians to fund the redemption. In addition, VRDP Funds are required to redeem certain of their outstanding VRDP Shares if they fail to maintain
certain asset coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, VRDP Shares may be redeemed, in whole
or in part, at any time at the option of VRDP Funds. The redemption price per VRDP Share is equal to the liquidation value per share plus any outstanding unpaid dividends.
Dividends on the VRDP Shares are payable monthly at a variable rate se weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum
rate. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the
length of time that the VRDP Shares fail to be remarketed. At the date of issuance, the VRDP Shares were assigned a long-term rating of Aaa from Moodys and AAA from Fitch. Subsequent to the issuance of VRDP Shares, Moodys completed a
review of its methodology for rating securities issued by registered closed-end funds. As of January 31, 2014, the VRDP Shares were assigned a long-term rating of Aa2 for MCA, MYM and MYN and Aa1 for MYI from Moodys under its new ratings
methodology. The VRDP Shares continue to be assigned a long-term rating of AAA from Fitch.
The short-term ratings on the VRDP Shares are directly
related to the short-term ratings of the liquidity provider for such VRDP Shares. Changes in the credit quality of the liquidity provider could cause a change in the short-term credit ratings of the VRDP Shares as rated by Moodys, Fitch and/or
S&P. A change in the short-term credit rating of the liquidity provider or the VRDP Shares may adversely affect the dividend rate paid on such shares, although the dividend rate paid on the VRDP Shares is not directly related based upon either
short-term rating. The liquidity provider may be terminated prior to the scheduled termination date if the liquidity provider fails to maintain short-term debt ratings in one of the two highest rating categories. The short-term ratings on the VRDP
Shares were withdrawn by Moodys, Fitch and/or S&P at the commencement of the special rate period, as described below.
For financial
reporting purposes, VRDP Shares are considered debt of the issuer; therefore, the liquidation value, which approximates fair value, of VRDP Shares is recorded as a liability in the Statements of Assets and Liabilities. Unpaid dividends are included
in interest expense and fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
59
|
|
|
|
Notes to Financial Statements (continued)
|
|
|
payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VRDP Shares are included as a component of interest expense, fees and amortization of offering costs
in the Statements of Operations. VRDP Shares are treated as equity for tax purposes. Dividends paid to holders of VRDP Shares are generally classified as tax-exempt income for tax-reporting purposes.
The VRDP Funds may incur remarketing fees of 0.10% on the aggregate principal amount of all VRDP Shares, which, if any, are included in remarketing fees on
Preferred Shares in the Statements of Operations. All of the VRDP Shares successfully remarketed prior to the beginning of the special rate period.
The annualized dividend rates for the VRDP Shares for the six months end January 31, 2014 were as follows:
|
|
|
|
|
|
|
Rate
|
|
MCA
|
|
|
1.01%
|
|
MYM
|
|
|
1.01%
|
|
MYN
|
|
|
1.01%
|
|
MYI
|
|
|
1.01%
|
|
VRDP Shares issued and outstanding remained constant for the six months ended January 31, 2014.
On June 21, 2012, the VRDP Funds announced a special rate period for a three-year term ending June 24, 2015 with respect to their VRDP Shares. The
liquidity and fee agreements remain in effect for the duration of the special rate period and the VRDP shares are still subject to mandatory redemption by the VRDP Funds on maturity date. The VRDP Shares will not be remarketed or subject to optional
or mandatory tender events during such time. During the special rate period, the VRDP Funds are required to maintain the same asset coverage, basic maintenance amount and leverage requirements for the VRDP Shares. The VRDP Funds will not pay any
liquidity and remarketing fees during the special rate period and instead will pay dividends monthly based on the sum of the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Index and a percentage per annum based on the
long-term ratings assigned to the VRDP Shares. The short-term ratings were withdrawn by Moodys, Fitch and/or S&P. Short-term ratings may be re-assigned upon the termination of the special rate period when the VRDP Shares revert back to
remarketable securities.
If the VRDP Funds redeem the VRDP Shares on a date that is one year or more before the end of the special rate period
and the VRDP Shares are rated above A1/A by Moodys and Fitch respectively, then such redemption is subject to a redemption premium payable to the holder of the VRDP Shares based on the time remaining in the special rate period, subject to
certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. After June 24, 2015, the holder of the VRDP Shares and the VRDP Funds may mutually agree to extend the special rate period. If the special
rate period is not extended, the VRDP Shares will revert back to remarketable securities and will be remarketed and available for purchase by qualified institutional investors.
VMTP Shares
MUE has issued Series W-7 VMTP Shares, $100,000 liquidation value per share, in a privately
negotiated offering and sale of VMTP Shares exempt from registration under the Securities Act.
The VMTP Shares outstanding as of January 31,
2014 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue
Date
|
|
|
Shares
Issued
|
|
|
Aggregate
Principal
|
|
|
Term
Date
|
|
MUE
|
|
|
12/16/11
|
|
|
|
1,310
|
|
|
$
|
131,000,000
|
|
|
|
1/02/15
|
|
MUE is required to redeem its VMTP Shares on the term date, unless earlier redeemed or repurchased or unless extended. There
is no assurance that the term of the Fund's VMTP Shares will be extended or that the Fund's VMTP Shares will be replaced with any other preferred shares or other form of leverage upon the redemption or repurchase of the VMTP Shares. Six months prior
to term date, the VMTP Fund is required to begin to segregate liquid assets with the Funds custodian to fund the redemption. In addition, the VMTP Fund is required to redeem certain of its outstanding VMTP Shares if it fails to maintain
certain asset coverage, basic maintenance amount or leverage requirements.
Subject to certain conditions, the Fund's VMTP Shares may be redeemed,
in whole or in part, at any time at the option of the Fund. The redemption price per VMTP Share is equal to the liquidation value per share plus any outstanding unpaid dividends and applicable redemption premium. If the Fund redeems the VMTP Shares
on a date that is one year or more prior to the term date and the VMTP Shares are rated above A1/A+ by Moodys and Fitch, respectively, then such redemption is subject to a prescribed redemption premium (up to 3% of the liquidation preference)
payable to the holder of the VMTP Shares based on the time remaining to the term date, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. The VMTP Shares are subject to certain
restrictions on transfer, and the Fund may also be required to register the VMTP Shares for sale under the Securities Act under certain circumstances. In addition, amendments to the VMTP governing document generally require the consent of the
holders of VMTP Shares.
Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread
to the SIFMA Municipal Swap Index. The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by Moodys and Fitch. At the date of issuance, the VMTP Shares were assigned long-term ratings of Aaa
from Moodys and AAA from Fitch. Subsequent to the issuance of the VMTP Shares, Moodys completed a review of its methodology for rating securities issued by registered closed-end funds. As of January 31, 2014, the VMTP Shares were
assigned a long-term rating of Aa1 from Moodys under its new rating methodology. The VMTP Shares continue to be assigned a long-term rating of AAA from Fitch. The dividend rate on the VMTP Shares is subject to a step-up spread if the Fund
fails to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions or gross-up payments, and maintaining certain asset coverage and leverage requirements.
The average annualized dividend rate of the VMTP Shares for the six months ended January 31, 2014 for MUE was 1.06%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
|
|
|
|
Notes to Financial Statements (concluded)
|
|
|
For financial reporting purposes, VMTP Shares are considered debt of the issuer; therefore the liquidation value, which approximates fair value, of VMTP Shares is recorded as a liability in the Statements of
Assets and Liabilities. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends paid on the VMTP Shares are included as a component of interest expense, fees and amortization
of offering costs in the Statements of Operations. VMTP Shares are treated as equity for tax purposes. Dividends paid to holders of VMTP Shares are generally classified as tax-exempt income for tax-reporting purposes.
VMTP Shares issued and outstanding remained constant for the six months ended January 31, 2014.
Offering Costs: The Funds incurred costs in connection with the issuance of VRDP Shares and/or VMTP Shares. For VRDP Shares, these costs were recorded as a deferred charge and will be amortized over the
30-year life of the VRDP Shares with the exception of upfront fees paid to the liquidity provider which were amortized over the life of the liquidity agreement. For VMTP Shares, these costs were recorded as a deferred charge and will be amortized
over the 3-year life of the VMTP Shares. Amortization of these costs is included in interest expense, fees and amortization of offering costs in the Statements of Operations.
10. Subsequent Events:
Management's evaluation of the impact of all subsequent events on the
Funds' financial statements was completed through the date the financial statements were issued and the following items were noted:
Each Fund
paid a net investment income dividend on March 3, 2014 to Common Shareholders of record on February 14, 2014:
|
|
|
|
|
|
|
Common
Dividend
Per Share
|
|
MUE
|
|
$
|
0.0705
|
|
MCA
|
|
$
|
0.0760
|
|
MYM
|
|
$
|
0.0675
|
|
MYN
|
|
$
|
0.0680
|
|
MYI
|
|
$
|
0.0720
|
|
Additionally, the Funds declared a net investment income dividend on March 3, 2014 payable to Common Shareholders of
record on March 14, 2014 as follows:
|
|
|
|
|
|
|
Common
Dividend
Per Share
|
|
MUE
|
|
$
|
0.0705
|
|
MCA
|
|
$
|
0.0760
|
|
MYM
|
|
$
|
0.0675
|
|
MYN
|
|
$
|
0.0680
|
|
MYI
|
|
$
|
0.0740
|
|
The dividends declared on VMTP or VRDP Shares for the period February 1, 2014 to February 28, 2014 were as
follows:
|
|
|
|
|
|
|
|
|
Series
|
|
Dividends
Declared
|
|
MUE VMTP Shares
|
|
W-7
|
|
$
|
103,939
|
|
MCA VRDP Shares
|
|
W-7
|
|
$
|
125,628
|
|
MYM VRDP Shares
|
|
W-7
|
|
$
|
65,870
|
|
MYN VRDP Shares
|
|
W-7
|
|
$
|
186,895
|
|
MYI VRDP Shares
|
|
W-7
|
|
$
|
268,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL REPORT
|
|
JANUARY 31, 2014
|
|
61
|