UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

 

 

Investment Company Act file number 811-06499

 

Name of Fund: BlackRock MuniYield California Fund, Inc. (MYC)

 

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

 

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniYield California 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: 07/31/2014

 

Date of reporting period: 10/31/2013

 

Item 1 – Schedule of Investments

 
 
Schedule of Investments October 31, 2013 (Unaudited)

BlackRock MuniYield California Fund, Inc. (MYC)

(Percentages shown are based on Net Assets)

 

   
Municipal Bonds Par
(000)		   Value  
   

California — 94.9%

Corporate  — 1.7%  
City of Chula Vista California, Refunding RB, San Diego Gas & Electric:          
  Series A, 5.88%, 2/15/34 $ 975 $ 1,086,735  
  Series D, 5.88%, 1/01/34   4,000   4,458,400  
       
    5,545,135  
 
County/City/Special District/School District  — 35.7%  
Campbell Union High School District, GO, Election of 2006, Series C, 5.75%, 8/01/40   4,000   4,420,600  
City of Los Angeles California, COP, Senior, Sonnenblick Del Rio West Los Angeles (AMBAC), 6.20%, 11/01/31   2,000   2,007,220  
City of San Jose California Hotel Tax, RB, Convention Center Expansion & Renovation Project:          
  6.50%, 5/01/36   1,520   1,729,319  
  6.50%, 5/01/42   1,860   2,108,496  
County of Santa Clara California Financing Authority, Refunding LRB, Series L, 5.25%, 5/15/36   16,000   17,378,560  
El Monte Union High School District, GO, Election of 2002, Series C, 5.25%, 6/01/32   9,620   10,258,191  
Garden Grove Unified School District, GO, Election of 2010, Series C, 5.25%, 8/01/40   5,500   5,867,015  
Grossmont Healthcare District, GO, Election of 2006, Series B, 6.13%, 7/15/40   2,000   2,265,480  
Los Angeles Community College District California, GO, Election of 2008, Series C, 5.25%, 8/01/39   7,210   7,775,480  
Los Angeles Municipal Improvement Corp., RB, Real Property, Series E:          
  5.75%, 9/01/34   1,215   1,353,753  
  6.00%, 9/01/34   2,590   2,937,112  
Los Rios Community College District, GO, Election of 2002, Series D, 5.38%, 8/01/34   4,570   5,001,225  
Mount San Antonio Community College District, GO, Refunding, Election of 2008, Series 2013A, 5.00%, 8/01/34   4,500   4,792,725  
           
Municipal Bonds Par
(000)		   Value  

California (continued)

County/City/Special District/School District (concluded)  
Oak Grove School District California, GO, Election of 2008, Series A, 5.50%, 8/01/33 $ 4,000 $ 4,457,440  
Oakland Unified School District/Alameda County, GO, Election of 2012, 6.63%, 8/01/38   1,250   1,339,263  
Ohlone Community College District, GO, Election of 2010, Series A, 5.25%, 8/01/41   7,135   7,596,634  
Pico Rivera Public Financing Authority, RB, 5.75%, 9/01/39   6,035   6,459,381  
Riverside Community Properties Development, Inc., RB, Riverside County Law Building Project, 6.00%, 10/15/38   5,000   5,319,650  
San Diego Regional Building Authority, RB, County Operations Center & Annex, Series A, 5.38%, 2/01/36   4,100   4,497,044  
San Jose California Financing Authority, Refunding LRB, Convention Center Expansion & Renovation Project, Series A, 5.00%, 6/01/39   9,340   9,670,543  
Santa Ana Unified School District, GO, Election of 2008, Series A, 5.13%, 8/01/33   6,180   6,523,299  
West Contra Costa California Unified School District, GO, Election of 2012, Series A, 5.50%, 8/01/39 (a)   2,500   2,660,850  
       
    116,419,280  
 
Education  — 4.2%  
California Educational Facilities Authority, Refunding RB:          
  Pitzer College, 6.00%, 4/01/40   2,500   2,741,875  
  San Francisco University, 6.13%, 10/01/36   1,645   1,885,088  
California Municipal Finance Authority, RB, Emerson College, 6.00%, 1/01/42   2,500   2,734,075  
California School Finance Authority, RB:          
  Alliance College, Series A, 6.00%, 7/01/33   1,500   1,508,595  
  Alliance College, Series A, 6.30%, 7/01/43   3,000   3,013,890  
               
BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 20131
 
Schedule of Investments (continued)

BlackRock MuniYield California Fund, Inc. (MYC)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Par
(000)		   Value  

California (continued)

Education (concluded)  
California School Finance Authority, RB  (concluded):          
  Value Schools, 6.65%, 7/01/33 $ 595 $ 594,345  
  Value Schools, 6.90%, 7/01/43   1,330   1,323,337  
       
    13,801,205  
 
Health  — 15.6%  
ABAG Finance Authority for Nonprofit Corps, Refunding RB, Sharp Healthcare:          
  6.38%, 8/01/34   2,000   2,069,320  
  Series A, 6.00%, 8/01/30   2,270   2,574,680  
California Health Facilities Financing Authority, RB:          
  Children's Hospital, Series A, 5.25%, 11/01/41   11,090   11,227,183  
  St. Joseph Health System, Series A, 5.75%, 7/01/39   990   1,100,593  
  Sutter Health, Series B, 6.00%, 8/15/42   7,530   8,684,650  
California Health Facilities Financing Authority, Refunding RB:          
  Catholic Healthcare West, Series A, 6.00%, 7/01/39   10,000   10,898,700  
  Providence Health, 6.50%, 10/01/38   3,625   4,156,679  
  Series A, 6.50%, 11/01/38   1,000   1,118,630  
California Statewide Communities Development Authority, RB, Sutter Health, Series A, 6.00%, 8/15/42   7,995   9,127,092  
       
    50,957,527  
 
Housing  — 1.1%  
County of Santa Clara Housing Authority, RB, John Burns Gardens Apartments Project, Series A, AMT, 6.00%, 8/01/41   3,500   3,500,140  
 
State  — 12.1%  
California State Public Works Board, LRB, Department of Education, Riverside Campus Project, Series B, 6.50%, 4/01/34   10,000   11,488,200  
Municipal Bonds Par
(000)		   Value  

California (continued)

State (concluded)  
California State Public Works Board, RB:          
  Department of Corrections and Rehabilitation, Sub-Series I-1, 6.38%, 11/01/34 $ 4,400 $ 5,065,984  
 

Department of Developmental Services, Poterville,

Series C, 6.25%, 4/01/34

   1,465   1,665,075  
  Trustees of the California State University, Series D, 6.00%, 4/01/27   215   247,746  
State of California, GO, Various Purposes:          
  6.00%, 4/01/38   15,000   17,081,100  
  6.00%, 11/01/39   3,345   3,854,611  
       
    39,402,716  
 
Tobacco  — 1.8%  
California Statewide Financing Authority, RB, Tobacco Settlement:          
  Series A, 6.00%, 5/01/43   1,300   1,175,174  
  Series B, 6.00%, 5/01/43   5,000   4,519,900  
       
    5,695,074  
 
Transportation  — 8.2%  
City of San Jose California, RB, Series A-1, AMT (AGM):          
  5.50%, 3/01/30   1,000   1,058,610  
  5.75%, 3/01/34   1,000   1,067,620  
City of San Jose California, Refunding ARB, Series A-1, AMT, 6.25%, 3/01/34   1,400   1,554,252  
County of Orange California, ARB, Series B, 5.75%, 7/01/34   3,000   3,291,990  
County of Sacramento California, ARB:          
  PFC/Grant, Sub-Series D, 6.00%, 7/01/35   3,000   3,353,730  
  Senior Series B, 5.75%, 7/01/39   900   997,686  
County of San Joaquin Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A, 6.00%, 3/01/36   2,440   2,801,754  
San Francisco City & County Airports Commission, ARB, Series E, 6.00%, 5/01/39   5,065   5,762,299  
               
BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 20132
 
Schedule of Investments (continued)

BlackRock MuniYield California Fund, Inc. (MYC)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Par
(000)		   Value  

California (concluded)

Transportation (concluded)  
San Francisco City & County Airports Commission, Refunding ARB, 2nd Series A, AMT, 5.25%, 5/01/33 $ 1,440 $ 1,499,011  
San Francisco Port Commission California, RB, Series A, 5.13%, 3/01/40   5,050   5,166,049  
       
    26,553,001  
 
Utilities  — 14.5%  
City of Los Angeles California Wastewater System, Refunding RB, Sub-Series A, 5.00%, 6/01/35   6,000   6,404,580  
City of Petaluma California Wastewater, Refunding RB, 6.00%, 5/01/36   2,645   2,992,183  
Dublin-San Ramon Services District, Refunding RB, 6.00%, 8/01/41   2,420   2,780,846  
Eastern Municipal Water District, COP, Series H, 5.00%, 7/01/35   8,420   8,772,209  
Los Angeles Department of Water & Power, RB:          
  Series B, 5.00%, 7/01/43   5,500   5,755,530  
  Sub-Series A-1, 5.25%, 7/01/38   3,000   3,184,770  

Los Angeles Department of Water & Power, Refunding RB, Series A, 5.25%, 7/01/39

   4,000   4,275,240  

Oceanside Public Financing Authority, Refunding RB, Series A:

          
  5.25%, 5/01/30   1,245   1,381,539  
  5.25%, 5/01/33   2,810   3,073,718  
San Diego Public Facilities Financing Authority, Refunding RB, Sewer Improvements, Senior Series A:          
  5.25%, 5/15/34   2,000   2,143,860  
  5.38%, 5/15/34   3,910   4,233,592  
San Francisco City & County California Public Utilities Commission, Refunding RB, Series A, 5.13%, 11/01/39   2,295   2,403,324  
       
    47,401,391  
 
Total Municipal Bonds — 94.9%   309,275,469  
 
         
Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (b) Par
(000)		   Value  

California — 69.9%

County/City/Special District/School District  — 30.9%  
City of Los Angeles California, Refunding RB, Series A, 5.00%, 6/01/39 $ 9,870 $ 10,398,539  
El Dorado Union High School District, GO, Election of 2008, 5.00%, 8/01/35   5,000   5,152,600  
Los Angeles Community College District California, GO:          
  Election of 2001, Series E-1, 5.00%, 8/01/33   14,850   15,693,777  
  Election of 2003, Series E (AGM), 5.00%, 8/01/31   10,002   10,633,231  
  Election of 2008, Series C, 5.25%, 8/01/39 (c)   9,680   10,439,299  
Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A, 6.00%, 8/01/33   3,828   4,408,889  
San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33   7,732   8,623,413  
San Francisco Bay Area Rapid Transit District, Refunding RB, Series A (NPFGC):          
  Sales Tax, 5.00%, 7/01/30   6,000   6,272,820  
  5.00%, 7/01/34   5,439   5,685,798  
San Marcos Unified School District, GO, Election of 2010, Series A, 5.00%, 8/01/38   15,520   16,124,814  
Sonoma County Junior College District, GO, Election of 2002, Series B (AGM), 5.00%, 8/01/28   6,875   7,247,215  
       
    100,680,395  
 
Education  — 14.3%  
California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/39 (c)   13,845   14,827,026  
Peralta Community College District, GO, Election of 2000, Series D (AGM), 5.00%, 8/01/30   1,050   1,073,993  
University of California, RB:          
  Series L, 5.00%, 5/15/36   8,500   9,010,765  
  Series L, 5.00%, 5/15/40   11,597   12,067,323  
  Series O, 5.75%, 5/15/34   2,805   3,167,228  
               
BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 20133
 
Schedule of Investments (continued)

BlackRock MuniYield California Fund, Inc. (MYC)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (b) Par
(000)		   Value  

California (continued)

Education (concluded)  
University of California, Refunding RB, Limited Project, Series G, 5.00%, 5/15/37 $ 6,161 $ 6,461,461  
       
    46,607,796  
 
Health  — 3.1%  
California Health Facilities Financing Authority, RB, Sutter Health, Series A (BHAC, NPFGC), 5.00%, 11/15/42   10,002   10,018,545  
 
Transportation  — 1.5%  
City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Senior Series A, 5.00%, 5/15/40   4,999   5,096,785  
 
Utilities  — 20.1%  
City of Los Angeles California Wastewater System, Refunding RB, Series A, 5.00%, 6/01/34   7,500   8,079,525  
Eastern Municipal Water District, COP, Series H, 5.00%, 7/01/33   4,748   4,960,401  
Los Angeles Department of Water & Power, RB, Power System:          
  Sub-Series A-1 (AMBAC), 5.00%, 7/01/37   15,098   15,828,145  
  Sub-Series A-2 (AGM), 5.00%, 7/01/35   7,250   7,675,430  
Metropolitan Water District of Southern California, RB:          
  Series A, 5.00%, 7/01/37   20,000   21,415,400  
             
Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (b) Par
(000)		   Value  

California (concluded)

Utilities (concluded)  
Metropolitan Water District of Southern California, RB  (concluded):          
  Series C, 5.00%, 7/01/35 $ 7,145 $ 7,584,616  
       
    65,543,517  
 
Total Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts — 69.9%   227,947,038  
 
Total Long-Term Investments
(Cost — $513,802,153) — 164.8%		   537,222,507  
 
 
 
Short-Term Securities
Shares		      
 
   
BIF California Municipal Money Fund, 0.00% (d)(e)   382,379   382,379  
 
Total Short-Term Securities
(Cost — $382,379) — 0.1%		   382,379  
 
Total Investments
(Cost — $514,184,532*) — 164.9%		   537,604,886  
Other Assets Less Liabilities — 2.5%   7,906,321  
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (34.9%)   (113,658,804)  
VRDP Shares, at Liquidation Value — (32.5%)   (105,900,000)  
       
Net Assets Applicable to Common Shares — 100.0% $ 325,952,403  
 
               
* As of October 31, 2013, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost $ 400,582,662  
Gross unrealized appreciation $ 26,341,534  
Gross unrealized depreciation   (2,959,500)  
Net unrealized appreciation $ 23,382,034  

 

Notes to Schedule of Investments

(a) When-issued security. Unsettled when-issued transactions were as follows:
 
  Counterparty   Value   Unrealized
Appreciation		  
 
  Piper Jaffray   $ 2,660,850 $ 45,900  
 
                                     
(b) Represent bonds transferred to a TOB. In exchange the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction.
BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 20134
 
Schedule of Investments (continued)

BlackRock MuniYield California Fund, Inc. (MYC)

 

(c) All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from October 1, 2016 to August 1, 2018 is $14,704,685.
(d) Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2013, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

 
  Affiliate   Shares
Held at
July 31, 2013		   Net
Activity		   Shares
Held at
October 31, 2013		   Income  
 
  BIF California Municipal Money Fund   4,979,601   (4,597,222)   382,379   —  
                                           
 

 

(e) Represents the current yield as of report date.

Portfolio Abbreviations

To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:

 

AGM Assured Guaranty Municipal Corp.
AMBAC American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax (subject to)
ARB Airport Revenue Bonds
BHAC Berkshire Hathaway Assurance Corp.
COP Certificates of Participation
GO General Obligation Bonds
LRB Lease Revenue Bonds
NPFGC National Public Finance Guarantee Corp.
RB Revenue Bonds

•
Financial futures contracts as of October 31, 2013 were as follows:
 
Contracts
Sold		 Issue Exchange Expiration Notional
Value		   Unrealized
Depreciation		  
 
(200) 10-Year US Treasury Note Chicago Board of Trade December
2013		 $ 25,471,875 $ (233,078)  
 

•

 

 For Fund compliance purposes, the Fund’s sector classifications refer to any 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 Fund management. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.
BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 20135
 
Schedule of Investments (concluded)

BlackRock MuniYield California Fund, Inc. (MYC)

 
• Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes as follows:

  • Level 1 — unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access
 
  • Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)
 
  • Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund's own assumptions used in determining the fair value of investments and derivative financial instruments)
       
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund's policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund's policy regarding valuation of investments and derivative financial instruments, please refer to the Fund's most recent financial statements as contained in its annual report.

The following tables summarize the Fund's investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2013:

 

  Level 1   Level 2   Level 3   Total  
Assets:    
Investments:  
  Long-Term Investments1   — $ 537,222,507   — $ 537,222,507  
  Short-Term Securities $ 382,379   —   —   382,379  
Total $ 382,379 $ 537,222,507   — $ 537,604,886  
                                 
1    See above Schedule of Investments for values in each sector.
                 
  Level 1   Level 2   Level 3   Total  
 
Derivative Financial Instruments 2  
Liabilities:  
Interest rate contracts $ (233,078)   —   — $ (233,078)  
                               
2    Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.
Certain of the Fund's assets and/or liabilities are held at carrying amount, which approximates fair value for financial reporting purposes. As of October 31, 2013, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:  
  Level 1   Level 2   Level 3   Total
Assets:  
  Cash pledged for financial futures contracts $ 354,000   —   — $ 354,000
Liabilities:  
  TOB trust certificates   — $ (113,640,190)   —   (113,640,190)
  VRDP Shares   —   (105,900,000)   —   (105,900,000)
Total $ 354,000 $ (219,540,190)   — $ (219,186,190)
                               
There were no transfers between levels during the period ended October 31, 2013.

 

BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 20136
 

Item 2 – Controls and Procedures

2(a) – The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the ″1940 Act″)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
2(b) – There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 3 – Exhibits

  Certifications – Attached hereto
  Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
     
  BlackRock MuniYield California Fund, Inc.
     
  By: /s/ John M. Perlowski
    John M. Perlowski
    Chief Executive Officer (principal executive officer) of
    BlackRock MuniYield California Fund, Inc.
     
  Date: December 23, 2013
     
  Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
     
  By: /s/ John M. Perlowski
    John M. Perlowski
    Chief Executive Officer (principal executive officer) of
    BlackRock MuniYield California Fund, Inc.
     
  Date: December 23, 2013
     
  By: /s/ Neal J. Andrews
    Neal J. Andrews
    Chief Financial Officer (principal financial officer) of
    BlackRock MuniYield California Fund, Inc.
     
  Date: December 23, 2013