UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-06499
Name of Fund: BlackRock MuniYield California Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock MuniYield California Fund, Inc., 800 Scudders Mill
Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton,
NJ, 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 10/31/06
Date of reporting period: 11/01/05 - 10/31/06
Item 1 - Report to Stockholders
ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES FIXED INCOME LIQUIDITY
REAL ESTATE
Annual Report
OCTOBER 31, 2006
(BLACKROCK logo)
BlackRock MuniYield Arizona Fund, Inc.
BlackRock MuniYield California Fund, Inc.
BlackRock MuniYield California Insured Fund, Inc.
BlackRock MuniYield Florida Fund
BlackRock MuniYield Michigan Insured Fund II, Inc.
BlackRock MuniYield New York Insured Fund, Inc.
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
These reports, including the financial information herein, are transmitted to
shareholders of BlackRock MuniYield Arizona Fund, Inc., BlackRock MuniYield
California Fund, Inc., BlackRock MuniYield California Insured Fund, Inc.,
BlackRock MuniYield Florida Fund, BlackRock MuniYield Michigan Insured Fund
II, Inc. and BlackRock MuniYield New York Insured Fund, Inc. for their
information. This is not a prospectus. Past performance results shown in these
reports should not be considered a representation of future performance. The
Funds have leveraged their Common Shares/Stock and intend to remain leveraged
by issuing Preferred Shares/Stock to provide the Common Shareholders/Common
Stock shareholders with potentially higher rates of return. Leverage creates
risks for Common Shareholders/Common Stock shareholders, including the
likelihood of greater volatility of net asset value and market price of shares
of the Common Shares/Stock, and the risk that fluctuations in the short-term
dividend rates of the Preferred Shares/Stock may affect the yield to Common
Shareholders/ Common Stock shareholders. Statements and other information
herein are as dated and are subject to change.
A description of the policies and procedures that the Funds use to determine
how to vote proxies relating to portfolio securities is available (1)
without charge, upon request, by calling toll-free 1-800-441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's Web
site at http://www.sec.gov. Information about how the Funds vote proxies
relating to securities held in the Funds' portfolios during the most recent
12-month period ended June 30 is available (1) at www.blackrock.com; and
(2) on the Securities and Exchange Commission's Web site at http://www.sec.gov.
(GO PAPERLESS...logo)
It's Fast, Convenient, & Timely!
BlackRock MuniYield Arizona Fund, Inc.
BlackRock MuniYield California Fund, Inc.
BlackRock MuniYield California Insured Fund, Inc.
BlackRock MuniYield Florida Fund
BlackRock MuniYield Michigan Insured Fund II, Inc.
BlackRock MuniYield New York Insured Fund, Inc.
Important Tax Information
All of the net investment income distributions paid by BlackRock MuniYield
Arizona Fund, Inc., BlackRock MuniYield California Fund, Inc., BlackRock
MuniYield California Insured Fund, Inc., BlackRock MuniYield Florida Fund,
BlackRock MuniYield Michigan Insured Fund II, Inc. and BlackRock MuniYield New
York Insured Fund, Inc. during the taxable year ended October 31, 2006 qualify
as tax-exempt interest dividends for federal income tax purposes.
Additionally, the following summarizes the taxable per share distributions
paid by BlackRock MuniYield Arizona Fund, Inc. during the year:
Payable Long-Term
Date Capital Gains
Common Stock Shareholders 12/29/2005 $0.116480
Preferred Shareholders:
Series A 11/17/2005 $20.62
11/25/2005 $24.46
12/01/2005 $19.56
Series B 11/15/2005 $19.83
11/22/2005 $20.62
11/29/2005 $22.19
12/06/2005 $ 2.82
Series C 12/19/2005 $13.88
Swap Agreements
The Funds may invest in swap agreements, which are over-the-counter contracts
in which one party agrees to make periodic payments based on the change in
market value of a specified bond, basket of bonds, or index in return for
periodic payments based on a fixed or variable interest rate or the change in
market value of a different bond, basket of bonds or index. Swap agreements
may be used to obtain exposure to a bond or market without owning or taking
physical custody of securities. Swap agreements involve the risk that the
party with whom each Fund has entered into a swap will default on its
obligation to pay the Fund and the risk that the Fund will not be able to meet
its obligations to pay the other party to the agreement.
Announcement of Annual Stockholders Meeting
Each Fund has determined that its annual stockholders meeting originally
scheduled to be held in April 2007 will be postponed until, and will be held
in, June 2007. Proposals of stockholders intended to be presented at the
meeting must be received by each Fund by February 15, 2007 for inclusion in
the Fund's proxy statement and form of proxy for that meeting. The persons
named as proxies in the proxy materials for each Fund's 2007 annual meeting
of stockholders may exercise discretionary authority with respect to any
stockholder proposal presented at such meeting if written notice of such
proposal has not been received by the Funds by April 1, 2007. Written
proposals and notices should be sent to the Secretary of the Fund, 800
Scudders Mill Road, Plainsboro, New Jersey 08536.
ANNUAL REPORTS OCTOBER 31, 2006
A Letter to Shareholders
Dear Shareholder
Ten months into 2006, we are able to say it has been an interesting year for
investors. After a volatile start and far-reaching mid-year correction, the
financial markets regained some positive momentum through late summer and
fall. For the six- and 12-month periods ended October 31, 2006, most major
market indexes managed to post positive returns:
Total Returns as of October 31, 2006 6-month 12-month
U.S. equities (Standard & Poor's 500 Index) +6.11% +16.34%
Small cap U.S. equities (Russell 2000 Index) +0.90 +19.98
International equities (MSCI Europe, Australasia, Far East Index) +3.77 +27.52
Fixed income (Lehman Brothers Aggregate Bond Index) +4.60 + 5.19
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +4.12 + 5.75
High yield bonds (Credit Suisse High Yield Index) +4.66 +10.29
The Federal Reserve Board (the Fed), after raising the target short-term
interest rate 17 times between June 2004 and June 2006, finally opted to pause
on August 8, 2006. This left the federal funds rate at 5.25%, where it
remained through the September and October Fed meetings. In interrupting its
two-year rate-hiking campaign, the Fed acknowledged that economic growth is
slowing, led by softness in the housing market. However, the central bankers
continue to take a cautionary position on inflation, despite a decline in
energy prices in recent months. At the time of this writing, the price of oil
had settled into the $60-per-barrel range after reaching nearly $78 per barrel
earlier in the year.
Notwithstanding the mid-year correction, equity markets generally found
support in solid corporate earnings reports in the first three quarters of the
year. Overall corporate health, including strong company balance sheets,
helped to sustain robust dividend-distribution, share-buyback and merger-and-
acquisition activity. Many international equity markets fared equally well or
better, thanks in part to higher economic growth rates and low inflation.
In the U.S. bond market, prices declined for much of the year as investors
focused on decent economic activity and inflation concerns. Bond prices began
to improve in late June as the economy showed signs of weakening and inflation
pressures subsided. Notably, the Treasury curve inverted periodically, a
phenomenon typically associated with periods of economic weakness. At the end
of October, the one-month Treasury bill offered the highest yield on the curve
at 5.18%, while the 30-year Treasury bond had a yield of 4.72%.
Amid the uncertainty inherent in the financial markets, we encourage you to
review your goals periodically with your financial professional and to make
portfolio changes, as needed. For additional insight and timely "food for
thought" for investors, we also invite you to visit Shareholder magazine at
www.blackrock.com/shareholdermagazine. We are pleased to make our investor-
friendly magazine available to you online. We thank you for trusting BlackRock
with your investment assets, and we look forward to continuing to serve your
investment needs.
Sincerely,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
President and Director/Trustee
ANNUAL REPORTS OCTOBER 31, 2006
A Discussion With Your Funds' Portfolio Managers
The Funds continued to focus on the dual goals of providing a generous current
income accrual and muting price volatility, while maintaining a high degree of
credit quality within each portfolio.
Describe the recent market environment relative to municipal bonds.
Supported by a positive technical backdrop, municipal bonds managed to
significantly outperform their taxable counterparts for the 12-month period
ended October 31, 2006. Despite considerable volatility, taxable bond yields
were little changed over the past year. Tax-exempt bonds, in the meantime, saw
their yields decline (as prices, which move opposite of yields, rose).
For much of the first half of the fiscal period, longer-maturity U.S. Treasury
bond yields rose (and prices declined) as investors focused on strong U.S.
economic activity and inflationary concerns triggered by rising oil prices. By
mid-May 2006, the yield on 30-year U.S. Treasury bonds had risen more than
70 basis points (.70%) to 5.31%. Bond prices began to improve in late June as
economic activity weakened and inflationary pressures subsided. Bond price
improvement accelerated after the Federal Reserve Board (the Fed) refrained
from raising the target interest rate at its August 8 meeting, a move that
came after 17 consecutive interest rate hikes since June 2004. Recent declines
in oil prices, and especially gasoline prices, helped to reverse earlier
inflationary concerns and support higher bond prices. Over the 12-month period,
30-year U.S. Treasury bond yields fell four basis points to 4.72%, while
10-year Treasury yields rose four basis points to 4.61%.
Meanwhile, the municipal bond market found support in declining new-issue
volume and increasing investor demand. As reported by Municipal Market Data,
yields on AAA-rated municipal issues maturing in 30 years declined 52 basis
points to 4.07% over the past 12 months. Shorter maturities experienced
smaller yield declines, with yields on AAA-rated municipal issues maturing in
10 years falling 28 basis points to 3.64%.
Demand for municipal product by retail and institutional investors has
remained very strong despite the recent decline in bond yields. The strong
demand is reflected in continued flows into long-term, tax-exempt mutual
funds. As reported by the Investment Company Institute, long-term municipal
bond funds saw net new cash inflows of more than $1.3 billion during September
2006, a material increase from $344 million in July and $283 million in June.
During the first nine months of 2006, long-term tax-exempt bond funds had net
new cash flows of over $9.6 billion, a 43% increase compared to the same period
a year earlier. Recent weekly fund flows, reported by AMG Data, averaged
$416 million in October 2006, well above the July average of $247 million and
the year-to-date weekly average of $315 million.
Also supporting municipal bond price improvement has been a decline in new
issuance. In the first 10 months of 2006, more than $295 billion in new long-
term municipal bonds was underwritten, a decline of over 12.5% versus the same
period a year ago. Notably, after declining for much of the year, refunding
activity increased slightly in October as the lower interest rate environment
sparked an increase in refinancing activity. On a year-to-date basis, however,
refunding activity has declined over 50% relative to last year's refunding
issuance.
Looking ahead, the positive technical framework in the municipal marketplace
suggests that the tax-exempt market should continue to perform well. New
supply is expected to remain manageable and tax-exempt bond yield ratios
remain in their recent range of 86% - 89% of comparable long-term U.S.
Treasury yields, well within their recent historic norms. These ratios argue
for continued strong demand from non-traditional, arbitrage-related accounts,
which continue to be attracted to the municipal bond market given its
relatively steep yield curve. Taken together, these factors suggest that
the municipal market is poised to continue to perform well as we approach
year-end.
BlackRock MuniYield Arizona Fund, Inc.
Describe conditions in the State of Arizona.
The state's fiscal year 2007 budget was signed by Governor Janet Napolitano on
June 21. At slightly less than $10 billion, budgeted expenditures are nearly
11% more than in the previous year. The budget projects a General Fund surplus
of $69.1 million, not including one-time revenues and expenditures. The final
package includes $370 million in income- and property-tax relief, significantly
larger than the governor's original proposal of $100 million. This represents
the largest tax-cut package in Arizona history and was the source of
contentious debate, as the governor and the legislature explored options for
responding to the state's growing surpluses in recent years. The final budget
also applies $100 million toward pay raises for teachers, a $1.9 billion
package to strengthen border security, and allocates monies to the budget
stabilization fund.
ANNUAL REPORTS OCTOBER 31, 2006
For the first two months of fiscal year 2007, major categories of revenues
continued their pattern of growth, with sales and income taxes increasing 5.8%
and 7.5%, respectively. Although this is solid growth, it does represent a
slowdown from last year. In addition, revenue collections for this time period
came in $5.8 million below budget. More data is needed to determine whether
this lower rate of growth is a persistent trend. Even if this slowing trend
does continue, we would expect the Arizona economy to continue to experience
moderate growth.
In early October, the Goodyear City Council unanimously approved a contract
with the Cleveland Indians that calls for the baseball team to move spring
training to a new bond-financed facility in 2010. Plans call for the Arizona
Sports and Tourism Authority, which had previously issued debt to finance the
new Arizona Cardinals stadium and other baseball spring training facilities,
to finance two-thirds of the cost, with the city issuing bonds for the
remainder. The amount and terms of the bonds have not been finalized.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2006, the Common Stock of BlackRock
MuniYield Arizona Fund, Inc. (formerly MuniYield Arizona Fund, Inc.) had net
annualized yields of 5.40% and 5.30%, based on a year-end per share net asset
value of $14.53 and a per share market price of $14.79, respectively, and
$.784 per share income dividends. Over the same period, the total investment
return on the Fund's Common Stock was +7.47%, based on a change in per share
net asset value from $14.39 to $14.53, and assuming reinvestment of all
distributions.
We maintained a fully invested position throughout the year, which allowed the
Fund to provide shareholders with an above-average yield and to take full
advantage of the bond market rally that ensued once the Fed stopped raising
interest rates, thereby enhancing total return as well. Also contributing to
the Fund's results was our exposure to lower-quality, higher-yielding credits,
which were among the market's top performers, particularly in the second half
of the year. Most notably, our position in uninsured municipal debt issued by
Puerto Rico performed very well after the commonwealth announced in early July
that it would impose its first sales tax in an effort to generate revenue to
close its budget shortfall. Puerto Rico issues are tax-exempt in all 50
states, and we are attracted to them for their relatively attractive yields,
liquidity and diversification benefits, a particularly important consideration
in a single-state portfolio.
For the six-month period ended October 31, 2006, the total investment return
on the Fund's Common Stock was +5.63%, based on a change in per share net
asset value from $14.12 to $14.53, and assuming reinvestment of all
distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the American Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Stock can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
Municipal bonds fared quite well during the year, supported by low new
issuance, healthy investor demand and strong performance relative to the
taxable bond market. We did not make significant changes to the portfolio's
composition or our investment strategy during the fiscal period. As always, we
focused on our dual goals of muting price volatility in the portfolio while
also generating a generous income accrual for our shareholders. We felt this
was accomplished through the Fund's current structure and found little
incentive to make significant changes.
In Arizona, new municipal bond issuance was down nearly 50% compared to the
same 12 months a year ago. Given the limited supply in the market, and the
generally low coupons available on new issues, there were few compelling
opportunities to restructure the portfolio. For the most part, we found that
most of the securities held in the portfolio have higher yields than those
currently available in the market. Having said that, we did take advantage of
a limited number of small, higher-yielding issues that came to market. These
bonds performed well as credit spreads (versus higher-quality issues of
comparable maturity) tightened.
ANNUAL REPORTS OCTOBER 31, 2006
A Discussion With Your Funds' Portfolio Managers (continued)
Overall, we maintained a fairly neutral duration profile for most of the
period and a fully invested stance. Both of these factors aided performance,
particularly as the bond markets embarked on a strong rally in the final three
months of the period.
For the six-month period ended October 31, 2006, the Fund's Auction Market
Preferred Stock had an average yield of 3.20% for Series A, 3.22% for Series B
and 3.29% for Series C. The Fed raised short-term interest rates six times
during the 12-month period, but opted to keep the target rate on hold at 5.25%
in August, September and October 2006. As such, the Fund's borrowing costs
began to stabilize and even move slightly lower late in the period. Despite
the Fed's interest rate increases during the period, the municipal yield curve
remained positively sloped and continued to generate an income benefit to the
Common Stock shareholder from the leveraging of Preferred Stock. However,
should the spread between short-term and long-term interest rates narrow, the
benefits of leverage will decline and, as a result, reduce the yield on the
Fund's Common Stock. (For a more complete explanation of the benefits and
risks of leveraging, see page 71 of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
We remained fully invested at period-end and fairly neutral with respect to
interest rate risk. The bond market has come a long way in recent months,
despite some uncertain rhetoric from the Fed. The central bankers acknowledge
that the economy is slowing, led by a sharp deceleration in housing, but
continue to take a cautionary tone on inflation. Against this backdrop, we
believe a neutral stance is appropriate. We will look to sell into strength
as the market presents opportunities, particularly at the longer end of the
curve. We also continue to explore opportunities back down the curve in the
15-year - 20-year range. We have found that we can move five years - 10 years
down the curve without sacrificing a significant amount of yield. Given the
degree of yield-curve flattening that has occurred over the course of the
Fed's interest rate-hiking campaign, we believe this maturity range could
perform well in the future.
Finally, while we generally work within the municipal cash marketplace, we may
employ hedging strategies in some cases to achieve our duration targets
without disturbing the structure of the portfolio. We believe this is a
prudent option given the lack of available supply and relatively low yields
currently available in the municipal market, allowing us to target our desired
duration without giving up attractively structured bonds that contribute
meaningfully to the Fund's distribution rate. In keeping with our underlying
investment goals, such strategies will be employed within the broader
framework of muting price volatility and enhancing current income for our
shareholders.
BlackRock MuniYield California Fund, Inc.
Describe conditions in the State of California.
The State of California's financial climate continues to benefit from the
overall U.S. economic up-tick, resulting in a sizable budgetary cash position
compared to the deficits experienced in past years. The fiscal year 2007
budget was adopted on time for the first time in a number of years, due in
part to a recent surge in revenues. Still, the budget includes substantial
spending growth and the overall structural deficit remains, which will limit
further rating improvements for the state's general obligation bonds.
News for the second half of the reporting period was dominated by the
gubernatorial election between incumbent Arnold Schwarzenegger and current
state treasurer, Phil Angelides. The governor's race produced several new
budgetary suggestions, however, there is likely to be very little budgetary
action in reelected Governor Schwarzenegger's next term. Residents also
had the opportunity to vote on $43 billion of state bonding measures and
$10 billion in local measures during the November election. All of the state
bonding measures were passed by voters, which will result in a wealth of new
issues coming to market. While we certainly recognize California's improved
financial condition given its large and diverse economic base, it is important
to note that the state relies on an extremely volatile revenue stream to bear
the burden of its increasing debt levels.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2006, the Common Stock of BlackRock
MuniYield California Fund, Inc. (formerly MuniYield California Fund, Inc.) had
net annualized yields of 4.57% and 4.93%, based on a year-end per share net
asset value of $15.11 and a per share market price of $14.00, respectively,
and $.690 per share income dividends. Over the same period, the total
investment return on the Fund's Common Stock was +8.03%, based on a change in
per share net asset value from $14.73 to $15.11, and assuming reinvestment of
all distributions.
ANNUAL REPORTS OCTOBER 31, 2006
The Fund's total return, based on net asset value, slightly lagged the +8.24%
average return of its comparable Lipper category of California Municipal Debt
Funds for the 12-month period. (Funds in this Lipper category invest primarily
in municipal debt issues exempt from taxation in the State of California.) The
underperformance was partially attributable to the Fund's relatively short
duration in the first half of the fiscal period. Because bond prices fall as
their yields rise, we had assumed this posture in an effort to achieve some
price stability for the portfolio in the face of rising interest rates. As
bond prices began improving during the last six months of the period,
portfolio activity was aimed at moving to a relatively neutral duration
posture, which was achieved by period-end. In addition, we maintained an
underweight exposure to lower-rated credits. This sector outperformed the
broader market during the period as investors sought out higher yields, and
the under-representation in the portfolio detracted from relative results.
For the six-month period ended October 31, 2006, the total investment return
on the Fund's Common Stock was +5.78%, based on a change in per share net
asset value from $14.65 to $15.11, and assuming reinvestment of all
distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Stock can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
Much of the activity over the past 12 months was aimed at improving the Fund's
total return. Municipal issuance was uncharacteristically light during the
period, particularly after a record-setting level of new issuance in calendar
year 2005. Although the dearth in supply somewhat limited our ability to
restructure the portfolio, we were able to achieve our goal of moving the Fund
to a more neutral posture with respect to relative interest rate exposure.
This was consistent with the recommendation of our internal Municipal
Investment Committee. We also were able to capitalize on market movements by
making purchases when bond yields reached the peak of their trading range for
the period (that is, prices were down), and then selectively selling a portion
of these issues after bond prices had rallied toward the end of the third
quarter of 2006.
The Fund continued to be challenged by the need to reinvest the proceeds from
bonds that were called early by their issuers. In order to take advantage of
the relatively steep municipal yield curve, we attempted to bolster the yield
distribution to shareholders by increasing the portion of Fund assets
committed to inverse floating-rate product (a bond or other type of debt
instrument whose coupon rate has an inverse relationship to short-term
interest rates). We favored this method of yield enhancement over the purchase
of lower-rated credits, whose yield spreads versus higher-quality issues of
comparable maturity were already at historically tight levels and continued to
tighten further throughout the fiscal period.
For the six-month period ended October 31, 2006, the Fund's Auction Market
Preferred Stock had average yields of 3.27% for Series A, 3.21% for Series B,
3.26% for Series C and 3.12% for Series D. The Fed raised short-term interest
rates six times during the 12-month reporting period, but opted to keep the
target rate on hold at 5.25% in August, September and October 2006. As such,
the Fund's borrowing costs began to stabilize and even move slightly lower
late in the period. Despite the Fed's interest rate increases during the
period, the municipal yield curve remained positively sloped and continued to
generate an income benefit to the Common Stock shareholder from the leveraging
of Preferred Stock. However, should the spread between short-term and long-
term interest rates narrow, the benefits of leverage will decline and, as a
result, reduce the yield on the Fund's Common Stock. (For a more complete
explanation of the benefits and risks of leveraging, see page 71 of this
report to shareholders.)
How would you characterize the Fund's position at the close of the period?
The Fund ended the period with a neutral duration posture relative to its
California municipal bond fund peers. However, in the new fiscal year we will
be looking for improvements in bond prices as opportunities to resume a below-
benchmark duration. At the same time, we remain committed to protecting the
Fund's net asset value and will continue to address the income distribution
potential of the portfolio through the use of inverse floating-rate product.
ANNUAL REPORTS OCTOBER 31, 2006
A Discussion With Your Funds' Portfolio Managers (continued)
Tight credit spreads discourage us from participating actively in the lower-
quality portion of the market, as we see little relative value from a risk/
reward standpoint at this time. Consequently, we ended the period with a very
high-quality portfolio - with 85% of the Fund's net assets rated AA or higher
and 82% rated AAA.
BlackRock MuniYield California Insured Fund, Inc.
Describe conditions in the State of California.
The State of California's financial climate continues to benefit from the
overall U.S. economic up-tick, resulting in a sizable budgetary cash position
compared to the deficits experienced in past years. The fiscal year 2007
budget was adopted on time for the first time in a number of years, due in
part to a recent surge in revenues. Still, the budget includes substantial
spending growth and the overall structural deficit remains, which will limit
further rating improvements for the state's general obligation bonds.
News for the second half of the reporting period was dominated by the
gubernatorial election between incumbent Arnold Schwarzenegger and current
state treasurer, Phil Angelides. The governor's race produced several new
budgetary suggestions; however, there is likely to be very little budgetary
action in reelected Governor Schwarzenegger's next term. Residents also
had the opportunity to vote on $43 billion of state bonding measures and
$10 billion in local measures during the November election. All of the state
bonding measures were passed by voters, which will result in a wealth of new
issues coming to market. While we certainly recognize California's improved
financial condition given its large and diverse economic base, it is important
to note that the state relies on an extremely volatile revenue stream to bear
the burden of its increasing debt levels.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2006, the Common Stock of BlackRock
MuniYield California Insured Fund, Inc. (formerly MuniYield California Insured
Fund, Inc.) had net annualized yields of 5.19% and 5.35%, based on a year-end
per share net asset value of $15.09 and a per share market price of $14.64,
respectively, and $.783 per share income dividends. Over the same period, the
total investment return on the Fund's Common Stock was +7.57%, based on a
change in per share net asset value from $14.82 to $15.09, and assuming
reinvestment of all distributions.
The Fund's total return, based on net asset value, lagged the +7.78% average
return of its comparable Lipper category of California Insured Municipal Debt
Funds for the 12-month period. (Funds in this Lipper category invest primarily
in municipal debt issues exempt from taxation in the State of California and
insured as to timely payment.) For some time, our investment strategy has been
focused on achieving a high level of current income for our shareholders. This
has been achieved through maintaining an above-average coupon accrual, which
has allowed the Fund to provide a highly competitive yield. On a total return
basis, the underperformance for the period was partially attributable to the
Fund's relatively short duration. Because bond prices fall as their yields
rise, we had assumed this short duration posture in an effort to achieve some
price stability for the portfolio in the face of rising interest rates. In
addition, we maintained an underweight exposure to lower-rated credits. This
sector outperformed the broader market during the period as investors sought
out higher yields, and the under-representation in the portfolio detracted
from relative results.
For the six-month period ended October 31, 2006, the total investment return
on the Fund's Common Stock was +5.62%, based on a change in per share net
asset value from $14.66 to $15.09, and assuming reinvestment of all
distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Stock can vary significantly from total investment returns
based on changes in the Fund's net asset value.
ANNUAL REPORTS OCTOBER 31, 2006
What changes were made to the portfolio during the period?
Municipal issuance was uncharacteristically light during the period,
particularly after a record-setting level of new issuance in calendar year
2005. The dearth in supply limited our ability to significantly restructure
the portfolio. Instead, our efforts were concentrated on moving the Fund
closer to a more neutral posture with respect to relative interest rate
exposure, consistent with the recommendation of our internal Municipal
Investment Committee. We were able to achieve a market-neutral duration
posture by purchasing a limited amount of longer-maturity bonds as interest
rates increased, effectively extending the Fund's duration. These purchases
were financed through the sale of prerefunded bonds with shorter maturities.
Our efforts to maintain a satisfactory yield distribution to shareholders
during the period were increasingly hampered by older dated bonds being called
early by their issuers. Reinvesting the proceeds from these bond redemptions
has been extremely challenging given the low availability of insured bonds in
the market and historically tight credit quality spreads. Over the fiscal
year, we increased the portion of Fund assets committed to inverse floating-
rate product (a bond or other type of debt instrument whose coupon rate has an
inverse relationship to short-term interest rates) as appropriately structured
securities became available. We prefer a higher-quality asset mix in such an
environment, and at period-end 96.6% of Fund assets were rated AAA with bond
insurance.
For the six-month period ended October 31, 2006, the Fund's Auction Market
Preferred Stock had average yields of 3.19% for Series A, 3.09% for Series B,
3.11% for Series C, 3.26% for Series D, 3.08% for Series E and 3.22% for
Series F. The Fed raised short-term interest rates six times during the
12-month period, but opted to keep the target rate on hold at 5.25% in August,
September and October 2006. As such, the Fund's borrowing costs began to
stabilize and even move slightly lower late in the period. Despite the Fed's
interest rate increases during the period, the municipal yield curve remained
positively sloped and continued to generate an income benefit to the Common
Stock shareholder from the leveraging of Preferred Stock. However, should the
spread between short-term and long-term interest rates narrow, the benefits of
leverage will decline and, as a result, reduce the yield on the Fund's Common
Stock. (For a more complete explanation of the benefits and risks of
leveraging, see page 71 of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
The Fund ended the period with a neutral duration posture relative to its
California insured municipal bond fund peers. However, in the new fiscal year
we will be looking for improvements in bond prices as opportunities to resume
a more defensive position. We remain committed to protecting the Fund's net
asset value and will attempt to improve the Fund's ability to add to its
dividend reserve. The Fund currently holds a 2% cash equivalent reserve that
is available for investment when attractively structured and priced securities
become available. Tight credit spreads discourage us from participating
actively in the lower-quality portion of the market, as we see little relative
value from a risk/reward standpoint at this time. Consequently, we ended the
period with a very high-quality portfolio.
BlackRock MuniYield Florida Fund
Describe conditions in the State of Florida.
Florida maintains credit ratings of Aa1, AAA and AA+ from Moody's, Standard &
Poor's and Fitch, respectively. The state's consistently strong financial
performance has been the result of a robust service-oriented economy, prudent
budget decisions and a moderate debt profile. Florida's budget for fiscal year
2007 grew 7% to $74 billion and reflects continued spending constraints,
conservative revenue projections and additional deposits to the state's
reserve funds. Florida has adhered to strict budget guidelines in recent
history and we expect that trend to continue, as many of the state's budget
practices have been made into law.
Solid economic growth has allowed the state to build revenue reserves to an
estimated $8 billion and to offer its residents some tax relief in the form of
tax credits, tax-free shopping days and the repeal of the intangible tax.
Overall sales tax growth, which has averaged over 8% per year in recent
history, should be sufficient to cover any revenue losses associated with the
repeal of the intangible tax, although no new revenue streams have been
created. Spending at the state level remains dominated by education, with over
50% of the budget dedicated to primary and secondary education needs. The
state also faces significant additional spending requirements as a result of
the recent Class Size Initiative and an overall desire to increase the quality
of public education in Florida. In addition to education, we expect that
population growth will increase demand on the government to provide more monies
for transportation, public safety, health services and emergency relief.
ANNUAL REPORTS OCTOBER 31, 2006
A Discussion With Your Funds' Portfolio Managers (continued)
Overall, Florida's economy continues to outperform on both a national and
regional basis. Job creation has surpassed the national average, leading to
low unemployment and rising personal incomes. The most recent data reflects an
unemployment rate of 3.2%, compared to a national average of 4.4%. These
trends, coupled with a relatively low cost of living, have encouraged
migration into Florida and led to a more diversified demographic base.
Although the demands of a growing population will put pressure on the state's
finances, we continue to believe that Florida is well-positioned given its
financial flexibility and record of proactive management.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2006, the Common Shares of BlackRock
MuniYield Florida Fund (formerly MuniYield Florida Fund) had net annualized
yields of 5.27% and 5.55%, based on a year-end per share net asset value of
$15.11 and a per share market price of $14.35, respectively, and $.796 per
share income dividends. Over the same period, the total investment return on
the Fund's Common Shares was +7.24%, based on a change in per share net asset
value from $14.91 to $15.11, and assuming reinvestment of all distributions.
The Fund's total return, based on net asset value, outpaced the +7% average
return of the Lipper Florida Municipal Debt Funds category for the 12-month
period. (Funds in this Lipper category limit their investment to those
securities exempt from taxation in the state of Florida.) Performance
reflected a continuation of the trends discussed in our semi-annual report to
shareholders. Specifically, the Fund benefited from our emphasis on longer-
dated issues, which continued to outperform as the yield curve flattened,
particularly in the first half of the fiscal year. Also contributing
positively was our exposure to higher-yielding uninsured credits, which
outperformed the broader market as investors searched for yield in the low
interest rate environment. Finally, the portfolio held some bonds that had
been advance refunded, which leads to strong price appreciation for these
credits and has benefited the Fund's total return.
These positives were offset somewhat by our exposure, in the form of
prerefunded bonds, to the intermediate part of the yield curve. This sector
continued to underperform as the curve flattened, although we retained many of
these bonds given their high acquisition yields and corresponding contribution
to the Fund's income stream. In addition, the Fund is precluded from investing
in non-investment grade municipal credits, which was somewhat of a
disadvantage relative to our Lipper peers as the lowest-quality bonds
outperformed.
For the six-month period ended October 31, 2006, the total investment return
on the Fund's Common Shares was +5.03%, based on a change in per share net
asset value from $14.79 to $15.11, and assuming reinvestment of all
distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Shares (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Shares can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
For most of the year, we generally focused on premium-coupon bonds in the
20-year - 25-year maturity range whenever they became available. This was
consistent with our goal of increasing the income provided to shareholders and
muting the Fund's net asset value volatility, particularly as the yield curve
flattened. However, as the year progressed, we began to see some opportunity
in the 10-year - 20-year area of the curve. This maturity range had suffered
most under the weight of the Fed's interest rate hikes and, we believe, could
be poised for strong relative performance as the yield curve resteepens.
Issuance of Florida municipal bonds increased approximately 41% during the
period compared to the same 12 months a year ago. However, as has been the
case for some time, few new issues met our desired investment characteristics.
Much of the supply came in the form of refinancings, and the majority of the
new issues offered coupons below 5%. In general, the cost of obtaining 5.25%
coupons in the new-issue market remained prohibitive. Importantly, we remained
fully invested throughout the year in order to augment yield.
ANNUAL REPORTS OCTOBER 31, 2006
For the six-month period ended October 31, 2006, the Fund's Auction Market
Preferred Shares had average yields of 3.47% for Series A, 3.42% for Series B
and 3.40% for Series C. The Fed raised short-term interest rates six times
during the 12-month reporting period, but opted to keep the target rate on
hold at 5.25% in August, September and October 2006. As such, the Fund's
borrowing costs began to stabilize and even move slightly lower late in the
period. Despite the rate increases during the period, the tax-exempt yield
curve maintained a positive slope, allowing us to borrow at a lower rate than
where we invest. This continued to generate an income benefit to the holders
of Common Shares from the leveraging of Preferred Shares. However, should the
spread between short-term and long-term interest rates narrow, the benefits of
leveraging will decline and, as a result, reduce the yield on the Fund's
Common Shares. (For a more complete explanation of the benefits and risks of
leveraging, see page 71 of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
We would characterize the Fund's position as fairly neutral in terms of
interest rate risk. We are continuing in our efforts to increase the Fund's
exposure to bonds with maturities in the 10-year - 20-year range. At the same
time, to enhance yield, we are looking to add some 20-year - 30-year bonds
with coupons in the area of 5.25%, without paying a premium to the AAA scale.
Although the Fed paused in its interest rate-hiking campaign, leaving the
federal funds rate unchanged at 5.25%, the central bank has indicated that it
will continue to look to the economic and inflationary data for signposts in
determining future monetary policy. As such, we would expect the U.S. equity
and bond markets to remain volatile as investors continue to anticipate and
react to economic data and Fed actions. Against this backdrop, we will
continue to maintain a fully invested portfolio and intend to use periods of
volatility to pursue higher-coupon bonds whenever they are attractively
priced.
BlackRock MuniYield Michigan Insured Fund II, Inc.
Describe conditions in the State of Michigan.
The State of Michigan maintained credit ratings of Aa2, AA and AA from
Moody's, Standard & Poor's and Fitch, respectively. Troubles in the automotive
sector (in particular, at General Motors/Delphi) have caused stagnant revenue
growth that could be indicative of a more structural or long-term economic
problem. These lingering concerns triggered two rating downgrades during the
annual period. Fitch assigned a negative rating outlook to the state in mid-
April, and Standard & Poor's followed suit in August. Without marked fiscal
improvements, further rating downgrades are possible in 2006 or 2007.
The key to future ratings actions remains the performance of the state's
economy, which continues to lag national trends as well as that of the Great
Lakes region. State employment continued to descend in fiscal year 2006,
albeit at a slower pace when compared to the previous five years. Future job
cuts in the automotive industry threaten to further undermine revenue
collections, and could result in additional state aid commitments. Compounding
that, the legislature's repeal of the single-business income tax is expected
to cost the state $1.9 billion annually beginning in fiscal year 2009, and
will likely produce significant structural deficits. To maintain current
rating levels will require employment stability and continued budget balancing.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2006, the Common Stock of
BlackRock MuniYield Michigan Insured Fund II, Inc. (formerly MuniYield
Michigan Insured Fund II, Inc.) had net annualized yields of 5.21% and
5.44%, based on a year-end per share net asset value of $14.60 and a per
share market price of $13.97, respectively, and $.760 per share income
dividends. Over the same period, the total investment return on the Fund's
Common Stock was +6.09%, based on a change in per share net asset value
from $14.54 to $14.60, and assuming reinvestment of all distributions.
The Fund's total return, based on net asset value, lagged the +7.46% average
return of the Lipper Michigan Municipal Debt Funds category for the 12-month
period. (Funds in this Lipper category limit their investment to securities
exempt from taxation in Michigan or a city in Michigan.) As an insured fund,
at least 80% of the Fund's holdings must be insured or rated AAA. This above-
average credit quality profile put the Fund at a disadvantage relative to some
of its more aggressive peers, as lower-rated issues experienced consistently
strong price appreciation through-out the period. We also had retained some
seasoned, higher-couponed issues with maturities and call features that became
very responsive to yield movements in the intermediate maturity sector, and
this detracted from performance as the municipal yield curve flattened and the
intermediate sector underperformed. Nevertheless, these bonds came with
attractive book yields and contributed meaningfully to the Fund's distribution
rate. We chose to maintain our positions given that the sale of these bonds
would likely result in both material capital gain distributions and an overall
reduction in the Fund's level of coupon income. As a result, the Fund ended
the fiscal year with one of the highest distribution yields among its peers.
ANNUAL REPORTS OCTOBER 31, 2006
A Discussion With Your Funds' Portfolio Managers (continued)
For the six-month period ended October 31, 2006, the total investment return
on the Fund's Common Stock was +4.76%, based on a change in per share net
asset value from $14.31 to $14.60, and assuming reinvestment of all
distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Stock can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
A decline in new-issue volume, coupled with low nominal bond yields, offered
limited trading opportunities throughout the reporting period. During the past
year, $10.53 billion in Michigan municipal bonds was underwritten, a decline
of more than 26% versus the same 12 months a year ago. This compared to the
national average decline in issuance of 6.8%.
For the most part, recent purchases have focused on AA-rated and A-rated
hospital revenue bonds, which offered good value given their incremental yield
and significant market liquidity. The Fund's credit quality profile remained
largely unchanged during the period, with 84% of net assets rated AAA.
For the six-month period ended October 31, 2006, the Fund's Auction Market
Preferred Stock had average yields of 3.28% for Series A, 3.38% for Series B
and 3.33% for Series C. The Fed raised short-term interest rates six times
during the 12-month reporting period, but opted to keep the target rate on
hold at 5.25% in August, September and October 2006. As such, the Fund's
borrowing costs began to stabilize and even move slightly lower late in the
period. Despite the Fed's interest rate increases during the period, the
municipal yield curve remained positively sloped and continued to generate an
income benefit to the Common Stock shareholder from the leveraging of Preferred
Stock. However, should the spread between short-term and long-term interest
rates narrow, the benefits of leverage will decline and, as a result, reduce
the yield on the Fund's Common Stock. (For a more complete explanation of the
benefits and risks of leveraging, see page 71 of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
The Fund ended the annual period in a slightly defensive position, as current
yield levels appear to be lower than economic and inflation fundamentals
alone would support. Ongoing positive technical factors - in particular the
significant amount of excess liquidity-driven demand seen in recent months -
prevent taking a more defensive duration posture.
We will continue to monitor economic trends, notably employment and housing,
to ensure the Fund's current structure is appropriate. Future portfolio
activity is expected to support our ongoing efforts to enhance shareholder
income and maintain the Fund's higher-than-average distribution yield.
BlackRock MuniYield New York Insured Fund, Inc.
Discuss conditions in the State of New York.
In December 2005, credit-rating agency Moody's upgraded New York's rating to
Aa3, the state's highest rating from Moody's since 1975. Standard & Poor's and
Fitch have maintained ratings of AA and AA-, respectively, and all three
agencies assign a stable outlook to the state's ratings.
New York State finalized its 2006-2007 budget on April 26. The $112.5 billion
budget kept most of Governor George Pataki's proposals intact, including about
$850 million in tax cuts and the allocation of almost $2 billion from the 2006
fiscal year surplus toward out-year gaps. In compliance with a court order on
school funding, the budget also includes $700 million in school operating aid.
It is unclear whether this amount, as well as additional capital grants and
bonding authority to New York City, will be sufficient in meeting the court
mandate. On October 30, state officials released the mid-year update to the
2006-2007 financial plan, which reflected changes made by the legislature and
governor since the budget was enacted. The update continues to reflect
increased property tax rebates, a cap on gasoline taxes, and deferral of
certain Medicaid cost-containment rules that will be paid for with
stabilization reserve monies. Notably, however, the fiscal year 2007-2008 and
2008-2009 out-year gaps have been reduced to $2.4 billion and $4.5 billion,
respectively, from $3.2 billion and $5.4 billion, respectively. These
reductions are due mainly to higher forecasted personal income tax receipts,
particularly from securities industry profits, and lower Medicaid costs than
originally projected.
ANNUAL REPORTS OCTOBER 31, 2006
The state's September 2006 employment numbers show a 0.8% increase from
September 2005 levels. New York continues to rank fifth-highest among all
states in per capita income.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2006, the Common Stock of BlackRock
MuniYield New York Insured Fund, Inc. (formerly MuniYield New York Insured
Fund, Inc.) had net annualized yields of 5.24% and 5.35%, based on a year-end
per share net asset value of $14.40 and a per share market price of $14.10,
respectively, and $.755 per share income dividends. Over the same period, the
total investment return on the Fund's Common Stock was +6.71%, based on a
change in per share net asset value from $14.26 to $14.40, and assuming
reinvestment of all distributions.
The Fund's total return, based on net asset value, lagged the +7.09% average
return of the Lipper New York Insured Municipal Debt Funds category for the
12-month period. (Funds in this Lipper category invest primarily in securities
exempt from taxation in New York and insured as to timely payment.) However,
the Fund provided an above-average distribution rate relative to its Lipper
peers, reflecting our efforts to enhance tax-exempt income for shareholders.
Detracting from the Fund's total return for much of the period was our
slightly long duration profile. We entered the fiscal year with a slightly
long duration in expectation that the Fed would stop raising interest rates
sooner than it actually did. (Duration is a measure of interest rate
sensitivity. A shorter duration means less sensitivity to interest rate moves,
and vice versa.) Although the Fed tightened more than we anticipated, Fund
performance improved since the central bank's initial pause on August 8. The
Fed left the target rate unchanged again in September and October, setting the
stage for a relatively static interest rate environment in the near-term, a
scenario in which higher-yielding bonds are an advantage. Also detracting from
performance were bond calls that occurred during the period, causing the
portfolio to lose some of its high-coupon holdings prior to maturity.
Fund performance benefited from our positions in some out-of-favor credits,
including discount bonds. As the public grew more comfortable with the idea
that the Fed had finished its current tightening cycle, we saw renewed retail
interest in the market. The retail buyer tends to like discount or current-
coupon bonds and, therefore, we began to see these types of holdings
outperform on both a yield and total return basis.
For the six-month period ended October 31, 2006, the total investment return
on the Fund's Common Stock was +5.45%, based on a change in per share net
asset value from $14.02 to $14.40, and assuming reinvestment of all
distributions.
For a description of the Fund's total investment return based on a change in
the per share market value of the Fund's Common Stock (as measured by the
trading price of the Fund's shares on the New York Stock Exchange), and
assuming reinvestment of dividends, please refer to the Financial Highlights
section of this report. As a closed-end fund, the Fund's shares may trade in
the secondary market at a premium or discount to the Fund's net asset value.
As a result, total investment returns based on changes in the market value of
the Fund's Common Stock can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
Portfolio activity reflected our focus on providing an attractive level of tax-
exempt income. At times when rates rose, we sought to engage in yield pickup
swaps - that is, booking bonds at higher yields than those we swapped out of
in order to improve the Fund's distribution rate. We also looked to buy some
out-of-favor coupons, primarily discount bonds and slightly longer-maturity
issues, for yield enhancement. In general, we favored the long end of the
curve, which has been more attractive for yield pickup and outperformed on a
price basis when the Fed paused.
ANNUAL REPORTS OCTOBER 31, 2006
A Discussion With Your Funds' Portfolio Managers (concluded)
We made significant purchases in Yankees and Mets (Queens Stadium) bonds, as
well as bonds issued for the Jacob Javits Convention Center, Long Island Power
Authority, New York State Energy Brooklyn Union Gas (BUG) and Puerto Rico
Convention Center. All of these issues are insured. We were able to make these
additions despite a 28% decline in New York new issuance over the past year.
In the Fund's uninsured basket, we have concentrated on housing and education
bonds, to the extent possible, and favored higher-yielding, lower-rated
investment grade credits over AAA-rated and AA-rated bonds. Notably, the
portfolio benefited from credit-rating upgrades in New York during the past
year. The upgrades of the city's and state's credit have added to portfolio
credit quality while also translating into bond price appreciation.
On the sell side, we actively sold some bonds as their call protection
declined to within or under three years. As bonds approach their call dates,
the amortization of the premium price accelerates - that is, the bonds' price
declines at a faster rate and, therefore, they are likely to underperform the
market. In seeking to balance yield and total return, we opted to sell some of
these high-book-yield bonds at a premium ahead of their call date given that,
on a total return basis, we would expect them to lag the overall market.
For the six-month period ended October 31, 2006, the Fund's Auction Market
Preferred Stock had average yields of 3.58% for Series A, 3.07% for Series B,
3.18% for Series C, 3.15% for Series D, 3.45% for Series E and 3.21% for
Series F. The Fed raised short-term interest rates six times during the
12-month reporting period, but opted to keep the target rate on hold at 5.25%
in August, September and October 2006. As such, the Fund's borrowing costs
began to stabilize and even move slightly lower late in the period. Despite
the Fed's interest rate increases during the period, the municipal yield curve
remained positively sloped and continued to generate an income benefit to the
Common Stock shareholder from the leveraging of Preferred Stock. However,
should the spread between short-term and long-term interest rates narrow, the
benefits of leverage will decline and, as a result, reduce the yield on the
Fund's Common Stock. (For a more complete explanation of the benefits and
risks of leveraging, see page 71 of this report to shareholders.)
How would you characterize the portfolio's position at the close of the
period?
Recently, amid the decline in yields and conjecture about a future Fed ease,
it appears that the market's valuation is overextended. With the 30-year
Treasury yield at 4.72%, more than 50 basis points below the federal funds
rate, it seems unlikely that these rates can be sustained. This prompted us to
move to a slightly more defensive posture at period-end, consistent with the
recommendation of our internal Investment Committee.
Overall, we continue our efforts to balance yield and total return and will
look for the market to provide opportunities, in the form of higher yields or
increased municipal supply, to restructure the portfolio. Since spring of this
year, we have focused our attention on the 25-year sector of the curve and
continue to believe that the most compelling opportunities reside there, where
we are able to find attractive relative yields and good call protection for
the Fund.
Michael A. Kalinoski, CFA
Vice President and Portfolio Manager
BlackRock MuniYield Arizona Fund, Inc.
Walter C. O'Connor, CFA
Vice President and Portfolio Manager
BlackRock MuniYield California Fund, Inc.
BlackRock MuniYield California Insured Fund, Inc.
Robert D. Sneeden
Vice President and Portfolio Manager
BlackRock MuniYield Florida Fund
Fred K. Stuebe
Vice President and Portfolio Manager
BlackRock MuniYield Michigan Insured Fund II, Inc.
Timothy T. Browse, CFA
Vice President and Portfolio Manager
BlackRock MuniYield New York Insured Fund, Inc.
November 28, 2006
ANNUAL REPORTS OCTOBER 31, 2006
Portfolio Information
Quality Profiles as of October 31, 2006
Percent of
BlackRock MuniYield Arizona Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 54.7%
AA/Aa 5.5
A/A 11.6
BBB/Baa 20.6
BB/Ba 1.8
NR (Not Rated) 4.5
Other* 1.3
* Includes portfolio holdings in short-term investments.
Percent of
BlackRock MuniYield California Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 81.7%
AA/Aa 3.2
A/A 10.8
BBB/Baa 3.5
Other* 0.8
* Includes portfolio holdings in short-term investments.
Percent of
BlackRock MuniYield California Insured Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 96.7%
AA/Aa 1.0
A/A 2.2
Other* 0.1
* Includes portfolio holdings in short-term investments.
Percent of
BlackRock MuniYield Florida Fund Total
By S&P/Moody's Rating Investments
AAA/Aaa 77.5%
AA/Aa 2.4
A/A 6.6
BBB/Baa 9.1
NR (Not Rated) 2.1
Other* 2.3
* Includes portfolio holdings in variable rate demand notes
and short-term investments.
Percent of
BlackRock MuniYield Michigan Insured Fund II, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 84.0%
AA/Aa 4.2
A/A 7.6
BBB/Baa 2.6
Other* 1.6
* Includes portfolio holdings in short-term investments.
Percent of
BlackRock MuniYield New York Insured Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 90.0%
AA/Aa 5.6
A/A 3.3
BBB/Baa 0.3
Other* 0.8
* Includes portfolio holdings in variable rate demand notes
and short-term investments.
Dividend Policy
The Funds' dividend policy is to distribute all or a portion of their net
investment income to their shareholders on a monthly basis. In order to
provide shareholders with a more stable level of dividend distributions, the
Funds may at times pay out less than the entire amount of net investment
income earned in any particular month and may at times, in any particular
month, pay out such accumulated but undistributed income in addition to net
investment income earned in that month. As a result, the dividends paid by the
Funds for any particular month may be more or less than the amount of net
investment income earned by the Funds during such month. The Funds' current
accumulated but undistributed net investment income, if any, is disclosed in
the Statements of Net Assets, which comprises part of the financial
information included in these reports.
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments as of October 31, 2006
BlackRock MuniYield Arizona Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Arizona--124.4%
$ 1,000 Arizona Educational Loan Marketing Corporation,
Educational Loan Revenue Refunding Bonds, AMT,
Junior Sub-Series, 6.30% due 12/01/2008 $ 1,002
1,800 Arizona Health Facilities Authority, Hospital System
Revenue Bonds (Phoenix Children's Hospital), Series A,
6.125% due 11/15/2022 1,890
1,435 Arizona Health Facilities Authority Revenue Bonds
(Catholic Healthcare West), Series A, 6.625%
due 7/01/2020 1,583
Arizona Student Loan Acquisition Authority, Student
Loan Revenue Refunding Bonds, AMT:
3,285 Junior Subordinated Series B-1, 6.15%
due 5/01/2029 3,508
1,000 Senior Series A-1, 5.90% due 5/01/2024 1,063
Arizona Tourism and Sports Authority, Tax
Revenue Bonds:
1,000 (Baseball Training Facilities Project), 5%
due 7/01/2016 1,034
2,000 (Multi-Purpose Stadium Facility), Series A,
5.375% due 7/01/2023 (b) 2,177
Downtown Phoenix Hotel Corporation, Arizona,
Revenue Bonds (d):
1,500 Senior Series A, 5% due 7/01/2036 1,578
1,500 Sub-Series B, 5% due 7/01/2036 1,582
750 Gladden Farms Community Facilities District, Arizona,
GO, 5.50% due 7/15/2031 769
3,000 Greater Arizona Development Authority, Infrastructure
Revenue Bonds, Series B, 5% due 8/01/2030 (b) 3,183
Maricopa County, Arizona, Hospital Revenue
Refunding Bonds (Sun Health Corporation):
1,670 6.125% due 4/01/2007 (g) 1,720
735 6.125% due 4/01/2018 756
900 Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1), Series A,
6.625% due 7/01/2020 904
2,400 Maricopa County, Arizona, IDA, Hospital Facility Revenue
Refunding Bonds (Samaritan Health Services), Series A, 7%
due 12/01/2016 (b)(c) 2,956
1,000 Maricopa County, Arizona, Peoria Unified School
District Number 11, GO, Second Series, 5%
due 7/01/2025 (d) 1,067
Face
Amount Municipal Bonds Value
Arizona (continued)
$ 1,485 Maricopa County, Arizona, Pollution Control
Corporation, PCR, Refunding (Public Service
Company of New Mexico Project), Series A,
6.30% due 12/01/2026 $ 1,519
655 Maricopa County, Arizona, Public Finance Corporation,
Lease Revenue Bonds, RIB, Series 511X, 7.17%
due 7/01/2014 (a)(i) 761
1,825 Maricopa County, Arizona, Scottsdale Unified School
District Number 48, GO, 6.60% due 7/01/2012 2,103
500 Maricopa County, Arizona, Tempe Elementary Unified
School District Number 3, GO, Refunding, 7.50%
due 7/01/2010 (d) 566
1,000 Maricopa County, Arizona, Unified School District
Number 090, School Improvement, GO (Saddle
Mountain), Series A, 5% due 7/01/2014 1,036
1,000 Mesa, Arizona, IDA Revenue Bonds (Discovery Health
Systems), Series A, 5.625% due 1/01/2010 (b)(g) 1,068
1,000 Nogales Arizona Municipal Development Authority,
Inc., Revenue Bonds, 5% due 6/01/2030 (a) 1,058
4,500 Northern Arizona University System Revenue Bonds,
5.50% due 6/01/2034 (d) 4,956
2,000 Phoenix and Pima County, Arizona, IDA, S/F
Mortgage Revenue Bonds, Series 2A, 4.70%
due 3/01/2039 (e)(f) 2,143
3,325 Phoenix, Arizona, Civic Improvement Corporation,
Excise Tax Revenue Bonds (Civic Plaza Expansion
Project), Sub-Series A, 5% due 7/01/2035 (d) 3,519
600 Phoenix, Arizona, Civic Improvement Corporation,
Senior Lien Airport Revenue Bonds, AMT, Series B,
5.25% due 7/01/2032 (d) 627
Phoenix, Arizona, Civic Improvement Corporation,
Water System Revenue Refunding Bonds, Junior Lien:
2,500 5.50% due 7/01/2020 (d) 2,720
2,000 5% due 7/01/2029 (b) 2,127
Pima County, Arizona, IDA, Education Revenue Bonds
(Arizona Charter Schools Project), Series C:
750 6.70% due 7/01/2021 799
1,000 6.75% due 7/01/2031 1,061
985 Pima County, Arizona, IDA, Education Revenue
Refunding Bonds (Arizona Charter Schools Project II),
Series A, 6.75% due 7/01/2021 1,051
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedules of Investments,
we have abbreviated the names of many of the securities according to the list
at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DRIVERS Derivative Inverse Tax-Exempt Receipts
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
PILOT Payment in Lieu of Taxes
RIB Residual Interest Bonds
ROLS Reset Option Long Securities
S/F Single-Family
VRDN Variable Rate Demand Notes
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield Arizona Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Arizona (continued)
$ 1,000 Pima County, Arizona, IDA, Revenue Refunding
Bonds (Health Partners), Series A, 5.625%
due 4/01/2014 (b) $ 1,027
3,050 Pima County, Arizona, Unified School District
Number 1, Tucson, GO, Refunding, 7.50%
due 7/01/2009 (d) 3,350
Pinal County, Arizona, COP:
1,250 5% due 12/01/2026 1,300
1,250 5% due 12/01/2029 1,296
500 Pinal County, Arizona, IDA, Wastewater Revenue
Bonds (San Manuel Facilities Project), AMT, 6.25%
due 6/01/2026 552
1,000 Queen Creek Improvement District Number 001,
Arizona, Special Assessment Bonds, 5% due 1/01/2032 1,018
1,500 Salt River Project, Arizona, Agriculture Improvement
and Power District, Electric System Revenue Refunding
Bonds, Series A, 5% due 1/01/2035 1,595
2,250 Scottsdale, Arizona, IDA, Hospital Revenue Bonds
(Scottsdale Healthcare), 5.80% due 12/01/2011 (g) 2,492
Scottsdale, Arizona, Municipal Property Corporation,
Excise Tax Revenue Bonds:
1,000 5% due 7/01/2029 1,069
1,500 5% due 7/01/2030 1,604
1,195 Show Low, Arizona, IDA, Hospital Revenue Bonds
(Navapache Regional Medical Center), 5%
due 12/01/2035 (h) 1,249
1,500 South Campus Group LLC, Arizona Student Housing
Revenue Bonds (Arizona State University South
Campus Project), Series 2003, 5.625%
due 9/01/2035 (b) 1,652
340 Tucson and Pima County, Arizona, IDA, S/F Mortgage
Revenue Refunding Bonds (Mortgage-Backed Securities
Program), AMT, Series A-1, 6% due 7/01/2021 (e)(f) 340
1,000 Tucson, Arizona, IDA, Senior Living Facilities Revenue
Bonds (Christian Care Tucson Inc. Project), Series A,
6.125% due 7/01/2024 (h) 1,083
1,105 University of Arizona, COP, Refunding, Series A, 5.125%
due 6/01/2029 (a) 1,172
2,000 University of Arizona, COP, Series B, 5%
due 6/01/2028 (a) 2,091
Vistancia Community Facilities District, Arizona, GO:
1,275 6.75% due 7/15/2022 1,386
750 5.75% due 7/15/2024 787
500 Watson Road Community Facilities District,
Arizona, Special Assessment Revenue Bonds, 6%
due 7/01/2030 525
2,000 Yavapai County, Arizona, IDA, Hospital Facility
Revenue Bonds (Yavapai Regional Medical Center),
Series A, 6% due 8/01/2033 2,172
Guam--1.6%
1,000 Guam Government Waterworks Authority, Water
and Wastewater System, Revenue Refunding
Bonds, 5.875% due 7/01/2035 1,075
Face
Amount Municipal Bonds Value
Puerto Rico--18.9%
$ 1,700 Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Bonds, Series G, 5% due 7/01/2033 $ 1,764
2,000 Puerto Rico Commonwealth, Public Improvement,
GO, Series A, 5.125% due 7/01/2031 2,072
Puerto Rico Electric Power Authority, Power
Revenue Bonds:
1,000 Series II, 5.25% due 7/01/2031 1,062
1,500 Series NN, 5.125% due 7/01/2029 1,583
1,000 Series NN, 5% due 7/01/2032 (b) 1,054
1,500 Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Revenue Bonds
(Cogeneration Facility--AES Puerto Rico Project),
AMT, 6.625% due 6/01/2026 1,632
2,000 Puerto Rico Public Buildings Authority, Government
Facilities Revenue Refunding Bonds, Series I, 5.25%
due 7/01/2033 2,139
1,000 Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Revenue Bonds, Series E, 5.50%
due 8/01/2029 1,065
Total Municipal Bonds
(Cost--$90,583)--144.9% 95,092
Municipal Bonds Held in Trust (l)
Arizona--19.7%
Arizona State University Revenue Bonds (d):
1,645 5.50% due 7/01/2018 1,802
3,780 5.50% due 7/01/2019 4,142
2,000 5.50% due 7/01/2020 2,191
1,245 5.50% due 7/01/2021 1,364
Maricopa County, Arizona, Public Finance Corporation,
Lease Revenue Bonds (a):
415 5.50% due 7/01/2011 (g) 446
2,775 5.50% due 7/01/2015 2,983
Puerto Rico--1.6%
1,000 Puerto Rico Commonwealth, Public Improvement,
GO, 5.75% due 7/01/2010 (b)(g) 1,074
Total Municipal Bonds Held in Trust
(Cost--$13,473)--21.3% 14,002
Shares
Held Short-Term Securities
1,418 CMA Arizona Municipal Money Fund, 2.88% (j)(k) 1,418
Total Short-Term Securities
(Cost--$1,418)--2.2% 1,418
Total Investments (Cost--$105,474*)--168.4% 110,512
Other Assets Less Liabilities--2.9% 1,916
Liability for Trust Certificates,
Including Interest Expense Payable--(9.9%) (6,507)
Preferred Stock, at Redemption Value--(61.4%) (40,310)
---------
Net Assets Applicable to Common Stock--100.0% $ 65,611
=========
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (concluded)
BlackRock MuniYield Arizona Fund, Inc. (In Thousands)
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 99,262
===============
Gross unrealized appreciation $ 4,829
Gross unrealized depreciation (9)
---------------
Net unrealized appreciation $ 4,820
===============
(a) AMBAC Insured.
(b) MBIA Insured.
(c) Escrowed to maturity.
(d) FGIC Insured.
(e) FHLMC Collateralized.
(f) FNMA/GNMA Collateralized.
(g) Prerefunded.
(h) Radian Insured.
(i) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(j) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA Arizona Municipal Money Fund (189) $28
(k) Represents the current yield as of October 31, 2006.
(l) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of Municipal Bonds Held in Trust.
o Forward interest rate swaps outstanding as of October 31, 2006
were as follows:
Notional Unrealized
Amount Depreciation
Pay a fixed rate of 3.855% and receive
a floating rate based on a 1-week Bond
Market Association rate
Broker, Citibank N.A.
Expires January 2022 $2,000 $(14)
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments as of October 31, 2006
BlackRock MuniYield California Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
California--124.5%
$ 1,730 ABAG Finance Authority for Nonprofit Corporations,
California, Revenue Refunding Bonds (Redwood
Senior Homes and Services), 6% due 11/15/2022 $ 1,893
2,075 Antioch Area Public Facilities Financing Agency,
California, Special Tax (Community Facilities District
Number 1989-1), 5.70% due 8/01/2009 (a)(f) 2,214
2,820 Arcata, California, Joint Powers Financing Authority,
Tax Allocation Revenue Refunding Bonds (Community
Development Project Loan), Series A, 6%
due 8/01/2023 (a) 2,825
2,500 Bakersfield, California, COP, Refunding (Convention
Center Expansion Project), 5.80% due 4/01/2007 (b)(f) 2,549
1,375 California Health Facilities Financing Authority Revenue
Bonds (Kaiser Permanente), RIB, Series 26, 7.14%
due 6/01/2022 (d)(h) 1,509
1,490 California Health Facilities Financing Authority, Revenue
Refunding Bonds (Pomona Valley Hospital Medical
Center), Series A, 5.625% due 7/01/2019 (b) 1,538
4,990 California Infrastructure and Economic Development
Bank Revenue Bonds (J. David Gladstone Institute
Project), 5.50% due 10/01/2022 5,327
3,000 California Pollution Control Financing Authority, Solid
Waste Disposal Revenue Bonds (Waste Management
Inc. Project), AMT, Series A-2, 5.40% due 4/01/2025 3,179
California Rural Home Mortgage Finance Authority,
Homebuyers Fund S/F Mortgage Revenue Bonds, AMT:
2,000 (Mortgage-Backed Security Program), Series A,
5.40% due 12/01/2036 (c)(n) 2,143
420 Sub-Series FH-1, 5.50% due 8/01/2047 439
50 California Rural Home Mortgage Finance Authority, S/F
Mortgage Revenue Bonds (Mortgage-Backed Securities
Program), AMT, Series B, 6.15% due 6/01/2020 (c) 51
California State, GO:
5,000 5.125% due 4/01/2025 5,331
4,135 5.50% due 4/01/2030 4,557
California State, GO, Refunding:
620 5.75% due 5/01/2030 665
2,785 (Veterans), AMT, Series BJ, 5.70%
due 12/01/2032 2,845
California State Public Works Board, Lease
Revenue Bonds:
2,000 (California State University), Series C, 5.40%
due 10/01/2022 (b) 2,068
5,000 (Department of Corrections), Series C, 5.50%
due 6/01/2023 5,501
4,000 (Department of Health Services), Series A, 5.75%
due 11/01/2009 (b)(f) 4,293
17,000 (Various Community College Projects), Series A,
5.625% due 3/01/2016 (a) 17,367
6,850 California State, Various Purpose, GO, 5.50%
due 11/01/2033 7,533
Face
Amount Municipal Bonds Value
California (continued)
$ 5,250 California Statewide Communities Development
Authority, COP (John Muir/Mount Diablo Health
System), 5.125% due 8/15/2022 (b) $ 5,405
California Statewide Communities Development
Authority, Health Facility Revenue Bonds (Memorial
Health Services), Series A:
3,270 6% due 10/01/2023 3,641
3,000 5.50% due 10/01/2033 3,191
2,500 California Statewide Communities Development
Authority, Revenue Refunding Bonds (Kaiser Hospital
Asset Management, Inc.), Series C, 5.25%
due 8/01/2031 2,675
2,380 California Statewide Communities Development
Authority, Water Revenue Bonds (Pooled Financing
Program), Series C, 5.25% due 10/01/2028 (d) 2,548
Chabot-Las Positas, California, Community College
District, GO (Election of 2004), Series B (a):
2,500 5% due 8/01/2030 2,673
1,200 5% due 8/01/2031 1,282
2,000 Chino Basin, California, Regional Financing Authority
Revenue Bonds (Inland Empire Utility Agency Sewer
Project), 5.75% due 11/01/2009 (b)(f) 2,149
5,000 Chula Vista, California, IDR, Refunding (San Diego
Gas & Electric Co.), AMT, Series C, 5.25%
due 12/01/2027 5,381
6,995 Clovis, California, Public Financing Authority,
Wastewater Revenue Bonds, 5% due 8/01/2035 (b) 7,401
2,705 Contra Costa County, California, Public Financing
Lease Revenue Refunding Bonds (Various Capital
Facilities), Series A, 5.30% due 8/01/2020 (b) 2,802
3,750 Cucamonga, California, County Water District,
COP, 5.125% due 9/01/2035 (e) 3,969
2,500 Davis, California, Joint Unified School District,
Community Facilities District, Special Tax Refunding
Bonds, Number 1, 5.50% due 8/15/2021 (b) 2,536
7,000 Fontana Unified School District, California, GO,
Series A, 5.25% due 8/01/2028 (d) 7,563
4,000 Fremont, California, Unified School District, Alameda
County, GO (Election of 2002), Series B, 5%
due 8/01/2030 (d) 4,253
3,650 Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds,
Series A-4, 7.80% due 6/01/2042 4,469
9,390 Grant Joint Union High School District, California,
GO (Election of 2006), 5% due 8/01/2029 (d) 9,920
5,595 Grossmont-Cuyamaca Community College District,
California, GO (Election of 2002), Series B, 5%
due 8/01/2029 (e) 5,953
Industry, California, Urban Development Agency,
Tax Allocation Refunding Bonds (Civic-Recreational-
Industrial Redevelopment Project Number 1) (b):
5,000 5.50% due 5/01/2020 5,124
14,915 5.50% due 5/01/2021 15,302
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield California Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
California (continued)
$ 2,000 Los Angeles, California, COP (Sonnenblick Del Rio
West Los Angeles), 6.20% due 11/01/2031 (a) $ 2,202
7,000 Los Angeles, California, Wastewater System Revenue
Bonds, Series A, 5% due 6/01/2008 (e)(f) 7,234
4,500 Los Angeles, California, Wastewater System, Revenue
Refunding Bonds, Subordinate Series A, 5%
due 6/01/2027 (b) 4,726
3,780 Los Angeles County, California, Metropolitan
Transportation Authority, Sales Tax Revenue Refunding
Bonds, Proposition A, First Tier Senior Series A, 5%
due 7/01/2027 (a) 4,020
5,000 Los Angeles County, California, Public Works Financing
Authority, Lease Revenue Bonds (Multiple Capital
Facilities Project VI), Series A, 5.625%
due 5/01/2010 (a)(f) 5,357
2,550 Los Angeles County, California, Sanitation Districts
Financing Authority, Revenue Refunding Bonds (Capital
Projects--District Number 14), Sub-Series B, 5%
due 10/01/2030 (e) 2,714
1,000 Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, Series A, 5%
due 7/01/2030 (d) 1,063
4,000 Metropolitan Water District of Southern California,
Waterworks Revenue Refunding Bonds, Series B, 5%
due 7/01/2035 4,272
8,705 Modesto, California, Wastewater Treatment Facilities
Revenue Bonds, 5.625% due 11/01/2007 (b)(f) 8,978
7,570 Morgan Hill, California, Unified School District, GO,
5% due 8/01/2026 (e)(g)(k) 3,199
6,675 Murrieta Valley, California, Unified School District,
Public Financing Authority, Special Tax Revenue Bonds,
Series A, 5.125% due 9/01/2026 (m) 7,229
Oakland, California, Alameda County Unified School
District, GO (b):
6,240 (Election of 2000), 5% due 8/01/2027 6,621
3,290 Series F, 5.50% due 8/01/2017 3,512
3,770 Series F, 5.50% due 8/01/2018 4,022
5,250 Orange County, California, Sanitation District, COP,
5% due 2/01/2033 (e) 5,494
3,000 Oxnard, California, Financing Authority, Wastewater
Revenue Bonds (Redwood Trunk Sewer and Headworks
Projects), Series A, 5.25% due 6/01/2034 (e) 3,224
1,000 Palm Springs, California, Financing Authority, Lease
Revenue Refunding Bonds (Convention Center Project),
Series A, 5.50% due 11/01/2035 (b) 1,111
2,000 Peralta, California, Community College District, GO
(Election of 2000), Series D, 5% due 8/01/2030 (d) 2,127
1,750 Pleasant Valley, California, School District, Ventura
County, GO, Series C, 5.75% due 8/01/2025 (b)(g) 1,850
2,255 Pomona, California, Public Financing Authority,
Revenue Refunding Bonds (Merged Redevelopment
Project), Series A1, 5.75% due 2/01/2034 2,389
Face
Amount Municipal Bonds Value
California (continued)
$10,600 Port of Oakland, California, Port Revenue Refunding
Bonds, Series I, 5.40% due 11/01/2017 (b) $ 10,992
4,315 Rancho Cucamonga, California, Redevelopment Agency,
Tax Allocation Refunding Bonds (Rancho Redevelopment
Project), 5.25% due 9/01/2020 (d) 4,529
2,345 Richmond, California, Redevelopment Agency, Tax
Allocation, Refunding Bonds (Harbor Redevelopment
Project), Series A, 5.50% due 7/01/2018 (b) 2,459
5,000 Sacramento, California, Municipal Utility District,
Electric Revenue Refunding Bonds, Series L, 5.125%
due 7/01/2022 (b) 5,141
2,500 Sacramento, California, Municipal Utility District
Financing Authority, Revenue Bonds (Consumers
Project), 5.125% due 7/01/2029 (b) 2,709
Sacramento County, California, Sanitation District
Financing Authority, Revenue Refunding Bonds:
6,775 (County Sanitation District Number 1), 5%
due 8/01/2035 (b) 7,199
3,455 Series A, 5.60% due 12/01/2017 3,460
2,110 Salinas Valley, California, Solid Waste Authority,
Revenue Refunding Bonds, AMT, 5.125%
due 8/01/2022 (a) 2,204
8,000 San Bernardino, California, City Unified School District,
GO, Refunding, Series A, 5.875% due 8/01/2009 (e)(f) 8,580
3,000 San Bernardino, California, Joint Powers Financing
Authority, Lease Revenue Bonds (Department of
Transportation Lease), Series A, 5.50%
due 12/01/2020 (b) 3,060
3,600 San Diego, California, Unified School District, GO
(Election of 1998), Series F, 5% due 7/01/2029 (d) 3,806
5,010 San Diego County, California, Water Authority, Water
Revenue Bonds, COP, Series A, 5% due 5/01/2031 (d) 5,290
6,000 San Francisco, California, Bay Area Rapid Transit
District, Sales Tax Revenue Refunding Bonds, Series A,
5% due 7/01/2030 (b) 6,377
1,720 San Francisco, California, City and County Educational
Facilities, GO (Community College), Series A, 5.75%
due 6/15/2008 (f) 1,810
1,310 San Francisco, California, City and County Zoo Facilities,
GO, Series B, 5.75% due 6/15/2008 (f) 1,378
4,615 San Jose, California, Airport Revenue Bonds, Series D,
5% due 3/01/2028 (b) 4,840
1,855 San Jose, California, Unified School District, Santa Clara
County, GO (Election of 2002), Series B, 5%
due 8/01/2029 (e) 1,974
10,005 San Jose-Evergreen, California, Community College
District, Capital Appreciation, GO (Election of 2004),
Refunding, Series A, 5.12% due 9/01/2023 (b)(k) 4,514
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield California Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
California (concluded)
$ 5,000 San Juan, California, Unified School District, GO
(Election of 2002), 5% due 8/01/2028 (b) $ 5,254
2,020 Santa Clara, California, Unified School District, GO,
5.50% due 7/01/2021 (e) 2,170
3,500 Santa Clara County, California, Housing Authority, M/F
Housing Revenue Bonds (John Burns Gardens Apartments
Project), AMT, Series A, 6% due 8/01/2041 3,731
2,170 Santa Clarita, California, Community College District,
GO (Election 2001), 5% due 8/01/2028 (d) 2,307
4,000 Santa Monica, California, Community College District,
GO (Election of 2004), Series A, 5% due 5/01/2030 (b) 4,247
4,000 Santa Monica, California, Redevelopment Agency, Tax
Allocation Bonds (Earthquake Recovery Redevelopment
Project), 6% due 7/01/2009 (a)(f) 4,295
2,500 Sequoia, California, Unified High School District, GO,
Refunding, 5% due 7/01/2028 (d) 2,672
1,675 Shasta-Tehama-Trinity Joint Community College
District, California, GO (Election of 2002), Series B,
5.25% due 8/01/2024 (d) 1,847
6,875 Sonoma County, California, Junior College District,
GO (Election 2002), Refunding, Series B, 5%
due 8/01/2028 (d) 7,310
2,265 South Bayside, California, Waste Management
Authority, Waste System Revenue Bonds, 5.75%
due 3/01/2020 (a) 2,416
1,600 Stockton, California, Public Financing Authority, Water
Revenue Bonds (Water System Capital Improvement
Projects), Series A, 5% due 10/01/2031 (b) 1,702
2,930 Stockton, California, Public Financing Revenue Bonds
(Redevelopment Projects), Series A, 5.25%
due 9/01/2034 (i) 3,139
3,235 Taft, California, Public Financing Authority, Lease
Revenue Bonds (Community Correctional Facility),
Series A, 6.05% due 1/01/2017 (b) 3,280
1,310 Torrance, California, Hospital Revenue Refunding
Bonds (Torrance Memorial Medical Center), Series A,
6% due 6/01/2022 1,431
1,000 Ventura, California, Unified School District, GO
(Election of 1997), Series H, 5.125% due 8/01/2034 (d) 1,072
3,990 Vernon, California, Electric System Revenue Bonds
(Malburg Generating Station Project), 5.50%
due 4/01/2008 (f) 4,104
5,000 Vista, California, Joint Powers Financing Authority,
Lease Revenue Refunding Bonds, 5.625%
due 5/01/2016 (b) 5,149
Puerto Rico--3.0%
2,500 Puerto Rico Commonwealth, Public Improvement,
GO, Series A, 5.25% due 7/01/2030 2,707
6,500 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Series NN, 5.125% due 7/01/2029 6,861
Face
Amount Municipal Bonds Value
U.S. Virgin Islands--1.1%
$ 3,000 Virgin Islands Government Refinery Facilities,
Revenue Refunding Bonds (Hovensa Coker Project),
AMT, 6.50% due 7/01/2021 $ 3,384
Total Municipal Bonds
(Cost--$385,332)--125.2% 402,808
Municipal Bonds Held in Trust (o)
California--32.5%
9,000 Anaheim, California, Public Financing Authority,
Electric System District Facilities Revenue Bonds,
Series A, 5% due 10/01/2031 (d) 9,479
7,250 California Health Facilities Financing Authority
Revenue Bonds (Kaiser Permanente), Series A, 5.50%
due 6/01/2022 (d)(g) 7,603
10,210 Contra Costa County, California, Community College
District, GO (Election of 2002), 5% due 8/01/2030 (d) 10,794
6,020 La Quinta, California, Financing Authority, Local
Agency Revenue Bonds, Series A, 5.125%
due 9/01/2034 (a) 6,413
13,500 Los Angeles, California, Unified School District, GO,
Series A, 5% due 1/01/2028 (b) 14,274
10,460 Palm Desert, California, Financing Authority, Tax
Allocation Revenue Refunding Bonds (Project Area
Number 2), Series A, 5.125% due 8/01/2036 (a) 11,244
11,615 Port of Oakland, California, Revenue Refunding
Bonds, AMT, Series L, 5.375% due 11/01/2027 (e) 12,498
16,000 Sacramento, California, Municipal Utility District
Financing Authority, Revenue Bonds (Consumers
Project), 5.125% due 7/01/2029 (b) 17,337
20,710 San Diego, California, Certificates of Undivided Interest,
Revenue Bonds (Water Utility Fund Net Systems), 5.20%
due 8/01/2024 (e) 21,415
5,430 San Francisco, California, Bay Area Rapid Transit
District, Sales Tax Revenue Refunding Bonds, Series A,
5% due 7/01/2034 (b) 5,769
8,490 University of California, Limited Project Revenue
Bonds, Series B, 5% due 5/15/2033 (d) 8,953
Total Municipal Bonds Held in Trust
(Cost--$123,154)--39.1% 125,779
Shares
Held Short-Term Securities
3,993 CMA California Municipal Money Fund, 3.07% (j)(l) 3,993
Total Short-Term Securities
(Cost--$3,993)--1.2% 3,993
Total Investments (Cost--$512,479*)--165.5% 532,580
Other Assets Less Liabilities--7.5% 24,123
Liability for Trust Certificates,
Including Interest Expense Payable--(18.6%) (59,806)
Preferred Stock, at Redemption Value--(54.4%) (175,196)
----------
Net Assets Applicable to Common Stock--100.0% $ 321,701
==========
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (concluded)
BlackRock MuniYield California Fund, Inc. (In Thousands)
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 453,821
===============
Gross unrealized appreciation $ 19,417
Gross unrealized depreciation (1)
---------------
Net unrealized appreciation $ 19,416
===============
(a) AMBAC Insured.
(b) MBIA Insured.
(c) FNMA/GNMA Collateralized.
(d) FSA Insured.
(e) FGIC Insured.
(f) Prerefunded.
(g) Escrowed to maturity.
(h) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(i) Radian Insured.
(j) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA California Municipal Money Fund 3,176 $262
(k) Represents a zero coupon bond; the interest rate shown is the effective
yield at the time of purchase.
(l) Represents the current yield as of October 31, 2006.
(m) Assured Guaranty Insured.
(n) FHLMC Collateralized.
(o) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of Municipal Bonds Held in Trust.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments as of October 31, 2006
BlackRock MuniYield California Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
California--126.4%
$ 7,000 ABAG Finance Authority for Nonprofit Corporations,
California, COP (Children's Hospital Medical Center),
6% due 12/01/2029 (a) $ 7,534
2,350 Alameda, California, GO, 5% due 8/01/2033 (f) 2,484
5,665 Alhambra, California, Unified School District, GO
(Election of 2004), Series A, 5% due 8/01/2029 (b) 6,028
3,580 Anaheim, California, Public Financing Authority,
Electric System Distribution Facilities Revenue Bonds,
Series A, 5% due 10/01/2031 (e) 3,771
2,400 Anaheim, California, Union High School District, GO
(Election of 2002), 5% due 8/01/2027 (f) 2,523
3,675 Bakersfield, California, COP, Refunding (Convention
Center Expansion Project), 5.80% due 4/01/2007 (f)(g) 3,747
255 Bay Area Government Association, California, Tax
Allocation Revenue Refunding Bonds (California
Redevelopment Agency Pool), Series A, 6%
due 12/15/2024 (e) 256
3,990 Brentwood, California, Infrastructure Refinancing
Authority, Infrastructure Revenue Refunding Bonds,
Series A, 5.20% due 9/02/2029 (e) 4,249
California Community College Financing Authority,
Lease Revenue Bonds, Series A (f)(g):
3,215 5.95% due 12/01/2009 3,502
1,100 6% due 12/01/2009 1,200
5,000 California Educational Facilities Authority Revenue
Bonds (University of San Diego), Series A, 5.50%
due 10/01/2032 5,364
10,765 California Educational Facilities Authority, Student
Loan Revenue Bonds (CalEdge Loan Program), AMT,
5.55% due 4/01/2028 (a) 11,126
2,750 California Health Facilities Financing Authority Revenue
Bonds (Kaiser Permanente), Series A, 5.50%
due 6/01/2022 (e)(i) 2,884
California Rural Home Mortgage Finance Authority,
S/F Mortgage Revenue Bonds (Mortgage-Backed
Securities Program), AMT (d):
440 Series A, 6.35% due 12/01/2029 (c) 442
210 Series B, 6.25% due 12/01/2031 214
12,680 California State Department of Veteran Affairs, Home
Purpose Revenue Refunding Bonds, Series A, 5.35%
due 12/01/2027 (a) 13,563
860 California State, GO, 6.25% due 10/01/2019 (f) 869
California State, GO, Refunding:
3,000 5.25% due 2/01/2029 3,190
3,000 Series BX, 5.50% due 12/01/2031 (e) 3,032
4,530 California State Public Works Board, Lease Revenue
Bonds (Department of Corrections--Ten Administrative
Segregation Housing Units), Series A, 5.25%
due 3/01/2020 (a) 4,849
16,675 California State Public Works Board, Lease Revenue
Refunding Bonds (Department of Corrections), Series B,
5.625% due 11/01/2016 (f) 17,035
Face
Amount Municipal Bonds Value
California (continued)
$ 2,660 California State University, Systemwide Revenue Bonds,
Series A, 5.375% due 11/01/2018 (b) $ 2,919
2,720 California State University, Systemwide Revenue
Refunding Bonds, Series A, 5.125% due 11/01/2026 (a) 2,883
5,950 California State, Various Purpose, GO, 5.50%
due 11/01/2033 6,544
10,000 California State, Various Purpose, GO, Refunding,
4.75% due 3/01/2035 (f) 10,280
4,100 California Statewide Communities Development
Authority, COP (Kaiser Permanente), 5.30%
due 12/01/2015 (e)(i) 4,252
3,685 California Statewide Communities Development
Authority, Health Facility Revenue Bonds (Memorial
Health Services), Series A, 6% due 10/01/2023 4,103
8,155 Calleguas-Las Virgenes, California, Public Financing
Authority Revenue Bonds (Calleguas Municipal Water
District Project), Series A, 5% due 7/01/2013 (f)(g) 8,866
7,000 Capistrano, California, Unified School District,
Community Facility District, Special Tax Refunding
Bonds, 5% due 9/01/2029 (b) 7,431
4,600 Ceres, California, Redevelopment Agency, Tax Allocation
Bonds (Ceres Redevelopment Project Area Number 1),
5.75% due 11/01/2030 (f) 5,025
8,000 Chabot-Las Positas, California, Community College
District, GO (Election of 2004), Series B, 5%
due 8/01/2031 (a) 8,547
6,000 Chaffey, California, Union High School District, GO,
Series C, 5.375% due 5/01/2023 (e) 6,529
3,000 Chino Valley, California, Unified School District, GO
(Election of 2002), Series C, 5.25% due 8/01/2030 (f) 3,267
5,910 Chula Vista, California, Elementary School District, COP,
5% due 9/01/2029 (f) 6,227
3,275 Coachella Valley, California, Unified School District, GO
(Election of 2005), Series A, 5% due 8/01/2025 (b) 3,495
2,540 Coalinga, California, Redevelopment Agency Tax
Allocation Bonds, 5.90% due 9/15/2025 (f) 2,806
4,135 Contra Costa, California, Water District, Water Revenue
Refunding Bonds, Series L, 5% due 10/01/2032 (e) 4,316
12,180 Contra Costa County, California, COP, Refunding
(Merrithew Memorial Hospital Project), 5.375%
due 11/01/2017 (f) 12,616
8,500 Corona, California, COP (Clearwater Cogeneration
Project), 5% due 9/01/2028 (f) 8,915
1,100 El Centro, California, Financing Authority, Water
Revenue Bonds, Series A, 5.25% due 10/01/2035 (e) 1,197
Fremont, California, Unified School District, Alameda
County, GO:
6,000 (Election of 2002), Series B, 5% due 8/01/2030 (e) 6,380
10,755 Series A, 5.50% due 8/01/2026 (b) 11,766
4,295 Fresno, California, Joint Powers Financing Authority,
Lease Revenue Bonds, Series A, 5.75%
due 6/01/2026 (e) 4,659
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield California Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
California (continued)
$ 6,930 Fullerton, California, Public Financing Authority, Tax
Allocation Revenue Bonds, 5% due 9/01/2027 (a) $ 7,330
4,390 Glendale, California, Electric Revenue Bonds, 5%
due 2/01/2032 (f) 4,586
Glendora, California, Unified School District, GO
(Election of 2005), Series A (f):
1,350 5% due 8/01/2027 1,442
2,700 5.25% due 8/01/2030 2,959
2,500 La Quinta, California, Financing Authority, Local Agency
Revenue Bonds, Series A, 5.25% due 9/01/2024 (a) 2,710
3,050 Little Lake, California, City School District, GO,
Refunding, 5.50% due 7/01/2025 (e) 3,415
10,260 Lodi, California, Unified School District, GO
(Election of 2002), 5% due 8/01/2029 (e) 10,787
10,000 Los Angeles, California, Community Redevelopment
Agency, Community Redevelopment Financing Authority
Revenue Bonds (Bunker Hill Project), Series A, 5%
due 12/01/2027 (e) 10,536
Los Angeles, California, Department of Airports, Airport
Revenue Bonds (b):
290 (Los Angeles International Airport), AMT, Series D,
5.625% due 5/15/2012 292
2,500 (Ontario International Airport), AMT, Series A, 6%
due 5/15/2017 2,529
5,275 Series A, 5.25% due 5/15/2019 5,670
Los Angeles, California, Department of Airports, Airport
Revenue Refunding Bonds (Ontario International Airport),
AMT, Series A (f):
4,950 5% due 5/15/2021 5,275
2,755 5% due 5/15/2023 2,920
Los Angeles, California, Unified School District, GO:
2,880 (Election of 2004), Series C, 5% due 7/01/2027 (b) 3,045
5,000 (Election of 2004), Series F, 5% due 7/01/2030 (b) 5,344
7,000 Series E, 5% due 7/01/2030 (a) 7,440
4,000 Los Angeles, California Unified School District, GO,
Refunding, Series B, 4.75% due 7/01/2025 (b) 4,173
5,000 Los Angeles, California, Wastewater System Revenue
Refunding Bonds, Series A, 4.75% due 6/01/2035 (f) 5,149
5,000 Los Angeles, California, Water and Power Revenue
Bonds (Power System), Sub-Series A-1, 5%
due 7/01/2031 (e) 5,310
3,165 Los Angeles, California, Water and Power Revenue
Refunding Bonds (Power System), Series A-A-2, 5.375%
due 7/01/2021 (f) 3,403
Los Angeles County, California, Metropolitan
Transportation Authority, Sales Tax Revenue
Refunding Bonds:
5,240 Proposition A, First Tier Senior Series A, 5%
due 7/01/2027 (a) 5,573
6,500 Proposition A, First Tier Senior Series A, 5%
due 7/01/2035 (a) 6,903
2,000 Proposition C, Second Tier Senior Series A, 5.25%
due 7/01/2010 (b)(g) 2,141
8,735 Los Angeles County, California, Public Works Financing
Authority, Lease Revenue Refunding Bonds (Master
Refunding Project), Series A, 5% due 12/01/2028 (f) 9,244
Face
Amount Municipal Bonds Value
California (continued)
$ 3,000 Los Rios, California, Community College District, GO
(Election of 2002), Series B, 5% due 8/01/2027 (f) $ 3,169
2,010 Madera, California, Public Financing Authority, Water
and Wastewater Revenue Refunding Bonds, 5%
due 3/01/2036 (f) 2,133
6,865 Merced, California, Community College District,
GO (School Facilities District Number 1), 5%
due 8/01/2031 (f) 7,334
5,370 Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, Series B-1, 5%
due 10/01/2033 (b) 5,639
8,000 Murrieta Valley, California, Unified School District,
Public Financing Authority, Special Tax Revenue Bonds,
Series A, 5.125% due 9/01/2026 (m) 8,664
6,015 Natomas Unified School District, California, GO
(Election of 2006), 5% due 8/01/2028 (b) 6,396
4,245 Nevada County, California, COP, Refunding, 5.25%
due 10/01/2019 (f) 4,530
2,000 New Haven, California, Unified School District, GO,
Refunding, 5.75% due 8/01/2020 (e) 2,218
4,270 Oakland, California, Sewer Revenue Bonds, Series A,
5% due 6/15/2029 (e) 4,513
2,000 Oakland, California, State Building Authority, Lease
Revenue Bonds (Elihu M. Harris State Office Building),
Series A, 5.50% due 4/01/2008 (a)(g) 2,076
1,245 Orange County, California, Airport Revenue Refunding
Bonds, AMT, 5.625% due 7/01/2012 (f) 1,283
6,360 Orange County, California, Public Financing Authority,
Lease Revenue Refunding Bonds (Juvenile Justice Center
Facility), 5.375% due 6/01/2018 (a) 6,955
10,000 Oxnard, California, Financing Authority, Wastewater
Revenue Bonds (Redwood Trunk Sewer and Headworks
Projects), Series A, 5.25% due 6/01/2034 (b) 10,747
9,645 Oxnard, California, Unified High School District, GO,
Refunding, Series A, 6.20% due 8/01/2030 (f) 11,350
1,275 Palm Springs, California, Financing Authority, Lease
Revenue Refunding Bonds (Convention Center Project),
Series A, 5.50% due 11/01/2035 (f) 1,417
4,640 Palmdale, California, Water District Public Facility
Corporation, COP, 5% due 10/01/2029 (b) 4,884
Placentia-Yorba Linda, California, Unified
School District:
5,000 COP, 5% due 10/01/2030 (b) 5,287
5,000 GO (Election of 2002), Series C, 5%
due 8/01/2029 (f) 5,320
2 Port of Oakland, California, AMT, RIB, Series 1192,
6.93% due 11/01/2027 (b)(h) 2
7,500 Port of Oakland, California, Revenue Bonds, AMT,
Series K, 5.75% due 11/01/2029 (b) 7,990
3,000 Riverside, California, COP, 5% due 9/01/2028 (a) 3,147
Riverside, California, Unified School District, GO
(Election of 2001):
6,000 Series A, 5.25% due 2/01/2023 (b) 6,483
7,515 Series B, 5% due 8/01/2030 (f) 8,035
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield California Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
California (continued)
$ 4,500 Riverside County, California, Asset Leasing Corporation,
Leasehold Revenue Refunding Bonds (Riverside County
Hospital Project), Series B, 5.70% due 6/01/2016 (f) $ 5,021
3,000 Sacramento, California, City Financing Authority,
Capital Improvement Revenue Bonds (Community
Rein Capital Program), Series A, 5% due 12/01/2036 (a) 3,185
6,000 Sacramento County, California, Sanitation District
Financing Authority, Revenue Bonds, Series A, 5%
due 12/01/2035 (a) 6,351
2,565 Saddleback Valley, California, Unified School District,
GO, 5% due 8/01/2029 (e) 2,713
5,000 San Bernardino, California, City Unified School District,
GO, Series A, 5% due 8/01/2028 (e) 5,279
385 San Bernardino County, California, S/F Home Mortgage
Revenue Refunding Bonds, AMT, Series A-1, 6.25%
due 12/01/2031 (d) 393
San Diego, California, Redevelopment Agency,
Subordinate Tax Allocation Bonds (Centre City
Redevelopment Project), Series A (a):
2,720 5.25% due 9/01/2024 2,982
2,860 5.25% due 9/01/2025 3,129
5,400 San Diego, California, Unified Port District, Revenue
Refunding Bonds, AMT, Series A, 5.25%
due 9/01/2019 (f) 5,831
San Diego County, California, COP (Salk Institute for
Bio Studies) (f):
3,570 5.75% due 7/01/2022 3,884
5,200 5.75% due 7/01/2031 5,655
San Diego County, California, Water Authority, Water
Revenue Bonds, COP, Series A (e):
7,350 5% due 5/01/2030 7,767
10,000 5% due 5/01/2031 10,560
9,630 San Francisco, California, Bay Area Rapid Transit
District, Sales Tax Revenue Refunding Bonds,
Series A, 5% due 7/01/2030 (f) 10,235
San Francisco, California, City and County Airport
Commission, International Airport Revenue Refunding
Bonds, Second Series 28B (f):
3,000 5.25% due 5/01/2023 3,214
6,455 5.25% due 5/01/2024 6,916
San Francisco, California, City and County Airport
Commission, International Airport, Special Facilities
Lease Revenue Bonds (SFO Fuel Company LLC), AMT,
Series A (e):
1,000 6.10% due 1/01/2020 1,047
985 6.125% due 1/01/2027 1,031
San Francisco, California, Community College District, GO,
Refunding, Series A (b):
1,735 5.375% due 6/15/2019 1,869
1,730 5.375% due 6/15/2020 1,864
1,925 5.375% due 6/15/2021 2,074
4,135 San Jose, California, Airport Revenue Bonds, Series D,
5% due 3/01/2028 (f) 4,336
1,632 San Jose, California, Financing Authority, Lease Revenue
Refunding Bonds, DRIVERS, Series 1280Z, 6.131%
due 12/01/2010 (a)(h) 1,762
Face
Amount Municipal Bonds Value
California (continued)
$ 4,250 San Juan, California, Unified School District, GO
(Election of 2002), 5% due 8/01/2028 (f) $ 4,466
4,350 San Mateo County, California, Transit District, Sales
Tax Revenue Refunding Bonds, Series A, 5%
due 6/01/2029 (f) 4,624
2,595 Santa Clara, California, Redevelopment Agency,
Tax Allocation Bonds (Bayshore North Project),
Series A, 5.25% due 6/01/2019 (a) 2,721
5,500 Santa Clara, California, Subordinated Electric Revenue
Bonds, Series A, 5% due 7/01/2028 (f) 5,776
1,100 Santa Clara Valley, California, Water District, Water
Utility System Revenue, Series A, 5.125%
due 6/01/2031 (b) 1,146
Santa Rosa, California, High School District, GO:
3,000 5.375% due 8/01/2026 (e) 3,233
2,500 (Election of 2002), 5% due 8/01/2028 (f) 2,627
6,750 Shasta, California, Joint Powers Financing Authority,
Lease Revenue Bonds (County Administration Building
Project), Series A, 5% due 4/01/2033 (f) 7,051
1,645 South Tahoe, California, Joint Powers Financing Authority,
Revenue Refunding Bonds (South Tahoe Redevelopment
Project Area Number 1), Series A, 5% due 10/01/2029 (e) 1,732
5,000 Southern California Public Power Authority, Power
Project Revenue Bonds (Magnolia Power Project),
Series A-1, 5% due 7/01/2033 (a) 5,230
2,600 Stockton, California, Public Financing Authority,
Water Revenue Bonds (Water System Capital
Improvement Projects), Series A, 5%
due 10/01/2031 (f) 2,765
1,055 Stockton, California, Public Financing Revenue
Refunding Bonds, Series A, 5.875%
due 9/02/2016 (e) 1,065
1,500 Tehachapi, California, COP, Refunding (Installment
Sale), 5.75% due 11/01/2016 (e) 1,654
6,000 Tracy, California, Community Development Agency,
Tax Allocation Refunding Bonds, Series A, 5%
due 3/01/2034 (a) 6,247
3,000 Turlock, California, Public Finance Authority, Sewer
Revenue Bonds, Series A, 5% due 9/15/2033 (b) 3,149
University of California Revenue Bonds:
8,720 (Multiple Purpose Projects), Series Q, 5%
due 9/01/2024 (e) 9,227
6,110 (Multiple Purpose Projects), Series Q, 5%
due 9/01/2033 (e) 6,385
4,790 Series O, 5.125% due 9/01/2031 (b) 5,047
3,395 Ventura County, California, Community College District,
GO, Refunding, Series A, 5% due 8/01/2027 (f) 3,569
2,550 Vista, California, Unified School District, GO, Series B,
5% due 8/01/2028 (b) 2,679
2,185 Walnut, California, Public Financing Authority, Tax
Allocation Revenue Bonds (Walnut Improvement Project),
5.375% due 9/01/2021 (a) 2,355
6,690 West Contra Costa, California, Unified School District,
GO (Election of 2002), Series B, 5% due 8/01/2032 (e) 6,977
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (concluded)
BlackRock MuniYield California Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Puerto Rico--7.7%
$10,000 Puerto Rico Commonwealth Infrastructure Financing
Authority, Special Tax and Capital Appreciation
Revenue Bonds, Series A, 4.56%
due 7/01/2029 (a)(l) $ 3,740
4,335 Puerto Rico Commonwealth, Public Improvement,
GO, 5.75% due 7/01/2010 (f)(g) 4,658
10,000 Puerto Rico Municipal Finance Agency, GO, RIB,
Series 225, 7.66% due 8/01/2012 (e)(h) 11,316
20,000 Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Revenue Bonds, Series E, 5.75%
due 2/01/2007 (g) 20,111
Total Municipal Bonds
(Cost--$665,990)--134.1% 695,281
Municipal Bonds Held in Trust (n)
California--30.5%
19,870 California State, Veterans, GO, Refunding, AMT,
Series B, 5.70% due 12/01/2032 (a) 20,303
10,000 East Bay Municipal Utility District, California, Water
System Revenue Bonds, Sub-Series A, 5%
due 6/01/2035 (f) 10,593
15,150 Long Beach, California, Harbor Revenue Bonds, AMT,
Series A, 5.375%, due 5/15/2024 16,003
16,000 Los Angeles, California, Department of Water and Power,
Power System Revenue Refunding Bonds, Series A,
Sub-Series A-2, 5% due 7/01/2027 (f) 16,813
Port of Oakland, California, Revenue Bonds, AMT,
Series K (b):
9,180 5.75% due 11/01/2012 9,768
10,820 5.75% due 11/01/2013 11,513
Face
Amount Municipal Bonds Held in Trust (n) Value
California (concluded)
$19,035 Port of Oakland, California, Revenue Refunding
Bonds, AMT, Series L, 5.375% due 11/01/2027 (b) $ 20,482
24,710 San Diego, California, Certificates of Undivided
Interest Revenue Bonds (Water Utility Fund),
5.20% due 8/01/2024 (b) 25,551
10,500 San Francisco, California, Bay Area Rapid Transit
District, Sales Tax Revenue Refunding Bonds,
Series A, 5% due 7/01/2034 (f) 11,155
8,137 San Jose, California, Financing Authority, Lease
Revenue Refunding Bonds (Civic Center Project),
Series B, 5% due 6/01/2032 (a) 8,462
7,300 San Jose, California, Redevelopment Agency,
Tax Allocation Bonds (Housing Set-Aside
Merged Area), AMT, Series E, 5.85%
due 8/01/2027 (f) 7,556
Total Municipal Bonds Held in Trust
(Cost--$155,120)--30.5% 158,199
Shares
Held Short-Term Securities
1,124 CMA California Municipal Money Fund, 3.07% (j)(k) 1,124
Total Short-Term Securities
(Cost--$1,124)--0.2% 1,124
Total Investments (Cost--$822,234*)--164.8% 854,604
Other Assets Less Liabilities--3.8% 19,896
Liability for Trust Certificates,
Including Interest Expense Payable--(15.5%) (80,631)
Preferred Stock, at Redemption Value--(53.1%) (275,202)
----------
Net Assets Applicable to Common Stock--100.0% $ 518,667
==========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 742,447
===============
Gross unrealized appreciation $ 32,205
Gross unrealized depreciation (52)
---------------
Net unrealized appreciation $ 32,153
===============
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FHLMC Collateralized.
(d) FNMA/GNMA Collateralized.
(e) FSA Insured.
(f) MBIA Insured.
(g) Prerefunded.
(h) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(i) Escrowed to maturity.
(j) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA California Municipal Money Fund 1,117 $135
(k) Represents the current yield as of October 31, 2006.
(l) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(m) Assured Guaranty Insured.
(n) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of Municipal Bonds Held in Trust.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments as of October 31, 2006
BlackRock MuniYield Florida Fund (In Thousands)
Face
Amount Municipal Bonds Value
District of Columbia--0.5%
$ 1,000 Metropolitan Washington Airports Authority, D.C.,
Airport System Revenue Bonds, AMT, Series A, 5.25%
due 10/01/2032 (f) $ 1,050
Florida--129.9%
2,100 Alachua County, Florida, School Board, COP, 5.25%
due 7/01/2029 (b) 2,253
1,595 Arbor Greene Community Development District, Florida,
Special Assessment Revenue Refunding Bonds, 5%
due 5/01/2019 1,682
2,420 Bay County, Florida, Sales Tax Revenue Bonds, 5%
due 9/01/2027 (b) 2,589
2,000 Beacon Tradeport Community Development District,
Florida, Special Assessment Revenue Refunding
Bonds (Commercial Project), Series A, 5.625%
due 5/01/2032 (o) 2,176
2,030 Brevard County, Florida, Local Option Fuel Tax Revenue
Bonds, 5% due 8/01/2024 (f) 2,164
2,870 Broward County, Florida, Airport System Revenue
Bonds, AMT, Series I, 5.75% due 10/01/2018 (b) 3,136
Broward County, Florida, Educational Facilities Authority
Revenue Bonds (Nova Southeastern University):
2,750 5% due 4/01/2031 (c) 2,907
1,000 Series B, 5.625% due 4/01/2034 1,056
Cape Coral, Florida, Special Obligation Revenue
Bonds (m):
1,750 5% due 10/01/2023 1,880
2,060 5% due 10/01/2026 2,201
2,425 5% due 10/01/2033 2,579
Citrus County, Florida, Hospital Board Revenue Refunding
Bonds (Citrus Memorial Hospital):
2,305 6.25% due 8/15/2023 2,539
2,850 6.375% due 8/15/2032 3,148
460 Collier County, Florida, IDA, IDR, Refunding (Southern
States Utilities), AMT, 6.50% due 10/01/2025 470
Duval County, Florida, HFA, S/F Mortgage Revenue
Refunding Bonds, AMT (i):
1,170 5.40% due 10/01/2021 1,195
1,955 5.85% due 10/01/2027 (m) 2,012
485 Florida Housing Finance Corporation, Homeowner
Mortgage Revenue Refunding Bonds, AMT, Series 4,
6.25% due 7/01/2022 (j) 496
Florida Municipal Loan Council Revenue Bonds (m):
1,580 Series A-1, 5.125% due 7/01/2034 1,675
4,250 Series B, 5.375% due 11/01/2030 4,528
1,220 Florida State Board of Education, Capital Outlay, GO,
Public Education, Series A, 6% due 1/01/2010 (n) 1,319
2,500 Florida State Board of Education, GO (Public Education
Capital Outlay), Series J, 5% due 6/01/2031 2,635
1,000 Florida State Board of Education, Lottery Revenue
Bonds, Series A, 6% due 7/01/2010 (f)(n) 1,087
1,000 Florida State Governmental Utility Authority, Utility
Revenue Bonds (Lehigh Utility System), 5.125%
due 10/01/2033 (b) 1,059
Face
Amount Municipal Bonds Value
Florida (continued)
$ 1,075 Gainesville, Florida, Utilities System Revenue Bonds,
Series A, 5.25% due 10/01/2022 $ 1,168
5,000 Hernando County, Florida, School Board, COP, 5%
due 7/01/2035 (m) 5,290
Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System):
5,900 Series A, 6% due 11/15/2011 (n) 6,582
1,000 Series C, 5.25% due 11/15/2036 1,067
Hillsborough County, Florida, Court Facilities Revenue
Bonds (b)(n):
3,945 5.40% due 11/01/2007 4,055
1,055 5.40% due 11/01/2012 1,157
Hillsborough County, Florida, IDA, Exempt Facilities
Revenue Bonds (National Gypsum Company), AMT:
2,500 Series A, 7.125% due 4/01/2030 2,750
3,750 Series B, 7.125% due 4/01/2030 4,125
1,000 Hillsborough County, Florida, IDA, Hospital Revenue
Bonds (H. Lee Moffitt Cancer Center Project), Series C,
5.50% due 7/01/2032 1,056
1,000 Hillsborough County, Florida, Port District Revenue
Bonds (Tampa Port Authority Project), AMT, 5%
due 6/01/2026 (m) 1,048
1,500 Hillsborough County, Florida, School Board, COP, 5%
due 7/01/2029 (m) 1,568
1,000 Jacksonville, Florida, Economic Development
Commission, Health Care Facilities Revenue Bonds
(Mayo Clinic-Jacksonville), Series A, 5.50%
due 11/15/2036 (m) 1,084
Jacksonville, Florida, Economic Development
Commission, IDR (Metropolitan Parking Solutions
Project), AMT (a):
1,140 5.50% due 10/01/2030 1,223
2,800 5.875% due 6/01/2031 3,099
1,500 Jacksonville, Florida, Excise Taxes Revenue Bonds,
Series B, 5.125% due 10/01/2032 (f) 1,586
2,315 Jacksonville, Florida, Guaranteed Entitlement Revenue
Refunding and Improvement Bonds, 5.25%
due 10/01/2032 (f) 2,474
3,800 Jacksonville, Florida, Sales Tax Revenue Bonds, 5%
due 10/01/2027 (m) 3,992
3,500 Lakeland, Florida, Hospital System Revenue Bonds
(Lakeland Regional Health System), Series A, 5.5%
due 11/15/2009 (m)(n) 3,723
3,375 Lee County, Florida, Capital Revenue Bonds, 5.25%
due 10/01/2023 (b) 3,661
35 Lee County, Florida, HFA, S/F Mortgage Revenue Bonds
(Multi-County Program), AMT, Series A-1, 7.125%
due 3/01/2028 (i) 35
200 Lee County, Florida, Hospital Board of Directors,
Hospital Revenue Bonds (Memorial Health System),
VRDN, Series A, 3.66% due 4/01/2025 (q) 200
2,500 Lee County, Florida, School Board, COP, Series A,
5% due 8/01/2024 (j) 2,677
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield Florida Fund (In Thousands)
Face
Amount Municipal Bonds Value
Florida (continued)
$ 110 Leon County, Florida, HFA, S/F Mortgage Revenue
Bonds (Multi-County Program), AMT, Series B, 7.30%
due 1/01/2028 (g)(k) $ 113
85 Manatee County, Florida, HFA, S/F Mortgage Revenue
Bonds, AMT, Sub-Series 2, 7.75% due 5/01/2026 (g)(k) 86
220 Manatee County, Florida, HFA, S/F Mortgage Revenue
Refunding Bonds, AMT, Sub-Series 1, 6.25%
due 11/01/2028 (g)(k) 222
1,000 Marco Island, Florida, Utility System Revenue Bonds,
5% due 10/01/2033 (m) 1,051
Martin County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Martin Memorial Medical
Center), Series A:
1,350 5.75% due 11/15/2022 1,466
3,535 5.875% due 11/15/2032 3,848
3,000 Miami Beach, Florida, Water and Sewer Revenue
Bonds, 5.75% due 9/01/2025 (b) 3,245
Miami-Dade County, Florida, Aviation Revenue Bonds,
AMT, Series A:
4,335 5% due 10/01/2033 (j) 4,471
4,300 (Miami International Airport)
6% due 10/01/2029 (f) 4,663
3,865 (Miami International Airport)
5% due 10/01/2033 (f) 4,004
1,750 Miami-Dade County, Florida, Educational Facilities
Authority Revenue Bonds (University of Miami),
Series A, 5.75% due 4/01/2029 (b) 1,880
4,750 Miami-Dade County, Florida, Expressway Authority,
Toll System Revenue Bonds, Series B, 5%
due 7/01/2033 (f) 5,000
490 Miami-Dade County, Florida, HFA, Home Ownership
Mortgage Revenue Refunding Bonds, AMT, Series A-1,
6.30% due 10/01/2020 (h)(k) 504
3 Miami-Dade County, Florida, Health Facilities Authority,
Hospital Revenue Refunding Bonds, DRIVERS, Series 208,
7.366% due 8/15/2017 (b)(r) 3
Miami-Dade County, Florida, School Board COP:
3,200 Series A, 5.50% due 10/01/2009 (j)(n) 3,373
2,500 Series B, 5% due 11/01/2031 (b) 2,649
2,800 Miami-Dade County, Florida, Solid Waste System
Revenue Bonds, 5.25% due 10/01/2030 (m) 3,043
Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds:
1,750 (Adventist Health System), 6.25% due 11/15/2024 1,954
5,140 (Orlando Regional Healthcare), 6%
due 12/01/2012 (n) 5,770
10,500 Orange County, Florida, School Board, COP, Series A,
5.25% due 8/01/2009 (m)(n) 11,064
Face
Amount Municipal Bonds Value
Florida (continued)
Orlando and Orange County, Florida, Expressway
Authority Revenue Bonds, Series B (b):
$ 3,000 5% due 7/01/2030 $ 3,145
10,185 5% due 7/01/2035 10,666
1,000 Orlando, Florida, Utilities Commission, Water and
Electric Revenue Refunding Bonds, Series C, 5.25%
due 10/01/2023 1,074
1,955 Osceola County, Florida, School Board, COP, Series A,
5.25% due 6/01/2027 (b) 2,084
1,760 Osceola County, Florida, Tourist Development Tax
Revenue Bonds, Series A, 5.50% due 10/01/2027 (f) 1,907
5,000 Palm Beach County, Florida, Airport System Revenue
Bonds, AMT, Series A, 5% due 10/01/2034 (m) 5,240
3,390 Palm Beach County, Florida, Criminal Justice Facilities
Revenue Bonds, 7.20% due 6/01/2015 (f) 4,253
Palm Beach County, Florida, School Board,
COP, Series A:
6,000 6.25% due 8/01/2010 (f)(n) 6,601
2,200 5% due 8/01/2031 (j) 2,338
1,435 Palm Coast, Florida, Utility System Revenue Bonds, 5%
due 10/01/2027 (m) 1,506
3,500 Peace River/Manasota Regional Water Supply Authority,
Florida, Utility System Revenue Bonds, Series A, 5%
due 10/01/2025 (j) 3,728
Pinellas County, Florida, HFA, S/F Housing Revenue
Refunding Bonds (Multi-County Program), AMT,
Series A-1 (h)(k):
430 6.30% due 9/01/2020 434
655 6.35% due 9/01/2025 662
3,000 Pinellas County, Florida, Health Facilities Authority
Revenue Bonds (BayCare Health System Inc.), 5.75%
due 5/15/2013 (n) 3,346
Polk County, Florida, Public Facilities Revenue
Bonds (m):
1,300 5% due 12/01/2025 1,388
1,480 5% due 12/01/2033 1,570
4,385 Polk County, Florida, School Board COP, Master Lease,
Series A, 5.50% due 1/01/2025 (j) 4,710
1,200 Port Everglades Authority, Florida, Port Revenue Bonds,
7.125% due 11/01/2016 (e) 1,412
1,215 Port St. Lucie, Florida, Utility Revenue Bonds, 5.25%
due 9/01/2025 (m) 1,326
3,500 Port St. Lucie, Florida, Utility System Revenue Refunding
Bonds, Series A, 5% due 9/01/2029 (m) 3,732
2,045 Reedy Creek, Florida, Improvement District, Utilities
Revenue Bonds, Series 1, 5% due 10/01/2025 (b) 2,181
Saint Johns County, Florida, Ponte Vedra Utility System
Revenue Bonds (j):
1,900 5% due 10/01/2030 2,015
1,000 5% due 10/01/2035 1,059
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield Florida Fund (In Thousands)
Face
Amount Municipal Bonds Value
Florida (concluded)
Saint Johns County, Florida, Sales Tax Revenue
Bonds (b):
$ 2,400 Series A, 5.25% due 10/01/2032 $ 2,582
1,200 Series A, 5.25% due 10/01/2034 1,290
1,015 Series B, 5.25% due 10/01/2032 1,092
South Florida Water Management District, COP (b):
1,175 5% due 10/01/2031 1,250
2,275 5% due 10/01/2036 2,416
South Lake County, Florida, Hospital District Revenue
Bonds (South Lake Hospital Inc.):
1,000 5.80% due 10/01/2034 1,046
1,150 6.375% due 10/01/2034 1,278
Sumter County, Florida, Capital Improvement Revenue
Bonds (b):
2,190 5% due 6/01/2026 2,339
3,500 5% due 6/01/2030 3,725
5,000 Tampa Bay, Florida, Water Utility System Revenue
Bonds, 5.75% due 10/01/2011 (f)(n) 5,490
3,235 University of Central Florida (UCF) Athletics Association
Inc., COP, Series A, 5.25% due 10/01/2034 (f) 3,476
Village Center Community Development District, Florida,
Recreational Revenue Bonds, Series A (m):
1,995 5.375% due 11/01/2034 2,182
1,000 5.125% due 11/01/2036 1,070
5,040 Village Center Community Development District, Florida,
Utility Revenue Bonds, 5.125% due 10/01/2028 (m) 5,344
1,000 Volusia County, Florida, IDA, Student Housing Revenue
Bonds (Stetson University Project), Series A, 5%
due 6/01/2035 (d) 1,059
5,000 Volusia County, Florida, School Board, COP (Master
Lease Program), 5.50% due 8/01/2024 (j) 5,281
Georgia--1.7%
3,270 Atlanta, Georgia, Airport Passenger Facility Charge
and Subordinate Lien General Revenue Refunding
Bonds, Series C, 5% due 1/01/2033 (j) 3,424
New Jersey--3.6%
New Jersey EDA, Cigarette Tax Revenue Bonds:
3,500 5.50% due 6/15/2024 3,710
1,735 5.75% due 6/15/2029 1,888
505 5.50% due 6/15/2031 538
1,000 Tobacco Settlement Financing Corporation of
New Jersey, Asset-Backed Revenue Bonds, 7%
due 6/01/2041 1,157
Face
Amount Municipal Bonds Value
Puerto Rico--4.5%
$ 1,000 Puerto Rico Commonwealth, Public Improvement,
GO, Series A, 5.25% due 7/01/2026 $ 1,080
2,000 Puerto Rico Public Buildings Authority, Government
Facilities Revenue Refunding Bonds, Series I, 5%
due 7/01/2036 2,084
Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Revenue Bonds, Series E:
1,715 5.70% due 2/01/2010 (n) 1,828
4,025 5.50% due 8/01/2029 4,288
Total Municipal Bonds
(Cost--$270,528)--140.2% 287,159
Municipal Bonds Held in Trust (s)
Florida--18.2%
16,000 Miami-Dade County, Florida, Expressway
Authority, Toll System Revenue Bonds, 6.375%
due 7/01/2010 (f)(n) 17,620
6,595 Miami-Dade County, Florida, Health Facilities
Authority, Hospital Revenue Refunding Bonds
(Miami Children's Hospital), Series A, 5.625%
due 8/15/2011 (b)(n) 7,143
Santa Rosa County, Florida, School Board, COP,
Revenue Refunding Bonds, Series 2 (f):
1,180 5.25% due 2/01/2026 1,279
1,820 5.25% due 2/01/2031 1,972
8,500 South Broward, Florida, Hospital District, Hospital
Revenue Bonds, 5.625% due 5/01/2032 (m) 9,280
Total Municipal Bonds Held in Trust
(Cost--$35,244)--18.2% 37,294
Shares
Held Short-Term Securities
7,459 CMA Florida Municipal Money Fund, 2.88% (l)(p) 7,459
Total Short-Term Securities
(Cost--$7,459)--3.6% 7,459
Total Investments (Cost--$313,231*)--162.0% 331,912
Other Assets Less Liabilities--0.1% 273
Liability for Trust Certificates,
Including Interest Expense Payable--(8.4%) (17,259)
Preferred Shares, at Redemption Value--(53.7%) (110,061)
----------
Net Assets Applicable to Common Shares--100.0% $ 204,865
==========
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (concluded)
BlackRock MuniYield Florida Fund (In Thousands)
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 298,814
===============
Gross unrealized appreciation $ 16,119
Gross unrealized depreciation (68)
---------------
Net unrealized appreciation $ 16,051
===============
(a) ACA Insured.
(b) AMBAC Insured.
(c) Assured Guaranty Insured.
(d) CIFG Insured.
(e) Escrowed to maturity.
(f) FGIC Insured.
(g) FHLMC Collateralized.
(h) FNMA Collateralized.
(i) FNMA/GNMA Collateralized.
(j) FSA Insured.
(k) GNMA Collateralized.
(l) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA Florida Municipal Money Fund 7,459 $150
Merrill Lynch Institutional Tax-Exempt Fund (500) --++
++ Amount is less than $1,000.
(m) MBIA Insured.
(n) Prerefunded.
(o) Radian Insured.
(p) Represents the current yield as of October 31, 2006.
(q) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(r) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(s) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of Municipal Bonds Held in Trust.
o Forward interest rate swaps outstanding as of October 31, 2006
were as follows:
Notional Unrealized
Amount Depreciation
Pay a fixed rate of 3.856% and
receive a floating rate based on a
1-week Bond Market Association rate
Broker, JPMorgan Chase Bank
Expires December 2016 $25,000 $(431)
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments as of October 31, 2006
BlackRock MuniYield Michigan Insured Fund II, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Michigan--136.5%
$ 2,400 Adrian, Michigan, City School District, GO, 5%
due 5/01/2034 (d) $ 2,522
Anchor Bay, Michigan, School District, School Building
and Site, GO (c)(f):
2,000 Series I, 6% due 5/01/2009 2,116
3,165 Series II, 5.75% due 5/01/2010 3,392
2,275 Bay City, Michigan, School District, School Building &
Site, GO, 5% due 5/01/2031 (d) 2,422
2,150 Bullock Creek, Michigan, School District, GO, 5.50%
due 5/01/2010 (e)(f) 2,287
1,000 Central Montcalm, Michigan, Public Schools, GO,
5.75% due 5/01/2009 (e)(f) 1,052
3,850 Charlotte, Michigan, Public School District, GO,
5.375% due 5/01/2009 (c)(f) 4,018
2,420 Delta County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (Mead Westvaco-Escanaba),
Series A, 6.25% due 4/15/2012 (f) 2,735
Detroit, Michigan, City School District, GO (School
Building and Site Improvement) (c):
2,000 Series A, 5% due 5/01/2013 (f) 2,158
1,480 Series A, 5.375% due 5/01/2013(f) 1,629
1,900 Series B, 5% due 5/01/2028 1,980
2,000 Detroit, Michigan, City School District, GO (School
Building and Site Improvement), Refunding, Series A,
5% due 5/01/2021 (d) 2,136
Detroit, Michigan, Water Supply System Revenue Bonds:
4,600 Senior Lien, Series A, 5% due 7/01/2034 (e) 4,798
1,780 Second Lien, Series B, 5% due 7/01/2013 (e)(f) 1,923
2,620 Second Lien, Series B, 5% due 7/01/2034 (e) 2,733
2,000 Series B, 5.25% due 7/01/2013 (e)(f) 2,190
2,500 Dickinson County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (International Paper Company Project),
Series A, 5.75% due 6/01/2016 2,682
2,170 Dickinson County, Michigan, Healthcare System, Hospital
Revenue Refunding Bonds, 5.80% due 11/01/2024 (h) 2,279
East Grand Rapids, Michigan, Public School District,
GO (d)(f):
1,610 5.75% due 5/01/2009 1,695
6,300 6% due 5/01/2009 6,666
Eaton Rapids, Michigan, Public Schools, School Building
and Site, GO (d):
2,000 5.25% due 5/01/2023 2,177
1,000 5% due 5/01/2026 1,057
1,250 5% due 5/01/2029 1,318
Flint, Michigan, Hospital Building Authority, Revenue
Refunding Bonds (Hurley Medical Center), Series A (h):
385 5.375% due 7/01/2020 393
775 6% due 7/01/2020 845
1,800 Fowlerville, Michigan, Community Schools, School
District, GO, 5% due 5/01/2030 (c) 1,897
Face
Amount Municipal Bonds Value
Michigan (continued)
$ 3,650 Gibraltar, Michigan, School District, School Building
and Site, GO, 5% due 5/01/2028 (c) $ 3,851
Grand Blanc, Michigan, Community Schools, GO (c):
1,000 5.625% due 5/01/2017 1,088
1,000 5.625% due 5/01/2018 1,087
1,100 5.625% due 5/01/2019 1,196
Grand Rapids, Michigan, Building Authority Revenue
Bonds, Series A (a):
665 5.50% due 10/01/2012 (f) 732
805 5.50% due 10/01/2018 880
190 5.50% due 10/01/2019 208
1,500 Grand Rapids, Michigan, Sanitation Sewer System
Revenue Refunding and Improvement Bonds, Series A,
5.50% due 1/01/2022 (c) 1,745
225 Harper Woods, Michigan, City School District, School
Building and Site, GO, Refunding, 5% due 5/01/2034 (c) 236
4,500 Hartland, Michigan, Consolidated School District, GO,
6% due 5/01/2010 (c)(f) 4,857
1,275 Haslett, Michigan, Public School District, Building and
Site, GO, 5.625% due 11/01/2011 (e)(f) 1,395
2,000 Howell, Michigan, Public Schools, GO, 5.875%
due 5/01/2009 (e)(f) 2,111
2,660 Hudsonville, Michigan, Public Schools, School Building
and Site, GO, 5% due 5/01/2029 (d) 2,804
3,975 Jackson, Michigan, Public Schools, GO, 5.375%
due 5/01/2010 (c)(f) 4,211
3,750 Kalamazoo, Michigan, Hospital Finance Authority,
Hospital Facility Revenue Refunding Bonds (Bronson
Methodist Hospital), 5.50% due 5/15/2008 (e)(f) 3,893
3,000 Kent, Michigan, Hospital Finance Authority Revenue
Bonds (Spectrum Health), Series A, 5.50%
due 7/15/2011 (e)(f) 3,269
1,440 Ludington, Michigan, Area School District, GO, 5.25%
due 5/01/2023 (e) 1,563
1,125 Michigan Higher Education Facilities Authority, Limited
Obligation Revenue Bonds (Hillsdale College Project),
5% due 3/01/2035 1,164
1,000 Michigan Higher Education Facilities Authority, Limited
Obligation Revenue Refunding Bonds (Hope College),
Series A, 5.90% due 4/01/2032 1,058
Michigan Higher Education Facilities Authority Revenue
Refunding Bonds (College for Creative Studies):
550 5.85% due 12/01/2022 588
1,000 5.90% due 12/01/2027 1,066
3,000 Michigan Higher Education Student Loan Authority,
Student Loan Revenue Bonds, AMT, Series XVII-B,
5.40% due 6/01/2018 (a) 3,083
Michigan State Building Authority Revenue Bonds
(Facilities Program), Series II:
1,185 4.67% due 10/15/2009 (a)(b)(j) 1,063
1,675 4.77% due 10/15/2010 (a)(b)(j) 1,446
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield Michigan Insured Fund II, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Michigan (continued)
Michigan State Building Authority, Revenue
Refunding Bonds:
$ 2,000 (Facilities Program), Series II, 5%
due 10/15/2029 (e) $ 2,098
4,600 (Facilities Program), Series II, 5%
due 10/15/2033 (a) 4,883
3,870 Michigan State COP, 5.50% due 6/01/2010 (a)(f) 4,114
Michigan State, Comprehensive Transportation Revenue
Refunding Bonds (d):
1,000 5% due 5/15/2026 1,070
1,500 Series A, 5.50% due 11/01/2018 1,622
285 Michigan State, HDA, Rental Housing Revenue Bonds,
AMT, Series A, 5.30% due 10/01/2037 (e) 291
1,000 Michigan State Hospital Finance Authority, Hospital
Revenue Bonds (Mid-Michigan Obligation Group),
Series A, 5.50% due 4/15/2018 (a) 1,076
Michigan State Hospital Finance Authority, Hospital
Revenue Refunding Bonds:
1,300 (Crittenton Hospital), Series A, 5.625%
due 3/01/2027 1,392
1,250 (Sparrow Obligation Group), 5.625%
due 11/15/2031 1,327
Michigan State Hospital Finance Authority Revenue
Bonds:
2,000 (Mercy Health Services), Series R, 5.375%
due 8/15/2026 (a)(b) 2,023
3,420 (Mid-Michigan Obligor Group), Series A, 5%
due 4/15/2036 3,542
Michigan State Hospital Finance Authority, Revenue
Refunding Bonds:
4,000 5% due 11/15/2036 (e) 4,207
8,000 (Ascension Health Credit), Series A, 6.125%
due 11/15/2009 (e)(f) 8,648
3,760 (Ascension Health Credit), Series A, 6.25%
due 11/15/2009 (e)(f) 4,078
1,345 (Henry Ford Health System), Series A, 5.25%
due 11/15/2032 1,440
4,065 (Henry Ford Health System), Series A, 5%
due 11/15/2038 4,228
3,215 (Mercy Health Services), Series X, 6%
due 8/15/2009 (e)(f) 3,450
1,000 (Mercy-Mount Clemens), Series A, 6%
due 5/15/2014 (e) 1,061
2,000 (Mercy-Mount Clemens), Series A, 5.75%
due 5/15/2029 (e) 2,113
1,000 (Trinity Health Credit), Series C, 5.375%
due 12/01/2023 1,064
3,450 (Trinity Health Credit), Series C, 5.375%
due 12/01/2030 3,667
1,900 (Trinity Health Credit), Series D, 5% due 8/15/2034 1,990
5,500 (Trinity Health), Series A, 6% due 12/01/2027 (a) 6,003
1,000 Michigan State Housing Development Authority,
Limited Obligation M/F Housing Revenue Bonds
(Deaconess Towers Apartments), AMT, 5.25%
due 2/20/2048 (l) 1,031
Face
Amount Municipal Bonds Value
Michigan (continued)
Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds:
$ 9,500 (Detroit Edison Company Pollution Control Project),
AMT, Series A, 5.55% due 9/01/2029 (e) $ 10,019
2,000 (Detroit Edison Company Pollution Control Project),
Series AA, 6.95% due 5/01/2011 (c) 2,262
3,200 (Detroit Edison Company Pollution Control Project),
Series C, 5.45% due 9/01/2029 3,357
1,375 (Dow Chemical Company Project), AMT, 5.50%
due 12/01/2028 1,478
6,500 Monroe County, Michigan, Economic Development
Corp., Limited Obligation Revenue Refunding Bonds
(Detroit Edison Co. Project), Series AA, 6.95%
due 9/01/2022 (c) 8,589
1,200 New Lothrop, Michigan, Area Public Schools, School
Building and Site, GO, 5% due 5/01/2035 (d) 1,270
600 Oak Park, Michigan, Street Improvement, GO, 5%
due 5/01/2030 (e) 639
1,000 Plainwell, Michigan, Community Schools, School
District, School Building and Site, GO, 5.50%
due 11/01/2012 (d)(f) 1,099
1,000 Pontiac, Michigan, Tax Increment Finance Authority,
Revenue Refunding Bonds (Development Area
Number 3), 5.375% due 6/01/2017 (h) 1,058
1,000 Reed, Michigan, City Public Schools, School Building
and Site, GO, 5% due 5/01/2014 (d)(f) 1,087
1,900 Rochester, Michigan, Community School District, GO,
Series II, 5.50% due 11/01/2011 (e)(f) 2,067
1,500 Romulus, Michigan, Community Schools, GO, 5.75%
due 5/01/2009 (c)(f) 1,579
1,050 Roseville, Michigan, School District, School Building
and Site, GO, Refunding, 5% due 5/01/2031 (d) 1,118
Saginaw Valley State University, Michigan, General
Revenue Refunding Bonds (c):
1,450 5% due 7/01/2024 1,537
1,000 5% due 7/01/2034 1,052
2,500 Saint Clair County, Michigan, Economic Revenue
Refunding Bonds (Detroit Edison Company), RIB,
Series 282, 8.92% due 8/01/2024 (a)(g) 2,824
2,650 South Lyon, Michigan, Community Schools, GO,
Series A, 5.75% due 5/01/2010 (e)(f) 2,840
Southfield, Michigan, Public Schools, School Building
and Site, GO, Series A (d):
1,950 5.25% due 5/01/2027 2,103
1,000 5% due 5/01/2029 1,054
1,000 Sparta, Michigan, Area Schools, School Building and
Site, GO, 5% due 5/01/2030 (c) 1,054
6,500 Wayne Charter County, Michigan, Airport Revenue
Bonds (Detroit Metropolitan Wayne County), AMT,
Series A, 5.375% due 12/01/2015 (e) 6,752
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (concluded)
BlackRock MuniYield Michigan Insured Fund II, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Michigan (concluded)
$ 1,180 Wayne Charter County, Michigan, Detroit
Metropolitan Airport, GO, Airport Hotel, Series A,
5% due 12/01/2030 (e) $ 1,234
Wayne County, Michigan, Airport Authority Revenue
Bonds, AMT (e):
5,200 (Detroit Metropolitan Wayne County Airport), 5%
due 12/01/2034 5,416
3 DRIVERS, Series 1081-Z, 6.591% due 6/01/2013 (g) 3
5,300 Wyoming, Michigan, Sewage Disposal System Revenue
Bonds, 5% due 6/01/2030 (e) 5,618
1,330 Zeeland, Michigan, Public Schools, School Building
and Site, GO, 5% due 5/01/2029 (e) 1,402
Puerto Rico--1.3%
1,100 Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Refunding Bonds, Series K, 5% due 7/01/2040 1,147
1,000 Puerto Rico Commonwealth, Public Improvement,
GO, Series A, 5.25% due 7/01/2026 1,080
Total Municipal Bonds
(Cost--$225,833)--137.8% 242,850
Municipal Bonds Held in Trust (m)
Michigan--25.6%
2,700 Detroit, Michigan, Water Supply System, Senior Lien
Revenue Bonds, Series A, 5.75% due 7/01/2011 (c)(f) 2,975
Michigan State Building Authority, Revenue Refunding
Bonds (Facilities Program), Series I:
7,000 5.50% due 10/15/2010 (d) 7,548
5,350 5.50% due 10/15/2011 (b) 5,642
Face
Amount Municipal Bonds Held in Trust (m) Value
Michigan (concluded)
Michigan State COP, Refunding (New Center
Development Inc.) (b)(e):
$ 5,715 5.75% due 9/01/2010 $ 6,194
5,045 5.75% due 9/01/2011 5,468
8,000 Saint Clair County, Michigan, Economic Revenue
Refunding Bonds (Detroit Edison Co. Project),
Series AA, 6.40% due 8/01/2024 (a) 8,518
Wayne County, Michigan, Airport Authority Revenue
Bonds (Detroit Metropolitan Wayne County Airport),
AMT (e):
4,475 5.25% due 12/01/2025 4,797
3,700 5.25% due 12/01/2026 3,966
Puerto Rico--2.8%
4,540 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Series HH, 5.75% due 7/01/2010 (d)(f) 4,917
Total Municipal Bonds Held in Trust
(Cost--$49,853)--28.4% 50,025
Shares
Held Short-Term Securities
4,714 CMA Michigan Municipal Money Fund,
2.96% (i)(k) 4,714
Total Short-Term Securities
(Cost--$4,714)--2.7% 4,714
Total Investments (Cost--$280,400*)--168.9% 297,589
Other Assets Less Liabilities--0.8% 1,524
Liability for Trust Certificates,
Including Interest Expense Payable--(13.1%) (23,864)
Preferred Stock, at Redemption Value--(56.2%) (99,033)
----------
Net Assets Applicable to Common Stock--100.0% $ 176,216
==========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 257,124
===============
Gross unrealized appreciation $ 16,782
Gross unrealized depreciation --
---------------
Net unrealized appreciation $ 16,782
===============
(a) AMBAC Insured.
(b) Escrowed to maturity.
(c) FGIC Insured.
(d) FSA Insured.
(e) MBIA Insured.
(f) Prerefunded.
(g) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(h) ACA Insured.
(i) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA Michigan Municipal Money Fund (1,899) $92
(j) Represents a zero coupon bond; the interest rate shown is the effective
yield at the time of purchase.
(k) Represents the current yield as of October 31, 2006.
(l) GNMA Collateralized.
(m) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of Municipal Bonds Held in Trust.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments as of October 31, 2006
BlackRock MuniYield New York Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
New York--122.1%
$23,790 Albany County, New York, Airport Authority, Airport
Revenue Bonds, AMT, 6% due 12/15/2023 (c)(q) $ 24,836
Buffalo, New York, School, GO, Series D (b):
1,250 5.50% due 12/15/2014 1,359
1,500 5.50% due 12/15/2016 1,632
4,300 Buffalo, New York, Sewer Authority, Revenue
Refunding Bonds, Series F, 6% due 7/01/2013 (b) 4,804
1,700 Dutchess County, New York, Resource Recovery Agency
Revenue Bonds (Solid Waste System-Forward), Series A,
5.40% due 1/01/2013 (d) 1,818
Erie County, New York, IDA, School Facility Revenue
Bonds (City of Buffalo Project) (c):
1,900 5.75% due 5/01/2020 2,100
5,250 5.75% due 5/01/2024 5,620
Huntington, New York, GO, Refunding, (a):
485 5.50% due 4/15/2011 524
460 5.50% due 4/15/2012 506
455 5.50% due 4/15/2013 504
450 5.50% due 4/15/2014 504
450 5.50% due 4/15/2015 508
1,675 Ilion, New York, Central School District, GO, Series B,
5.50% due 6/15/2010 (b)(e) 1,803
Long Island Power Authority, New York, Electric
System Revenue Bonds:
7,000 Series A, 5% due 9/01/2029 (a) 7,404
8,500 Series A, 5% due 9/01/2034 (a) 8,964
10,000 Series C, 5% due 9/01/2035 10,507
5,750 Long Island Power Authority, New York, Electric
System Revenue Refunding Bonds, Series B, 5%
due 12/01/2035 (j) 6,096
4,250 Madison County, New York, IDA, Civic Facility
Revenue Bonds (Colgate University Project), Series A,
5% due 7/01/2035 (a) 4,507
2,000 Metropolitan Transportation Authority, New York,
Commuter Facilities Revenue Bonds, Series A, 5.75%
due 1/01/2008 (d)(e) 2,080
10,000 Metropolitan Transportation Authority, New York,
Commuter Facilities Revenue Refunding Bonds, Series B,
4.875% due 7/01/2018 (b)(h) 10,297
Metropolitan Transportation Authority, New York,
Dedicated Tax Fund Revenue Bonds, Series A:
5,000 5% due 11/15/2011 (b)(e) 5,332
9,500 5% due 11/15/2035 (d) 10,133
Metropolitan Transportation Authority, New York,
Dedicated Tax Fund, Revenue Refunding Bonds, Series A:
10,600 5% due 11/15/2030 (d) 11,088
1,015 5% due 11/15/2032 (c) 1,061
Metropolitan Transportation Authority, New York,
Revenue Refunding Bonds:
3,900 RIB, Series 724X, 7.69% due 11/15/2032 (c)(g) 4,731
1,740 Series A, 5.125% due 11/15/2022 (b) 1,864
16,105 Series A, 5% due 11/15/2030 (c) 16,963
2,500 Series A, 5.25% due 11/15/2031 (b) 2,681
1,500 Series B, 5% due 11/15/2028 (d) 1,580
Face
Amount Municipal Bonds Value
New York (continued)
$ 2,000 Metropolitan Transportation Authority, New York,
Service Contract Revenue Refunding Bonds, Series A,
5% due 7/01/2025 (b) $ 2,119
Metropolitan Transportation Authority, New York, Transit
Facilities Revenue Refunding Bonds, Series C (c)(e):
2,885 5.125% due 1/01/2012 3,102
1,640 5.125% due 7/01/2012 1,771
3,000 Metropolitan Transportation Authority, New York,
Transportation Revenue Bonds, Series A, 5%
due 11/15/2032 (b) 3,152
Metropolitan Transportation Authority, New York,
Transportation Revenue Refunding Bonds, Series F (d):
6,235 5.25% due 11/15/2027 6,687
5,000 5% due 11/15/2031 5,228
Monroe County, New York, IDA Revenue Bonds
(Southview Towers Project), AMT:
1,400 6.125% due 2/01/2020 1,501
1,125 6.25% due 2/01/2031 1,213
1,160 Montgomery County, New York, IDA, Lease Revenue
Bonds (Hamilton Fulton Montgomery Board of
Cooperative Educational Services Project), Series A,
5% due 7/01/2034 (l) 1,217
10,830 Nassau Health Care Corporation, New York, Health
System Revenue Bonds, 5.75% due 8/01/2009 (c)(e) 11,666
New York City, New York, City Housing Development
Corporation, M/F Housing Revenue Bonds, AMT, Series C:
1,500 5% due 11/01/2026 1,543
2,000 5.05% due 11/01/2036 2,084
1,275 New York City, New York, City IDA, Civic Facility
Revenue Refunding Bonds (Nightingale-Bamford School),
5.25% due 1/15/2018 (a) 1,380
7,075 New York City, New York, City IDA, IDR (Japan Airlines
Company), AMT, 6% due 11/01/2015 (c) 7,146
New York City, New York, City IDA, PILOT Revenue
Bonds:
9,250 (Queens Baseball Stadium Project), 5%
due 1/01/2036 (a) 9,873
6,500 (Yankee Stadium Project), 5% due 3/01/2036 (d) 6,926
17,500 (Yankee Stadium Project), 4.50%
due 3/01/2039 (b) 17,524
7,970 New York City, New York, City IDA, Parking Facility
Revenue Bonds (Royal Charter-New York Presbyterian),
5.75% due 12/15/2029 (c) 8,862
1,500 New York City, New York, City IDA, Special Facility
Revenue Refunding Bonds (Terminal One Group
Association Project), AMT, 5.50% due 1/01/2024 1,624
6,750 New York City, New York, City Municipal Financing
Authority, Water and Sewer Systems Revenue Bonds,
5% due 6/15/2036 (d) 7,184
500 New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System, Crossover Revenue
Refunding Bonds, Series F, 5% due 6/15/2029 (c) 518
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield New York Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
New York (continued)
New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System Revenue Bonds:
$ 2,850 Series A, 5.75% due 6/15/2009 (b)(e) $ 3,036
14,700 Series B, 5.75% due 6/15/2007 (d)(e) 15,048
New York City, New York, City Municipal Water
Finance Authority, Water and Sewer System, Revenue
Refunding Bonds:
5,000 5.50% due 6/15/2010 (d)(e) 5,380
1,250 Series A, 5.125% due 6/15/2034 (d) 1,320
5,500 Series A, 5% due 6/15/2035 (a) 5,758
1,750 Series C, 5% due 6/15/2035 (d) 1,843
1,020 New York City, New York, City Transit Authority,
Metropolitan Transportation Authority, Triborough,
COP, Series A, 5.625% due 1/01/2012 (a) 1,090
New York City, New York, City Transitional Finance
Authority, Future Tax Secured Revenue Bonds:
6,805 Series B, 6.25% due 5/15/2010 (b)(e) 7,479
800 Series B, 6.25% due 5/15/2010 (e) 880
1,260 Series C, 5.50% due 5/01/2009 (e) 1,332
16,195 Series C, 5% due 2/01/2033 (b) 17,038
2,500 Series E, 5.25% due 2/01/2022 (d) 2,693
3,000 New York City, New York, City Transitional Finance
Authority, Future Tax Secured, Revenue Refunding
Bonds, Series D, 5.25% due 2/01/2021 (d) 3,248
1,000 New York City, New York, City Transitional Finance
Authority, Revenue Refunding Bonds, Series A, 5%
due 11/15/2026 (b) 1,053
New York City, New York, GO:
3,000 Series A, 5.75% due 5/15/2010 (b)(e) 3,249
2,500 Series B, 5.75% due 8/01/2013 (d) 2,704
3,750 Series D, 5.25% due 10/15/2023 4,023
8,000 Series J, 5% due 5/15/2023 8,426
9,500 Series M, 5% due 4/01/2035 9,958
1,150 Sub-Series C-1, 5.25% due 8/15/2026 1,234
3,965 VRDN, Sub-Series A-6, 3.58%
due 11/01/2026 (c)(f) 3,965
New York City, New York, GO, Refunding:
895 Series A, 6.375% due 5/15/2010 (b)(e) 987
70 Series B, 7% due 2/01/2018 (a) 71
1,500 VRDN, Series H, Sub-Series H-2, 3.61%
due 8/01/2013 (d)(f) 1,500
5,700 New York City, New York, Sales Tax Asset
Receivable Corporation Revenue Bonds, Series A,
5% due 10/15/2032 (a) 6,041
4,250 New York City, New York, Trust for Cultural Resources,
Revenue Refunding Bonds (American Museum of
Natural History), Series A, 5% due 7/01/2036 (d) 4,496
2,400 New York Convention Center Development Corporation,
New York, Revenue Bonds (Hotel Unit Fee Secured),
5% due 11/15/2030 (a) 2,550
Face
Amount Municipal Bonds Value
New York (continued)
$ 1,000 New York State Dormitory Authority, Consolidated
Revenue Refunding Bonds (City University System),
Series 1, 5.625% due 1/01/2008 (c)(e) $ 1,043
5,000 New York State Dormitory Authority, Non-State
Supported Debt, Revenue Refunding Bonds (Cornell
University), Series A, 5% due 7/01/2035 5,323
New York State Dormitory Authority Revenue Bonds:
3,580 (Eger Health Care and Rehabilitation Center),
6.10% due 8/01/2037 (i) 3,895
1,500 (Long Island University), Series B, 5.25%
due 9/01/2028 (k) 1,592
2,000 (New School for Social Research), 5.75%
due 7/01/2007 (d)(e) 2,069
1,180 (New York State Rehabilitation Association),
Series A, 5.25% due 7/01/2019 (j) 1,278
1,000 (New York State Rehabilitation Association),
Series A, 5.125% due 7/01/2023 (j) 1,055
6,900 (School Districts Financing Program), Series E,
5.75% due 10/01/2030 (d) 7,622
1,000 Series B, 6.50% due 2/15/2011 (d)(h) 1,118
3,560 (State University Adult Facilities), Series B,
5.75% due 5/15/2010 (c)(e) 3,856
1,780 (Upstate Community Colleges), Series A,
6% due 7/01/2010 (c)(e) 1,947
New York State Dormitory Authority, Revenue
Refunding Bonds:
3,155 (City University System), Series C, 7.50%
due 7/01/2010 (b) 3,402
4,255 (Mental Health Services Facilities Improvement),
Series A, 5.75% due 2/15/2007 (d)(e) 4,367
1,370 (School District Financing Program), Series I,
5.75% due 10/01/2018 (d) 1,524
6,000 (Siena College), 5.75% due 7/01/2007 (d)(e) 6,206
New York State Dormitory Authority, Supported Debt
Revenue Bonds:
1,570 (Mental Health Facilities), Series B, 5.25%
due 2/15/2014 (e) 1,727
270 (Mental Health Facilities), Series B, 5.25%
due 2/15/2023 290
3,000 (State University Dormitory Facilities), Series A,
5% due 7/01/2031 (d) 3,204
1,000 New York State Dormitory Authority, Supported Debt
Revenue Refunding Bonds (Department of Health),
Series A, 5% due 7/01/2025 (j) 1,058
14,250 New York State Energy Research and Development
Authority, Gas Facilities Revenue Refunding Bonds
(Brooklyn Union Gas Company/Keyspan), AMT,
Series A, 4.70% due 2/01/2024 (b) 14,661
3,500 New York State Environmental Facilities Corporation,
Special Obligation Revenue Refunding Bonds
(Riverbank State Park), 6.25% due 4/01/2012 (a) 3,854
800 New York State Housing Finance Agency, State Personal
Income Tax Revenue Bonds (Economic Development
and Housing), Series A, 5% due 9/15/2023 (d) 848
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield New York Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
New York (continued)
$ 1,985 New York State Mortgage Agency, Homeowner
Mortgage Revenue Bonds, AMT, Series 130, 4.80%
due 10/01/2037 $ 2,002
New York State Mortgage Agency, Homeowner
Mortgage Revenue Refunding Bonds, AMT:
1,540 Series 133, 4.95% due 10/01/2021 1,590
7,400 Series 137, 4.70% due 10/01/2031 7,429
New York State Municipal Bond Bank Agency, Special
School Purpose Revenue Bonds, Series C:
3,470 5.25% due 6/01/2019 3,726
3,920 5.25% due 6/01/2020 4,232
6,000 New York State Thruway Authority, General Revenue
Bonds, Series F, 5% due 1/01/2030 (a) 6,358
New York State Thruway Authority, General Revenue
Refunding Bonds, Series G (c):
8,000 4.75% due 1/01/2029 8,275
17,750 4.75% due 1/01/2030 18,361
2,820 New York State Thruway Authority, Highway and
Bridge Trust Fund Revenue Bonds, Series A, 6.25%
due 4/01/2011 (c) 3,082
New York State Thruway Authority, Local Highway
and Bridge Service Contract Revenue Bonds (e):
3,000 5.75% due 4/01/2010 (a) 3,243
2,000 Series A-2, 5.375% due 4/01/2008 (d) 2,071
2,170 New York State Thruway Authority, Local Highway
and Bridge Service Contract, Revenue Refunding Bonds,
6% due 4/01/2007 (d)(e) 2,235
4,380 New York State Thruway Authority, Second General
Highway and Bridge Trust Fund Revenue Bonds,
Series A, 5% due 4/01/2026 (a) 4,685
New York State Urban Development Corporation,
Personal Income Tax Revenue Bonds:
3,000 Series C-1, 5% due 3/15/2013 (d)(e) 3,243
5,000 (State Facilities), Series A-1, 5% due 3/15/2029 (b) 5,274
3,190 New York State Urban Development Corporation,
Revenue Refunding Bonds (Correctional Capital
Facilities), Series A, 6.50% due 1/01/2011 (c) 3,546
1,000 Niagara Falls, New York, City School District, COP,
Refunding (High School Facility), 5% due 6/15/2028 (c) 1,055
1,000 Niagara Falls, New York, GO (Water Treatment Plant),
AMT, 7.25% due 11/01/2010 (d) 1,131
2,705 Niagara, New York, Frontier Authority, Airport Revenue
Bonds (Buffalo Niagara International Airport), Series B,
5.50% due 4/01/2019 (d) 2,847
1,260 North Country, New York, Development Authority,
Solid Waste Management System, Revenue Refunding
Bonds, 6% due 5/15/2015 (c) 1,408
North Hempstead, New York, GO, Refunding,
Series B (b):
1,745 6.40% due 4/01/2013 2,019
555 6.40% due 4/01/2017 676
Face
Amount Municipal Bonds Value
New York (continued)
$ 1,665 Oneida County, New York, IDA, Civic Facilities
Revenue Bonds (Mohawk Valley), Series A, 5.20%
due 2/01/2013 (c) $ 1,725
2,500 Port Authority of New York and New Jersey,
Consolidated Revenue Bonds, AMT, 137th Series,
5.125% due 7/15/2030 (c) 2,647
4,000 Port Authority of New York and New Jersey,
Consolidated Revenue Refunding Bonds, AMT,
119th Series, 5.50% due 9/15/2016 (b) 4,046
15,000 Port Authority of New York and New Jersey Revenue
Refunding Bonds, AMT, 120th Series, 6%
due 10/15/2032 (d) 15,474
Port Authority of New York and New Jersey, Special
Obligation Revenue Bonds, AMT (d):
2 DRIVERS, Series 278, 7.585% due 12/01/2022 (g) 2
14,750 (JFK International Air Terminal), Series 6, 6.25%
due 12/01/2010 16,111
7,175 (JFK International Air Terminal LLC), Series 6,
6.25% due 12/01/2011 7,971
3,500 (JFK International Air Terminal LLC), Series 6,
5.75% due 12/01/2025 3,576
4,425 (Special Project--JFK International Air Terminal),
Series 6, 6.25% due 12/01/2013 5,042
7,380 (Special Project--JFK International Air Terminal),
Series 6, 6.25% due 12/01/2014 8,533
1,255 Rensselaer County, New York, IDA, Civic Facility
Revenue Bonds (Rensselaer Polytechnic Institute),
Series B, 5.50% due 8/01/2022 (a) 1,330
2,500 Rensselaer, New York, City School District, COP, 5%
due 6/01/2036 (l) 2,654
1,000 Suffolk County, New York, IDA, Civic Facility Revenue
Refunding Bonds (Dowling College), Series A, 5%
due 6/01/2036 (n) 1,035
4,625 Suffolk County, New York, IDA, IDR (Keyspan--Port
Jefferson), AMT, 5.25% due 6/01/2027 4,837
Suffolk County, New York, IDA, Solid Waste Disposal
Facility, Revenue Refunding Bonds (Ogden Martin
System Huntington Project), AMT (a):
8,530 6% due 10/01/2010 9,234
9,170 6.15% due 10/01/2011 10,139
6,470 6.25% due 10/01/2012 7,288
1,750 Suffolk County, New York, Public Improvement, GO,
Series B, 4.50% due 11/01/2024 (d) 1,805
Tobacco Settlement Financing Corporation of
New York Revenue Bonds:
5,000 Series A-1, 5.25% due 6/01/2020 (a) 5,388
2,000 Series A-1, 5.25% due 6/01/2022 (a) 2,148
2,000 Series C-1, 5.50% due 6/01/2021 2,187
1,900 Series C-1, 5.50% due 6/01/2022 2,074
2,305 Triborough Bridge and Tunnel Authority, New York,
General Purpose Revenue Refunding Bonds, Series Y,
6% due 1/01/2012 (d)(h) 2,494
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield New York Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
New York (concluded)
Triborough Bridge and Tunnel Authority, New York,
Revenue Refunding Bonds (d):
$ 7,000 5.25% due 11/15/2023 $ 7,570
19,675 5% due 11/15/2032 20,560
2,265 Series A, 5% due 1/01/2012 (e) 2,422
1,500 Series B, 5% due 11/15/2032 1,567
Triborough Bridge and Tunnel Authority, New York,
Subordinate Revenue Bonds:
2,465 5% due 11/15/2028 (a) 2,596
6,000 Series A, 5.25% due 11/15/2030 (d) 6,437
1,050 Western Nassau County, New York, Water Authority,
Water System Revenue Refunding Bonds, 5%
due 5/01/2035 (a) 1,110
2,010 Yonkers, New York, GO, Series A, 5.75%
due 10/01/2010 (b)(e) 2,192
Guam--0.8%
A.B. Won Guam International Airport Authority,
General Revenue Refunding Bonds, AMT, Series C (d):
2,240 5.25% due 10/01/2021 2,351
2,050 5.25% due 10/01/2022 2,152
Puerto Rico--9.4%
Puerto Rico Commonwealth Highway and Transportation
Authority, Transportation Revenue Bonds:
2,265 Series G, 5.25% due 7/01/2019 (b) 2,464
1,000 Series G, 5.25% due 7/01/2021 (b) 1,086
1,250 Trust Receipts, Class R, Series B, 7.803%
due 7/01/2035 (d)(g) 1,473
3,000 Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation
Revenue Refunding Bonds, Series D, 5.75%
due 7/01/2012 (e) 3,336
Puerto Rico Commonwealth Infrastructure Financing
Authority, Special Tax and Capital Appreciation Revenue
Bonds, Series A (o):
22,030 4.62% due 7/01/2031 (b) 7,524
3,900 4.67% due 7/01/2035 (a) 1,095
8,000 4.77% due 7/01/2043 (a) 1,566
1,000 Puerto Rico Commonwealth, Public Improvement, GO,
Refunding, Series B, 5.25% due 7/01/2032 1,081
1,000 Puerto Rico Commonwealth, Public Improvement, GO,
Series A, 5.25% due 7/01/2030 1,083
4,000 Puerto Rico Convention Center District Authority,
Hotel Occupancy Tax Revenue Bonds, Series A, 5%
due 7/01/2031 (a) 4,285
Face
Amount Municipal Bonds Value
Puerto Rico (concluded)
Puerto Rico Electric Power Authority, Power
Revenue Bonds:
$ 4,750 Series NN, 5.125% due 7/01/2029 $ 5,014
5,000 Series RR, 5% due 7/01/2029 (j) 5,310
7,095 Series RR, 5% due 7/01/2030 (l) 7,519
7,100 Series RR, 5% due 7/01/2035 (b) 7,551
Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Revenue Bonds, Series E:
2,300 5.50% due 2/01/2012 (e) 2,511
700 5.50% due 8/01/2029 746
Total Municipal Bonds
(Cost--$716,982)--132.3% 751,296
Municipal Bonds Held in Trust (r)
New York--30.0%
50,000 Metropolitan Transportation Authority, New York,
Revenue Refunding Bonds, Series A, 5.75%
due 11/15/2032 (c) 55,330
33,750 New York Convention Center Development
Corporation, New York, Revenue Bonds (Hotel Unit
Fee Secured), 5% due 11/15/2035 (a) 35,737
25,000 New York City, New York, City Municipal Water
Finance Authority, Water and Sewer System Revenue
Bonds, Series A, 5.75% due 6/15/2011 (d)(e) 27,280
22,085 New York City, New York, GO, Series C, 5.75%
due 3/15/2027 (c) 24,458
10,155 Port Authority of New York and New Jersey, Special
Obligation Revenue Bonds (JFK International Air
Terminal), AMT, Series 6, 5.75% due 12/01/2022 (d) 10,570
New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A (a):
13,000 5.25% due 10/15/2027 14,020
16,000 5% due 10/15/2032 17,255
Total Municipal Bonds Held in Trust
(Cost--$179,221)--32.5% 184,650
Shares
Held Short-Term Securities
1,604 CMA New York Municipal Money Fund, 3.03% (m)(p) 1,604
Total Short-Term Securities
(Cost--$1,604)--0.3% 1,604
Total Investments (Cost--$897,807*)--165.1% 937,550
Other Assets Less Liabilities--3.6% 20,610
Liability for Trust Certificates,
Including Interest Expense Payable--(15.1%) (85,980)
Preferred Stock, at Redemption Value--(53.6%) (304,226)
----------
Net Assets Applicable to Common Stock--100.0% $ 567,954
==========
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (concluded)
BlackRock MuniYield New York Insured Fund, Inc. (In Thousands)
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 813,121
===============
Gross unrealized appreciation $ 39,564
Gross unrealized depreciation (130)
---------------
Net unrealized appreciation $ 39,434
===============
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) Prerefunded.
(f) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(g) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(h) Escrowed to maturity.
(i) FHA Insured.
(j) CIFG Insured.
(k) Radian Insured.
(l) XL Capital Insured.
(m) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA New York Municipal Money Fund 503 $95
(n) ACA Insured.
(o) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(p) Represents the current yield as of October 31, 2006.
(q) All or a portion of security held as collateral in connection with
open financial futures contracts.
(r) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of Municipal Bonds Held in Trust.
o Financial futures contracts sold as of October 31, 2006
were as follows:
Number of Expiration Face Unrealized
Contracts Issue Date Value Depreciation
279 30-Year U.S.
Treasury Note December 2006 $31,081 $(350)
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Net Assets
BlackRock
BlackRock BlackRock MuniYield
MuniYield MuniYield California
Arizona California Insured
As of October 31, 2006 Fund, Inc. Fund, Inc. Fund, Inc.
Assets
Investments in unaffiliated securities, at value* $ 109,093,462 $ 528,587,246 $ 853,480,669
Investments in affiliated securities, at value** 1,418,209 3,993,012 1,123,800
Cash 80,591 85,815 5,204
Receivable for securities sold -- 22,323,238 30,562,378
Interest receivable 1,936,485 8,196,230 13,368,249
Prepaid expenses 9,309 13,668 32,483
--------------- --------------- ---------------
Total assets 112,538,056 563,199,209 898,572,783
--------------- --------------- ---------------
Liabilities
Trust certificates 6,430,000 59,342,500 80,002,222
Unrealized depreciation on forward interest rate swaps 14,298 -- --
Payable for securities purchased -- 6,037,318 23,411,096
Dividends payable to Common Stock shareholders -- 156,237 212,897
Interest expense payable 77,251 463,031 628,293
Payable to investment adviser 42,692 201,513 323,038
Payable to other affiliates 680 3,184 5,088
Accrued expenses 52,173 98,282 121,465
--------------- --------------- ---------------
Total liabilities 6,617,094 66,302,065 104,704,099
--------------- --------------- ---------------
Preferred Stock
Preferred Stock, at redemption value of AMPS+++ at $25,000
per share liquidation preference*** 40,310,170 175,196,312 275,201,522
--------------- --------------- ---------------
Net Assets Applicable to Common Stock
Net assets applicable to Common Stock $ 65,610,792 $ 321,700,832 $ 518,667,162
=============== =============== ===============
Net Assets Consist of
Undistributed investment income--net $ 463,121 $ 1,657,437 $ 2,317,280
Undistributed (accumulated) realized capital gains (losses)--net 104,426 (1,656,334) (13,665,739)
Unrealized appreciation--net 5,023,459 20,101,324 32,354,835
--------------- --------------- ---------------
Total accumulated earnings--net 5,591,006 20,102,427 21,006,376
Common Stock, par value $.10 per share++ 451,562 2,129,526 3,436,120
Paid-in capital in excess of par 59,568,224 299,468,879 494,224,666
--------------- --------------- ---------------
Net Assets $ 65,610,792 $ 321,700,832 $ 518,667,162
=============== =============== ===============
Net asset value per share of Common Stock $ 14.53 $ 15.11 $ 15.09
=============== =============== ===============
Market price $ 14.79 $ 14.00 $ 14.64
=============== =============== ===============
* Identified cost of unaffiliated securities $ 104,055,705 $ 508,485,922 $ 821,109,721
=============== =============== ===============
** Identified cost of affiliated securities $ 1,418,209 $ 3,993,012 $ 1,123,800
=============== =============== ===============
*** Preferred Stock authorized, issued and outstanding:
Series A Shares, par value $.10 per share 518 2,400 1,800
=============== =============== ===============
Series B Shares, par value $.10 per share 694 2,400 1,800
=============== =============== ===============
Series C Shares, par value $.10 per share 400 800 1,600
=============== =============== ===============
Series D Shares, par value $.10 per share -- 1,400 2,000
=============== =============== ===============
Series E Shares, par value $.10 per share -- -- 2,000
=============== =============== ===============
Series F Shares, par value $.10 per share -- -- 1,800
=============== =============== ===============
++ Common Stock issued and outstanding 4,515,619 21,295,255 34,361,200
=============== =============== ===============
+++ Auction Market Preferred Stock.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Net Assets (concluded)
BlackRock BlackRock
BlackRock MuniYield MuniYield New
MuniYield Michigan Insured York Insured
As of October 31, 2006 Florida Fund Fund II, Inc. Fund, Inc.
Assets
Investments in unaffiliated securities, at value* $ 324,453,662 $ 292,875,607 $ 935,946,484
Investments in affiliated securities, at value** 7,458,500 4,714,033 1,603,803
Cash 33,561 37,487 --
Receivable for securities sold 2,074,073 -- 8,568,122
Interest receivable 4,430,231 5,272,751 14,567,099
Prepaid expenses 13,380 12,794 23,541
--------------- --------------- ---------------
Total assets 338,463,407 302,912,672 960,709,049
--------------- --------------- ---------------
Liabilities
Trust certificates 17,047,500 23,683,781 84,995,000
Bank overdraft -- -- 25,809
Unrealized depreciation on forward interest rate swaps 431,275 -- --
Interest expense payable 211,398 180,663 984,801
Payable for securities purchased 5,587,731 3,513,126 1,505,132
Dividends payable to Common Shareholders/Common Stock shareholders 55,237 91,444 316,432
Variation margin payable -- -- 209,250
Payable to investment adviser 125,374 111,585 352,695
Payable to other affiliates 2,028 1,776 5,000
Accrued expenses 76,737 81,432 135,424
--------------- --------------- ---------------
Total liabilities 23,537,280 27,663,807 88,529,543
--------------- --------------- ---------------
Preferred Shares/Stock
Preferred Shares/Stock, at redemption value of AMPS+++ at $25,000
per share liquidation preference*** 110,060,673 99,033,324 304,225,960
--------------- --------------- ---------------
Net Assets Applicable to Common Shares/Stock
Net assets applicable to Common Shares/Stock $ 204,865,454 $ 176,215,541 $ 567,953,546
=============== =============== ===============
Net Assets Consist of
Undistributed investment income--net $ 1,046,367 $ 914,458 $ 2,979,732
Accumulated realized capital losses--net (10,316,919) (7,217,199) (35,432,297)
Unrealized appreciation--net 18,250,205 17,146,599 39,393,456
--------------- --------------- ---------------
Total accumulated earnings--net 8,979,653 10,843,858 6,940,891
Common Shares/Stock, par value $.10 per share++ 1,355,802 1,206,972 3,944,596
Paid-in capital in excess of par 194,529,999 164,164,711 557,068,059
--------------- --------------- ---------------
Net Assets $ 204,865,454 $ 176,215,541 $ 567,953,546
=============== =============== ===============
Net asset value per share of Common Shares/Stock $ 15.11 $ 14.60 $ 14.40
=============== =============== ===============
Market price $ 14.35 $ 13.97 $ 14.10
=============== =============== ===============
* Identified cost of unaffiliated securities $ 305,772,182 $ 275,686,070 $ 896,202,731
=============== =============== ===============
** Identified cost of affiliated securities $ 7,458,500 $ 4,714,033 $ 1,603,803
=============== =============== ===============
*** Preferred Shares/Stock authorized, issued and outstanding:
Series A Shares, par value $.05 per share 2,200 2,200 1,700
=============== =============== ===============
Series B Shares, par value $.05 per share 1,600 -- 1,700
=============== =============== ===============
Series B Shares, par value $.10 per share -- 1,360 --
=============== =============== ===============
Series C Shares, par value $.05 per share 600 -- 2,800
=============== =============== ===============
Series C Shares, par value $.10 per share -- 400 --
=============== =============== ===============
Series D Shares, par value $.05 per share -- -- 1,960
=============== =============== ===============
Series E Shares, par value $.05 per share -- -- 2,200
=============== =============== ===============
Series F Shares, par value $.05 per share -- -- 1,800
=============== =============== ===============
++ Common Stock/Shares issued and outstanding 13,558,024 12,069,721 39,445,962
=============== =============== ===============
+++ Auction Market Preferred Shares/Stock.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Operations
BlackRock
BlackRock BlackRock MuniYield
MuniYield MuniYield California
Arizona California Insured
For the Year Ended October 31, 2006 Fund, Inc. Fund, Inc. Fund, Inc.
Investment Income
Interest and amortization of premium and discount earned $ 5,504,858 $ 25,004,029 $ 40,844,730
Dividends from affiliates 27,938 262,352 135,113
--------------- --------------- ---------------
Total income 5,532,796 25,266,381 40,979,843
--------------- --------------- ---------------
Expenses
Investment advisory fees 523,001 2,450,181 3,920,165
Interest expense and fees 242,253 1,423,439 2,880,069
Commission fees 103,076 444,918 707,630
Accounting services 64,200 165,536 236,562
Transfer agent fees 44,019 69,157 95,572
Professional fees 50,722 58,561 61,837
Printing and shareholder reports 6,746 27,014 41,646
Listing fees 1,964 16,572 21,183
Custodian fees 8,340 26,883 38,354
Pricing fees 9,083 17,930 24,497
Directors' fees and expenses 14,052 24,218 32,023
Other 33,833 68,295 60,888
--------------- --------------- ---------------
Total expenses before reimbursement 1,101,289 4,792,704 8,120,426
Reimbursement of expenses (5,210) (36,605) (20,167)
--------------- --------------- ---------------
Total expenses after reimbursement 1,096,079 4,756,099 8,100,259
--------------- --------------- ---------------
Investment income--net 4,436,717 20,510,282 32,879,584
--------------- --------------- ---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain on investments--net 426,255 3,468,346 4,037,090
--------------- --------------- ---------------
Change in unrealized appreciation/depreciation on:
Investments--net 1,136,648 4,191,570 8,293,148
Forward interest rate swaps--net (14,298) -- --
--------------- --------------- ---------------
Total change in unrealized appreciation/depreciation--net 1,122,350 4,191,570 8,293,148
--------------- --------------- ---------------
Total realized and unrealized gain--net 1,548,605 7,659,916 12,330,238
--------------- --------------- ---------------
Dividends & Distributions to Preferred Stock Shareholders
Dividends and distributions to Preferred Stock shareholders:
Investment income--net (1,175,501) (5,371,492) (8,252,857)
Realized gain--net (84,465) -- --
--------------- --------------- ---------------
Total dividends and distributions to Preferred Stock shareholders (1,259,966) (5,371,492) (8,252,857)
--------------- --------------- ---------------
Net Increase in Net Assets Resulting from Operations $ 4,725,356 $ 22,798,706 $ 36,956,965
=============== =============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Operations (concluded)
BlackRock BlackRock
BlackRock MuniYield MuniYield
MuniYield Michigan New York
Florida Insured Insured
For the Year Ended October 31, 2006 Fund Fund II, Inc. Fund, Inc.
Investment Income
Interest and amortization of premium and discount earned $ 16,084,301 $ 14,460,918 $ 44,914,449
Dividends from affiliates 150,336 91,927 94,883
--------------- --------------- ---------------
Total income 16,234,637 14,552,845 45,009,332
--------------- --------------- ---------------
Expenses
Investment advisory fees 1,558,020 1,366,227 4,313,544
Interest expense and fees 670,859 880,136 2,942,210
Commission fees 279,082 253,858 772,269
Accounting services 118,420 107,858 254,822
Transfer agent fees 64,516 64,076 119,435
Professional fees 64,373 57,362 67,256
Printing and shareholder reports 17,417 15,549 46,630
Listing fees 16,572 16,605 24,310
Custodian fees 19,882 16,870 44,811
Pricing fees 17,967 15,033 29,363
Trustees'/Directors' fees and expenses 19,527 18,474 34,081
Other 48,628 56,348 69,400
--------------- --------------- ---------------
Total expenses before reimbursement 2,895,263 2,868,396 8,718,131
Reimbursement of expenses (26,824) (16,908) (13,621)
--------------- --------------- ---------------
Total expenses after reimbursement 2,868,439 2,851,488 8,704,510
--------------- --------------- ---------------
Investment income--net 13,366,198 11,701,357 36,304,822
--------------- --------------- ---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net 1,173,822 664,101 6,252
Financial futures contracts and/or forward interest rate
swaps--net 397,207 (175,696) (249,334)
--------------- --------------- ---------------
Total realized gain (loss)--net 1,571,029 488,405 (243,082)
--------------- --------------- ---------------
Change in unrealized appreciation/depreciation on:
Investments--net 2,980,496 956,523 9,337,398
Financial futures contracts and/or forward interest rate
swaps--net (676,888) -- (350,297)
--------------- --------------- ---------------
Total change in unrealized appreciation/depreciation--net 2,303,608 956,523 8,987,101
--------------- --------------- ---------------
Total realized and unrealized gain--net 3,874,637 1,444,928 8,744,019
--------------- --------------- ---------------
Dividends to Preferred Shareholders/Preferred Stock Shareholders
Investment income--net (3,537,371) (3,095,027) (9,387,734)
--------------- --------------- ---------------
Net Increase in Net Assets Resulting from Operations $ 13,703,464 $ 10,051,258 $ 35,661,107
=============== =============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Changes in Net Assets (As Restated for 2005. See Note 6)
BlackRock MuniYield Arizona
Fund, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 4,436,717 $ 4,351,984
Realized gain--net 426,255 710,366
Change in unrealized appreciation--net 1,122,350 (2,915,171)
Dividends and distributions to Preferred Stock shareholders (1,259,966) (613,942)
--------------- ---------------
Net increase in net assets resulting from operations 4,725,356 1,533,237
--------------- ---------------
Dividends & Distributions to Common Stock Shareholders
Investment income--net (3,599,489) (4,139,688)
Realized gain--net (523,554) (98,063)
--------------- ---------------
Net decrease in net assets resulting from dividends and distributions to
Common Stock shareholders (4,123,043) (4,237,751)
--------------- ---------------
Stock Transactions
Value of shares issued to Common Stock shareholders in reinvestment of dividends 335,820 347,232
Offering and underwriting costs, including adjustments, resulting from the
issuance of Preferred Stock 42,343 (229,567)
--------------- ---------------
Net increase in net assets resulting from stock transactions 378,163 117,665
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 980,476 (2,586,849)
Beginning of year 64,630,316 67,217,165
--------------- ---------------
End of year* $ 65,610,792 $ 64,630,316
=============== ===============
* Undistributed investment income--net $ 463,121 $ 801,394
=============== ===============
See Notes to Financial Statements.
(As Restated for 2005. See Note 6)
BlackRock MuniYield California
Fund, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 20,510,282 $ 19,769,525
Realized gain--net 3,468,346 3,325,934
Change in unrealized appreciation--net 4,191,570 (12,989,118)
Dividends to Preferred Stock shareholders (5,371,492) (2,698,791)
--------------- ---------------
Net increase in net assets resulting from operations 22,798,706 7,407,550
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (14,821,497) (18,399,100)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (14,821,497) (18,399,100)
--------------- ---------------
Stock Transactions
Offering and underwriting costs, including adjustments, resulting from the
issuance of Preferred Stock 15,461 (504,510)
--------------- ---------------
Net increase (decrease) in net assets resulting from stock transactions 15,461 (504,510)
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 7,992,670 (11,496,060)
Beginning of year 313,708,162 325,204,222
--------------- ---------------
End of year* $ 321,700,832 $ 313,708,162
=============== ===============
* Undistributed investment income--net $ 1,657,437 $ 1,340,144
=============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Changes in Net Assets BlackRock MuniYield California Insured Fund, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 32,879,584 $ 32,771,189
Realized gain--net 4,037,090 4,558,434
Change in unrealized appreciation--net 8,293,148 (16,405,544)
Dividends to Preferred Stock shareholders (8,252,857) (4,367,576)
--------------- ---------------
Net increase in net assets resulting from operations 36,956,965 16,556,503
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (27,351,515) (30,100,411)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (27,351,515) (30,100,411)
--------------- ---------------
Stock Transactions
Offering and underwriting costs, including adjustments, resulting from the
issuance of Preferred Stock (4,270) (595,687)
--------------- ---------------
Net decrease in net assets resulting from stock transactions (4,270) (595,687)
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 9,601,180 (14,139,595)
Beginning of year 509,065,982 523,205,577
--------------- ---------------
End of year* $ 518,667,162 $ 509,065,982
=============== ===============
* Undistributed investment income--net $ 2,317,280 $ 4,912,758
=============== ===============
See Notes to Financial Statements.
BlackRock MuniYield Florida Fund
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 13,366,198 $ 13,339,050
Realized gain--net 1,571,029 1,319,459
Change in unrealized appreciation/depreciation--net 2,303,608 (4,748,326)
Dividends to Preferred shareholders (3,537,371) (1,961,036)
--------------- ---------------
Net increase in net assets resulting from operations 13,703,464 7,949,147
--------------- ---------------
Dividends to Common Shareholders
Investment income--net (10,968,155) (12,521,937)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Shareholders (10,968,155) (12,521,937)
--------------- ---------------
Share Transactions
Value of shares issued to Common Shareholders in reinvestment of dividends 91,289 --
Offering and underwriting costs, including adjustments, resulting from the
issuance of Preferred Shares (3,184) (280,155)
--------------- ---------------
Net increase (decrease) in net assets resulting from share transactions 88,105 (280,155)
--------------- ---------------
Net Assets Applicable to Common Shares
Total increase (decrease) in net assets applicable to Common Shares 2,823,414 (4,852,945)
Beginning of year 202,042,040 206,894,985
--------------- ---------------
End of year* $ 204,865,454 $ 202,042,040
=============== ===============
* Undistributed investment income--net $ 1,046,367 $ 2,185,695
=============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Changes in Net Assets (concluded) BlackRock MuniYield Michigan Insured Fund II, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 11,701,357 $ 11,882,846
Realized gain--net 488,405 2,125,649
Change in unrealized appreciation/depreciation--net 956,523 (9,184,637)
Dividends to Preferred Stock shareholders (3,095,027) (1,750,817)
--------------- ---------------
Net increase in net assets resulting from operations 10,051,258 3,073,041
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (9,351,799) (10,914,778)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (9,351,799) (10,914,778)
--------------- ---------------
Stock Transactions
Value of shares issued to Common Stock shareholders in reinvestment of dividends 227,419 112,030
Offering and underwriting costs, including adjustments, resulting from the
issuance of Preferred Stock 24,274 (229,567)
--------------- ---------------
Net increase (decrease) in net assets resulting from stock transactions 251,693 (117,537)
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 951,152 (7,959,274)
Beginning of year 175,264,389 183,223,663
--------------- ---------------
End of year* $ 176,215,541 $ 175,264,389
=============== ===============
* Undistributed investment income--net $ 914,458 $ 1,659,927
=============== ===============
See Notes to Financial Statements.
BlackRock MuniYield New York Insured Fund, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 36,304,822 $ 36,961,564
Realized gain (loss)--net (243,082) 875,940
Change in unrealized appreciation/depreciation--net 8,987,101 (20,848,183)
Dividends to Preferred Stock shareholders (9,387,734) (5,032,367)
--------------- ---------------
Net increase in net assets resulting from operations 35,661,107 11,956,954
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (30,176,161) (33,134,608)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (30,176,161) (33,134,608)
--------------- ---------------
Stock Transactions
Offering and underwriting costs, including adjustments, resulting from the
issuance of Preferred Stock (5,720) (595,687)
--------------- ---------------
Net decrease in net assets resulting from stock transactions (5,720) (595,687)
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 5,479,226 (21,773,341)
Beginning of year 562,474,320 584,247,661
--------------- ---------------
End of year* $ 567,953,546 $ 562,474,320
=============== ===============
* Undistributed investment income--net $ 2,979,732 $ 6,238,805
=============== ===============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Financial Highlights (As Restated for 2005, 2004, 2003 and 2002. See Note 6)
BlackRock MuniYield Arizona Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of year $ 14.39 $ 15.04 $ 14.64 $ 14.53 $ 14.19
------------ ------------ ------------ ------------ ------------
Investment income--net .98++ .97++ .98++ 1.00++ .97
Realized and unrealized gain (loss)--net .36 (.49) .40 .05 .26
Less dividends and distributions to Preferred Stock
shareholders:
Investment income--net (.26) (.14) (.06) (.06) (.09)
Realized gain--net (.02) --++++ -- -- --
------------ ------------ ------------ ------------ ------------
Total from investment operations 1.06 .34 1.32 .99 1.14
------------ ------------ ------------ ------------ ------------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.80) (.92) (.92) (.88) (.80)
Realized gain--net (.12) (.02) -- -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions to Common Stock
shareholders (.92) (.94) (.92) (.88) (.80)
------------ ------------ ------------ ------------ ------------
Offering and underwriting costs, including
adjustments, resulting from the issuance of
Preferred Stock --+++ (.05) -- -- --
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 14.53 $ 14.39 $ 15.04 $ 14.64 $ 14.53
============ ============ ============ ============ ============
Market price per share, end of year $ 14.79 $ 16.03 $ 15.10 $ 14.13 $ 13.25
============ ============ ============ ============ ============
Total Investment Return*
Based on net asset value per share 7.47% 1.91% 9.40% 7.19% 8.60%
============ ============ ============ ============ ============
Based on market price per share (1.80%) 13.07% 13.80% 13.45% 6.54%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of reimbursement and
excluding interest expense** 1.33% 1.20% 1.19% 1.18% 1.28%
============ ============ ============ ============ ============
Total expenses, net of reimbursement** 1.70% 1.51% 1.39% 1.37% 1.61%
============ ============ ============ ============ ============
Total expenses** 1.71% 1.52% 1.40% 1.38% 1.61%
============ ============ ============ ============ ============
Total investment income--net** 6.90% 6.54% 6.65% 6.79% 6.86%
============ ============ ============ ============ ============
Amount of dividends to Preferred Stock shareholders 1.83% .91% .42% .42% .61%
============ ============ ============ ============ ============
Investment income--net, to Common Stock shareholders 5.07% 5.63% 6.23% 6.37% 6.25%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 2.92% 1.90% .92% .91% 1.26%
============ ============ ============ ============ ============
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 65,611 $ 64,630 $ 67,217 $ 65,234 $ 64,699
============ ============ ============ ============ ============
Preferred Stock outstanding at liquidation
preference, end of year (in thousands) $ 40,300 $ 40,300 $ 30,300 $ 30,300 $ 30,300
============ ============ ============ ============ ============
Portfolio turnover 31% 28% 21% 24% 32%
============ ============ ============ ============ ============
Leverage
Asset coverage per $1,000 $ 2,628 $ 2,604 $ 3,218 $ 3,153 $ 3,135
============ ============ ============ ============ ============
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 716 $ 462 $ 222 $ 220 $ 305
============ ============ ============ ============ ============
Series B--Investment income--net $ 715 $ 473 $ 236 $ 237 $ 324
============ ============ ============ ============ ============
Series C++++++--Investment income--net $ 770 $ 99 -- -- --
============ ============ ============ ============ ============
* Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially different
returns. Total investment returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
++ Based on average shares outstanding.
++++ Amount is less than $(.01) per share.
++++++ Series C was issued on August 31, 2005.
+++ Amount is less than $.01 per share.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Financial Highlights (As Restated for 2005, 2004, 2003 and 2002. See Note 6)
BlackRock MuniYield California Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of year $ 14.73 $ 15.27 $ 15.17 $ 15.14 $ 15.22
------------ ------------ ------------ ------------ ------------
Investment income--net* .96 .93 1.02 1.06 1.07
Realized and unrealized gain (loss)--net .37 (.46) .12 .04 (.06)
Less dividends and distributions to Preferred Stock
shareholders:
Investment income--net (.25) (.13) (.07) (.10) (.12)
Realized gain--net -- -- -- --++ --++
------------ ------------ ------------ ------------ ------------
Total from investment operations 1.08 .34 1.07 1.00 .89
------------ ------------ ------------ ------------ ------------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.70) (.86) (.97) (.97) (.97)
Realized gain--net -- -- -- --++ --++
------------ ------------ ------------ ------------ ------------
Total dividends and distributions to Common Stock
shareholders (.70) (.86) (.97) (.97) (.97)
------------ ------------ ------------ ------------ ------------
Offering and underwriting costs, including
adjustments, resulting from the issuance of
Preferred Stock --++++++ (.02) -- -- --
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 15.11 $ 14.73 $ 15.27 $ 15.17 $ 15.14
============ ============ ============ ============ ============
Market price per share, end of year $ 14.00 $ 13.37 $ 14.43 $ 14.15 $ 14.46
============ ============ ============ ============ ============
Total Investment Return**
Based on net asset value per share 8.03% 2.59% 7.74% 7.14% 6.14%
============ ============ ============ ============ ============
Based on market price per share 10.28% (1.46%) 9.16% 4.64% 2.18%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of reimbursement and excluding
interest expense*** 1.06% .98% .96% .95% .99%
============ ============ ============ ============ ============
Expenses, net of reimbursement*** 1.51% 1.13% 1.12% 1.16% 1.26%
============ ============ ============ ============ ============
Total expenses*** 1.52% 1.13% 1.12% 1.17% 1.26%
============ ============ ============ ============ ============
Total investment income--net*** 6.51% 6.16% 6.79% 6.93% 7.13%
============ ============ ============ ============ ============
Amount of dividends to Preferred Stock shareholders 1.70% .84% .44% .63% .77%
============ ============ ============ ============ ============
Investment income--net, to Common Stock shareholders 4.81% 5.32% 6.35% 6.30% 6.36%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 3.07% 1.88% 1.02% 1.46% 1.76%
============ ============ ============ ============ ============
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 321,701 $ 313,708 $ 325,204 $ 323,155 $ 322,345
============ ============ ============ ============ ============
Preferred Stock outstanding at liquidation
preference, end of year (in thousands) $ 175,000 $ 175,000 $ 140,000 $ 140,000 $ 140,000
============ ============ ============ ============ ============
Portfolio turnover 39% 53% 29% 18% 39%
============ ============ ============ ============ ============
Leverage
Asset coverage per $1,000 $ 2,838 $ 2,793 $ 3,323 $ 3,308 $ 3,302
============ ============ ============ ============ ============
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 808 $ 482 $ 270 $ 569 $ 607
============ ============ ============ ============ ============
Series B--Investment income--net $ 747 $ 451 $ 241 $ 217 $ 322
============ ============ ============ ============ ============
Series C--Investment income--net $ 751 $ 453 $ 250 $ 207 $ 292
============ ============ ============ ============ ============
Series D++++--Investment income--net $ 742 $ 70 -- -- --
============ ============ ============ ============ ============
* Based on average shares outstanding.
** Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially different
returns. Total investment returns exclude the effects of sales charges.
*** Do not reflect the effect of dividends to Preferred Stock shareholders.
++ Amount is less than $(.01) per share.
++++ Series D was issued on September 21, 2005.
++++++ Amount is less than $.01 per share.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Financial Highlights (As Restated for 2005, 2004, 2003 and 2002. See Note 6)
BlackRock MuniYield California Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of year $ 14.82 $ 15.23 $ 15.10 $ 15.26 $ 15.44
------------ ------------ ------------ ------------ ------------
Investment income--net .96+++ .95+++ .94+++ .95+++ .95
Realized and unrealized gain (loss)--net .35 (.33) .13 (.18) (.22)
Less dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.24) (.13) (.06) (.06) (.09)
Realized gain--net -- -- -- -- --++++++
------------ ------------ ------------ ------------ ------------
Total from investment operations 1.07 .49 1.01 .71 .64
------------ ------------ ------------ ------------ ------------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.80) (.88) (.88) (.87) (.81)
Realized gain--net -- -- -- -- (.01)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions to Common Stock
shareholders (.80) (.88) (.88) (.87) (.82)
------------ ------------ ------------ ------------ ------------
Offering and underwriting costs, including
adjustments, resulting from the issuance of
Preferred Stock --++++++ (.02) -- -- --
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 15.09 $ 14.82 $ 15.23 $ 15.10 $ 15.26
============ ============ ============ ============ ============
Market price per share, end of year $ 14.64 $ 14.16 $ 13.73 $ 13.82 $ 13.68
============ ============ ============ ============ ============
Total Investment Return*
Based on net asset value per share 7.57% 3.55% 7.54% 5.29% 4.68%
============ ============ ============ ============ ============
Based on market price per share 9.22% 9.75% 5.93% 7.50% .20%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of reimbursement and excluding
reorganization and interest expenses** 1.03% .96% .95% .94% .96%
============ ============ ============ ============ ============
Total expenses, net of reimbursement and excluding
reorganization expenses** 1.59% 1.27% 1.08% 1.08% 1.15%
============ ============ ============ ============ ============
Total expenses, excluding reorganization expenses** 1.60% 1.27% 1.08% 1.08% 1.15%
============ ============ ============ ============ ============
Total expenses** 1.60% 1.27% 1.08% 1.08% 1.19%
============ ============ ============ ============ ============
Total investment income--net** 6.46% 6.29% 6.29% 6.20% 6.38%
============ ============ ============ ============ ============
Amount of dividends to Preferred Stock shareholders 1.62% .84% .43% .37% .56%
============ ============ ============ ============ ============
Investment income--net, to Common Stock shareholders 4.84% 5.45% 5.86% 5.83% 5.82%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 3.00% 1.86% .96% .85% 1.25%
============ ============ ============ ============ ============
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 518,667 $ 509,066 $ 523,206 $ 518,786 $ 524,485
============ ============ ============ ============ ============
Preferred Stock outstanding at liquidation
preference, end of year (in thousands) $ 275,000 $ 275,000 $ 230,000 $ 230,000 $ 230,000
============ ============ ============ ============ ============
Portfolio turnover 27% 39% 63% 47% 63%
============ ============ ============ ============ ============
Leverage
Asset coverage per $1,000 $ 2,886 $ 2,851 $ 3,275 $ 3,256 $ 3,280
============ ============ ============ ============ ============
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 744 $ 478 $ 246 $ 216 $ 359
============ ============ ============ ============ ============
Series B--Investment income--net $ 725 $ 463 $ 238 $ 212 $ 324
============ ============ ============ ============ ============
Series C--Investment income--net $ 730 $ 441 $ 224 $ 204 $ 320
============ ============ ============ ============ ============
Series D++--Investment income--net $ 800 $ 480 $ 249 $ 242 $ 203
============ ============ ============ ============ ============
Series E++--Investment income--net $ 727 $ 448 $ 236 $ 196 $ 201
============ ============ ============ ============ ============
Series F++++--Investment income--net $ 770 $ 62 -- -- --
============ ============ ============ ============ ============
* Total investment returns based on market value, which can be significantly greater or
lesser than the net asset value, may result in substantially different returns. Total
investment returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to
Preferred Stock shareholders.
++ Series D and E were issued on February 4, 2002.
++++ Series F was issued on September 21, 2005.
++++++ Amount is less than $(.01) per share.
+++ Based on average shares outstanding.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Financial Highlights (As Restated for 2005, 2004, 2003 and 2002. See Note 6)
BlackRock MuniYield Florida Fund
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of year $ 14.91 $ 15.27 $ 14.97 $ 14.97 $ 14.81
------------ ------------ ------------ ------------ ------------
Investment income--net .99+++ .98+++ 1.00+++ 1.06+++ 1.03
Realized and unrealized gain (loss)--net .28 (.26) .29 (.07) .09
Less dividends and distributions to Preferred
Shareholders:
Investment income--net (.26) (.14) (.07) (.07) (.09)
Realized gain--net -- -- -- -- --++
------------ ------------ ------------ ------------ ------------
Total from investment operations 1.01 .58 1.22 .92 1.03
------------ ------------ ------------ ------------ ------------
Less dividends and distributions to Common
Shareholders:
Investment income--net (.81) (.92) (.92) (.92) (.87)
Realized gain--net -- -- -- -- --++
------------ ------------ ------------ ------------ ------------
Total dividends and distributions to Common
Shareholders (.81) (.92) (.92) (.92) (.87)
------------ ------------ ------------ ------------ ------------
Offering and underwriting costs, including
adjustments, resulting from the issuance of
Preferred Shares --++ (.02) -- -- --
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 15.11 $ 14.91 $ 15.27 $ 14.97 $ 14.97
============ ============ ============ ============ ============
Market price per share, end of year $ 14.35 $ 14.93 $ 14.28 $ 13.80 $ 13.34
============ ============ ============ ============ ============
Total Investment Return*
Based on net asset value per share 7.24% 3.98% 8.99% 6.76% 7.80%
============ ============ ============ ============ ============
Based on market price per share 1.71% 11.34% 10.57% 10.44% 1.77%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Common Shares
Total expenses, net of reimbursement and
excluding interest expense** 1.09% 1.05% 1.03% 1.04% 1.06%
============ ============ ============ ============ ============
Total expenses, net of reimbursement** 1.42% 1.25% 1.18% 1.18% 1.24%
============ ============ ============ ============ ============
Total expenses** 1.44% 1.25% 1.19% 1.19% 1.24%
============ ============ ============ ============ ============
Total investment income--net** 6.63% 6.46% 6.67% 7.01% 7.00%
============ ============ ============ ============ ============
Amount of dividends to Preferred Shareholders 1.75% .95% .48% .45% .64%
============ ============ ============ ============ ============
Investment income--net, to Common Shareholders 4.88% 5.51% 6.19% 6.56% 6.36%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Preferred Shares
Dividends to Preferred Shareholders 3.22% 2.01% 1.03% .97% 1.34%
============ ============ ============ ============ ============
Supplemental Data
Net assets applicable to Common Shares,
end of year (in thousands) $ 204,865 $ 202,042 $ 206,895 $ 202,890 $ 202,919
============ ============ ============ ============ ============
Preferred Shares outstanding at liquidation
preference, end of year (in thousands) $ 110,000 $ 110,000 $ 95,000 $ 95,000 $ 95,000
============ ============ ============ ============ ============
Portfolio turnover 46% 42% 33% 35% 36%
============ ============ ============ ============ ============
Leverage
Asset coverage per $1,000 $ 2,862 $ 2,837 $ 3,178 $ 3,136 $ 3,136
============ ============ ============ ============ ============
Dividends Per Share on Preferred Shares Outstanding
Series A--Investment income--net $ 811 $ 507 $ 254 $ 247 $ 337
============ ============ ============ ============ ============
Series B--Investment income--net $ 796 $ 487 $ 263 $ 242 $ 333
============ ============ ============ ============ ============
Series C++++--Investment income--net $ 800 $ 110 -- -- --
============ ============ ============ ============ ============
* Total investment returns based on market value, which can be significantly greater or
lesser than the net asset value, may result in substantially different returns. Total
investment returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Shareholders.
++ Amount is less than $(.01) per share.
++++ Series C was issued on August 31, 2005.
+++ Based on average shares outstanding.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Financial Highlights (As Restated for 2005, 2004, 2003 and 2002. See Note 6)
BlackRock MuniYield Michigan Insured Fund II, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of year $ 14.54 $ 15.21 $ 15.21 $ 14.91 $ 14.97
------------ ------------ ------------ ------------ ------------
Investment income--net .97+++ .99+++ 1.00+++ 1.02+++ 1.00
Realized and unrealized gain (loss)--net .13 (.58) --+++++ .24 (.07)
Less dividends to Preferred Stock shareholders
from investment income (.26) (.15) (.07) (.07) (.10)
------------ ------------ ------------ ------------ ------------
Total from investment operations .84 .26 .93 1.19 .83
------------ ------------ ------------ ------------ ------------
Less dividends to Common Stock shareholders
from investment income (.78) (.91) (.93) (.89) (.89)
------------ ------------ ------------ ------------ ------------
Offering and underwriting costs, including
adjustments, resulting from the issuance of
Preferred Stock --++++++++ (.02) -- -- --
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 14.60 $ 14.54 $ 15.21 $ 15.21 $ 14.91
============ ============ ============ ============ ============
Market price per share, end of year $ 13.97 $ 14.41 $ 14.54 $ 13.75 $ 13.45
============ ============ ============ ============ ============
Total Investment Return*
Based on net asset value per share 6.09% 1.73% 6.78% 8.82% 6.36%
============ ============ ============ ============ ============
Based on market price per share 2.42% 5.47% 12.91% 9.06% 3.70%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of reimbursement and
excluding interest expense** 1.13% 1.07% 1.05% 1.01% 1.12%
============ ============ ============ ============ ============
Total expenses, net of reimbursement** 1.64% 1.46% 1.26% 1.20% 1.39%
============ ============ ============ ============ ============
Total expenses** 1.65% 1.47% 1.28% 1.22% 1.39%
============ ============ ============ ============ ============
Total investment income--net** 6.72% 6.57% 6.61% 6.73% 6.91%
============ ============ ============ ============ ============
Amount of dividends to Preferred Stock shareholders 1.78% .97% .47% .47% .66%
============ ============ ============ ============ ============
Investment income--net, to Common Stock shareholders 4.94% 5.60% 6.14% 6.26% 6.25%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 3.13% 1.96% .96% .97% 1.36%
============ ============ ============ ============ ============
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 176,216 $ 175,264 $ 183,224 $ 183,237 $ 179,607
============ ============ ============ ============ ============
Preferred Stock outstanding at liquidation
preference, end of year (in thousands) $ 99,000 $ 99,000 $ 89,000 $ 89,000 $ 89,000
============ ============ ============ ============ ============
Portfolio turnover 14% 19% 35% 27% 35%
============ ============ ============ ============ ============
Leverage
Asset coverage per $1,000 $ 2,780 $ 2,770 $ 3,059 $ 3,059 $ 3,018
============ ============ ============ ============ ============
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 779 $ 488 $ 236 $ 243 $ 343
============ ============ ============ ============ ============
Series B++--Investment income--net $ 783 $ 494 $ 247 $ 245 $ 136
============ ============ ============ ============ ============
Series C++++--Investment income--net $ 791 $ 14 -- -- --
============ ============ ============ ============ ============
* Total investment returns based on market value, which can be significantly greater or
lesser than the net asset value, may result in substantially different returns. Total
investment returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
++ Series B was issued on May 31, 2002.
++++ Series C was issued on October 19, 2005.
+++ Based on average shares outstanding.
+++++ Amount is less than $(.01) per share.
++++++++ Amount is less than $.01 per share.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Financial Highlights (As Restated for 2005, 2004, 2003 and 2002. See Note 6)
BlackRock MuniYield New York Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of year $ 14.26 $ 14.81 $ 14.81 $ 14.83 $ 15.01
------------ ------------ ------------ ------------ ------------
Investment income--net .92+++ .94+++ .91+++ .97+++ .94
Realized and unrealized gain (loss)--net .23 (.50) (.01) (.09) (.19)
Less dividends and distributions to Preferred Stock
shareholders:
Investment income--net (.24) (.13) (.06) (.07) (.10)
Realized gain--net -- -- -- -- --++
------------ ------------ ------------ ------------ ------------
Total from investment operations .91 .31 .84 .81 .65
------------ ------------ ------------ ------------ ------------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.77) (.84) (.84) (.83) (.83)
Realized gain--net -- -- -- -- --++
------------ ------------ ------------ ------------ ------------
Total dividends and distributions to Common Stock
shareholders (.77) (.84) (.84) (.83) (.83)
------------ ------------ ------------ ------------ ------------
Offering and underwriting costs, including
adjustments, resulting from the issuance of
Preferred Stock --++ (.02) -- -- --
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 14.40 $ 14.26 $ 14.81 $ 14.81 $ 14.83
============ ============ ============ ============ ============
Market price per share, end of year $ 14.10 $ 13.17 $ 13.20 $ 13.25 $ 13.36
============ ============ ============ ============ ============
Total Investment Return*
Based on net asset value per share 6.71% 2.53% 6.53% 6.19% 4.97%
============ ============ ============ ============ ============
Based on market price per share 13.13% 6.24% 6.13% 5.45% 1.24%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of reimbursement and
excluding interest expense** 1.03% .96% .94% .94% .96%
============ ============ ============ ============ ============
Total expenses, net of reimbursement** 1.56% 1.31% 1.13% 1.15% 1.08%
============ ============ ============ ============ ============
Total expenses** 1.56% 1.31% 1.13% 1.16% 1.08%
============ ============ ============ ============ ============
Total investment income--net** 6.50% 6.37% 6.23% 6.49% 6.37%
============ ============ ============ ============ ============
Amount of dividends to Preferred Stock shareholders 1.68% .87% .42% .50% .66%
============ ============ ============ ============ ============
Investment income--net, to Common Stock shareholders 4.82% 5.50% 5.81% 5.99% 5.71%
============ ============ ============ ============ ============
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 3.09% 1.91% .95% 1.13% 1.49%
============ ============ ============ ============ ============
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 567,954 $ 562,474 $ 584,248 $ 584,025 $ 584,793
============ ============ ============ ============ ============
Preferred Stock outstanding at liquidation
preference, end of year (in thousands) $ 304,000 $ 304,000 $ 259,000 $ 259,000 $ 259,000
============ ============ ============ ============ ============
Portfolio turnover 43% 35% 18% 45% 72%
============ ============ ============ ============ ============
Leverage
Asset coverage per $1,000 $ 2,868 $ 2,850 $ 3,256 $ 3,255 $ 3,258
============ ============ ============ ============ ============
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 820 $ 493 $ 254 $ 249 $ 334
============ ============ ============ ============ ============
Series B--Investment income--net $ 727 $ 448 $ 203 $ 232 $ 305
============ ============ ============ ============ ============
Series C--Investment income--net $ 759 $ 469 $ 240 $ 214 $ 356
============ ============ ============ ============ ============
Series D--Investment income--net $ 735 $ 464 $ 231 $ 454 $ 503
============ ============ ============ ============ ============
Series E--Investment income--net $ 824 $ 496 $ 251 $ 255 $ 356
============ ============ ============ ============ ============
Series F++++--Investment income--net $ 766 $ 65 -- -- --
============ ============ ============ ============ ============
* Total investment returns based on market value, which can be significantly greater or
lesser than the net asset value, may result in substantially different returns. Total
investment returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
++ Amount is less than $(.01) per share.
++++ Series F was issued on September 21, 2005.
+++ Based on average shares outstanding.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements
1. Significant Accounting Policies:
On September 29, 2006, MuniYield Arizona Fund, Inc., MuniYield California
Fund, Inc., MuniYield California Insured Fund, Inc., MuniYield Florida Fund,
MuniYield Michigan Insured Fund II, Inc. and MuniYield New York Insured Fund,
Inc. were renamed BlackRock MuniYield Arizona Fund, Inc., BlackRock MuniYield
California Fund, Inc., BlackRock MuniYield California Insured Fund, Inc.,
BlackRock MuniYield Florida Fund, BlackRock MuniYield Michigan Insured Fund
II, Inc. and BlackRock MuniYield New York Insured Fund, Inc. (the "Funds" or
individually as the "Fund"). The Funds are registered under the Investment
Company Act of 1940, as amended, as non-diversified, closed-end management
investment companies. The Funds' financial statements are prepared in
conformity with U.S. generally accepted accounting principles, which may
require the use of management accruals and estimates. Actual results may
differ from these estimates. The Funds determine, and make available for
publication, the net asset values of their Common Stock/Shares on a daily
basis. Common Stock shares and Common Shares are listed on the New York Stock
Exchange under the symbol MYC for BlackRock MuniYield California Fund, Inc.,
MCA for BlackRock MuniYield California Insured Fund, Inc., MYF for BlackRock
MuniYield Florida Fund, MYM for BlackRock MuniYield Michigan Insured Fund II,
Inc. and MYN for BlackRock MuniYield New York Insured Fund, Inc. Common Stock
is listed on the American Stock Exchange under the symbol MZA for BlackRock
MuniYield Arizona Fund, Inc. The following is a summary of significant
accounting policies followed by the Funds.
(a) Valuation of investments--Municipal bonds are traded primarily in the over-
the-counter ("OTC") markets and are valued at the last available bid price in
the OTC market or on the basis of values as obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Funds under the general
direction of each Fund's Board of Directors/Trustees. Such valuations and
procedures are reviewed periodically by each Fund's Board of Directors/
Trustees. Financial futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of such
exchanges. Options written or purchased are valued at the last sale price in
the case of exchange-traded options. Options traded in the OTC market are
valued at the last asked price (options written) or the last bid price
(options purchased). Swap agreements are valued by quoted fair valuations
received daily by the Funds' pricing service. Short-term investments with a
remaining maturity of 60 days or less are valued at amortized cost, which
approximates market value, under which method the investment is valued at cost
and any premium or discount is amortized on a straight line basis to maturity.
Investments in open-end investment companies are valued at their net asset
value each business day. Securities and other assets for which market
quotations are not readily available are valued at fair value as determined
in good faith by or under the direction of each Fund's Board of Directors/
Trustees.
(b) Derivative financial instruments--Each Fund may engage in various
portfolio investment strategies both to increase the return of the Fund and to
hedge, or protect, their exposure to interest rate movements and movements in
the securities markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
* Financial futures contracts--Each Fund may purchase or sell financial
futures contracts and options on such financial futures contracts. Financial
futures contracts are contracts for delayed delivery of securities at a
specific future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits, and maintains as collateral, such initial margin
as required by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker an amount
of cash equal to the daily fluctuation in value of the contract. Such receipts
or payments are known as variation margin and are recorded by the Fund as
unrealized gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
* Options--Each Fund may purchase and write call and put options. When the
Fund writes an option, an amount equal to the premium received by the Fund is
reflected as an asset and an equivalent liability. The amount of the liability
is subsequently marked-to-market to reflect the current market value of the
option written. When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or deducted from)
the basis of the security acquired or deducted from (or added to) the proceeds
of the security sold. When an option expires (or the Fund enters into a
closing transaction), the Fund realizes a gain or loss on the option to the
extent of the premiums received or paid (or gain or loss to the extent the
cost of the closing transaction exceeds the premium paid or received).
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
Written and purchased options are non-income producing investments.
* Forward interest rate swaps--Each Fund may enter into forward interest rate
swaps. In a forward interest rate swap, the Fund and the counterparty agree to
make periodic net payments on a specified notional contract amount, commencing
on a specified future effective date, unless terminated earlier. When the
agreement is closed, the Fund records a realized gain or loss in an amount
equal to the value of the agreement.
* Swaps--Each Fund may enter into swap agreements, which are OTC contracts in
which each Fund and a counterparty agree to make periodic net payments on a
specified notional amount. The net payments can be made for a set period of
time or may be triggered by a predetermined credit event. The net periodic
payments may be based on a fixed or variable interest rate; the change in
market value of a specified security, basket of securities or index; or the
return generated by a security. These periodic payments received or made by
each Fund are recorded in the accompanying Statements of Operations as
realized gains or losses, respectively. Gains or losses are also realized upon
termination of the swap agreements. Swaps are marked-to-market daily and
changes in value are recorded as unrealized appreciation (depreciation). Risks
include changes in the returns of the underlying instruments, failure of the
counterparties to perform under the contracts' terms and the possible lack of
liquidity with respect to the swap agreements.
(c) Municipal Bonds Held in Trust--Certain Funds invest in leveraged residual
certificates ("TOB Residuals") issued by tender option bond trusts ("TOBs"). A
TOB is established by a third party sponsor forming a special purpose entity,
into which a Fund, or an agent on behalf of the Fund, transfers municipal
securities. A TOB typically issues two classes of beneficial interests: short-
term floating rate certificates, which are sold to third party investors, and
residual certificates, which are generally issued to the Fund which made the
transfer or to affiliates of the Fund. Each Fund's transfers of the municipal
securities to a TOB do not qualify for sale treatment under Statement of
Financial Accounting Standards No. 140 "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities," therefore the
municipal securities deposited into a TOB are presented in the Funds'
schedules of investments and the proceeds from the transactions are reported
as a liability for trust certificates. Similarly, proceeds from residual
certificates issued to affiliates, if any, from the transaction are included
in the liability for trust certificates. Interest income from the underlying
security 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 reported as expenses of a
Fund. The floating rate certificates have interest rates that generally reset
weekly and their holders have the option to tender certificates to the TOB for
redemption at par at each reset date. The residual interests held by the Funds
include the right of the Funds (1) to cause the holders of a proportional
share of floating rate certificates to tender their certificates at par, and
(2) to transfer a corresponding share of the municipal securities from the TOB
to the Funds. At October 31, 2006, the aggregate value of the underlying
municipal securities transferred to TOBs and the liability for trust
certificates were:
Underlying
Municipal
Liability for Range of Bonds
Trust Interest Transferred
Certificates Rates to TOBs
BlackRock MuniYield 3.59% -
Arizona Fund, Inc. $ 6,430,000 3.60% $ 14,002,249
BlackRock MuniYield
California Fund, Inc. $59,342,500 3.56% $125,778,553
BlackRock MuniYield
California Insured 3.56% -
Fund, Inc. $80,002,222 5.20% $158,198,562
BlackRock MuniYield
Florida Fund $17,047,500 3.60% $ 37,293,752
BlackRock MuniYield
Michigan Insured 3.60% -
Fund II, Inc. $23,683,781 5.75% $ 50,025,121
BlackRock MuniYield
New York Insured 3.60% -
Fund, Inc. $84,995,000 3.63% $184,649,608
Financial transactions executed through TOBs generally will under perform the
market for fixed rate municipal bonds in a rising interest rate environment,
but tend to outperform the market for fixed rate municipal bonds when interest
rates decline or remain relatively stable. Should short-term interest rates
rise, the Funds' investment in TOB Residuals likely will adversely affect the
Funds' investment income-net and distributions to shareholders. Fluctuations
in the market value of municipal securities deposited into the TOB may
adversely affect the Fund's net asset values per share.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
While the Funds' investment policies and restrictions expressly permit
investments in inverse floating rate securities such as TOB Residuals, they
generally do not allow the Funds to borrow money for purposes of making
investments. The Funds' management believes that the Funds' restrictions on
borrowings do not apply to the secured borrowings deemed to have occurred for
accounting purposes.
(d) Income taxes--It is each Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
(e) Security transactions and investment income--Security transactions are
recorded on the dates the trans-actions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Funds amortize all
premiums and discounts on debt securities.
(f) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
(g) Offering costs--Direct expenses relating to the public offering of each
Fund's Preferred Stock/Shares were charged to Common Stock/Shares capital at
the time of issuance of the shares. Any adjustments to estimates of offering
costs were recorded to capital.
(h) Bank overdraft--The BlackRock MuniYield New York Insured Fund, Inc.
recorded a bank overdraft, which resulted from management estimates of
available cash.
(i) Recent accounting pronouncements--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
109." FIN 48 prescribes the minimum recognition threshold a tax position must
meet in connection with accounting for uncertainties in income tax positions
taken or expected to be taken by an entity including mutual funds before being
measured and recognized in the financial statements. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006. The impact on
each of the Fund's financial statements, if any, is currently being assessed.
In addition, in September 2006, Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" ("FAS 157"), was issued and is effective
for fiscal years beginning after November 15, 2007. FAS 157 defines fair
value, establishes a framework for measuring fair value and expands
disclosures about fair value measurements. Management is currently evaluating
the implications of FAS 157. At this time its impact on each of the Fund's
financial statements has not been determined.
(j) Reclassification for BlackRock MuniYield California Insured Fund, Inc.--
U.S. generally accepted accounting principles require that certain components
of net assets be adjusted to reflect permanent differences between financial
and tax reporting. Accordingly, during the current year, $129,310 has been
reclassified between accumulated net realized capital losses and undistributed
net investment income as a result of permanent differences attributable to
amortization methods on fixed income securities. This reclassification has no
effect on net assets or net asset values per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM"), and its affiliates, including Fund Asset
Management Management, L.P. ("FAM"), with BlackRock, Inc. to create a new
independent company. Merrill Lynch has a 49.8% economic interest and a 45%
voting interest in the combined company and The PNC Financial Services Group,
Inc. has approximately a 34% economic and voting interest. The new company
operates under the BlackRock name and is governed by a board of directors with
a majority of independent members.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
On August 15, 2006, shareholders of each Fund approved a new Investment
Advisory Agreement with BlackRock Advisors, Inc. (the "Manager"), an indirect,
wholly owned subsidiary of BlackRock, Inc. BlackRock Advisors, Inc. was
recently reorganized into a limited liability company and renamed BlackRock
Advisors, LLC. The new Investment Advisory Agreement between each Fund and the
Manager became effective on September 29, 2006. Prior to September 29, 2006,
FAM was the Investment Adviser. The general partner of FAM was Princeton
Services, Inc. ("PSI"), an indirect, wholly owned subsidiary of Merrill Lynch,
which was the limited partner.
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 the Fund. For such services, each Fund
pays a monthly fee at an annual rate of .50% of the Fund's average daily net
assets, including proceeds from the issuance of Preferred Stock/Shares. The
Manager (and formerly FAM) has agreed to reimburse its management fee by the
amount of management fees each Fund pays to the Manager and/or FAM indirectly
through its investments described below:
For the Period
Nov. 1, 2005 to
Sept. 29, 2006
Reimbursement
Investment by FAM
BlackRock MuniYield CMA Arizona Municipal
Arizona Fund, Inc. Money Fund $ 4,634
BlackRock MuniYield CMA California Municipal
California Fund, Inc. Money Fund $35,338
BlackRock MuniYield
California Insured CMA California Municipal
Fund, Inc. Money Fund $19,311
BlackRock MuniYield Merrill Lynch Institutional
Florida Fund Tax-Exempt Fund/
CMA Florida Municipal
Money Fund $23,533
BlackRock MuniYield
Michigan Insured CMA Michigan Municipal
Fund II, Inc. Money Fund $15,942
BlackRock MuniYield
New York Insured CMA New York Municipal
Fund, Inc. Money Fund $10,281
For the Period
Sept. 30, 2006 to
Oct. 31, 2006
Reimbursement
Investment by the Manager
BlackRock MuniYield CMA Arizona Municipal
Arizona Fund, Inc. Money Fund $ 577
BlackRock MuniYield CMA California Municipal
California Fund, Inc. Money Fund $ 1,267
BlackRock MuniYield
California Insured CMA California Municipal
Fund, Inc. Money Fund $ 856
BlackRock MuniYield CMA Florida Municipal
Florida Fund Money Fund $ 3,291
BlackRock MuniYield
Michigan Insured CMA Michigan Municipal
Fund II, Inc. Money Fund $ 966
BlackRock MuniYield
New York Insured CMA New York Municipal
Fund, Inc. Money Fund $ 3,340
In addition, the Manager has entered into a sub-advisory agreement with
BlackRock Investment Management, LLC, an affiliate of the Manager, under which
the Manager pays the Sub-Adviser, for services it provides, a fee equal to 59%
of the management fee paid by each Fund to the Manager.
For the year ended October 31, 2006, the Funds reimbursed the Manager and/or
FAM for certain accounting services. The reimbursements were as follows:
For the Period For the Period
Nov. 1, 2005 to Sept. 30, 2006
Sept. 29, 2006 to Oct. 31, 2006
Reimbursement Reimbursement
to FAM to the Manager
BlackRock MuniYield
Arizona Fund, Inc. $ 2,185 $ 170
BlackRock MuniYield
California Fund, Inc. $10,099 $ 796
BlackRock MuniYield
California Insured Fund, Inc. $16,121 $ 1,272
BlackRock MuniYield
Florida Fund $ 6,672 $ 507
BlackRock MuniYield
Michigan Insured
Fund II, Inc. $ 5,771 $ 444
BlackRock MuniYield
New York Insured Fund, Inc. $17,870 $ 1,250
Prior to September 29, 2006, certain officers and/or directors/trustees of the
Funds were officers and/or directors of Merrill Lynch, FAM, MLIM and/or PSI.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
Commencing September 29, 2006, certain officers and/or directors/trustees of
the Funds are officers and/or directors of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended October 31, 2006 were as follows:
Total Total
Purchases Sales
BlackRock MuniYield Arizona
Fund, Inc. $ 34,510,595 $ 37,666,422
BlackRock MuniYield California
Fund, Inc. $205,071,617 $175,804,877
BlackRock MuniYield California
Insured Fund, Inc. $263,414,916 $231,514,387
BlackRock MuniYield
Florida Fund $148,099,651 $149,925,982
BlackRock MuniYield Michigan
Insured Fund II, Inc. $ 40,678,235 $ 42,799,061
BlackRock MuniYield New York
Insured Fund, Inc. $402,828,500 $417,011,371
4. Stock/Share Transactions:
BlackRock MuniYield Arizona Fund, Inc., BlackRock MuniYield California Fund,
Inc., BlackRock MuniYield California Insured Fund, Inc., BlackRock MuniYield
Michigan Insured Fund II, Inc. and BlackRock MuniYield New York Insured Fund,
Inc. are authorized to issue 200,000,000 shares of stock, including Preferred
Stock, par value $.10 per share for all Funds except for BlackRock MuniYield
Michigan Insured Fund II, Inc. Series A and BlackRock MuniYield New York
Insured Fund, Inc., which have a par value of $.05 per share, and all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of stock without
approval of holders of Common Stock.
BlackRock MuniYield Florida Fund is authorized to issue an unlimited number of
common shares of beneficial interest, including Preferred Shares, par value
$.05 per share, all of which were initially classified as Common Shares. The
Board of Trustees is authorized, however, to reclassify any unissued shares of
beneficial interest without approval of holders of Common Shares.
Common Stock/Shares
BlackRock MuniYield Arizona Fund, Inc.
Shares issued and outstanding during the years ended October 31, 2006 and
October 31, 2005 increased by 22,850 and 23,152, respectively, as a result of
dividend reinvestments.
BlackRock MuniYield California Fund, Inc.
Shares issued and outstanding during the years ended October 31, 2006 and
October 31, 2005 remained constant.
BlackRock MuniYield California Insured Fund, Inc.
Shares issued and outstanding during the years ended October 31, 2006 and
October 31, 2005 remained constant.
BlackRock MuniYield Florida Fund
Shares issued and outstanding during the year ended October 31, 2006 increased
by 6,144 as a result of dividend reinvestments. Shares issued and outstanding
during the year ended October 31, 2005 remained constant.
BlackRock MuniYield Michigan Insured Fund II, Inc.
Shares issued and outstanding during the years ended October 31, 2006 and
October 31, 2005 increased by 15,590 and 7,539, respectively, as a result of
dividend reinvestments.
BlackRock MuniYield New York Insured Fund, Inc.
Shares issued and outstanding during the years ended October 31, 2006 and
October 31, 2005 remained constant.
Preferred Stock/Shares
Auction Market Preferred Stock/Shares are redeemable Stock/Shares of the
Funds, with a liquidation preference of $25,000 per share plus accrued and
unpaid dividends that entitle their holders to receive cash dividends at an
annual rate that may vary for the successive dividend periods. The yields in
effect at October 31, 2006 were as follows:
BlackRock
BlackRock BlackRock MuniYield
MuniYield MuniYield California
Arizona California Insured
Fund, Inc. Fund, Inc. Fund, Inc.
Series A 3.15% 3.40% 3.40%
Series B 3.25% 3.20% 3.20%
Series C 3.50% 3.35% 3.30%
Series D -- 2.949% 3.30%
Series E -- -- 2.95%
Series F -- -- 3.00%
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
BlackRock BlackRock
BlackRock MuniYield MuniYield
MuniYield Michigan New York
Florida Insured Insured
Fund Fund II, Inc. Fund, Inc.
Series A 3.49% 3.42% 3.45%
Series B 3.50% 3.45% 3.00%
Series C 3.45% 3.45% 3.00%
Series D -- -- 3.00%
Series E -- -- 3.45%
Series F -- -- 3.00%
BlackRock MuniYield Arizona Fund, Inc.
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 400 shares from the issuance of an additional series of Preferred
Stock.
BlackRock MuniYield California Fund, Inc.
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 1,400 shares from the issuance of an additional series of
Preferred Stock.
BlackRock MuniYield California Insured Fund, Inc.
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 1,800 shares from the issuance of an additional series of
Preferred Stock.
BlackRock MuniYield Florida Fund
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 600 shares from the issuance of an additional series of Preferred
Shares.
BlackRock MuniYield Michigan Insured Fund II, Inc.
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 400 shares from the issuance of an additional series of Preferred
Stock.
BlackRock MuniYield New York Insured Fund, Inc.
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 1,800 shares from the issuance of an additional series of
Preferred Stock.
The Funds pay commissions to certain broker-dealers at the end of each auction
at an annual rate ranging from .25% to .375%, calculated on the proceeds of
each auction. For the year ended October 31, 2006, Merrill Lynch, Pierce,
Fenner & Smith, Incorporated earned commissions as follows:
Commissions
BlackRock MuniYield Arizona Fund, Inc. $ 54,694
BlackRock MuniYield California Fund, Inc. $200,615
BlackRock MuniYield California Insured Fund, Inc. $273,483
BlackRock MuniYield Florida Fund $144,381
BlackRock MuniYield Michigan Insured Fund II, Inc. $113,660
BlackRock MuniYield New York Insured Fund, Inc. $363,211
5. Distributions to Shareholders:
BlackRock MuniYield Arizona Fund, Inc. The Fund paid a tax-exempt income
dividend to holders of Common Stock in the amount of $.062000 per share on
November 29, 2006 to shareholders of record on November 14, 2006.
The tax character of distributions paid during the fiscal years ended October
31, 2006 and October 31, 2005 was as follows:
10/31/2006 10/31/2005
Distributions paid from:
Tax-exempt income $ 4,774,990 $ 4,746,990
Ordinary income -- 3,303
Net long-term capital gain 608,019 101,400
--------------- ----------------
Total distributions $ 5,383,009 $ 4,851,693
=============== ================
As of October 31, 2006, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 463,121
Undistributed long-term capital gains--net 317,724
----------------
Total undistributed earnings--net 780,845
Capital loss carryforward --
Unrealized gains--net 4,810,161*
----------------
Total accumulated earnings--net $ 5,591,006
================
* The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles and the difference
between the book and tax treatment of residual interests in tender
option bond trusts.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
BlackRock MuniYield California Fund, Inc.
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of $.057000 per share on November 29, 2006 to shareholders of record
on November 14, 2006.
The tax character of distributions paid during the fiscal years ended
October 31, 2006 and October 31, 2005 was as follows:
10/31/2006 10/31/2005
Distributions paid from:
Tax-exempt income $ 20,192,989 $ 21,097,891
--------------- ----------------
Total distributions $ 20,192,989 $ 21,097,891
=============== ================
As of October 31, 2006, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 1,421,700
Undistributed long-term capital gains--net --
----------------
Total undistributed earnings--net 1,421,700
Capital loss carryforward (857,391)*
Unrealized gains--net 19,538,118**
----------------
Total accumulated earnings--net $ 20,102,427
================
* On October 31, 2006, the Fund had a net capital loss carry-
forward of $857,391, of which $503,545 expires in 2008 and
$353,846 expires in 2011. This amount will be available to
offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on
straddles, the difference between book and tax amortization
methods for premiums and discounts on fixed income securities
and the difference between the book and tax treatment of residual
interests in tender option bond trusts.
BlackRock MuniYield California Insured Fund, Inc.
The Fund paid a tax-exempt income dividend to holders of Common Stock in
the amount of $.060000 per share on November 29, 2006 to shareholders of
record on November 14, 2006.
The tax character of distributions paid during the fiscal years ended
October 31, 2006 and October 31, 2005 was as follows:
10/31/2006 10/31/2005
Distributions paid from:
Tax-exempt income $ 35,604,372 $ 34,467,987
--------------- ----------------
Total distributions $ 35,604,372 $ 34,467,987
=============== ================
As of October 31, 2006, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 2,281,036
Undistributed long-term capital gains--net --
----------------
Total undistributed earnings--net 2,281,036
Capital loss carryforward (10,682,719)*
Unrealized gains--net 29,408,059**
----------------
Total accumulated earnings--net $ 21,006,376
================
* On October 31, 2006, the Fund had a net capital loss carry-
forward of $10,682,719, of which $3,096,014 expires in 2008,
$9,668 expires in 2009, $4,901,089 expires in 2011 and
$2,675,948 expires in 2012. This amount will be available to
offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on
straddles, the difference between book and tax amortization
methods for premiums and discounts on fixed income securities
and the difference between the book and tax treatment of residual
interests in tender option bond trusts.
BlackRock MuniYield Florida Fund
The Fund paid a tax-exempt income dividend to holders of Common Shares in
the amount of $.064000 per share on November 29, 2006 to shareholders of
record on November 14, 2006.
The tax character of distributions paid during the fiscal years ended
October 31, 2006 and October 31, 2005 was as follows:
10/31/2006 10/31/2005
Distributions paid from:
Tax-exempt income $ 14,505,526 $ 14,482,973
--------------- ----------------
Total distributions $ 14,505,526 $ 14,482,973
=============== ================
As of October 31, 2006, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 889,410
Undistributed long-term capital gains--net --
----------------
Total undistributed earnings--net 889,410
Capital loss carryforward (8,795,747)*
Unrealized gains--net 16,885,990**
----------------
Total accumulated earnings--net $ 8,979,653
================
* On October 31, 2006, the Fund had a net capital loss carry-
forward of $8,795,747, of which $921,907 expires in 2007,
$6,398,903 expires in 2008, and $1,474,937 expires in 2012.
This amount will be available to offset like amounts of any future
taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles, the difference between
book and tax amortization methods for premiums and discounts
on fixed income securities and the difference between the book and
tax treatment of residual interests in tender option bond trusts.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
BlackRock MuniYield Michigan Insured Fund II, Inc.
The Fund paid a tax-exempt income dividend to holders of Common Stock in
the amount of $.060000 per share on November 29, 2006 to shareholders of
record on November 14, 2006.
The tax character of distributions paid during the fiscal years ended
October 31, 2006 and October 31, 2005 was as follows:
10/31/2006 10/31/2005
Distributions paid from:
Tax-exempt income $ 12,446,826 $ 12,665,595
--------------- ----------------
Total distributions $ 12,446,826 $ 12,665,595
=============== ================
As of October 31, 2006, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 730,200
Undistributed long-term capital gains--net --
----------------
Total undistributed earnings--net 730,200
Capital loss carryforward (4,939,869)*
Unrealized gains--net 15,053,527**
----------------
Total accumulated earnings--net $ 10,843,858
================
* On October 31, 2006, the Fund had a net capital loss carry-
forward of $4,939,869, of which $2,600,765 expires in 2008,
$1,050,253 expires in 2010 and $1,288,851 expires in 2012.
This amount will be available to offset like amounts of any future
taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles, the difference between
book and tax amortization methods for premiums and discounts on
fixed income securities and the difference between the book and
tax treatment of residual interests in tender option bond trusts.
BlackRock MuniYield New York Insured Fund, Inc.
The Fund paid a tax-exempt income dividend to holders of Common Stock in
the amount of $.060000 per share on November 29, 2006 to shareholders of
record on November 14, 2006.
The tax character of distributions paid during the fiscal years ended
October 31, 2006 and October 31, 2005 was as follows:
10/31/2006 10/31/2005
Distributions paid from:
Tax-exempt income $ 39,563,895 $ 38,166,975
--------------- ----------------
Total distributions $ 39,563,895 $ 38,166,975
=============== ================
As of October 31, 2006, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 2,732,017
Undistributed long-term capital gains--net --
----------------
Total undistributed earnings--net 2,732,017
Capital loss carryforward (30,841,593)*
Unrealized gains--net 35,050,467**
----------------
Total accumulated earnings--net $ 6,940,891
================
* On October 31, 2006, the Fund had a net capital loss carry-
forward of $30,841,593 with $8,878,283 expiring in 2008,
$3,168,268 expiring in 2010, $16,583,200 expiring in 2012
and $2,211,842 expiring in 2014. This amount will be available
to offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles, the difference
between book and tax amortization methods for premiums and
discounts on fixed income securities, the realization for tax purposes
of unrealized gains/(losses) on certain futures contracts and the
difference between the book and tax treatment of residual interests
in tender option bond trusts.
6. Restatement Information:
During the year ended October 31, 2006, each of the Funds determined that the
criteria for sale accounting in Statement of Financial Accounting Standards
No. 140 had not been met for certain transfers of municipal bonds and that
these transfers should have been accounted for as secured borrowings rather
than as sales. Accordingly, BlackRock MuniYield Arizona Fund, Inc. and
BlackRock MuniYield California Fund, Inc. each has restated its statement of
changes in net assets for the year ended October 31, 2005 to give effect to
offsetting changes in realized gain--net and in the change in unrealized
appreciation/ depreciation--net on the transferred municipal securities.
Additionally, each of the six Funds has restated its financial highlights for
the years ended October 31, 2005, 2004, 2003 and 2002 to give effect to
recording the transfers of the municipal bonds as secured borrowings,
including recording interest on the bonds as interest income and interest on
the secured borrowings as interest expense.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
Statements of Changes in Net Assets
For the Year Ended October 31, 2005
BlackRock MuniYield BlackRock MuniYield
Arizona Fund, Inc. California Fund, Inc.
Previously Previously
Reported Restated Reported Restated
Realized gain--net $ 686,663 $ 710,366 $ 3,286,924 $ 3,325,934
Change in unrealized appreciation--net $ (2,891,468) $ (2,915,171) $ (12,950,108) $ (12,989,118)
Financial Highlights for BlackRock MuniYield Arizona Fund, Inc.
For the Years Ended October 31, 2005, 2004, 2003 and 2002
2005 2004 2003 2002
Previously Previously Previously Previously
Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net of
reimbursement** 1.20% 1.51% 1.19% 1.39% 1.18% 1.37% 1.28% 1.61%
Total expenses** 1.20% 1.52% 1.20% 1.40% 1.19% 1.38% 1.28% 1.61%
Portfolio turnover 28.08% 28% 23.69% 21% 26.99% 24% 42.51% 32%
** Do not reflect the effect of dividends to Preferred Stock shareholders.
Financial Highlights for BlackRock MuniYield California Fund, Inc.
For the Years Ended October 31, 2005, 2004, 2003 and 2002
2005 2004 2003 2002
Previously Previously Previously Previously
Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net of
reimbursement** .98% 1.13% .96% 1.12% .95% 1.16% .99% 1.26%
Total expenses** .98% 1.13% .96% 1.12% .96% 1.17% .99% 1.26%
Portfolio turnover 53.99% 53% 33.60% 29% 20.24% 18% 49.87% 39%
** Do not reflect the effect of dividends to Preferred Stock shareholders.
Financial Highlights for BlackRock MuniYield California Insured Fund, Inc.
For the Years Ended October 31, 2005, 2004, 2003 and 2002
2005 2004 2003 2002
Previously Previously Previously Previously
Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net of
reimbursement and excluding
reorganization expenses** .96% 1.27% .95% 1.08% .94% 1.08% .96% 1.15%
Total expenses, excluding
reorganization expenses** .96% 1.27% .95% 1.08% .94% 1.08% .96% 1.15%
Total expenses** .96% 1.27% .95% 1.08% .94% 1.08% 1.00% 1.19%
Portfolio turnover 42.13% 39% 68.05% 63% 52.17% 47% 77.13% 63%
** Do not reflect the effect of dividends to Preferred Stock shareholders.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (concluded)
Financial Highlights for BlackRock MuniYield Florida Fund
For the Years Ended October 31, 2005, 2004, 2003 and 2002
2005 2004 2003 2002
Previously Previously Previously Previously
Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net of
reimbursement** 1.05% 1.25% 1.03% 1.18% 1.04% 1.18% 1.06% 1.24%
Total expenses** 1.05% 1.25% 1.03% 1.19% 1.04% 1.19% 1.06% 1.24%
Portfolio turnover 41.96% 42% 36.11% 33% 40.45% 35% 39.54% 36%
** Do not reflect the effect of dividends to Preferred Shareholders.
Financial Highlights for BlackRock MuniYield Michigan Insured Fund II, Inc.
For the Years Ended October 31, 2005, 2004, 2003 and 2002
2005 2004 2003 2002
Previously Previously Previously Previously
Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net of
reimbursement** 1.07% 1.46% 1.05% 1.26% 1.01% 1.20% 1.12% 1.39%
Total expenses** 1.07% 1.47% 1.07% 1.28% 1.02% 1.22% 1.12% 1.39%
Portfolio turnover 23.18% 19% 39.26% 35% 30.84% 27% 41.77% 35%
** Do not reflect the effect of dividends to Preferred Stock shareholders.
Financial Highlights for BlackRock MuniYield New York Insured Fund, Inc.
For the Years Ended October 31, 2005, 2004, 2003 and 2002
2005 2004 2003 2002
Previously Previously Previously Previously
Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net of
reimbursement** .96% 1.31% .94% 1.13% .94% 1.15% .96% 1.08%
Total expenses** .96% 1.31% .95% 1.13% .94% 1.16% .96% 1.08%
Portfolio turnover 46.41% 35% 19.91% 18% 51.89% 45% 87.56% 72%
** Do not reflect the effect of dividends to Preferred Stock shareholders.
While the Statements of Net Assets for each of the Funds as of October 31,
2005, 2004, 2003 and 2002, not presented herein, have not been reissued to give
effect to the restatement, the principal effects of the restatement would be to
increase investments and liability for trust certificates by corresponding
amounts at each year, with no effect on previously reported net assets.
The Statements of Operations for each of the Funds for the years ended October
31, 2005, 2004, 2003 and 2002, not presented herein, have not been reissued to
give effect to the restatement. However, the principal effects of the
restatement would be to increase interest income and interest expense and fees
by corresponding amounts each year, and, where applicable, to revise realized
gain (loss) on investments--net, and the change in unrealized appreciation/
depreciation on investments--net, by corresponding and offsetting amounts.
The Statements of Changes in Net Assets for each of the Funds for the years
ended October 31, 2004, 2003 and 2002, not presented herein, have not been
reissued to give effect to the restatement, but the principal effects of a
restatement, where applicable, would be to revise previously reported realized
gain (loss)--net, and change in unrealized appreciation/depreciation--net, by
corresponding and offsetting amounts.
ANNUAL REPORTS OCTOBER 31, 2006
Report of Independent Registered Public Accounting Firm
To the Shareholders and Boards of Directors/Trustees of BlackRock MuniYield
Arizona Fund, Inc., BlackRock MuniYield California Fund, Inc., BlackRock
MuniYield California Insured Fund, Inc., BlackRock MuniYield Florida Fund,
BlackRock MuniYield Michigan Insured Fund II, Inc. and Blackrock MuniYield New
York Insured Fund, Inc.:
We have audited the accompanying statements of net assets, including the
schedules of investments, of BlackRock MuniYield Arizona Fund, Inc., BlackRock
MuniYield California Fund, Inc., BlackRock MuniYield California Insured Fund,
Inc., BlackRock MuniYield Florida Fund, BlackRock MuniYield Michigan Insured
Fund II, Inc. and BlackRock MuniYield New York Insured Fund, Inc. (formerly
MuniYield Arizona Fund, Inc., MuniYield California Fund, Inc., MuniYield
California Insured Fund, Inc., MuniYield Florida Fund, MuniYield Michigan
Insured Fund II, Inc. and MuniYield New York Insured Fund, Inc.) (the
"Funds"), as of October 31, 2006, and the related statements of operations for
the year then ended, the statements of changes in net assets for each of the
two years in the period then ended and the financial highlights for each of
the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Funds are not required to have, nor were we engaged to
perform, audits of their internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Funds' internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. Our
procedures included confirmation of securities owned as of October 31, 2006 by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the respective financial
position of BlackRock MuniYield Arizona Fund, Inc., BlackRock MuniYield
California Fund, Inc., BlackRock MuniYield California Insured Fund, Inc.,
BlackRock MuniYield Florida Fund, BlackRock MuniYield Michigan Insured Fund
II, Inc. and BlackRock MuniYield New York Insured Fund, Inc. as of October 31,
2006, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and their
financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States
of America.
As discussed in Note 6, the statements of changes in net assets for the year
ended October 31, 2005 of BlackRock MuniYield Arizona Fund, Inc. and BlackRock
MuniYield California Fund, Inc. and the financial highlights of each of the
Funds for the years ended October 31, 2005, 2004, 2003 and 2002 have been
restated.
Deloitte & Touche LLP
Princeton, New Jersey
January 16, 2007
Fund Certifications (unaudited)
In May 2006, BlackRock MuniYield California Fund, Inc., BlackRock MuniYield
California Insured Fund, Inc., BlackRock MuniYield Florida Fund, BlackRock
MuniYield Michigan Insured Fund II, Inc. and BlackRock MuniYield New York
Insured Fund, Inc. filed their Chief Executive Officer Certification for the
prior year with the New York Stock Exchange pursuant to Section 303A.12(a) of
the New York Stock Exchange Corporate Governance Listing Standards.
The Funds' Chief Executive Officer and Chief Financial Officer Certifications
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 were filed with each
Fund's Form N-CSR and are available on the Securities and Exchange
Commission's Web site at http://www.sec.gov.
ANNUAL REPORTS OCTOBER 31, 2006
Automatic Dividend Reinvestment Plan
How the Plan Works--The Funds offer a Dividend Reinvestment Plan (the "Plan")
under which income and capital gains dividends paid by each Fund are
automatically reinvested in additional shares of Common Stock of each Fund.
The Plan is administered on behalf of the shareholders by The Bank of New York
for BlackRock MuniYield Arizona Fund, Inc., BlackRock MuniYield California
Fund, Inc., BlackRock MuniYield Florida Fund, BlackRock MuniYield Michigan
Insured Fund II, Inc. and BlackRock MuniYield New York Insured Fund, Inc. and
Computershare Trust Company, N.A. for BlackRock MuniYield California Insured
Fund, Inc. (individually, the "Plan Agent" or together, the "Plan Agents").
Under the Plan, whenever the Funds declare a dividend, participants in the
Plan will receive the equivalent in shares of Common Stock of each Fund. The
Plan Agents will acquire the shares for the participant's account either (i)
through receipt of additional unissued but authorized shares of each Fund
("newly issued shares") or (ii) by purchase of outstanding shares of Common
Stock on the open market on the New York Stock Exchange or American Stock
Exchange, as applicable or elsewhere. If, on the dividend payment date, each
Fund's net asset value per share is equal to or less than the market price per
share plus estimated brokerage commissions (a condition often referred to as a
"market premium"), the Plan Agents will invest the dividend amount in newly
issued shares. If the Funds' net asset value per share is greater than the
market price per share (a condition often referred to as a "market discount"),
the Plan Agents will invest the dividend amount by purchasing on the open
market additional shares. If the Plan Agents are unable to invest the full
dividend amount in open market purchases, or if the market discount shifts to
a market premium during the purchase period, the Plan Agents will invest any
uninvested portion in newly issued shares. The shares acquired are credited to
each shareholder's account. The amount credited is determined by dividing the
dollar amount of the dividend by either (i) when the shares are newly issued,
the net asset value per share on the date the shares are issued or (ii) when
shares are purchased in the open market, the average purchase price per share.
Participation in the Plan--Participation in the Plan is automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
shares of Common Stock of the Funds unless the shareholder specifically elects
not to participate in the Plan. Shareholders who elect not to participate will
receive all dividend distributions in cash. Shareholders who do not wish to
participate in the Plan must advise their Plan Agent in writing (at the
address set forth below) that they elect not to participate in the Plan.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time without penalty by writing to the Plan Agent.
Benefits of the Plan--The Plan provides an easy, convenient way for
shareholders to make additional, regular investments in the Funds. The Plan
promotes a long-term strategy of investing at a lower cost. All shares
acquired pursuant to the Plan receive voting rights. In addition, if the
market price plus commissions of each Fund's shares is above the net asset
value, participants in the Plan will receive shares of the Funds for less than
they could otherwise purchase them and with a cash value greater than the
value of any cash distribution they would have received. However, there may
not be enough shares available in the market to make distributions in shares
at prices below the net asset value. Also, since each Fund does not redeem
shares, the price on resale may be more or less than the net asset value.
Plan Fees--There are no enrollment fees or brokerage fees for participating in
the Plan. The Plan Agents' service fees for handling the reinvestment of
distributions are paid for by the Funds. However, brokerage commissions may be
incurred when the Funds purchase shares on the open market and shareholders
will pay a pro rata share of any such commissions.
Tax Implications--The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income tax that
may be payable (or required to be withheld) on such dividends. Therefore,
income and capital gains may still be realized even though shareholders do not
receive cash. The value of shares acquired pursuant to the Plan will generally
be excluded from gross income to the extent that the cash amount reinvested
would be excluded from gross income. If, when the Funds' shares are trading at
a market premium, the Funds issue shares pursuant to the Plan that have a
greater fair market value than the amount of cash reinvested, it is possible
that all or a portion of the discount from the market value (which may not
exceed 5% of the fair market value of each Fund's shares) could be viewed as a
taxable distribution. If the discount is viewed as a taxable distribution, it
is also possible that the taxable character of this discount would be allocable
to all the shareholders, including shareholders who do not participate in the
Plan. Thus, shareholders who do not participate in the Plan might be required
to report as ordinary income a portion of their distributions equal to their
allocable share of the discount.
Contact Information--All correspondence concerning the Plan, including any
questions about the Plan, should be directed to the Plan Agent at The Bank of
New York, Church Street Station, P.O. Box 11258, New York, NY 10286-1258,
Telephone: 800-432-8224 for BlackRock MuniYield Arizona Fund, Inc., BlackRock
MuniYield California Fund, Inc., BlackRock MuniYield Florida Fund, BlackRock
MuniYield Michigan Insured Fund II, Inc. and BlackRock MuniYield New York
Insured Fund, Inc. and Computershare Trust Company, N.A., P.O. Box 43010,
Providence, RI 02940-3010, Telephone: 800-426-5523 for BlackRock MuniYield
California Insured Fund, Inc.
ANNUAL REPORTS OCTOBER 31, 2006
Disclosure of Investment Advisory Agreement (continued)
Disclosure of FAM Investment Advisory Agreements
The Board of Directors or the Board of Trustees, as pertinent, of each Fund
met in August 2006 to consider approval of the Fund's investment advisory
agreement with Fund Asset Management, L.P. ("FAM"), each Fund's investment
adviser at that time.
Activities and Composition of the Boards
All but one member of the Board is an independent director/trustee whose only
affiliation with FAM or other Merrill Lynch affiliates was as a director/
trustee of the Fund and as a director or trustee of certain other funds
advised by FAM or its affiliates. The Co-chairmen of each Board are also
independent directors/trustees. New director/trustee nominees are chosen by a
Nominating Committee comprised of independent directors/trustees. All
independent directors/trustees also are members of each Board's Audit
Committee, and the independent directors/trustees meet in executive session at
each in-person Board meeting. Each Board and each Board's Audit Committee meet
in person for at least two days each quarter and conduct other in-person and
telephone meetings throughout the year, some of which are formal Board
meetings and some of which are informational meetings. The independent counsel
to the independent directors/trustees attends all in-person Board and Audit
Committee meetings and other meetings at the independent directors'/trustees'
request.
FAM Investment Advisory Agreements--Matters Considered by the Boards
Every year, each Fund's Board considers approval of the Fund's investment
advisory agreement. Each Board assesses the nature, scope and quality of the
services provided to the Fund by the personnel of the investment adviser and
its affiliates, including administrative services, shareholder services,
oversight of fund accounting, marketing services and assistance in meeting
legal and regulatory requirements. Each Board also receives and assesses
information regarding the services provided to the Fund by certain
unaffiliated service providers.
At various times throughout the year, each Board also considers a range of
information in connection with its oversight of the services provided by the
investment adviser and its affiliates. Among the matters considered are: (a)
fees (in addition to management fees) paid to the investment adviser and its
affiliates by the Fund; (b) Fund operating expenses paid to third parties; (c)
the resources devoted to and compliance reports relating to each Fund's
investment objective, policies and restrictions, and its compliance with its
Code of Ethics and compliance policies and procedures; and (d) the nature,
cost and character of non-investment management services provided by the
investment adviser and its affiliates.
Each Board noted its view of FAM as one of the most experienced global asset
management firms and considered the overall services provided by FAM to be of
high quality. Each Board also noted its view of FAM as financially sound and
well managed and noted FAM's affiliation with one of America's largest
financial firms. Each Board works closely with the investment adviser in
overseeing the investment adviser's efforts to achieve good performance. As
part of this effort, each Board discusses portfolio manager effectiveness and,
when performance is not satisfactory, discusses with the investment adviser
taking steps such as changing investment personnel.
Annual Consideration of Approval by the Boards
In the period prior to the Board meeting to consider renewal of the investment
advisory agreement, each Board requests and receives materials specifically
relating to the Fund's investment advisory agreement. These materials are
prepared separately for each Fund and include (a) information compiled by
Lipper Inc. ("Lipper") on the fees and expenses, investment performance and
leverage of the Fund as compared to a comparable group of funds as classified
by Lipper; (b) information comparing each Fund's market price with its net
asset value per share; (c) a discussion by the Fund's portfolio management
team regarding investment strategies used by the Fund during its most recent
fiscal year; (d) information on the profitability to the investment adviser
and its affiliates of the investment advisory agreement and other relationships
with the Fund; and (e) information provided by the investment adviser
concerning investment advisory fees charged to other clients, such as retail
closed-end funds, under similar investment mandates. Each Board also considers
other matters it deems important to the approval process, such as payments made
for services related to the valuation and pricing of Fund portfolio holdings,
the Fund's portfolio turnover statistics, and direct and indirect benefits to
the investment adviser and its affiliates from their relationship with the
Fund.
Certain Specific Renewal Data
In connection with the most recent renewal of each Fund's investment advisory
agreement with FAM (each, a "FAM Investment Advisory Agreement") in August
2006, the independent directors'/trustees' and the Board's review included the
following:
ANNUAL REPORTS OCTOBER 31, 2006
Services Provided by the Investment Adviser--Each Fund's Board reviewed the
nature, extent and quality of services provided by FAM, focusing on the
investment advisory services and the resulting performance of the Fund. Each
Board uses data provided by Lipper and by management in its review of advisory
services. Each Board compared Fund performance - both including and excluding
the effects of the Fund's fees and expenses - to the performance of a
comparable group of funds and the performance of a relevant index or
combination of indexes. While each Board reviews performance data at least
quarterly, each Board attaches more importance to performance over relatively
long periods of time, typically three to five years. Each Fund's Board
concluded that the comparative data indicated that the Fund's performance was
competitive. Considering all these factors, each Fund's Board concluded that
the nature and quality of the services provided supported the continuation of
the Fund's FAM Investment Advisory Agreement.
FAM's Personnel and Investment Process--Each Fund's Board reviewed the Fund's
investment objectives and strategies. Each Board discussed with FAM's senior
management responsible for investment operations and the senior management of
FAM's municipal investing group the strategies being used to achieve the
stated objectives. Among other things, each Board considered the size,
education and experience of FAM's investment staff, its use of technology, and
FAM's approach to training and retaining portfolio managers and other
research, advisory and management personnel. Each Board also reviewed FAM's
compensation policies and practices with respect to the Fund's portfolio
managers. Each Board also considered the experience of the Fund's portfolio
manager. The Board of MuniYield Arizona Fund, Inc. noted that Mr. Kalinoski
has more than five years of experience in portfolio management. The Boards of
MuniYield California Fund, Inc. and MuniYield California Insured Fund, Inc.
noted that Mr. O'Connor has more than 15 years of experience in portfolio
management. The Board of MuniYield Florida Fund noted that Mr. Sneeden has
more than ten years of experience in portfolio management. The Board of
MuniYield Michigan Insured Fund II, Inc. noted that Mr. Stuebe has more than
15 years of experience in portfolio management. The Board of MuniYield New
York Insured Fund, Inc. noted that Mr. Browse has more than five years of
experience in portfolio management. Each Fund's Board concluded that FAM and
its investment staff have extensive experience in analyzing and managing the
types of investments used by the Fund and that the Fund benefits from that
experience.
Management Fees and Other Expenses--Each Fund's Board reviews the Fund's
contractual management fee rate and actual management fee rate as a percentage
of total assets at common asset levels - the actual rate includes advisory and
administrative service fees and the effects of any fee waivers - compared to
the other funds in its Lipper category. It also compares the Fund's total
expenses to those of other comparable funds. Each Board considered the
services provided to and the fees charged by FAM to other clients with similar
investment mandates. The Boards of MuniYield Arizona Fund, Inc., MuniYield
California Fund, Inc. and MuniYield Florida Fund noted that FAM had advised
the Boards that, with respect to the pertinent Fund, it had no other
comparable accounts with similar investment mandates. Each Fund's Board
determined that the Fund's contractual and actual management fee rates, as
well as total expenses, were competitive with those of comparable funds. Each
Fund's Board concluded that the Fund's management fee rate and overall expense
ratio were reasonable.
Profitability--Each Board considers the cost of the services provided to the
Fund by the investment adviser and the investment adviser's and its affiliates'
profits relating to the management and distribution of the Fund and the funds
advised by the investment manager and its affiliates. As part of its analysis,
each Fund's Board reviewed FAM's methodology in allocating its costs to the
management of the Fund and concluded that there was a reasonable basis for the
allocation. The Board concluded that the profits of FAM and its affiliates were
acceptable in relation to the nature and quality of services provided.
Economies of Scale--Each Fund's Board considered the extent to which economies
of scale might be realized as the assets of the Fund increase and whether
there should be changes in the management fee rate or structure in order to
enable the Fund to participate in these economies of scale. Each Fund's Board
considered economies of scale to the extent applicable to the Fund's closed-
end structure and determined that the Fund appropriately benefits from any
economies of scale. Each Board determined that the management fee structure
was reasonable and that no changes were currently necessary.
ANNUAL REPORTS OCTOBER 31, 2006
Disclosure of Investment Advisory Agreement (concluded)
Conclusion
After the independent directors/trustees of each Board deliberated in
executive session, the entire Board of each Fund, including all of the
independent directors/trustees, approved the renewal of the pertinent FAM
Investment Advisory Agreement, concluding that the advisory fee was reasonable
in relation to the services provided and that a contract renewal was in the
best interests of the shareholders.
Disclosure of New Investment Advisory Agreement
New BlackRock Investment Advisory Agreements--Matters Considered by the Boards
In connection with the combination of Merrill Lynch's investment advisory
business, including Fund Asset Management, L.P. (the "Previous Investment
Adviser"), with that of BlackRock, Inc. ("BlackRock") to create a new
independent company ("New BlackRock") (the "Transaction"), each Fund's Board
of Directors or Board of Trustees, as pertinent, considered and approved a
new investment advisory agreement (each, a "BlackRock Investment Advisory
Agreement") between the Fund and BlackRock Advisors, LLC ("BlackRock
Advisors"). Each Fund's shareholders subsequently approved the Fund's
BlackRock Investment Advisory Agreement and it became effective on September
29, 2006, replacing the Fund's investment advisory agreement with the Previous
Investment Adviser (each, a "Previous Investment Advisory Agreement").
Each Fund's Board discussed the Fund's BlackRock Investment Advisory Agreement
at telephonic and in-person meetings held during April and May 2006. Each
Fund's Board, including the independent directors/trustees, approved the
Fund's BlackRock Investment Advisory Agreement at an in-person meeting held on
May 9, 2006.
To assist each Fund's Board in its consideration of the Fund's BlackRock
Investment Advisory Agreement, BlackRock provided materials and information
about BlackRock, including its financial condition and asset management
capabilities and organization, and Merrill Lynch provided materials and
information about the Transaction. Each Fund's independent directors/trustees,
through their independent legal counsel, also requested and received
additional information from Merrill Lynch and BlackRock in connection with
their consideration of the Fund's BlackRock Investment Advisory Agreement. The
additional information was provided in advance of the May 9, 2006 meetings. In
addition, each Fund's independent directors/trustees consulted with their
counsel and Fund counsel on numerous occasions, discussing, among other
things, the legal standards and certain other considerations relevant to the
directors'/trustees' deliberations.
At each Fund's Board meetings, the directors/trustees discussed with Merrill
Lynch management and certain BlackRock representatives the Transaction, its
strategic rationale and BlackRock's general plans and intentions regarding the
Fund. At these Board meetings, representatives of Merrill Lynch and BlackRock
made presentations to and responded to questions from the Boards. The
directors/trustees also inquired about the plans for and anticipated roles and
responsibilities of certain employees and officers of the Previous Investment
Adviser, and of its affiliates, to be transferred to BlackRock in connection
with the Transaction. The independent directors/trustees also conferred
separately and with their counsel about the Transaction and other matters
related to the Transaction on a number of occasions, including in connection
with the April and May 2006 meetings. After the presentations and after
reviewing the written materials provided, each Fund's independent directors/
trustees met in executive sessions with their counsel to consider the Fund's
BlackRock Investment Advisory Agreement.
In connection with the directors'/trustees' review of each Fund's BlackRock
Investment Advisory Agreement, Merrill Lynch and/or BlackRock advised the
directors/trustees about a variety of matters. The advice included the
following, among other matters:
* that there was not expected to be any diminution in the nature, quality and
extent of services provided to any of the Funds or their shareholders by
BlackRock Advisors, including compliance services;
ANNUAL REPORTS OCTOBER 31, 2006
* that operation of New BlackRock as an independent investment management
firm would enhance its ability to attract and retain talented
professionals;
* that each Fund was expected to benefit from having access to BlackRock's
state of the art technology and risk management analytic tools, including
investment tools, provided under the BlackRock Solutions (R) brand name;
* that BlackRock had no present intention to alter any applicable expense
waivers or reimbursements that were currently in effect and, while it
reserved the right to do so in the future, it would seek Board approval
before making any changes;
* that in connection with the Transaction, Merrill Lynch and BlackRock had
agreed to conduct, and use reasonable best efforts to cause their
respective affiliates to conduct, their respective businesses in compliance
with the conditions of Section 15(f) of the Investment Company Act of 1940
(the "1940 Act") in relation to any public funds advised by BlackRock or
the Previous Investment Adviser (or affiliates), respectively; and
* that Merrill Lynch and BlackRock would derive benefits from the Transaction
and that, as a result, they had a financial interest in the matters being
considered that was different from that of Fund shareholders.
The directors/trustees considered the information provided by Merrill Lynch
and BlackRock above, and, among other factors, the following:
* the potential benefits to each Fund's shareholders from being part of a
combined fund family with BlackRock-sponsored funds, including possible
economies of scale and access to investment opportunities;
* the reputation, financial strength and resources of BlackRock and its
investment advisory subsidiaries and the anticipated financial strength and
resources of New BlackRock;
* the compliance policies and procedures of BlackRock Advisors;
* the terms and conditions of each Fund's BlackRock Investment Advisory
Agreement, including the fact that no Fund's schedule of total advisory
fees would increase under the pertinent BlackRock Investment Advisory
Agreement, but would remain the same;
* that in August 2005, each Fund's Board had performed a full annual review
of the pertinent Previous Investment Advisory Agreement, as required by the
1940 Act, and had determined that the Previous Investment Adviser had the
capabilities, resources and personnel necessary to provide the advisory and
administrative services that were then being provided to the Fund; and that
the advisory and/or management fees paid by the Fund, taking into account
any applicable agreed-upon fee waivers and breakpoints, had represented
reasonable compensation to the Previous Investment Adviser in light of the
services provided, the costs to the Previous Investment Adviser of
providing those services, economies of scale, the fees and other expenses
paid by similar funds (including information provided by Lipper Inc.
["Lipper"]), and such other matters as the directors/trustees had
considered relevant in the exercise of their reasonable judgment; and
* that Merrill Lynch had agreed to pay all expenses of each Fund, in
connection with the consideration by the Board of the Fund's BlackRock
Investment Advisory Agreement and related agreements and all costs of
shareholder approval of the BlackRock Investment Advisory Agreement and, as
a result, the Fund would bear no costs in obtaining shareholder approval of
the BlackRock Investment Advisory Agreement.
Certain of these considerations are discussed in more detail below.
In its review of the Fund's BlackRock Investment Advisory Agreement, each
Fund's Board assessed the nature, quality and scope of the services to be
provided to the Fund by the personnel of BlackRock Advisors and its affiliates,
including administrative services, shareholder services, oversight of fund
accounting and assistance in meeting legal and regulatory requirements. In
its review of the Fund's BlackRock Investment Advisory Agreement, each Fund's
Board also considered a range of information in connection with its oversight
of the services to be provided by BlackRock Advisors and its affiliates. Among
the matters considered for each Fund were: (a) fees (in addition to management
fees) to be paid to BlackRock Advisors and its affiliates by the Fund; (b) Fund
operating expenses paid to third parties; (c) the resources devoted to and
compliance reports relating to the Fund's investment objective, policies and
restrictions, and its compliance with its Code of Ethics and BlackRock
Advisors' compliance policies and procedures; and (d) the nature, cost and
character of non-investment management services to be provided by BlackRock
Advisors and its affiliates.
ANNUAL REPORTS OCTOBER 31, 2006
Disclosure of New Investment Advisory Agreement (continued)
In the period prior to each Fund's Board meeting to consider renewal of the
Fund's Previous Investment Advisory Agreement, the Board had requested and
received materials specifically relating to the Previous Investment Advisory
Agreement. For each Fund, these materials included (a) information compiled by
Lipper on the fees and expenses and the investment performance of the Fund as
compared to a comparable group of funds as classified by Lipper; (b)
information comparing the Fund's market price with its net asset value per
share; (c) a discussion by the Fund's portfolio management team on investment
strategies used by the Fund during its most recent fiscal year; (d)
information on the profitability to the Previous Investment Adviser of the
Fund's Previous Investment Advisory Agreement and other payments received by
the Previous Investment Adviser and its affiliates from the Fund; and (e)
information provided by the Previous Investment Adviser concerning services
related to the valuation and pricing of Fund portfolio holdings, the Fund's
portfolio turnover statistics, and direct and indirect benefits to the
Previous Investment Adviser and its affiliates from their relationship with
the Fund.
In their deliberations, each Fund's directors/trustees considered information
received in connection with their most recent approval of the continuance of
the Fund's Previous Investment Advisory Agreement, in addition to information
provided by BlackRock and BlackRock Advisors in connection with their
evaluation of the terms and conditions of the Fund's BlackRock Investment
Advisory Agreement. None of the Funds' directors/trustees identified any
particular information that was all-important or controlling. Each Fund's
directors/trustees, including a majority of the independent directors/
trustees, concluded that the terms of the Fund's BlackRock Investment
Advisory Agreement are appropriate, that the fees to be paid are reasonable in
light of the services to be provided to the Fund, and that the BlackRock
Investment Advisory Agreement should be approved and recommended to Fund
shareholders.
Nature, Quality and Extent of Services Provided--Each Fund's Board reviewed
the nature, quality and scope of services provided by the Previous Investment
Adviser, including the investment advisory services and the resulting
performance of the Fund, as well as the nature, quality and extent of services
expected to be provided by BlackRock Advisors. Each Fund's Board focused
primarily on the Previous Investment Adviser's investment advisory services
and the Fund's investment performance, but also considered certain areas in
which both the Previous Investment Adviser and the Fund received services as
part of the Merrill Lynch complex. Each Fund's Board compared the Fund's
performance - both including and excluding the effects of fees and expenses -
to the performance of a comparable group of funds, and the performance of a
relevant index or combination of indexes. While each Board reviews performance
data at least quarterly, consistent with the Previous Investment Adviser's
investment goals, the Board attaches more importance to performance over
relatively long periods of time, typically three to five years.
In evaluating the nature, quality and extent of the services to be provided
by BlackRock Advisors under each Fund's BlackRock Investment Advisory
Agreement, the directors/trustees considered, among other things, the expected
impact of the Transaction on the operations, facilities, organization and
personnel of New BlackRock and how it would affect the Fund; the ability of
BlackRock Advisors to perform its duties after the Transaction; and any
anticipated changes to the investment and other practices of the Fund.
Each Fund's directors/trustees were given information with respect to the
potential benefits to the Fund and its shareholders from having access to
BlackRock's state of the art technology and risk management analytic tools,
including the investment tools provided under the BlackRock Solutions brand
name.
Each Fund's directors/trustees were advised that, as a result of Merrill
Lynch's equity interest in BlackRock after the Transaction, the Fund would
continue to be subject to restrictions concerning certain transactions
involving Merrill Lynch affiliates (for example, transactions with a Merrill
Lynch broker-dealer acting as principal) absent revised or new regulatory
relief. Each Fund's directors/trustees were advised that a revision of
existing regulatory relief with respect to these restrictions was being sought
from the Securities and Exchange Commission and were advised of the
possibility of the receipt of such revised regulatory relief.
ANNUAL REPORTS OCTOBER 31, 2006
Based on their review of the materials provided and the assurances they had
received from the management of Merrill Lynch and of BlackRock, each Fund's
directors/trustees determined that the nature and quality of services to be
provided to the Fund under the Fund's BlackRock Investment Advisory Agreement
were expected to be as good as or better than that provided under the Fund's
Previous Investment Advisory Agreement. The directors/trustees were advised
that BlackRock Advisors did not plan to change any of the Funds' portfolio
management team upon the closing of the transaction. It was noted, however,
that other changes in personnel were expected to follow the Transaction and
the combination of the operations of the Previous Investment Adviser and its
affiliates with those of BlackRock. Each Fund's directors/trustees noted that
if current portfolio managers or other personnel were to cease to be available
prior to the closing of the Transaction, the Board would consider all
available options, including seeking the investment advisory or other services
of BlackRock affiliates. Accordingly, each Fund's directors/trustees concluded
that, overall, they were satisfied with assurances from BlackRock and
BlackRock Advisors as to the expected nature, quality and extent of the
services to be provided to the Fund under the Fund's BlackRock Investment
Advisory Agreement.
Costs of Services Provided, Fees and Profitability--It was noted that, in
conjunction with their recent review of the Fund's Previous Investment Advisory
Agreement, each Fund's directors/trustees had received, among other things, a
report from Lipper comparing the Fund's fees and expenses to those of a peer
group selected by Lipper, and information as to the fees charged by the
Previous Investment Adviser or its affiliates to other registered investment
company clients for investment management services. Each Fund's Board reviewed
the Fund's contractual management fee rate and actual management fee rate as a
percentage of total assets at common asset levels - the actual rate includes
advisory fees and the effects of any fee waivers - compared to the other funds
in its Lipper category. Each Fund's Board also compared the Fund's total
expenses to those of other comparable funds. The information showed that each
Fund had fees and expenses within the range of fees and expenses of comparable
funds. Each Fund's Board considered the services to be provided by and the fees
to be charged by BlackRock Advisors to other funds with similar investment
mandates and noted that the fees charged by BlackRock Advisors in those cases,
including fee waivers and expense reimbursements, were generally comparable to
those being charged to the Fund. Each Fund's Board concluded that the Fund's
management fee and fee rate and overall expense ratio are reasonable compared
to those of other comparable funds.
In evaluating the costs of the services to be provided by BlackRock Advisors
under the Fund's BlackRock Investment Advisory Agreement, each Fund's
directors/trustees considered, among other things, whether advisory fees or
other expenses would change as a result of the Transaction. Based on their
review of the materials provided and the fact that the Fund's BlackRock
Investment Advisory Agreement is substantially similar to the Fund's Previous
Investment Advisory Agreement in all material respects, including the rate of
compensation, each Fund's directors/trustees determined that the Transaction
should not increase the total fees payable, including any fee waivers or after
any expense caps or expense reimbursements, for advisory and administrative
services. Each Fund's directors/trustees noted that it was not possible to
predict how the Trans-action would affect BlackRock Advisors' profitability
from its relationship with the Fund.
Each Fund's directors/trustees discussed with BlackRock Advisors its general
methodology to be used in determining its profitability with respect to its
relationship with the Fund. Each Fund's directors/trustees noted that they
expect to receive profitability information from BlackRock Advisors on at
least an annual basis.
Economies of Scale--Each Fund's Board considered the extent to which economies
of scale might be realized as the assets of the Fund increase and whether
there should be changes in the management fee rate or structure in order to
enable the Fund to participate in these economies of scale. The Board
considered economies of scale to the extent applicable to each Fund's closed-
end structure and determined that each Fund appropriately benefits from any
economies of scale and no changes were currently necessary.
Fall-Out Benefits--Each Fund's directors/trustees considered whether the fund
would generate any fall-out benefits to BlackRock Advisors. Fall-out benefits
are indirect profits from other activities that accrue to a fund's investment
adviser or its affiliates solely because of the existence of the fund. In
evaluating the fall-out benefits to be received by BlackRock Advisors under
the Fund's BlackRock Investment Advisory Agreement, each Fund's
directors/trustees considered whether BlackRock Advisors would experience such
benefits to the same extent that the Previous Investment Adviser was
experiencing such benefits under the Fund's Previous Investment Advisory
Agreement. Based on their review of the materials provided, including
materials received in connection with their most recent approval of the
continuance of the Fund's Previous Investment Advisory Agreement, and their
discussions with management of the Previous Investment Adviser and BlackRock,
each Fund's directors/trustees determined that BlackRock Advisors' fall-out
benefits could include increased ability for BlackRock to distribute shares of
its funds and other investment products. The directors/trustees noted that any
fall-out benefits were difficult to quantify with certainty.
ANNUAL REPORTS OCTOBER 31, 2006
Disclosure of New Investment Advisory Agreement (concluded)
Investment Performance--Each Fund's Board considered investment performance
for the Fund. Each Fund's directors/trustees compared the Fund's performance -
both including and excluding the effects of fees and expenses - to the
performance of a comparable group of funds, and the performance of a relevant
index or combination of indexes. The comparative information received from
Lipper showed each Fund's performance at various levels within the range of
performance of comparable funds over different time periods. Each Fund's
directors/trustees believed the Fund's performance was satisfactory. Also,
each Board took into account the investment performance of funds advised by
BlackRock Advisors. Each Board considered comparative information from Lipper
which showed that the performance of the funds advised by BlackRock Advisors
was within the range of performance of comparable funds over different time
periods. Each Fund's Board noted BlackRock's considerable investment management
experience and capabilities, but was unable to predict what effect, if any,
consummation of the Transaction would have on the future performance of the
Fund.
Conclusion--After the independent directors/trustees of each Fund deliberated
in executive session, the Fund's entire Board, including the independent
directors/trustees, approved the Fund's BlackRock Investment Advisory
Agreement, concluding that the advisory fee rate was reasonable in relation to
the services provided and that the BlackRock Investment Advisory Agreement was
in the best interests of the shareholders. In approving the Fund's BlackRock
Investment Advisory Agreement, each Fund's Board noted that it anticipated
reviewing the continuance of the agreement in advance of the expiration of the
initial two-year period.
New BlackRock Sub-Advisory Agreements--Matters Considered by the Boards
At an in-person meeting held on August 22-23, 2006, each Fund's Board of
Directors or Board of Trustees, as pertinent, including the independent
directors/trustees, discussed and approved the Fund's sub-advisory agreement
(each, a "BlackRock Sub-Advisory Agreement") between BlackRock Advisors and
its affiliate, BlackRock Investment Management, LLC (the "Sub-Adviser"). Each
Fund's BlackRock Sub-Advisory Agreement became effective on September 29,
2006, at the same time the Fund's BlackRock Investment Advisory Agreement
became effective.
Pursuant to each Fund's BlackRock Sub-Advisory Agreement, the Sub-Adviser
receives a monthly fee from BlackRock Advisors equal to 59% of the advisory
fee received by BlackRock Advisors from the Fund. BlackRock Advisors pays the
Sub-Adviser out of its own resources, and there is no increase in the expenses
of any of the Funds as a result of the Fund's BlackRock Sub-Advisory
Agreement.
In approving the Fund's BlackRock Sub-Advisory Agreement at the August in
person meeting, each Fund's Board reviewed its considerations in connection
with its approval of the Fund's BlackRock Investment Advisory Agreement in May
2006. Each Fund's Board relied on the same information and considered the same
factors as those discussed above in connection with the approval of the Fund's
BlackRock Investment Advisory Agreement, and came to the same conclusion. In
reviewing the sub-advisory fee rate provided in each Fund's BlackRock Sub-
Advisory Agreement, the Fund's Board noted the fact that both BlackRock
Advisors and the Sub-Adviser have significant responsibilities under their
respective advisory agreements. BlackRock Advisors remains responsible for
oversight of each Fund's operations and administration, and the Sub-Adviser
provides advisory services to the Fund and is responsible for the day-to-day
management of the Fund's portfolio under the Fund's BlackRock Sub-Advisory
Agreement. Each Fund's Board also took into account the fact that there is no
increase in total advisory fees paid by the Fund as a result of the Fund's
BlackRock Sub-Advisory Agreement. Under all of the circumstances, each Fund's
Board concluded that it was a reasonable allocation of fees for the Sub-
Adviser to receive 59% of the advisory fee paid by the Fund to BlackRock
Advisors.
After each Fund's independent directors/trustees deliberated in executive
session, each Fund's entire Board, including the independent directors/
trustees, approved the Fund's BlackRock Sub-Advisory Agreement, concluding
that the sub-advisory fee was reasonable in relation to the services provided
and that the BlackRock Sub-Advisory Agreement was in the best interests of
shareholders.
ANNUAL REPORTS OCTOBER 31, 2006
The Benefits and Risks of Leveraging
The Funds utilize leveraging to seek to enhance the yield and net asset value
of their Common Shares/Common Stock. However, these objectives cannot be
achieved in all interest rate environments. To leverage, the Funds issue
Preferred Shares/Stock, which pay dividends at prevailing short-term interest
rates, and invests the proceeds in long-term municipal bonds. The interest
earned on these investments, net of dividends to Preferred Shares/Stock, is
paid to Common Shareholders/Common Stock shareholders in the form of
dividends, and the value of these portfolio holdings is reflected in the per
share net asset value of the Funds' Common Shares/Stock. However, in order to
benefit Common Shareholders/Common Stock shareholders, the yield curve must be
positively sloped; that is, short-term interest rates must be lower than long-
term interest rates. At the same time, a period of generally declining
interest rates will benefit Common Shareholders/Common Stock shareholders. If
either of these conditions change, then the risks of leveraging will begin to
outweigh the benefits.
To illustrate these concepts, assume a fund's Common Shares/Stock
capitalization of $100 million and the issuance of Preferred Shares/Stock for
an additional $50 million, creating a total value of $150 million available
for investment in long-term municipal bonds. If prevailing short-term interest
rates are approximately 3% and long-term interest rates are approximately 6%,
the yield curve has a strongly positive slope. The fund pays dividends on the
$50 million of Preferred Shares/Stock based on the lower short-term interest
rates. At the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates.
In this case, the dividends paid to Preferred Shareholders/ Preferred Stock
shareholders are significantly lower than the income earned on the fund's
long-term investments, and therefore the Common Shareholders/Common Stock
shareholders are the beneficiaries of the incremental yield. However, if short-
term interest rates rise, narrowing the differential between short-term and
long-term interest rates, the incremental yield pickup on the Common Shares/
Stock will be reduced or eliminated completely. At the same time, the market
value of the fund's Common Shares/Stock (that is, its price as listed on the
New York Stock Exchange or the American Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common Shares'/
Stocks' net asset value will reflect the full decline in the price of the
portfolio's investments, since the value of the fund's Preferred Shares/Stock
does not fluctuate. In addition to the decline in net asset value, the market
value of the fund's Common Shares/Stock may also decline. As of October 31,
2006, BlackRock MuniYield Arizona Fund, Inc., BlackRock MuniYield California
Fund, Inc., BlackRock MuniYield California Insured Fund, Inc. BlackRock
MuniYield Florida Fund, BlackRock MuniYield Michigan Insured Fund II, Inc. and
BlackRock MuniYield New York Insured Fund, Inc. had leverage amounts, due to
Auction Market Preferred Shares/Stock, of 38.05%, 35.23%, 34.65%, 34.94%,
35.97% and 34.86% of total net assets, respectively, before the deduction of
Preferred Shares/Stock.
As a part of their investment strategy, the Funds may invest in certain
securities whose potential income return is inversely related to changes in a
floating interest rate ("inverse floaters"). In general, income on inverse
floaters will decrease when short-term interest rates increase and increase
when short-term interest rates decrease. Investments in inverse floaters may
be characterized as derivative securities and may subject the Funds to the
risks of reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of providing
investment leverage and, as a result, the market value of such securities will
generally be more volatile than that of fixed rate, tax-exempt securities. To
the extent the Funds invest in inverse floaters, the market value of each
Fund's portfolio and the net asset value of each Fund's shares may also be
more volatile than if the Funds did not invest in these securities.
ANNUAL REPORTS OCTOBER 31, 2006
Proxy Results
BlackRock MuniYield Arizona Fund, Inc.
During the six-month period ended October 31, 2006, BlackRock MuniYield
Arizona Fund, Inc.'s shareholders voted on the following proposals, which
were approved at a special shareholders' meeting on August 15, 2006. A
description of the proposals and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement with
BlackRock Advisors, Inc. 2,372,656 104,312 151,044
To approve a contingent subadvisory agreement with
BlackRock Advisors, Inc. 2,384,510 104,313 139,189
BlackRock MuniYield California Fund, Inc.
During the six-month period ended October 31, 2006, BlackRock MuniYield
California Fund, Inc.'s shareholders voted on the following proposals, which
were approved at a special shareholders' meeting on August 15, 2006. A
description of the proposals and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement with
BlackRock Advisors, Inc. 11,533,151 460,731 689,660
To approve a contingent subadvisory agreement with
BlackRock Advisors, Inc. 11,520,292 470,208 693,042
BlackRock MuniYield California Insured Fund, Inc.
During the six-month period ended October 31, 2006, BlackRock MuniYield
California Insured Fund, Inc.'s shareholders voted on the following
proposals, which were approved at a special shareholders' meeting on August
15, 2006. A description of the proposals and number of shares voted were as
follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement with
BlackRock Advisors, Inc. 18,542,322 578,881 1,085,793
To approve a contingent subadvisory agreement with
BlackRock Advisors, Inc. 18,435,042 635,436 1,136,518
ANNUAL REPORTS OCTOBER 31, 2006
Proxy Results (concluded)
BlackRock MuniYield Florida Fund
During the six-month period ended October 31, 2006, BlackRock MuniYield
Florida Fund's shareholders voted on the following proposals, which were
approved at a special shareholders' meeting on July 31, 2006. A description
of the proposals and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement with
BlackRock Advisors, Inc. 7,131,609 180,902 195,765
To approve a contingent subadvisory agreement with
BlackRock Advisors, Inc. 7,117,086 197,984 193,206
BlackRock MuniYield Michigan Insured Fund II, Inc.
During the six-month period ended October 31, 2006, BlackRock MuniYield
Michigan Insured Fund II, Inc.'s shareholders voted on the following
proposals, which were approved at a special shareholders' meeting on August
15, 2006. A description of the proposals and number of shares voted were as
follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement with
BlackRock Advisors, Inc. 6,339,897 307,808 427,453
To approve a contingent subadvisory agreement with
BlackRock Advisors, Inc. 6,347,546 312,791 414,821
BlackRock MuniYield New York Insured Fund, Inc.
During the six-month period ended October 31, 2006, BlackRock MuniYield New
York Insured Fund, Inc.'s shareholders voted on the following proposals,
which were approved at a special shareholders' meeting on August 15, 2006. A
description of the proposals and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement with
BlackRock Advisors, Inc. 18,469,367 847,733 1,207,171
To approve a contingent subadvisory agreement with
BlackRock Advisors, Inc. 18,405,579 864,010 1,254,682
ANNUAL REPORTS OCTOBER 31, 2006
Officers and Directors or Trustees
Number of
Funds and
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director or Director or
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Interested Director or Trustee
Robert C. Doll, Jr.* President 2005 to Vice Chairman and Director of BlackRock, 122 Funds None
P.O. Box 9011 and Director present Inc., Global Chief Investment Officer for 168 Portfolios
Princeton, or Trustee Equities, Chairman of the BlackRock Retail
NJ 08543-9011 Operating Committee, and member of the
Age: 52 BlackRock Executive Committee since 2006;
President of the Funds advised by Merrill Lynch
Investment Managers, L.P. ("MLIM") and its
affiliates ("MLIM/FAM-advised funds") from 2005
to 2006 and Chief Investment Officer thereof from
2001 to 2006; President of MLIM and Fund Asset
Management, L.P. ("FAM") from 2001 to 2006;
Co-Head (Americas Region) thereof from 2000 to
2001 and Senior Vice President from 1999 to
2001; President and Director of Princeton Services,
Inc. ("Princeton Services") since 2001; President
of Princeton Administrators, L.P. ("Princeton
Administrators") from 2001 to 2006; Chief
Investment Officer of OppenheimerFunds, Inc. in
1999 and Executive Vice President thereof from
1991 to 1999.
* Mr. Doll is a director, trustee or member of an advisory board of certain other
investment companies for which BlackRock acts as investment adviser. Mr. Doll
is an "interested person," as described in the Investment Company Act, of the
Fund based on his current and former positions with BlackRock, Inc. and its
affiliates. Directors or Trustees serve until their resignation, removal or
death, or until December 31 of the year in which they turn 72. As Fund President,
Mr. Doll serves at the pleasure of the Board of Directors or Trustees.
Independent Directors or Trustees*
James H. Bodurtha** Director 1995 to Director, The China Business Group, Inc. since 37 Funds None
P.O. Box 9095 or Trustee present 1996 and Executive Vice President thereof from 57 Portfolios
Princeton, 1996 to 2003; Chairman of the Board, Berkshire
NJ 08543-9095 Holding Corporation since 1980; Partner, Squire,
Age: 62 Sanders & Dempsey from 1980 to 1993.
Kenneth A. Froot Director 2005 to Professor, Harvard University since 1992; 37 Funds None
P.O. Box 9095 or Trustee present Professor, Massachusetts Institute of Technology 57 Portfolios
Princeton, from 1986 to 1992.
NJ 08543-9095
Age: 49
ANNUAL REPORTS OCTOBER 31, 2006
Officers and Directors or Trustees (continued)
Number of
Funds and
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director or Director or
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Independent Directors or Trustees* (continued)
Joe Grills** Director 2002 to Member of the Committee of Investment of 37 Funds Kimco Realty
P.O. Box 9095 or Trustee present Employee Benefit Assets of the Association of 57 Portfolios Corporation
Princeton, Financial Professionals ("CIEBA") since 1986;
NJ 08543-9095 Member of CIEBA's Executive Committee since
Age: 71 1988 and its Chairman from 1991 to 1992;
Assistant Treasurer of International Business
Machines Corporation ("IBM") and Chief
Investment Officer of IBM Retirement Funds from
1986 to 1993; Member of the Investment Advisory
Committee of the State of New York Common
Retirement Fund since 1989; Member of the
Investment Advisory Committee of the Howard
Hughes Medical Institute from 1997 to 2000;
Director, Duke University Management Company
from 1992 to 2004, Vice Chairman thereof from
1998 to 2004, and Director Emeritus thereof since
2004; Director, LaSalle Street Fund from 1995 to
2001; Director, Kimco Realty Corporation since
1997; Member of the Investment Advisory
Committee of the Virginia Retirement System since
1998, Vice Chairman thereof from 2002 to 2005,
and Chairman thereof since 2005; Director,
Montpelier Foundation since 1998 and its Vice
Chairman since 2000; Member of the Investment
Committee of the Woodberry Forest School since
2000; Member of the Investment Committee of the
National Trust for Historic Preservation since 2000.
Herbert I. London Director 1992 Chairman of the Board of Directors of Vigilant 37 Funds None
P.O. Box 9095 or Trustee (MYC, Research, Inc. since 2006; Member of the Board 57 Portfolios
Princeton, MCA, of Directors for Grantham University since 2006;
NJ 08543-9095 MYF, Director of AIMS since 2006; Director of Reflex
Age: 67 MYM & Security since 2006; Director of InnoCentive, Inc.
MYN) and since 2006; Director of Cerego, LLC since 2005;
1993 Professor Emeritus, New York University since 2005;
(MZA) to John M. Olin Professor of Humanities, New York
present University from 1993 to 2005; and Professor
thereof from 1980 to 2005; President, Hudson
Institute since 1997 and Trustee thereof since
1980; Dean, Gallatin Division of New York
University from 1976 to 1993; Distinguished Fellow,
Herman Kahn Chair, Hudson Institute from 1984 to
1985; Director, Damon Corp. from 1991 to 1995;
Overseer, Center for Naval Analyses from 1983
to 1993.
ANNUAL REPORTS OCTOBER 31, 2006
Officers and Directors or Trustees (continued)
Number of
Funds and
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director or Director or
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Independent Directors or Trustees* (concluded)
Roberta Cooper Ramo Director 2000 to Shareholder, Modrall, Sperling, Roehl, Harris & 37 Funds None
P.O. Box 9095 or Trustee present Sisk, P.A. since 1993; President, American Bar 57 Portfolios
Princeton, Association from 1995 to 1996 and Member of
NJ 08543-9095 the Board of Governors thereof from 1994 to 1997;
Age: 64 Shareholder, Poole, Kelly and Ramo, Attorneys at
Law P.C. from 1977 to 1993; Director of ECMC
Group (service provider to students, schools and
lenders) since 2001; Director, United New Mexico
Bank (now Wells Fargo) from 1983 to 1988;
Director, First National Bank of New Mexico (now
Wells Fargo) from 1975 to 1976; Vice President,
American Law Institute since 2004.
Robert S. Salomon, Jr. Director 2002 to Principal of STI Management (investment adviser) 37 Funds None
P.O. Box 9095 or Trustee present from 1994 to 2005; Chairman and CEO of 57 Portfolios
Princeton, Salomon Brothers Asset Management Inc. from
NJ 08543-9095 1992 to 1995; Chairman of Salomon Brothers
Age: 69 Equity Mutual Funds from 1992 to 1995; regular
columnist with Forbes Magazine from 1992 to
2002; Director of Stock Research and U.S. Equity
Strategist at Salomon Brothers Inc. from 1975 to
1991; Trustee, Commonfund from 1980 to 2001.
* Directors or Trustees serve until their resignation, removal or death,
or until December 31 of the year in which they turn 72.
** Chairman of the Board of Directors or Trustees and the Audit Committee.
Position(s) Length of
Held with Time
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years
Fund Officers*
Donald C. Burke Vice 1993 to Managing Director of BlackRock since 2006; Managing Director of MLIM and FAM
P.O. Box 9011 President present in 2006; First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer
Princeton, and and thereof from 1999 to 2006; Vice President of MLIM and FAM from 1990 to 1997.
NJ 08543-9011 Treasurer 1999 to
Age: 46 present
John M. Loffredo Senior 2002 to Managing Director of BlackRock since 2006; Managing Director of MLIM from 2000
P.O. Box 9011 Vice present to 2006; Director (Municipal Tax-Exempt Fund Management) of MLIM from 1997
Princeton, President to 2000.
NJ 08543-9011
Age: 42
Timothy T. Browse Vice 2004 Vice President of BlackRock since 2006; Vice President (Municipal Tax-Exempt Fund
P.O. Box 9011 President (MYN) to Management) of MLIM from 2004 to 2006; Vice President, portfolio manager and
Princeton, present team leader of the Municipal Investments Team with Lord Abbett & Co. from 2000
NJ 08543-9011 to 2003; Vice President and portfolio manager in the municipal fund management
Age: 47 group of Eaton Vance Management, Inc. from 1992 to 2000.
Michael A. Kalinoski Vice 1999 Vice President of BlackRock since 2006; Vice President (Municipal Tax-Exempt Fund
P.O. Box 9011 President (MZA) to Management) of MLIM from 1999 to 2006.
Princeton, present
NJ 08543-9011
Age: 36
ANNUAL REPORTS OCTOBER 31, 2006
Officers and Directors or Trustees (concluded)
Position(s) Length of
Held with Time
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years
Fund Officers* (concluded)
Walter C. O'Connor Vice 1995 Managing Director of BlackRock since 2006; Managing Director (Municipal Tax-Exempt
P.O. Box 9011 President (MYC) Fund Management) of MLIM from 2003 to 2006; Director of MLM from 2000 to 2003;
Princeton, and 2002 Vice President of MLIM from 1993 to 2000.
NJ 08543-9011 (MCA) to
Age: 45 present
Robert D. Sneeden Vice 1998 Vice President of BlackRock since 2006; Vice President (Municipal Tax-Exempt Fund
P.O. Box 9011 President (MYF) to Management) of MLIM from 1998 to 2006; Assistant Vice President of MLIM from
Princeton, present 1994 to 1998.
NJ 08543-9011
Age: 53
Fred K. Stuebe Vice 1995 Director of BlackRock since 2006; Director (Municipal Tax-Exempt Fund Management)
P.O. Box 9011 President (MYM) to of MLIM from 2000 to 2006; Vice President of MLIM from 1994 to 2000.
Princeton, present
NJ 08543-9011
Age: 56
Jeffrey Hiller Fund Chief 2004 to Managing Director of BlackRock and Fund Chief Compliance Officer since 2006;
P.O. Box 9011 Compliance present Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President
Princeton, Officer and Chief Compliance Officer of MLIM (Americas Region) from 2004 to 2006; Chief
NJ 08543-9011 Compliance Officer of the IQ Funds since 2004; Global Director of Compliance at
Age: 55 Morgan Stanley Investment Management from 2002 to 2004; Managing Director and
Global Director of Compliance at Citigroup Asset Management from 2000 to 2002;
Chief Compliance Officer at Soros Fund Management in 2000; Chief Compliance
Officer at Prudential Financial from 1995 to 2000; Senior Counsel in the Securities
and Exchange Commission's Division of Enforcement in Washington, D.C. from 1990
to 1995.
Alice A. Pellegrino Secretary 2004 to Director of BlackRock since 2006; Director (Legal Advisory) of MLIM from 2002 to
P.O. Box 9011 present 2006; Vice President of MLIM from 1999 to 2002; Attorney associated with MLIM
Princeton, from 1997 to 2006; Secretary of MLIM, FAM, FAM Distributors, Inc. and Princeton
NJ 08543-9011 Services from 2004 to 2006.
Age: 46
* Officers of the Funds serve at the pleasure of the Board of Directors or Trustees.
Custodians and Transfer Agents
BlackRock MuniYield Arizona Fund, Inc.
BlackRock MuniYield California Fund, Inc.
BlackRock MuniYield Florida Fund
BlackRock MuniYield Michigan Insured Fund II, Inc.
BlackRock MuniYield New York Insured Fund, Inc.
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agents
Common Stock/Shares:
The Bank of New York
101 Barclay Street - 11 East
New York, NY 10286
Preferred Stock:
The Bank of New York
101 Barclay Street - 7 West
New York, NY 10286
BlackRock MuniYield California Insured Fund, Inc.
Custodian
State Street Bank and
Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agents
Common Stock:
Computershare Trust Company, N.A.
P.O. Box 43010
Providence, RI 02940-3010
Preferred Stock/Shares:
The Bank of New York
101 Barclay Street - 7 West
New York, NY 10286
ANNUAL REPORTS OCTOBER 31, 2006
Investment Objectives
AMEX Symbol BlackRock MuniYield Arizona Fund, Inc. seeks to provide
MZA shareholders with as high a level of current income exempt from
federal and Arizona income taxes as is consistent with its
investment policies and prudent investment management by investing
primarily in a portfolio of long-term, investment grade municipal
obligations the interest on which, in the opinion of bond counsel
to the issuer, is exempt from federal and Arizona income taxes.
NYSE Symbol BlackRock MuniYield California Fund, Inc. seeks to provide
MYC shareholders with as high a level of current income exempt from
federal and California income taxes as is consistent with its
investment policies and prudent investment management by investing
primarily in a portfolio of long-term municipal obligations the
interest on which, in the opinion of bond counsel to the issuer,
is exempt from federal and California income taxes.
NYSE Symbol BlackRock MuniYield California Insured Fund, Inc. seeks to provide
MCA shareholders with as high a level of current income exempt from
federal and California income taxes as is consistent with its
investment policies and prudent investment management by investing
primarily in a portfolio of long-term, investment grade municipal
obligations the interest on which, in the opinion of bond counsel
to the issuer, is exempt from federal and California income taxes.
NYSE Symbol BlackRock MuniYield Florida Fund seeks to provide shareholders
MYF with as high a level of current income exempt from federal income
taxes as is consistent with its investment policies and prudent
investment management by investing primarily in a portfolio of
long-term municipal obligations the interest on which, in the
opinion of bond counsel to the issuer, is exempt from federal
income taxes and which enables shares of the Fund to be exempt
from Florida intangible personal property taxes.
NYSE Symbol BlackRock MuniYield Michigan Insured Fund II, Inc. seeks to
MYM provide shareholders with as high a level of current income exempt
from federal and Michigan income taxes as is consistent with its
investment policies and prudent investment management by investing
primarily in a portfolio of long-term municipal obligations the
interest on which, in the opinion of bond counsel to the issuer,
is exempt from federal and Michigan income taxes.
NYSE Symbol BlackRock MuniYield New York Insured Fund, Inc. seeks to provide
MYN shareholders with as high a level of current income exempt from
federal income tax and New York State and New York City personal
income taxes as is consistent with its investment policies and
prudent investment management by investing primarily in a
portfolio of long-term municipal obligations the interest on
which, in the opinion of bond counsel to the issuer, is exempt
from federal income tax and New York State and New York City
personal income taxes.
Address For All Funds
P.O. Box 9011
Princeton, NJ 08543-9011
ANNUAL REPORTS OCTOBER 31, 2006
Blackrock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former
fund investors and individual clients (collectively, "Clients") and to
safeguarding their nonpublic personal information. The following information
is provided to help you understand what personal information BlackRock
collects, how we protect that information and why in certain cases we share
such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about
you from different sources, including the following: (i) information we
receive from you or, if applicable, your financial intermediary, on
applications, forms or other documents; (ii) information about your
transactions with us, our affiliates, or others; (iii) information we receive
from a consumer reporting agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any
nonpublic personal information about its Clients, except as permitted by law
or as is necessary to service Client accounts. These nonaffiliated third
parties are required to protect the confidentiality and security of this
information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that
may be of interest to you. In addition, BlackRock restricts access to
nonpublic personal information about its Clients to those BlackRock employees
with a legitimate business need for the information. BlackRock maintains
physical, electronic and procedural safeguards that are designed to protect
the nonpublic personal information of its Clients, including procedures
relating to the proper storage and disposal of such information.
Availability of Quarterly Schedule of Investments
The Funds file their complete schedules of portfolio holdings with the
Securities and Exchange Commission ("SEC") for the first and third quarters
of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the
SEC's Web site at http://www.sec.gov. The Funds' Forms N-Q may also be
reviewed and copied at the SEC's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained
by calling1-800-SEC-0330.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Funds' Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Funds' electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial adviser. Please note that not all investment
advisers, banks or brokerages may offer this service.
ANNUAL REPORTS OCTOBER 31, 2006
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of
the end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial
officer and principal accounting officer, or persons performing
similar functions. A copy of the code of ethics is available without
charge at www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors has determined that (i) the registrant has the following
audit committee financial experts serving on its audit committee and
(ii) each audit committee financial expert is independent: (1) Joe
Grills, (2) Robert S. Salomon, Jr., and (3) Stephen B. Swensrud
(retired as of December 31, 2005).
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending October 31, 2006 - $28,000
Fiscal Year Ending October 31, 2005 - $27,500
(b) Audit-Related Fees -
Fiscal Year Ending October 31, 2006 - $3,500
Fiscal Year Ending October 31, 2005 - $19,900
The nature of the services include professional services rendered in
connection with the registration and issuance of new AMP series of
the Fund, and compliance procedures associated with the Fund's AMPS.
(c) Tax Fees - Fiscal Year Ending October 31, 2006 - $6,000
Fiscal Year Ending October 31, 2005 - $5,700
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ending October 31, 2006 - $0
Fiscal Year Ending October 31, 2005 - $0
(e)(1) The registrant's audit committee (the "Committee") has
adopted policies and procedures with regard to the pre-approval of
services. Audit, audit-related and tax compliance services provided
to the registrant on an annual basis require specific pre-approval
by the Committee. The Committee also must approve other non-audit
services provided to the registrant and those non-audit services
provided to the registrant's affiliated service providers that
relate directly to the operations and the financial reporting of the
registrant. Certain of these non-audit services that the Committee
believes are a) consistent with the SEC's auditor independence rules
and b) routine and recurring services that will not impair the
independence of the independent accountants may be approved by the
Committee without consideration on a specific case-by-case basis
("general pre-approval"). However, such services will only be deemed
pre-approved provided that any individual project does not exceed
$5,000 attributable to the registrant or $50,000 for all of the
registrants the Committee oversees. Any proposed services exceeding
the pre-approved cost levels will require specific pre-approval by
the Committee, as will any other services not subject to general pre-
approval (e.g., unanticipated but permissible services). The
Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board
meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending October 31, 2006 - $3,204,783
Fiscal Year Ending October 31, 2005 - $6,277,749
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling,
controlled by, or under common control with the investment adviser
that provides ongoing services to the registrant that were not pre-
approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation
S-X is compatible with maintaining the principal accountant's
independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,739,500, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals
are members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act (15 U.S.C. 78c(a)(58)(A)):
James H. Bodurtha
Kenneth A. Froot
Joe Grills
Herbert I. London
Roberta Cooper Ramo
Robert S. Salomon, Jr.
Stephen B. Swensrud (retired as of December 31, 2005)
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies -
Proxy Voting Policies and Procedures
Each Fund's Board of Directors has delegated to the Manager
authority to vote all proxies relating to the Fund's portfolio
securities. The Manager has adopted policies and procedures (the
"Proxy Voting Procedures") with respect to the voting of proxies
related to the portfolio securities held in the account of one or
more of its clients, including a Fund. Pursuant to these Proxy
Voting Procedures, the Manager's primary objective when voting
proxies is to make proxy voting decisions solely in the best
interests of each Fund and its shareholders, and to act in a manner
that the Manager believes is most likely to enhance the economic
value of the securities held by the Fund. The Proxy Voting
Procedures are designed to ensure that the Manager considers the
interests of its clients, including each Fund, and not the interests
of the Manager, when voting proxies and that real (or perceived)
material conflicts that may arise between the Manager's interest and
those of the Manager's clients are properly addressed and resolved.
In order to implement the Proxy Voting Procedures, the Manager has
formed a Proxy Voting Committee (the "Committee"). The Committee,
which is a subcommittee of the Manager's Equity Investment Policy
Oversight Committee ("EIPOC"), is comprised of a senior member of
the Manager's equity management group who is also a member of EIPOC,
one or more other senior investment professionals appointed by
EIPOC, portfolio managers and investment analysts appointed by EIPOC
and any other personnel EIPOC deems appropriate. The Committee will
also include two non-voting representatives from the Manager's Legal
Department appointed by the Manager's General Counsel. The
Committee's membership shall be limited to full-time employees of
the Manager. No person with any investment banking, trading, retail
brokerage or research responsibilities for the Manager's affiliates
may serve as a member of the Committee or participate in its
decision making (except to the extent such person is asked by the
Committee to present information to the Committee on the same basis
as other interested knowledgeable parties not affiliated with the
Manager might be asked to do so). The Committee determines how to
vote the proxies of all clients, including a Fund, that have
delegated proxy voting authority to the Manager and seeks to ensure
that all votes are consistent with the best interests of those
clients and are free from unwarranted and inappropriate influences.
The Committee establishes general proxy voting policies for the
Manager and is responsible for determining how those policies are
applied to specific proxy votes, in light of each issuer's unique
structure, management, strategic options and, in certain
circumstances, probable economic and other anticipated consequences
of alternate actions. In so doing, the Committee may determine to
vote a particular proxy in a manner contrary to its generally stated
policies. In addition, the Committee will be responsible for
ensuring that all reporting and recordkeeping requirements related
to proxy voting are fulfilled.
The Committee may determine that the subject matter of a recurring
proxy issue is not suitable for general voting policies and requires
a case-by-case determination. In such cases, the Committee may elect
not to adopt a specific voting policy applicable to that issue. The
Manager believes that certain proxy voting issues require investment
analysis - such as approval of mergers and other significant
corporate transactions - akin to investment decisions, and are,
therefore, not suitable for general guidelines. The Committee may
elect to adopt a common position for the Manager on certain proxy
votes that are akin to investment decisions, or determine to permit
the portfolio manager to make individual decisions on how best to
maximize economic value for a Fund (similar to normal buy/sell
investment decisions made by such portfolio managers). While it is
expected that the Manager will generally seek to vote proxies over
which the Manager exercises voting authority in a uniform manner for
all the Manager's clients, the Committee, in conjunction with a
Fund's portfolio manager, may determine that the Fund's specific
circumstances require that its proxies be voted differently.
To assist the Manager in voting proxies, the Committee has retained
Institutional Shareholder Services ("ISS"). ISS is an independent
adviser that specializes in providing a variety of fiduciary-level
proxy-related services to institutional investment managers, plan
sponsors, custodians, consultants, and other institutional
investors. The services provided to the Manager by ISS include in-
depth research, voting recommendations (although the Manager is not
obligated to follow such recommendations), vote execution, and
recordkeeping. ISS will also assist the Fund in fulfilling its
reporting and recordkeeping obligations under the Investment Company
Act.
The Manager's Proxy Voting Procedures also address special
circumstances that can arise in connection with proxy voting. For
instance, under the Proxy Voting Procedures, the Manager generally
will not seek to vote proxies related to portfolio securities that
are on loan, although it may do so under certain circumstances. In
addition, the Manager will vote proxies related to securities of
foreign issuers only on a best efforts basis and may elect not to
vote at all in certain countries where the Committee determines that
the costs associated with voting generally outweigh the benefits.
The Committee may at any time override these general policies if it
determines that such action is in the best interests of a Fund.
From time to time, the Manager may be required to vote proxies in
respect of an issuer where an affiliate of the Manager (each, an
"Affiliate"), or a money management or other client of the Manager,
including investment companies for which the Manager provides
investment advisory, administrative and/or other services (each, a
"Client"), is involved. The Proxy Voting Procedures and the
Manager's adherence to those procedures are designed to address such
conflicts of interest. The Committee intends to strictly adhere to
the Proxy Voting Procedures in all proxy matters, including matters
involving Affiliates and Clients. If, however, an issue representing
a non-routine matter that is material to an Affiliate or a widely
known Client is involved such that the Committee does not reasonably
believe it is able to follow its guidelines (or if the particular
proxy matter is not addressed by the guidelines) and vote
impartially, the Committee may, in its discretion for the purposes
of ensuring that an independent determination is reached, retain an
independent fiduciary to advise the Committee on how to vote or to
cast votes on behalf of the Manager's clients.
In the event that the Committee determines not to retain an
independent fiduciary, or it does not follow the advice of such an
independent fiduciary, the Committee may pass the voting power to a
subcommittee, appointed by EIPOC (with advice from the Secretary of
the Committee), consisting solely of Committee members selected by
EIPOC. EIPOC shall appoint to the subcommittee, where appropriate,
only persons whose job responsibilities do not include contact with
the Client and whose job evaluations would not be affected by the
Manager's relationship with the Client (or failure to retain such
relationship). The subcommittee shall determine whether and how to
vote all proxies on behalf of the Manager's clients or, if the proxy
matter is, in their judgment, akin to an investment decision, to
defer to the applicable portfolio managers, provided that, if the
subcommittee determines to alter the Manager's normal voting
guidelines or, on matters where the Manager's policy is case-by-
case, does not follow the voting recommendation of any proxy voting
service or other independent fiduciary that may be retained to
provide research or advice to the Manager on that matter, no proxies
relating to the Client may be voted unless the Secretary, or in the
Secretary's absence, the Assistant Secretary of the Committee
concurs that the subcommittee's determination is consistent with the
Manager's fiduciary duties.
In addition to the general principles outlined above, the Manager
has adopted voting guidelines with respect to certain recurring
proxy issues that are not expected to involve unusual circumstances.
These policies are guidelines only, and the Manager may elect to
vote differently from the recommendation set forth in a voting
guideline if the Committee determines that it is in a Fund's best
interest to do so. In addition, the guidelines may be reviewed at
any time upon the request of a Committee member and may be amended
or deleted upon the vote of a majority of Committee members present
at a Committee meeting at which there is a quorum.
The Manager has adopted specific voting guidelines with respect to
the following proxy issues:
* Proposals related to the composition of the board of directors of
issuers other than investment companies. As a general matter, the
Committee believes that a company's board of directors (rather than
shareholders) is most likely to have access to important, nonpublic
information regarding a company's business and prospects, and is,
therefore, best-positioned to set corporate policy and oversee
management. The Committee, therefore, believes that the foundation
of good corporate governance is the election of qualified,
independent corporate directors who are likely to diligently
represent the interests of shareholders and oversee management of
the corporation in a manner that will seek to maximize shareholder
value over time. In individual cases, the Committee may look at a
nominee's number of other directorships, history of representing
shareholder interests as a director of other companies or other
factors, to the extent the Committee deems relevant.
* Proposals related to the selection of an issuer's independent
auditors. As a general matter, the Committee believes that corporate
auditors have a responsibility to represent the interests of
shareholders and provide an independent view on the propriety of
financial reporting decisions of corporate management. While the
Committee will generally defer to a corporation's choice of auditor,
in individual cases, the Committee may look at an auditors' history
of representing shareholder interests as auditor of other companies,
to the extent the Committee deems relevant.
* Proposals related to management compensation and employee
benefits. As a general matter, the Committee favors disclosure of an
issuer's compensation and benefit policies and opposes excessive
compensation, but believes that compensation matters are normally
best determined by an issuer's board of directors, rather than
shareholders. Proposals to "micro-manage" an issuer's compensation
practices or to set arbitrary restrictions on compensation or
benefits will, therefore, generally not be supported.
* Proposals related to requests, principally from management, for
approval of amendments that would alter an issuer's capital
structure. As a general matter, the Committee will support requests
that enhance the rights of common shareholders and oppose requests
that appear to be unreasonably dilutive.
* Proposals related to requests for approval of amendments to an
issuer's charter or by-laws. As a general matter, the Committee
opposes poison pill provisions.
* Routine proposals related to requests regarding the formalities of
corporate meetings.
* Proposals related to proxy issues associated solely with holdings
of investment company shares. As with other types of companies, the
Committee believes that a fund's board of directors (rather than its
shareholders) is best positioned to set fund policy and oversee
management. However, the Committee opposes granting boards of
directors authority over certain matters, such as changes to a
fund's investment objective, which the Investment Company Act
envisions will be approved directly by shareholders.
* Proposals related to limiting corporate conduct in some manner
that relates to the shareholder's environmental or social concerns.
The Committee generally believes that annual shareholder meetings
are inappropriate forums for discussion of larger social issues, and
opposes shareholder resolutions "micromanaging" corporate conduct or
requesting release of information that would not help a shareholder
evaluate an investment in the corporation as an economic matter.
While the Committee is generally supportive of proposals to require
corporate disclosure of matters that seem relevant and material to
the economic interests of shareholders, the Committee is generally
not supportive of proposals to require disclosure of corporate
matters for other purposes.
Information about how a Fund voted proxies relating to securities
held in the Fund's portfolio during the most recent 12 month period
ended October 31 is available without charge (1) at
www.blackrock.com and (2) on the Commission's web site at
http://www.sec.gov.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
as of October 31, 2006.
(a)(1) BlackRock MuniYield California Fund, Inc. is managed by a
team of investment professionals comprised of Theodore R. Jaeckel,
Jr., CFA, Managing Director at BlackRock, and Walter O'Connor,
Managing Director at BlackRock. Each is a member of BlackRock's
municipal tax-exempt management group. Mr. Jaeckel and Mr. O'Connor
are responsible for setting the Fund's overall investment strategy
and overseeing the management of the Fund. Mr. O'Connor is also the
Fund's lead portfolio manager and is responsible for the day-to-day
management of the Fund's portfolio and the selection of its
investments. Mr.. Jaeckel has been a member of the Fund's management
team since 2006 and Mr. O'Connor has been the Fund's portfolio
manager since 1992.
Mr. Jaeckel joined BlackRock in 2006. Prior to joining BlackRock, he
was a Managing Director (Municipal Tax-Exempt Fund Management) of
Merrill Lynch Investment Managers, L.P. ("MLIM") from 2005 to 2006
and a Director of MLIM from 1997 to 2005. He has been a portfolio
manager with BlackRock or MLIM since 1991.
Mr. O'Connor joined BlackRock in 2006. Prior to joining BlackRock,
he was a Managing Director (Municipal Tax-Exempt Fund Management) of
MLIM from 2003 to 2006 and was a Director of MLIM from 1997 to 2002.
He has been a portfolio manager with BlackRock or MLIM since 1991.
(a)(2) As of October 31, 2006:
(iii) Number of Other Accounts and
(ii) Number of Other Accounts Managed Assets for Which Advisory Fee is
and Assets by Account Type Performance-Based
Other Other
(i) Name of Registered Other Pooled Registered Other Pooled
Portfolio Investment Investment Other Investment Investment Other
Manager Companies Vehicles Accounts Companies Vehicles Accounts
Walter
O'Connor 82 0 0 0 0 0
$ 30,018,884,217 $ 0 $ 0 $ 0 $ 0 $ 0
Theodore R.
Jaeckel, Jr. 82 0 0 0 0 0
$ 30,018,884,217 $ 0 $ 0 $ 0 $ 0 $ 0
(iv) Potential Material Conflicts of Interest
BlackRock has built a professional working environment, firm-wide
compliance culture and compliance procedures and systems designed to
protect against potential incentives that may favor one account over
another. BlackRock has adopted policies and procedures that address
the allocation of investment opportunities, execution of portfolio
transactions, personal trading by employees and other potential
conflicts of interest that are designed to ensure that all client
accounts are treated equitably over time. Nevertheless, BlackRock
furnishes investment management and advisory services to numerous
clients in addition to the Fund, and BlackRock may, consistent with
applicable law, make investment recommendations to other clients or
accounts (including accounts which are hedge funds or have
performance or higher fees paid to BlackRock, or in which portfolio
managers have a personal interest in the receipt of such fees),
which may be the same as or different from those made to the Fund.
In addition, BlackRock, its affiliates and any officer, director,
stockholder or employee may or may not have an interest in the
securities whose purchase and sale BlackRock recommends to the Fund.
BlackRock, or any of its affiliates, or any officer, director,
stockholder, employee or any member of their families may take
different actions than those recommended to the Fund by BlackRock
with respect to the same securities. Moreover, BlackRock may refrain
from rendering any advice or services concerning securities of
companies of which any of BlackRock's (or its affiliates') officers,
directors or employees are directors or officers, or companies as to
which BlackRock or any of its affiliates or the officers, directors
and employees of any of them has any substantial economic interest
or possesses material non-public information. Each portfolio manager
also may manage accounts whose investment strategies may at times be
opposed to the strategy utilized for the Fund. In this connection,
it should be noted that certain portfolio managers currently manage
certain accounts that are subject to performance fees. In addition,
certain portfolio managers assist in managing certain hedge funds
and may be entitled to receive a portion of any incentive fees
earned on such funds and a portion of such incentive fees may be
voluntarily or involuntarily deferred. Additional portfolio managers
may in the future manage other such accounts or funds and may be
entitled to receive incentive fees.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and
must treat each client fairly. When BlackRock purchases or sells
securities for more than one account, the trades must be allocated
in a manner consistent with its fiduciary duties. BlackRock attempts
to allocate investments in a fair and equitable manner among client
accounts, with no account receiving preferential treatment. To this
end, BlackRock has adopted a policy that is intended to ensure that
investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve
reasonable efficiency in client transactions and provide BlackRock
with sufficient flexibility to allocate investments in a manner that
is consistent with the particular investment discipline and client
base.
(a)(3) As of October 31, 2006:
Portfolio Manager Compensation
The portfolio manager compensation program of BlackRock and its affiliates,
including the Investment Adviser, is critical to BlackRock's ability to attract
and retain the most talented asset management professionals. This program
ensures that compensation is aligned with maximizing investment returns and it
provides a competitive pay opportunity for competitive performance.
Compensation Program
The elements of total compensation for certain BlackRock and its affiliates
portfolio managers are a fixed base salary, annual performance-based cash and
stock compensation (cash and stock bonus) and other benefits. BlackRock has
balanced these components of pay to provide portfolio managers with a powerful
incentive to achieve consistently superior investment performance. By design,
portfolio manager compensation levels fluctuate--both up and down--with the
relative investment performance of the portfolios that they manage.
Base Salary
Under the BlackRock approach, like that of many asset management firms,
base salaries represent a relatively small portion of a portfolio manager's
total compensation. This approach serves to enhance the motivational value of
the performance-based (and therefore variable) compensation elements of the
compensation program.
Performance-Based Compensation
BlackRock believes that the best interests of investors are served by
recruiting and retaining exceptional asset management talent and managing their
compensation within a consistent and disciplined framework that emphasizes pay
for performance in the context of an intensely competitive market for talent.
To that end, certain BlackRock and its affiliates portfolio manager incentive
compensation is based on a formulaic compensation program.
BlackRock's formulaic portfolio manager compensation program includes:
investment performance relative to a subset of general closed-end, California
municipal debt funds over 1-, 3- and 5-year performance periods and a measure
of operational efficiency. Portfolio managers are compensated based on the pre-
tax performance of the products they manage. If a portfolio manager's tenure is
less than 5-years, performance periods will reflect time in position. Portfolio
managers are compensated based on the products they manage. A discretionary
element of portfolio manager compensation may include consideration of:
financial results, expense control, profit margins, strategic planning and
implementation, quality of client service, market share, corporate reputation,
capital allocation, compliance and risk control, leadership, workforce
diversity, supervision, technology and innovation. All factors are considered
collectively by BlackRock management.
Cash Bonus
Performance-based compensation is distributed to portfolio managers in a
combination of cash and stock. Typically, the cash bonus, when combined with
base salary, represents more than 60% of total compensation for portfolio
managers.
Stock Bonus
A portion of the dollar value of the total annual performance-based bonus
is paid in restricted shares of BlackRock stock. Paying a portion of annual
bonuses in stock puts compensation earned by a portfolio manager for a given
year "at risk" based on the Company's ability to sustain and improve its
performance over future periods.
The ultimate value of stock bonuses is dependent on future BlackRock stock
price performance. As such, the stock bonus aligns each portfolio manager's
financial interests with those of BlackRock shareholders and encourages a
balance between short-term goals and long-term strategic objectives. Management
strongly believes that providing a significant portion of competitive
performance-based compensation in stock is in the best interests of investors
and shareholders. This approach ensures that portfolio managers participate as
shareholders in both the "downside risk" and "upside opportunity" of the
Company's performance. Portfolio managers therefore have a direct incentive to
protect BlackRock's reputation for integrity.
Other Compensation Programs
Portfolio managers who meet relative investment performance and financial
management objectives during a performance year are eligible to participate in
a deferred cash program. Awards under this program are in the form of deferred
cash that may be benchmarked to a menu of certain BlackRock mutual funds
(including their own funds) during a five-year vesting period. The deferred
cash program aligns the interests of participating portfolio managers with the
investment results of BlackRock products and promotes continuity of successful
portfolio management teams.
Other Benefits
Portfolio managers are also eligible to participate in broad-based plans
offered generally to BlackRock employees, including broad-based retirement,
401(k), health, and other employee benefit plans.
(a)(4) Beneficial Ownership of Securities. As of October 31, 2006,
neither of Messrs. Jaeckel and O'Connor beneficially owns any
stock issued by the Fund.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not Applicable
Item 11 - Controls and Procedures
11(a) - The Registrant's principal executive and principal financial
officers have evaluated the Registrant's disclosure controls and
procedures, including internal control over financial reporting,
within 90 days of this filing. Such principal officers have
concluded that the Registrant's disclosure controls and procedures
were effective in design and operation to reasonably ensure that
information required to be disclosed by the Registrant in this Form
N-CSR was recorded, processed, summarized, and reported within the
required time periods, and were sufficient to form the basis of the
certifications required by Rule 30a-(2) of the Investment Company
Act of 1940, as amended. Prior to reaching that conclusion, such
principal officers had become aware of matters relating to the
Registrant's participation in certain inverse floater structures
that necessitated adjustments to financial information included in
Item 1 of this filing. As a result, management of the Registrant has
reevaluated certain disclosure controls and procedures determined
not to be effective, as discussed more fully below.
Management of the Registrant is responsible for establishing and
maintaining effective internal control over financial reporting. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related
costs of controls. The Registrant's internal control over financial
reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with
U.S. generally accepted accounting principles. Such internal
control includes policies and procedures that provide reasonable
assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of a registrant's assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
A control deficiency exists when the design or operation of a
control does not allow management or employees, in the normal course
of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a
control deficiency, or combination of control deficiencies, that
adversely affects the Registrant's ability to initiate, authorize,
record, process or report financial data reliably in accordance with
generally accepted accounting principles such that there is more
than a remote likelihood that a misstatement of the Registrant's
annual or interim financial statements that is more than
inconsequential will not be prevented or detected. A material
weakness is a significant deficiency, or combination of significant
deficiencies, that results in more than a remote likelihood that a
material misstatement of the annual or interim financial statements
will not be prevented or detected.
Prior to the filing of this Form N-CSR, the Registrant identified
the following control deficiency, that was determined to be a
material weakness, as defined above, in the Registrant's internal
control over financial reporting. The Registrant's controls related
to the review and analysis of relevant terms and conditions of
transfers of certain assets pertaining to inverse floater structures
were not operating effectively to appropriately determine whether
the transfers of assets qualified for sale accounting under the
provisions of Statement of Financial Accounting Standards No. 140,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" ("SFAS 140"). Accordingly, the
Registrant's financial statements as of and for the period ended
October 31, 2006, including prior periods where applicable, were
adjusted prior to being issued to appropriately reflect transfers of
such securities as secured borrowings and to report the related
income and expense. These adjustments had no impact on net assets,
net asset value per share or total return.
Management of the Registrant believes that subsequent to the
adjustments, the Registrant's accounting treatment of such transfers
is appropriate under SFAS 140. Additionally, management of the
Registrant is taking such further actions as are necessary to
enhance its internal control over financial reporting, and in doing
so, increase the effectiveness of such controls, so that such
transfers of assets are reviewed and evaluated appropriately under
the provisions of SFAS 140.
11(b) - There have been no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the
Investment Company Act of 1940, as amended) that occurred during the
second half of the Registrant's fiscal year that have materially
affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting. However, as
discussed above, subsequent to October 31, 2006, the Registrant is
further enhancing controls related to the application of SFAS 140.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock MuniYield California Fund, Inc.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock MuniYield California Fund, Inc.
Date: January 18, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock MuniYield California Fund, Inc.
Date: January 18, 2007
By: /s/ Donald C. Burke
--------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock MuniYield California Fund, Inc.
Date: January 18, 2007