BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.

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. (MYC)

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

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

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

Date of fiscal year end: 07/31/2017

Date of reporting period: 01/31/2017


Item 1 – Report to Stockholders

 


JANUARY 31, 2017

 

 

SEMI-ANNUAL REPORT (UNAUDITED)

 

    LOGO

 

BlackRock Muni New York Intermediate Duration Fund, Inc. (MNE)

BlackRock MuniYield Arizona Fund, Inc. (MZA)

BlackRock MuniYield California Fund, Inc. (MYC)

BlackRock MuniYield Investment Fund (MYF)

BlackRock MuniYield New Jersey Fund, Inc. (MYJ)

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


The Markets in Review

 

Dear Shareholder,

The 12 months ended January 31, 2017 was an exceptionally strong period for risk assets (such as stocks and high yield bonds), while higher-quality assets generated muted returns after struggling in the latter part of 2016. As the period began, worries about slowing growth in China and the instability of oil prices had global equity prices sliding. However, the broad market momentum shifted in the second half of 2016 as reflationary expectations in the United States helped drive a pick-up in global growth.

Markets were remarkably resilient during the period. Big surprises such as the United Kingdom’s vote to leave the European Union and the outcome of the U.S. presidential election brought spikes in equity market volatility, but they were ultimately short-lived. Instead, investors used the sell-offs to seize upon buying opportunities, allowing markets to quickly rebound. We believe this reinforces the case for taking the long view rather than reacting to short-term market noise.

The global reflationary theme — rising nominal growth, wages and inflation — was the dominant driver of asset returns during the period, outweighing significant political upheavals and uncertainty. This trend accelerated after the U.S. election and continued into the beginning of 2017, stoked by expectations for an extra boost to U.S. growth via fiscal policy.

Although economic momentum is gaining traction, the capacity for rapid global growth is restrained by structural factors including an aging population, low productivity growth and excess savings. A tempered economic growth trend and high valuations across most assets have set the stage for muted investment returns going forward.

Equity markets still have room to move, although the disparity between winners and losers is widening, making stock selection increasingly important. Fixed income investors are also facing challenges as bond markets recalibrate to accommodate rising rates and higher inflation expectations. And in a world where political risk and policy uncertainty abound, there is no lack of potential catalysts for higher volatility.

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

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of January 31, 2017  
    6-month     12-month  

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

    5.96     20.04

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

    12.43       33.53  

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

    3.49       12.03  

Emerging market equities
(MSCI Emerging Markets Index)

    4.92       25.41  

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

    0.20       0.37  

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

    (7.87     (3.26

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

    (2.95     1.45  

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

    (2.94     0.24  

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

    6.09       20.77  
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.  

 

                
2    THIS PAGE NOT PART OF YOUR FUND REPORT      


Table of Contents     

 

     Page  

The Markets in Review

    2  

Semi-Annual Report:

 

Municipal Market Overview

    4  

The Benefits and Risks of Leveraging

    5  

Derivative Financial Instruments

    5  

Fund Summaries

    6  
Financial Statements:  

Schedules of Investments

    16  

Statements of Assets and Liabilities

    39  

Statements of Operations

    40  

Statements of Changes in Net Assets

    41  

Statements of Cash Flows

    44  

Financial Highlights

    45  

Notes to Financial Statements

    50  

Officers and Directors

    60  

Additional Information

    61  

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    3


Municipal Market Overview     

 

For the Reporting Period Ended January 31, 2017

Municipal Market Conditions

Municipal bonds generated modestly positive performance for the period, in spite of vastly rising interest rates as a result of generally stronger economic data, signs of inflation pressures, Fed monetary policy normalization, and market expectations for pro-growth fiscal policy. However, ongoing reassurance from the Fed that rates would be increased gradually and would likely remain low overall resulted in strong demand for fixed income investments. Investors favored the income, relative yield, and stability of municipal bonds amid bouts of interest rate volatility (bond prices rise as rates fall) resulting from the United Kingdom’s decision to leave the European Union, the contentious U.S. election, and widening central bank divergence — i.e., policy easing outside the United States while the Fed slowly commences policy tightening. During the 12 months ended January 31, 2017, municipal bond funds garnered net inflows of approximately $24 billion (based on data from the Investment Company Institute).

For the same 12-month period, total new issuance remained robust from a historical perspective at $451 billion (significantly above the $394 billion issued in the prior 12-month period). A noteworthy portion of new supply during this period was attributable to refinancing activity (roughly 60%) as issuers continued to take advantage of low interest rates and a flatter yield curve to reduce their borrowing costs.

 

S&P Municipal Bond Index

Total Returns as of January 31, 2017

  6 months:   (2.94)%

12 months:   0.24%

 

A Closer Look at Yields

 

LOGO

 

From January 31, 2016 to January 31, 2017, yields on AAA-rated 30-year municipal bonds increased by 33 basis points (“bps”) from 2.75% to 3.08%, while 10-year rates rose by 61 bps from 1.71% to 2.32% and 5-year rates increased 63 bps from 1.00% to 1.63% (as measured by Thomson Municipal Market Data). The municipal yield curve modestly flattened over the 12-month period with the spread between 2- and 30-year maturities flattening by 9 bps and the spread between 10- and 30-year maturities flattening by 28 bps.

 

During the same time period, on a relative basis, tax-exempt municipal bonds broadly underperformed U.S. Treasuries with the greatest underperformance experienced in the intermediate part of the yield curve. In absolute terms, the positive performance of municipal bonds was driven largely by a supply/demand imbalance within the municipal market as investors sought income and incremental yield in an environment where opportunities became increasingly scarce. More broadly, municipal bonds came under pressure post the November U.S. election, erasing a bulk of year-to-date performance and influencing a strong pattern of mutual fund inflows to turn negative in the closing months of the period. The asset class is known for its lower relative volatility and preservation of principal with an emphasis on income as tax rates rise.

Financial Conditions of Municipal Issuers

The majority of municipal credits remain strong, despite well-publicized distress among a few issuers. Four of the five states with the largest amount of debt outstanding — California, New York, Texas and Florida — have exhibited markedly improved credit fundamentals during the slow national recovery. However, several states with the largest unfunded pension liabilities have seen their bond prices decline noticeably and remain vulnerable to additional price deterioration. On the local level, Chicago’s credit quality downgrade is an outlier relative to other cities due to its larger pension liability and inadequate funding remedies. BlackRock maintains the view that municipal bond defaults will remain minimal and in the periphery while the overall market is fundamentally sound. We continue to advocate careful credit research and believe that a thoughtful approach to structure and security selection remains imperative amid uncertainty in a modestly improving economic environment.

The opinions expressed are those of BlackRock as of January 31, 2017, and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of any individual holdings or market sectors. Investing involves risk including loss of principal. Bond values fluctuate in price so the value of your investment can go down depending on market conditions. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to Alternative Minimum Tax (AMT). Capital gains distributions, if any, are taxable.

The Standard & Poor’s Municipal Bond Index, a broad, market value-weighted index, seeks to measure the performance of the U.S. municipal bond market. All bonds in the index are exempt from U.S. federal income taxes or subject to the alternative minimum tax. Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index.

 

                
4    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


The Benefits and Risks of Leveraging     

 

The Funds may utilize leverage to seek to enhance the distribution rate on, and net asset value (“NAV”) of, their common shares (“Common Shares”). However, these objectives cannot be achieved in all interest rate environments.

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

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

However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed the Funds’ return on assets purchased with leverage proceeds, income to shareholders is lower than if the Funds had not used leverage. Furthermore, the value of the Funds’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the value of the Funds’ obligations under their respective leverage arrangements generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Funds’ NAVs positively or

negatively. Changes in the future direction of interest rates are very difficult to predict accurately, and there is no assurance that a Fund’s intended leveraging strategy will be successful.

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

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

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

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

 

 

Derivative Financial Instruments     

 

The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other asset without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the

transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    5


Fund Summary as of January 31, 2017    BlackRock Muni New York Intermediate Duration Fund,  Inc.

 

Fund Overview

BlackRock Muni New York Intermediate Duration Fund, Inc.’s (MNE) (the “Fund”) investment objective is to provide shareholders with high current income exempt from federal income tax and New York State and New York City personal income taxes. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income tax (except that the interest may be subject to the federal alternative minimum tax) and New York State and New York City personal income taxes. Under normal market conditions, the Fund invests at least 75% of its assets in municipal obligations that are investment grade quality, or are considered by the Fund’s adviser to be of comparable quality, at the time of investment. Under normal market conditions, the Fund invests at least 80% of its assets in municipal obligations with a duration of three to ten years. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Fund Information     

Symbol on New York Stock Exchange (“NYSE”)

  MNE

Initial Offering Date

  August 1, 2003

Yield on Closing Market Price as of January 31, 2017 ($13.61)1

  4.39%

Tax Equivalent Yield2

  8.88%

Current Monthly Distribution per Common Share3

  $0.0498

Current Annualized Distribution per Common Share3

  $0.5976

Economic Leverage as of January 31, 20174

  38%

 

  1   

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

 

  2   

Tax equivalent yield assumes the maximum marginal federal and state tax rate of 50.59%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

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

 

  4   

Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

Performance      

Returns for the six months ended January 31, 2017 were as follows:

    Returns Based On  
     Market Price     NAV  

MNE1,2

    (11.41 )%      (5.71 )% 

Lipper Intermediate Municipal Debt Funds3

    (6.35 )%      (4.82 )% 

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2  

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

 

  3   

Average return.

 

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

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

 

 

Municipal bonds lost ground in the six-month reporting period. After producing slightly positive returns in August, municipal bonds began to move lower in September and October due to a pick-up in new tax-exempt issuance and rising yields in the U.S. Treasury market. (Prices and yields move in opposite directions. The weakness accelerated in November once Donald Trump’s election victory caused investors to adjust their expectations in favor of stronger growth and tighter Fed policy. The municipal market subsequently stabilized and retraced some of its losses in December and January as the relative attractiveness of the asset class brought in new investors, but the modest rally was insufficient to make up for the earlier downturn. The New York municipal market faced the added challenge of elevated new-issue supply in late 2016.

 

 

At the sector level, exposure to the transportation, health care and education sectors detracted from performance. Holdings in longer-duration bonds, which were more sensitive to rising yields, also detracted. (Duration is a measure of interest-rate sensitivity.) Credit spreads widened during the period, so the Fund’s holdings in lower-rated investment-grade bonds were a further detractor.

 

 

Portfolio income, which was enhanced by the Fund’s use of leverage, made a positive contribution during a period of falling prices. However, leverage also served to accentuate the price declines associated with rising yields.

 

 

At a time when lower-quality, longer-dated bonds experienced the largest underperformance, the Fund’s positions in high-quality, short-dated issues performed relatively well and helped mitigate the impact of the market decline. The Fund sought to manage interest rate risk using U.S. Treasury futures. Given that Treasury yields rose as prices fell, this aspect of the Fund’s positioning had a positive effect on returns.

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

 

                
6    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


     BlackRock Muni New York Intermediate Duration Fund,  Inc.

 

 

Market Price and Net Asset Value Per Share Summary                              

 

      1/31/17      7/31/16      Change      High      Low  

Market Price

   $ 13.61      $ 15.75        (13.59 )%     $ 16.30      $ 13.27  

Net Asset Value

   $ 15.01      $ 16.32        (8.03 )%     $ 16.34      $ 14.80  

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   1/31/17     7/31/16  

Transportation

    24     25

County/City/Special District/School District

    21       21  

Education

    21       21  

Health

    10       12  

State

    10       7  

Utilities

    7       6  

Corporate

    3       4  

Housing

    3       3  

Tobacco

    1       1  

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

Credit Quality Allocation1   1/31/17     7/31/16  

AAA/Aaa

    12     10

AA/Aa

    49       48  

A

    22       23  

BBB/Baa

    12       12  

BB/Ba

    1       3  

N/R2

    4       4  

 

  1   

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

 

  2   

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of January 31, 2017 and July 31, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade each represents 4% of the Fund’s total investments.

 
 
Call/Maturity Schedule3  

Calendar Year Ended December 31,

 

2017

    4

2018

    5  

2019

    9  

2020

    6  

2021

    16  

 

  3   

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

 

 

  *   Excludes short-term securities.
 

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    7


Fund Summary as of January 31, 2017    BlackRock MuniYield Arizona Fund, Inc.

 

Fund Overview

BlackRock MuniYield Arizona Fund, Inc.’s (MZA) (the “Fund”) investment objective is to provide 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. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and Arizona income taxes. Under normal market conditions, the Fund expects to invest at least 75% of its assets in municipal obligations that are investment grade quality, or are considered by the Fund’s adviser to be of comparable quality, at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Fund Information     

Symbol on NYSE MKT

  MZA

Initial Offering Date

  October 29, 1993

Yield on Closing Market Price as of January 31, 2017 ($14.90)1

  4.99%

Tax Equivalent Yield2

  9.24%

Current Monthly Distribution per Common Share3

  $0.062

Current Annualized Distribution per Common Share3

  $0.744

Economic Leverage as of January 31, 20174

  38%

 

  1   

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

 

  2   

Tax equivalent yield assumes the maximum marginal federal and state tax rate of 45.97%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

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

 

  4   

Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

Performance      

Returns for the six months ended January 31, 2017 were as follows:

        Returns Based On      
     Market Price     NAV  

MZA1,2

    (13.61 )%      (4.81)

Lipper Other States Municipal Debt Funds3

    (8.44 )%      (5.37)

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

 

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

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

 

 

Municipal bonds lost ground in the six-month reporting period. After producing slightly positive returns in August, municipal bonds began to move lower in September and October due to a pick-up in new tax-exempt issuance and rising yields in the U.S. Treasury market. (Prices and yields move in opposite directions.) The weakness accelerated in November once Donald Trump’s election victory caused investors to adjust their expectations in favor of stronger growth and tighter Fed policy. The municipal market subsequently stabilized and retraced some of its losses in December and January as the relative attractiveness of the asset class brought in new investors, but the modest rally was insufficient to make up for the earlier downturn.

 

 

Arizona’s municipal bond market, though finishing in negative territory, nonetheless outpaced the broader national indices due to a favorable balance of relatively low new-issue supply and solid investor demand. The state’s economy continued to experience steady improvement, highlighted by better-than-average population and job growth. In addition, investors continued to react favorably to the conservative debt management employed by Arizona’s municipalities.

 

 

The Fund’s duration positioning detracted from performance on an absolute basis, reflecting the aggressive increase in municipal bond yields. (Duration is a measure of interest-rate sensitivity.) The Fund’s exposure to the long end of the yield curve also detracted, as longer-term bonds sold off more than shorter-term issues. Additionally, holdings in the healthcare-related sectors underperformed due to uncertainty surrounding the future of the Affordable Care Act.

 

 

Portfolio income, which was enhanced by the Fund’s use of leverage, made a positive contribution during a period of falling prices. However, leverage also served to accentuate the price declines associated with rising yields. The Fund sought to manage interest rate risk using U.S. Treasury futures. Given that Treasury yields rose as prices fell, this aspect of the Fund’s positioning had a positive effect on returns.

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

 

                
8    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


     BlackRock MuniYield Arizona Fund, Inc.

 

 

Market Price and Net Asset Value Per Share Summary

 

      1/31/17      7/31/16      Change      High      Low  

Market Price

   $ 14.90      $ 17.68        (15.72 )%     $ 18.06      $ 13.90  

Net Asset Value

   $ 14.32      $ 15.42        (7.13 )%     $ 15.42      $ 14.07  

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   1/31/17     7/31/16  

Education

    22     20

Utilities

    20       22  

County/City/Special District/School District

    19       20  

Health

    13       12  

Corporate

    12       12  

State

    9       9  

Transportation

    3       3  

Tobacco

    2       2  

Housing

    3        

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

Credit Quality Allocation1   1/31/17     7/31/16  

AAA/Aaa

    9     10

AA/Aa

    56       55  

A

    15       15  

BBB/Baa

    9       10  

BB/Ba

    8       6  

N/R2

    3       4  

 

  1   

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

 

  2   

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of January 31, 2017 and July 31, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade represents 3% and 4%, respectively, of the Fund’s total investments.

 

  3  

Represents less than 1%.

 
   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2017

    2

2018

    23  

2019

    8  

2020

    9  

2021

    10  

 

  4   

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

 

 

  *   Excludes short-term securities.
 

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    9


Fund Summary as of January 31, 2017    BlackRock MuniYield California Fund, Inc.

 

Fund Overview

BlackRock MuniYield California Fund, Inc.’s (MYC) (the “Fund”) investment objective is to provide 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. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and California income taxes. Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality, or are considered by the Fund’s adviser to be of comparable quality, at the time of investment. The Fund may invest up to 20% of its total assets in securities rated below investment grade or deemed equivalent at the time of purchase. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

 

Fund Information     

Symbol on NYSE

  MYC

Initial Offering Date

  February 28, 1992

Yield on Closing Market Price as of January 31, 2017 ($15.96)1

  5.26%

Tax Equivalent Yield2

  10.72%

Current Monthly Distribution per Common Share3

  $0.07

Current Annualized Distribution per Common Share3

  $0.84

Economic Leverage as of January 31, 20174

  42%

 

  1   

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

 

  2   

Tax equivalent yield assumes the maximum marginal federal and state tax rate of 50.93%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

The monthly distribution per Common Share, declared on March 1, 2017, was decreased to $0.062 per share. The yield on closing market price, current monthly distribution per Common Share and current annualized distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

  4   

Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

Performance      

Returns for the six months ended January 31, 2017 were as follows:

    Returns Based On  
     Market Price     NAV  

MYC1,2

    (4.12 )%      (6.52 )% 

Lipper California Municipal Debt Funds3

    (8.72 )%      (5.28 )% 

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2  

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

 

  3   

Average return.

 

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

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

 

 

Municipal bonds lost ground in the six-month reporting period. After producing slightly positive returns in August, municipal bonds began to move lower in September and October due to a pick-up in new tax-exempt issuance and rising yields in the U.S. Treasury market. (Prices and yields move in opposite directions.) The weakness accelerated in November once Donald Trump’s election victory caused investors to adjust their expectations in favor of stronger growth and tighter Fed policy. The municipal market subsequently stabilized and retraced some of its losses in December and January as the relative attractiveness of the asset class brought in new investors, but the modest rally was insufficient to make up for the earlier downturn.

 

 

California underperformed the national tax-exempt market, reflecting an unwinding of previously tight credit spreads for state and local issues, together with a larger calendar of new issuance. Despite the after-tax value provided by California municipal bonds for retail investors subject to the state’s high tax brackets, California funds were not immune to the redemptions experienced by both the general market and high-yield products in the latter part of the period.

 

 

The Fund’s positions on the long end of the yield curve detracted from performance in the environment of rising yields. In addition, positions in lower-rated investment-grade (such as those rated A and BBB) fared worse than high-grade securities as credit spreads widened.

 

 

All sectors experienced negative returns in the six month reporting period, but the Fund’s positions in health care suffered the weakest performance due to uncertainty surrounding the future of the Affordable Care Act. The Fund’s use of leverage, which amplifies the effect of interest rate movements, also detracted.

 

 

On the positive side, the Fund’s holdings in shorter duration securities held up relatively well during periods of market volatility. (Duration is a measure of interest rate sensitivity.) The Fund sought to manage interest rate risk using U.S. Treasury futures. Given that Treasury yields rose as prices fell, this aspect of the Fund’s positioning had a positive effect on returns.

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

 

                
10    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


     BlackRock MuniYield California Fund, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                              

 

      1/31/17      7/31/16      Change      High      Low  

Market Price

   $ 15.96      $ 17.43        (8.43 )%     $ 17.89      $ 14.66  

Net Asset Value

   $ 15.24      $ 17.07        (10.72 )%     $ 17.10      $ 14.95  

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   1/31/17     7/31/16  

County/City/Special District/School District

    40     39

Health

    15       14  

Education

    14       15  

Transportation

    11       7  

State

    8       9  

Utilities

    6       11  

Tobacco

    4       3  

Corporate

    1       1  

Housing

    1       1  

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

Credit Quality Allocation1   1/31/17     7/31/16  

AAA/Aaa

    5     4

AA/Aa

    68       71  

A

    20       21  

BBB/Baa

    2       1  

BB/Ba

    _       1  

B/B

    4       1  

N/R2

    1       1  

 

  1   

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

 

  2   

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of January 31, 2017 and July 31, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade each represents less than 1% of the Fund’s total investments.

 
 
Call/Maturity Schedule3  

Calendar Year Ended December 31,

 

2017

    6

2018

    7  

2019

    14  

2020

    7  

2021

    11  

 

  3  

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

 

 

  *   Excludes short-term securities.
 

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    11


Fund Summary as of January 31, 2017    BlackRock MuniYield Investment Fund

 

Fund Overview      

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

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

 

Fund Information     

Symbol on NYSE

  MYF

Initial Offering Date

  February 28, 1992

Yield on Closing Market Price as of January 31, 2017 ($15.26)1

  6.13%

Tax Equivalent Yield2

  10.83%

Current Monthly Distribution per Common Share3

  $0.078

Current Annualized Distribution per Common Share3

  $0.936

Economic Leverage as of January 31, 20174

  41%

 

  1   

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

 

  2   

Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

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

 

  4   

Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

Performance      

Returns for the six months ended January 31, 2017 were as follows:

    Returns Based On  
     Market Price     NAV  

MYF1,2

    (7.56 )%      (4.62 )% 

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    (7.34 )%      (5.63 )% 

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2  

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

 

  3   

Average return.

 

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

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

 

 

Municipal bonds lost ground in the six-month reporting period. After producing slightly positive returns in August, municipal bonds began to move lower in September and October due to a pick-up in new tax-exempt issuance and rising yields in the U.S. Treasury market. (Prices and yields move in opposite directions.) The weakness accelerated in November once Donald Trump’s election victory caused investors to adjust their expectations in favor of stronger growth and tighter Fed policy. The municipal market subsequently stabilized and retraced some of its losses in December and January as the relative attractiveness of the asset class brought in new investors, but the modest rally was insufficient to make up for the earlier downturn.

 

 

Positions in longer-dated, low investment-grade rated transportation and health care bonds detracted from results.

 

 

Portfolio income, which was enhanced by the Fund’s use of leverage, made a positive contribution during a period of falling prices. However, leverage also served to accentuate the price declines associated with rising yields.

 

 

At a time when lower-quality, longer-dated bonds experienced the largest underperformance, the Fund’s positions in high-quality, short-dated issues performed relatively well and helped mitigate the impact of the market decline. The Fund sought to manage interest rate risk using U.S. Treasury futures. Given that Treasury yields rose as prices fell, this aspect of the Fund’s positioning had a positive effect on returns.

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

 

                
12    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


     BlackRock MuniYield Investment Fund

 

 

Market Price and Net Asset Value Per Share Summary                              

 

      1/31/17      7/31/16      Change      High      Low  

Market Price

   $ 15.26      $ 17.02        (10.34 )%     $ 17.48      $ 14.32  

Net Asset Value

   $ 14.83      $ 16.03        (7.49 )%     $ 16.03      $ 14.63  

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   1/31/17     7/31/16  

Transportation

    27     30

County/City/Special District/School District

    19       19  

Health

    16       14  

Utilities

    15       15  

Education

    9       8  

State

    6       6  

Corporate

    3       3  

Tobacco

    3       3  

Housing

    2       2  

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

Credit Quality Allocation1   1/31/17     7/31/16  

AAA/Aaa

    8     8

AA/Aa

    54       55  

A

    24       26  

BBB/Baa

    6       6  

BB/Ba

    2       1  

B

    1       1  

N/R2

    5       3  

 

  1   

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

 

  2   

The investment adviser evaluates the credit quality of not-rated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of January 31, 2017 and July 31, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade represents 1% and less than 1% of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2017

    1

2018

    12  

2019

    30  

2020

    12  

2021

    17  

 

  3   

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

 

 

  *   Excludes short-term securities.
 

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    13


Fund Summary as of January 31, 2017    BlackRock MuniYield New Jersey Fund, Inc.

 

Fund Overview      

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

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

 

Fund Information     

Symbol on NYSE

  MYJ

Initial Offering Date

  May 1, 1992

Yield on Closing Market Price as of January 31, 2017 ($15.56)1

  5.78%

Tax Equivalent Yield2

  11.22%

Current Monthly Distribution per Common Share3

  $0.075

Current Annualized Distribution per Common Share3

  $0.900

Economic Leverage as of January 31, 20174

  39%

 

  1   

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

 

  2   

Tax equivalent yield assumes the maximum marginal federal and state tax rate of 48.48%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

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

 

  4   

Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

Performance      

Returns for the six months ended January 31, 2017 were as follows:

    Returns Based On  
     Market Price     NAV  

MYJ1,2

    (8.51 )%      (5.85 )% 

Lipper New Jersey Municipal Debt Funds3

    (9.68 )%      (6.06 )% 

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2  

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

 

  3   

Average return.

 

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

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

 

 

Municipal bonds lost ground in the six-month reporting period. After producing slightly positive returns in August, municipal bonds began to move lower in September and October due to a pick-up in new tax-exempt issuance and rising yields in the U.S. Treasury market. (Prices and yields move in opposite directions.) The weakness accelerated in November once Donald Trump’s election victory caused investors to adjust their expectations in favor of stronger growth and tighter Fed policy. The municipal market subsequently stabilized and retraced some of its losses in December and January as the relative attractiveness of the asset class brought in new investors, but the modest rally was insufficient to make up for the earlier downturn.

 

 

New Jersey underperformed the broader U.S. municipal bond market. The state’s credit rating remained under pressure due to continuing budgetary issues, lagging job growth versus the national averages, continued population out-migration and concerns about its pension-funding difficulties.

 

 

At the sector level, exposure to the state tax-backed, transportation and education sectors detracted from performance. Holdings in longer-duration bonds, which were more sensitive to rising yields, also detracted. (Duration is a measure of interest-rate sensitivity.) Credit spreads widened during the six month reporting period, so the Fund’s holdings in lower-rated investment-grade bonds were a further detractor.

 

 

Portfolio income, which was enhanced by the Fund’s use of leverage, made a positive contribution during a period of falling prices. However, leverage also served to accentuate the price declines associated with rising yields.

 

 

At a time when lower-quality, longer-dated bonds experienced the largest underperformance, the Fund’s positions in high-quality, short-dated issues performed relatively well and helped mitigate the impact of the market decline. The Fund sought to manage interest rate risk using U.S. Treasury futures. Given that Treasury yields rose as prices fell, this aspect of the Fund’s positioning had a positive effect on returns.

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

 

                
14    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


     BlackRock MuniYield New Jersey Fund, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                              

 

      1/31/17      7/31/16      Change      High      Low  

Market Price

   $ 15.56      $ 17.49        (11.03 )%     $ 17.62      $ 15.19  

Net Asset Value

   $ 15.50      $ 16.93        (8.45 )%     $ 16.94      $ 15.29  

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Total Investments*
Sector Allocation   1/31/17     7/31/16  

Transportation

    36     35

Education

    18       18  

County/City/Special District/School District

    17       17  

State

    13       14  

Corporate

    7       7  

Health

    6       6  

Housing

    2       2  

Utilities

    1       1  

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

Credit Quality Allocation1   1/31/17     7/31/16  

AA/Aa

    42     44

A

    44       43  

BBB/Baa

    11       10  

BB/Ba

    2       2  

N/R2

    1       1  

 

  1   

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

 

  2   

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of January 31, 2017 and July 31, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade each represents 1% of the Fund’s total investments.

 
   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2017

    6

2018

    11  

2019

    11  

2020

    6  

2021

    20  

 

  3   

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

 

 

  *   Excludes short-term securities.
 

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    15


Schedule of Investments January 31, 2017 (Unaudited)

  

BlackRock Muni New York Intermediate Duration Fund, Inc. (MNE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

New York — 128.9%

 

Corporate — 5.5%

 

Build NYC Resource Corp., Refunding RB:

    

Ethical Culture Fieldston School Project, 5.00%, 6/01/30

   $ 385     $ 436,455  

Pratt Paper, Inc. Project, AMT, 4.50%, 1/01/25 (a)

     500       520,355  

The Packer Collegiate Institute Project, 5.00%, 6/01/35

     250       275,750  

County of Onondaga New York Industrial Development Agency, RB, Bristol-Meyers Squibb Co. Project, AMT, 5.75%, 3/01/24

     500       596,115  

Niagara Area Development Corp., Refunding RB, Solid Waste Disposal Facility, Covanta Energy Project, Series B, 4.00%, 11/01/24 (a)

     500       501,275  

Utility Debt Securitization Authority, Refunding RB, New York Restructuring, Series E, 5.00%, 12/15/32

     1,000       1,150,800  
    

 

 

 
        3,480,750  

County/City/Special District/School District — 22.3%

 

Amherst Development Corp., Refunding RB, University at Buffalo Foundation Faculty-Student Housing Corp., Series A (AGM), 4.00%, 10/01/24

     1,000       1,046,670  

Brooklyn Arena Local Development Corp., Refunding RB, Barclays Center Project, Series A (AGM), 4.00%, 7/15/29

     1,000       1,044,950  

City of New York New York, GO, Refunding, Series E:

    

5.25%, 8/01/22

     2,000       2,349,480  

5.00%, 8/01/30

     1,250       1,422,250  

City of New York New York, GO:

    

Sub-Series A-1, 5.00%, 8/01/33

     700       789,166  

Sub-Series I-1, 5.50%, 4/01/21

     1,500       1,641,420  

Sub-Series I-1, 5.13%, 4/01/25

     750       810,997  

City of New York New York Industrial Development Agency, RB, PILOT, Queens Baseball Stadium (AMBAC), 5.00%, 1/01/31

     1,000       1,001,960  

City of New York New York Industrial Development Agency, Refunding ARB, Transportation Infrastructure Properties LLC, Series A, AMT, 5.00%, 7/01/22

     750       819,945  

City of Yonkers New York, GO, Refunding, Series B, 5.00%, 8/01/24

     490       568,126  

Haverstraw-Stony Point Central School District, GO, Refunding, (AGM), 5.00%, 10/15/33

     300       342,645  

Hudson Yards Infrastructure Corp., RB, Series A, 5.75%, 2/15/47

     1,000       1,131,870  

New York Convention Center Development Corp., Refunding RB, 5.00%, 11/15/32

     20       22,787  

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.00%, 11/15/31

     1,000       1,113,620  
    

 

 

 
        14,105,886  

Education — 30.0%

 

Build NYC Resource Corp., Refunding RB, 5.00%, 7/01/33

     2,000       2,142,500  

City of New York New York Trust for Cultural Resources, Refunding RB, American Museum of Natural History, Series A, 5.00%, 7/01/32

     500       567,820  

County of Buffalo & Erie New York Industrial Land Development Corp., Refunding RB, Buffalo State College Foundation Housing, 6.00%, 10/01/31

     1,000       1,145,220  

County of Monroe New York Industrial Development Corp., Refunding RB, Series A, 5.00%, 7/01/30

     1,000       1,147,350  

County of Nassau New York Industrial Development Agency, Refunding RB, New York Institute of Technology Project, Series A, 5.00%, 3/01/20 (b)

     1,000       1,109,010  

County of Schenectady New York Capital Resource Corp., Refunding RB, Union College, 5.00%, 7/01/32

     500       554,120  
Municipal Bonds   

Par  

(000)

    Value  

New York (continued)

 

Education (continued)

 

New York State Dormitory Authority, Refunding RB, Pace University, Series A, 5.00%, 5/01/27

   $ 980     $ 1,040,897  

State of New York Dormitory Authority, RB:

    

Convent of the Sacred Heart (AGM), 4.00%, 11/01/18

     500       523,865  

Convent of the Sacred Heart (AGM), 5.00%, 11/01/21

     120       136,624  

Fordham University, Series A, 5.25%, 7/01/25

     500       560,940  

Icahn School of Medicine at Mount Sinai, Series A, 5.00%, 7/01/32

     1,000       1,103,910  

Mount Sinai School of Medicine, 5.50%, 7/01/19 (b)

     1,000       1,101,100  

Mount Sinai School of Medicine, Series A (NPFGC), 5.15%, 7/01/24

     250       291,520  

Series A, 5.00%, 3/15/32

     1,000       1,142,520  

Touro College & University System Obligation Group, Series A, 4.13%, 1/01/30

     1,000       988,620  

State of New York Dormitory Authority, Refunding RB:

    

Fordham University, 5.00%, 7/01/29

     375       425,603  

Fordham University, 5.00%, 7/01/30

     300       338,988  

Series B, 5.00%, 7/01/31

     1,500       1,726,470  

State University Dormitory Facilities, Series A, 5.25%, 7/01/30

     1,050       1,210,093  

The Culinary Institute of America, 5.00%, 7/01/28

     500       541,965  

Troy Capital Resource Corp., Refunding RB, 5.00%, 8/01/32

     1,000       1,125,640  
    

 

 

 
        18,924,775  

Health — 16.6%

 

Build NYC Resource Corp., Refunding RB, New York Methodist Hospital Project, 5.00%, 7/01/30

     500       554,290  

County of Dutchess New York Industrial Development Agency, RB, Vassar Brothers Medical Center (AGC), 5.00%, 4/01/21

     215       238,899  

County of Dutchess New York Local Development Corp., Refunding RB, Health Quest System, Inc., Series A (AGM), 5.25%, 7/01/25

     1,000       1,096,390  

County of Westchester New York Healthcare Corp., Refunding RB, Senior Lien:

    

Remarketing, Series A, 5.00%, 11/01/24

     910       1,009,390  

Remarketing, Series A, 5.00%, 11/01/30

     580       628,430  

Series B, 6.00%, 11/01/20 (b)

     205       238,753  

Series B, 6.00%, 11/01/30

     35       38,768  

County of Westchester New York Local Development Corp., Refunding RB:

    

Kendal On Hudson Project, 4.00%, 1/01/23

     250       269,703  

Kendal On Hudson Project, 5.00%, 1/01/28

     875       954,826  

Westchester Medical Center, 5.00%, 11/01/34

     500       535,055  

State of New York Dormitory Authority, RB, Series A:

    

New York State Association for Retarded Children, Inc., 5.30%, 7/01/23

     450       489,929  

New York University Hospitals Center, 5.00%, 7/01/20 (b)

     1,000       1,119,330  

State of New York Dormitory Authority, Refunding RB:

    

Columbia University, Series B, 5.00%, 10/01/31

     250       297,750  

Mount Sinai Hospital Series A, 4.25%, 7/01/23

     250       267,588  

North Shore-Long Island Jewish Obligated Group, Series A, 5.00%, 5/01/32

     1,270       1,421,841  

North Shore-Long Island Jewish Obligated Group, Series A, 5.00%, 5/01/32

     500       547,335  

Yonkers New York Industrial Development Agency, RB, Sacred Heart Association Project, Series A, AMT (SONYMA), 4.80%, 10/01/26

     750       751,980  
    

 

 

 
        10,460,257  
 

 

See Notes to Financial Statements.

 

                
16    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


Schedule of Investments (continued)

  

BlackRock Muni New York Intermediate Duration Fund, Inc.  (MNE)

 

Municipal Bonds   

Par  

(000)

    Value  

New York (continued)

 

Housing — 2.2%

 

City of New York New York Housing Development Corp., RB, M/F Housing:

    

Series B1, 5.25%, 7/01/30

   $ 500     $ 569,275  

Series H-2-A, Remarketing, AMT, 5.00%, 11/01/30

     780       789,360  
    

 

 

 
        1,358,635  

State — 11.1%

 

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.00%, 1/15/23

     575       613,824  

City of New York New York Transitional Finance Authority, RB, Series S-1, 5.00%, 7/15/37

     1,140       1,279,696  

State of New York Dormitory Authority, RB:

    

Haverstraw King’s Daughters Public Library, 5.00%, 7/01/26

     1,015       1,142,646  

Municipal Health Facilities Lease, Sub-Series 2-4, 5.00%, 1/15/27

     600       621,108  

State of New York Thruway Authority, Refunding RB, Series A-1, 5.00%, 4/01/22

     1,000       1,084,280  

State of New York Urban Development Corp., Refunding RB, Personal Income Tax, Series A, 5.00%, 3/15/35

     1,990       2,276,461  
    

 

 

 
        7,018,015  

Tobacco — 1.3%

 

County of Niagara New York Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed, 5.25%, 5/15/34

     500       550,095  

New York Counties Tobacco Trust, Refunding RB, Tobacco Settlement Pass-Through, 5.00%, 6/01/30

     265       290,236  
    

 

 

 
        840,331  

Transportation — 34.6%

 

Metropolitan Transportation Authority, RB:

    

Series A, 5.00%, 11/15/27

     1,000       1,131,320  

Series A-1, 5.25%, 11/15/33

     500       570,260  

Series B, 5.25%, 11/15/33

     1,000       1,149,100  

Series B (NPFGC), 5.25%, 11/15/19

     860       949,113  

Sub-Series B-1, 5.00%, 11/15/24

     460       526,502  

Sub-Series B-4, 5.00%, 11/15/24

     300       343,371  

Sub-Series D-1, 5.25%, 11/15/44

     225       256,732  

New York State Thruway Authority, RB, Junior Lien, Series A, 5.00%, 1/01/34

     2,000       2,244,300  

New York Transportation Development Corp., RB, LaGuardia Airport Terminal B Redevelopment Project, Series A, AMT, 5.00%, 7/01/34

     1,000       1,080,920  

New York Transportation Development Corp., Refunding RB, American Airlines, Inc., AMT, 5.00%, 8/01/26

     1,000       1,041,980  

Port Authority of New York & New Jersey, ARB, JFK International Air Terminal LLC Project, 5.00%, 12/01/20

     1,000       1,096,570  

Port Authority of New York & New Jersey, RB, Consolidated, 169th Series, AMT, 5.00%, 10/15/21

     2,000       2,270,240  

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 152nd Series, AMT, 5.00%, 11/01/23

     500       522,495  

Port Authority of New York & New Jersey, Refunding RB, AMT:

    

178th Series, 5.00%, 12/01/32

     1,000       1,112,250  

Consolidated, 152nd Series, 5.00%, 11/01/24

     1,000       1,044,860  

State of New York Thruway Authority, Refunding RB, General:

    

Series I, 5.00%, 1/01/37

     660       730,726  

Series K, 5.00%, 1/01/32

     1,035       1,169,757  

Triborough Bridge & Tunnel Authority, RB:

    

Series B, 5.00%, 11/15/31

     2,005       2,331,193  

Series B-3, 5.00%, 11/15/33

     500       576,315  
Municipal Bonds   

Par  

(000)

    Value  

New York (continued)

 

Transportation (continued)

 

Triborough Bridge & Tunnel Authority, Refunding RB, Series A:

    

5.00%, 11/15/24

   $ 1,000     $ 1,174,660  

5.00%, 1/01/27

     500       571,915  
    

 

 

 
        21,894,579  

Utilities — 5.3%

 

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series DD, 5.00%, 6/15/32

     250       262,228  

Long Island Power Authority, Refunding RB, Electric System, Series A:

    

5.50%, 4/01/19 (b)

     500       546,125  

5.00%, 9/01/34

     1,000       1,106,840  

State of New York Environmental Facilities Corp., Refunding RB, NYC Municipal Water Finance Authority Project, 2nd Resolution, Series B, 5.00%, 6/15/31

     1,000       1,121,370  

Upper Mohawk Valley Regional Water Finance Authority, Refunding RB:

    

4.00%, 4/01/25

     125       139,506  

5.00%, 4/01/26

     160       191,861  
    

 

 

 
        3,367,930  
Total Municipal Bonds in New York       81,451,158  
    

Puerto Rico — 2.2%

 

Housing — 2.2%

 

Puerto Rico Housing Finance Authority, Refunding RB, M/F Housing, Subordinate, Capital Fund Modernization, 5.13%, 12/01/27

     1,360       1,434,582  
Total Municipal Bonds — 131.1%       82,885,740  
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
 

New York — 27.4%

 

County/City/Special District/School District — 10.5%

 

City of New York New York, GO, Refunding, Series E, 5.00%, 8/01/27

     599       650,736  

City of New York New York, GO:

    

Series I, 5.00%, 3/01/32

     991       1,123,619  

Sub-Series G-1, 5.00%, 4/01/29

     750       852,015  

City of New York New York Convention Center Development Corp., Refunding RB, Hotel Unit Fee Secured, 5.00%, 11/15/32

     3,540       4,033,370  
    

 

 

 
        6,659,740  

Education — 2.8%

 

State of New York Dormitory Authority, Refunding RB, Series E, 5.25%, 3/15/33

     1,500       1,759,665  

State — 4.5%

 

Sales Tax Asset Receivable Corp., Refunding RB, Fiscal 2015, Series A, 5.00%, 10/15/31

     990       1,154,904  

State of New York Urban Development Corp., RB, Personal Income Tax, Series A-1, 5.00%, 3/15/32

     1,499       1,714,969  
    

 

 

 
        2,869,873  
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    17


Schedule of Investments (continued)

  

BlackRock Muni New York Intermediate Duration Fund, Inc.  (MNE)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

New York (continued)

 

Transportation — 4.4%

 

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/25 (b)

   $ 749     $ 831,249  

Port Authority of New York & New Jersey, ARB, Consolidated, 169th Series, AMT, 5.00%, 10/15/26

     750       835,508  

Port Authority of New York & New Jersey, RB, 178th Series, AMT, 5.00%, 12/01/32

     991       1,102,227  
    

 

 

 
        2,768,984  

Utilities — 5.2%

 

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System:

    

2nd General Resolution, Fiscal 2011, Series HH, 5.00%, 6/15/32

     1,560       1,745,187  

Series A, 4.75%, 6/15/17 (b)

     283       286,463  

Series A, 4.75%, 6/15/30

     1,217       1,233,412  
    

 

 

 
        3,265,062  
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 27.4%
      17,323,324  
Total Long-Term Investments
(Cost — $96,412,470) — 158.5%
      100,209,064  
Short-Term Securities   

Shares

    Value  

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.50% (d)(e)

     621,655     $ 621,718  
Total Short-Term Securities
(Cost — $621,655) — 1.0%
      621,718  
Total Investments (Cost — $97,034,125) — 159.5%       100,830,782  
Other Assets Less Liabilities — 1.2%       779,521  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (14.1)%

 

    (8,956,357

VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (46.6)%

 

    (29,451,639
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 63,202,307  
    

 

 

 
 
Notes to Schedule of Investments

 

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

 

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

 

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

 

(d)   During the six months ended January 31, 2017, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares Held
at July 31,
2016
     Net
Activity
     Shares Held
at January 31,
2017
     Value at
January 31,
2017
     Income      Net
Realized
Gain1
     Change in
Unrealized
Appreciation
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     315,667        305,988        621,655      $ 621,718      $ 4,408      $ 912      $ 62  

1   Includes net capital gain distributions.

    

 

(e)   Current yield as of period end.

 

 

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

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts        
Contracts
Long (Short)
       Issue   Expiration     Notional
Value
    Unrealized
Depreciation
        
  (13      5-Year U.S. Treasury Note     March 2017     $ 1,532,273     $ (3,873  
  (45      10-Year U.S. Treasury Note     March 2017     $ 5,601,094       (13,443  
  (16      Long U.S. Treasury Bond     March 2017     $ 2,413,500       (2,631  
  1        Ultra Long U.S. Treasury Bond     March 2017     $ 160,687       (289        
  Total              $ (20,236  
          

 

 

 

 

See Notes to Financial Statements.

 

                
18    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


Schedule of Investments (concluded)

  

BlackRock Muni New York Intermediate Duration Fund, Inc.  (MNE)

 

 

Derivative Financial Instruments Categorized by Risk Exposure

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

 

Liabilities — Derivative Financial Instruments   Commodity
Contracts
    Credit
Contracts
    Equity
Contracts
    Foreign
Currency
Exchange
Contracts
    Interest
Rate
Contracts
    Other
Contracts
    Total         

Futures contracts

  Net unrealized depreciation1                           $ 20,236           $ 20,236          

1   Includes cumulative depreciation on futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

    

For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

Net Realized Gain (Loss) from:   Commodity
Contracts
    Credit
Contracts
    Equity
Contracts
    Foreign
Currency
Exchange
Contracts
    Interest
Rate
Contracts
    Other
Contracts
    Total         

Futures contracts

                          $ 266,297           $ 266,297          

Net Change in Unrealized Appreciation (Depreciation) on:

                                                               

Futures contracts

                          $ 32,659           $ 32,659          

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:    

Average notional value of contracts — long

  $ 80,344    

Average notional value of contracts — short

  $ 6,375,535          

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

 

Fair Value Hierarchy as of Period End

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

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:  

Long-Term Investments1

           $ 100,209,064                 $ 100,209,064  

Short-Term Securities

  $ 621,718                            621,718  
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 621,718        $ 100,209,064                 $ 100,830,782  
 

 

 

      

 

 

      

 

 

      

 

 

 
                
Derivative Financial Instruments2  

Liabilities:

 

Interest rate contracts

  $ (20,236                        $ (20,236

1   See above Schedule of Investments for values in each sector.

    

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

    

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

 

     Level 1        Level 2        Level 3        Total  

Liabilities:

 

TOB Trust Certificates

           $ (8,939,171               $ (8,939,171

VRDP Shares at Liquidation Value

             (29,600,000                 (29,600,000
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

           $ (38,539,171               $ (38,539,171
 

 

 

      

 

 

      

 

 

      

 

 

 

During the six months ended January 31, 2017, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    19


Schedule of Investments January 31, 2017 (Unaudited)

  

BlackRock MuniYield Arizona Fund, Inc. (MZA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Arizona — 146.1%

 

Corporate — 18.2%

 

County of Maricopa Arizona Pollution Control Corp., Refunding RB, Southern California Edison Co., Series A, 5.00%, 6/01/35

   $ 4,350     $ 4,726,754  

County of Pima Arizona IDA, RB, Tucson Electric Power Co. Project, Series A, 5.25%, 10/01/40

     1,000       1,095,380  

County of Pima Arizona IDA, Refunding RB, Tucson Electric Power Co. Project, Series A, 4.00%, 9/01/29

     1,000       1,034,930  

Salt Verde Financial Corp., RB, Senior:

    

5.50%, 12/01/29

     2,000       2,353,840  

5.00%, 12/01/37

     2,500       2,824,350  
    

 

 

 
        12,035,254  

County/City/Special District/School District — 30.5%

 

City of Tucson Arizona, COP, (AGC), 5.00%, 7/01/19 (a)

     1,000       1,088,990  

County of Maricopa Arizona School District No. 28 Kyrene Elementary, GO, School Improvement Project of 2010, Series B:

    

5.50%, 7/01/29

     480       573,355  

5.50%, 7/01/30

     400       475,948  

County of Maricopa Arizona Unified School District No. 89 Dysart, GO, School Improvement Project of 2006, Series C, 6.00%, 7/01/28

     1,000       1,069,120  

County of Maricopa Unified School District No 11-Peoria, GO, 5.00%, 7/01/35

     1,250       1,403,075  

County of Mohave Arizona Unified School District No. 20 Kingman, GO, School Improvement Project of 2006, Series C (AGC), 5.00%, 7/01/26

     1,000       1,089,490  

County of Pinal Arizona, RB, 5.00%, 8/01/33

     250       280,503  

Gilbert Public Facilities Municipal Property Corp., RB, 5.50%, 7/01/27

     2,000       2,167,780  

Greater Arizona Development Authority, RB, Santa Cruz County Jail, Series 2, 5.25%, 8/01/31

     1,155       1,210,960  

Marana Municipal Property Corp., RB, Series A, 5.00%, 7/01/28

     2,500       2,612,800  

Phoenix-Mesa Gateway Airport Authority, RB, Mesa Project, AMT, 5.00%, 7/01/38

     3,600       3,838,608  

Town of Buckeye Arizona, RB, 5.00%, 7/01/43

     4,000       4,397,320  
    

 

 

 
        20,207,949  

Education — 35.5%

 

Arizona Board of Regents, COP, Refunding, University of Arizona, Series C, 5.00%, 6/01/30

     2,595       2,881,592  

Arizona Industrial Development Authority, Refunding RB, Series A, 5.13%, 7/01/37 (b)

     500       503,505  

Arizona State University, RB, Series C (a):

    

6.00%, 7/01/18

     970       1,037,900  

6.00%, 7/01/18

     350       374,500  

6.00%, 7/01/18

     425       454,750  

6.00%, 7/01/18

     400       428,000  

Arizona State University, Refunding RB, 5.00%, 6/01/39

     2,050       2,315,598  

City of Phoenix Arizona IDA, RB:

    

Candeo School, Inc. Project, 6.63%, 7/01/33

     500       557,225  

Great Hearts Academies — Veritas Project, 6.30%, 7/01/42

     500       535,290  

Great Hearts Academies Project, Series A, 5.00%, 7/01/44

     2,000       2,073,880  

Legacy Traditional Schools Project, Series A, 6.75%, 7/01/44 (b)

     440       494,362  

Legacy Traditional Schools Projects, Series A, 5.00%, 7/01/46 (b)

     500       476,500  

City of Phoenix Arizona IDA, Refunding RB:

    

Basis Schools, Inc. Projects, 5.00%, 7/01/45 (b)

     1,000       979,160  

Basis Schools, Inc. Projects, Series A, 5.00%, 7/01/46 (b)

     1,500       1,466,040  
Municipal Bonds   

Par  

(000)

    Value  

Arizona (continued)

 

Education (continued)

 

City of Phoenix Arizona IDA, Refunding RB (continued):

    

Great Hearts Academies Projects, 5.00%, 7/01/46

   $ 500     $ 517,335  

Legacy Traditional School Projects, 5.00%, 7/01/45 (b)

     500       477,370  

County of Maricopa Arizona IDA, RB, Reid Traditional Schools Projects, 5.00%, 7/01/47

     1,000       1,034,120  

County of Maricopa Arizona IDA, Refunding RB, Paradise Schools Projects, 5.00%, 7/01/47 (b)

     1,000       973,660  

McAllister Academic Village LLC, Refunding RB, Arizona State University, 5.00%, 7/01/39

     500       550,435  

Northern Arizona University, RB, Stimulus Plan for Economic and Educational Development, 5.00%, 8/01/38

     3,000       3,283,320  

Student & Academic Services LLC, RB, 5.00%, 6/01/39

     1,400       1,548,078  

Town of Florence, Inc. Arizona, IDA, ERB, Legacy Traditional School Project, Queen Creek and Casa Grande Campuses, 6.00%, 7/01/43

     500       527,975  
    

 

 

 
        23,490,595  

Health — 21.0%

 

Arizona Health Facilities Authority, RB, Catholic Healthcare West, Series B-2 (AGM), 5.00%, 3/01/41

     500       534,380  

Arizona Health Facilities Authority, Refunding RB:

    

Banner Health, Series D, 5.50%, 1/01/18 (a)

     4,000       4,166,440  

Phoenix Children’s Hospital, Series A, 5.00%, 2/01/42

     1,000       1,049,070  

Scottsdale Lincoln Hospitals Project, Series A, 5.00%, 12/01/42

     1,750       1,898,435  

City of Tempe Arizona IDA, Refunding RB, Friendship Village of Tempe, Series A, 6.25%, 12/01/42

     500       527,815  

County of Maricopa Arizona IDA, RB, Catholic Healthcare West, Series A, 6.00%, 7/01/39

     170       184,115  

County of Maricopa Arizona IDA, Refunding RB, Banner Health Obligation Group, Series A:

    

3.25%, 1/01/37

     1,290       1,172,920  

5.00%, 1/01/38

     1,320       1,487,019  

County of Yavapai IDA, Refunding RB, Northern Arizona Healthcare System, 5.25%, 10/01/26

     1,000       1,117,110  

University Medical Center Corp., RB, 6.50%, 7/01/19 (a)

     500       561,650  

University Medical Center Corp., Refunding RB, 6.00%, 7/01/21 (a)

     1,000       1,185,950  
    

 

 

 
        13,884,904  

Housing — 0.2%

 

City of Phoenix & County of Maricopa Arizona IDA, Refunding RB, S/F Housing, AMT (Fannie Mae):

    

Series A-1, 5.75%, 5/01/40

     20       21,112  

Series A-2, 5.80%, 7/01/40

     30       30,607  

City of Phoenix & County of Pima Arizona IDA, Refunding RB, S/F Housing, AMT (Fannie Mae):

    

Series 1, 5.25%, 8/01/38

     11       10,721  

Series 2, 5.50%, 12/01/38

     39       40,124  
    

 

 

 
        102,564  

State — 14.4%

 

Arizona Department of Transportation State Highway Fund, RB, Series B, 5.00%, 7/01/18 (a)

     4,000       4,221,000  

Arizona School Facilities Board, COP (a):

    

5.13%, 9/01/18

     1,000       1,063,040  

5.75%, 9/01/18

     2,000       2,145,660  

State of Arizona, RB, Lottery Revenue, Series A (AGM), 5.00%, 7/01/29

     1,930       2,088,646  
    

 

 

 
        9,518,346  
 

 

See Notes to Financial Statements.

 

                
20    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


Schedule of Investments (continued)

  

BlackRock MuniYield Arizona Fund, Inc. (MZA)

 

Municipal Bonds   

Par  

(000)

    Value  

Arizona (continued)

 

Transportation — 4.4%

 

City of Phoenix Arizona Civic Improvement Corp., RB, Senior Lien, Series A, AMT, 5.00%, 7/01/33

   $ 1,000     $ 1,045,410  

City of Phoenix Arizona Civic Improvement Corp., Refunding RB:

    

Junior Lien, Series A, 5.00%, 7/01/40

     1,000       1,084,960  

City of Phoenix Arizona Civic Improvement Corp., Refunding RB:

    

Senior Lien, AMT, 5.00%, 7/01/32

     700       773,402  
    

 

 

 
        2,903,772  

Utilities — 21.9%

 

City of Lake Havasu City Arizona Wastewater System Revenue, RB, Series B, 5.00%, 7/01/40

     3,500       3,901,380  

City of Phoenix Arizona Civic Improvement Corp., Refunding RB, Senior Lien, 5.50%, 7/01/22

     2,000       2,121,300  

City of Phoenix Civic Improvement Corp., RB, Series B, 5.50%, 7/01/41

     100       126,703  

County of Pinal Arizona, RB, Electric District No. 4, 6.00%, 12/01/18 (a)

     2,000       2,176,640  

County of Pinal Arizona, Refunding RB, Electric District No. 3, 5.25%, 7/01/21 (a)

     2,500       2,892,200  

County of Pinal Arizona IDA, RB, San Manuel Facility Project, AMT, 6.25%, 6/01/26

     500       498,410  

Salt River Project Agricultural Improvement & Power District, RB, Series A, 5.00%, 1/01/18 (a)

     500       518,530  

Salt River Project Agricultural Improvement & Power District, Refunding RB, Series A, 5.00%, 12/01/41

     2,000       2,267,680  
    

 

 

 
        14,502,843  
Total Municipal Bonds in Arizona       96,646,227  
    

Puerto Rico — 2.8%

                

Tobacco — 2.8%

 

Children’s Trust Fund Tobacco Settlement, Refunding RB, Asset-Backed Bonds, 5.63%, 5/15/43

     1,845       1,844,852  
Total Municipal Bonds — 148.9%       98,491,079  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

Arizona — 10.0%

                

Utilities — 10.0%

 

City of Mesa Arizona, RB, Utility System, 5.00%, 7/01/35

   $ 3,000     $ 3,357,720  

City of Phoenix Arizona Civic Improvement Corp., Refunding RB, Water System, Junior Lien, Series A, 5.00%, 7/01/19 (a)

     3,000       3,269,970  
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 10.0%
      6,627,690  
Total Long-Term Investments
(Cost — $99,840,064) — 158.9%
      105,118,769  
    
                  
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.50% (d)(e)

     492,249       492,298  
Total Short-Term Securities
(Cost — $492,255) — 0.8%
      492,298  
Total Investments (Cost — $100,332,319) — 159.7%       105,611,067  
Other Assets Less Liabilities — 1.0%       683,592  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (4.5)%

 

    (3,001,810

VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (56.2)%

 

    (37,142,366
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 66,150,483  
    

 

 

 
 
Notes to Schedule of Investments

 

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

 

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

 

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

 

(d)   During the six months ended January 31, 2017, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   Shares Held
at July 31,
2016
    Net
Activity
    Shares Held
at January 31,
2017
    Value at
January 31,
2017
    Income    

Net

Realized
Gain1

    Change in
Unrealized
Appreciation
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

    776,573       (284,324     492,249     $ 492,298     $ 1,362     $ 43     $ 43  

1   Includes net capital gain distributions.

    

 

(e)   Current yield as of period end.

 

 

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

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    21


Schedule of Investments (continued)

  

BlackRock MuniYield Arizona Fund, Inc. (MZA)

 

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts              
Contracts
Short
       Issue   Expiration   Notional
Value
    Unrealized
Appreciation
(Depreciation)
        
  (8      5-Year U.S. Treasury Note   March 2017   $ 942,937     $ (987  
  (30      10-Year U.S. Treasury Note   March 2017   $ 3,734,063       (3,509  
  (21      Long U.S. Treasury Bond   March 2017   $ 3,167,719       7,841    
  (1      Ultra U.S. Treasury Bond   March 2017   $ 160,687       429          
 

Total

    $ 3,774    
          

 

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

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

 

Assets — Derivative Financial Instruments   Commodity
Contracts
    Credit
Contracts
    Equity
Contracts
    Foreign
Currency
Exchange
Contracts
    Interest
Rate
Contracts
    Other
Contracts
    Total         

Futures contracts

  Net unrealized appreciation1                           $ 8,270           $ 8,270          

Liabilities — Derivative Financial Instruments

                                                               

Futures contracts

  Net unrealized depreciation1                           $ 4,496           $ 4,496          

1   Includes cumulative appreciation (depreciation) on futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

    

                 
For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:  
                 
Net Realized Gain (Loss) from:   Commodity
Contracts
    Credit
Contracts
    Equity
Contracts
    Foreign
Currency
Exchange
Contracts
    Interest
Rate
Contracts
    Other
Contracts
    Total         

Futures contracts

                          $ 305,267           $ 305,267          

Net Change in Unrealized Appreciation (Depreciation) on:

                                                               

Futures contracts

                          $ 20,108           $ 20,108          

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:  

Average notional value of contracts — short

  $ 5,682,016  

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

 

See Notes to Financial Statements.

 

                
22    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


Schedule of Investments (concluded)

  

BlackRock MuniYield Arizona Fund, Inc. (MZA)

 

 

Fair Value Hierarchy as of Period End

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

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:  

Long-Term Investments1

           $ 105,118,769                 $ 105,118,769  

Short-Term Securities

  $ 492,298                            492,298  
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 492,298        $ 105,118,769                 $ 105,611,067  
 

 

 

      

 

 

      

 

 

      

 

 

 
                
Derivative Financial Instruments2                                     

Assets:

 

Interest rate contracts

  $ 8,270                          $ 8,270  

Liabilities:

 

Interest rate contracts

    (4,496                          (4,496
 

 

 

 

Total

  $ 3,774                          $ 3,774  
 

 

 

 

1   See above Schedule of Investments for values in each sector.

    

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

    

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

 

     Level 1        Level 2        Level 3        Total  

Liabilities:

 

TOB Trust Certificates

           $ (3,000,000               $ (3,000,000

VRDP Shares at Liquidation Value

             (37,300,000                 (37,300,000
 

 

 

 

Total

           $ (40,300,000               $ (40,300,000
 

 

 

 

During the six months ended January 31, 2017, there were no transfers between levels.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    23


Schedule of Investments January 31, 2017 (Unaudited)

  

BlackRock MuniYield California Fund, Inc. (MYC)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

California — 84.6%

 

Corporate — 1.3%

 

City of Chula Vista California, Refunding RB, San Diego Gas & Electric, Series D, 5.88%, 1/01/34

   $ 4,000     $ 4,369,280  

County/City/Special District/School District — 27.5%

 

City of Los Angeles California, COP, Senior, Sonnenblick Del Rio West Los Angeles (AMBAC), 6.20%, 11/01/31

     2,000       2,007,020  

City of Los Angeles California Municipal Improvement Corp., RB, Real Property, Series E, 6.00%, 9/01/19 (a)

     2,660       2,979,227  

City of San Jose California Hotel Tax, RB, Convention Center Expansion & Renovation Project:

    

6.50%, 5/01/36

     1,520       1,764,310  

6.50%, 5/01/42

     1,860       2,154,903  

County of Los Angeles California Metropolitan Transportation Authority, Refunding RB, Series A, 5.00%, 7/01/42 (b)

     4,000       4,647,800  

County of Riverside California Public Financing Authority, RB, Capital Facilities Project, 5.25%, 11/01/45

     5,000       5,702,850  

County of San Joaquin California Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A, 6.00%, 3/01/36

     2,440       2,823,446  

County of Santa Clara California Financing Authority, Refunding LRB, Series L, 5.25%, 5/15/18 (a)

     16,000       16,885,440  

Foothill-De Anza Community College District, GO, Refunding, 4.00%, 8/01/40

     3,500       3,637,515  

Garden Grove Unified School District, GO, Election of 2010, Series C, 5.25%, 8/01/40

     5,500       6,285,180  

Los Angeles Community College District, GO, Refunding, 5.00%, 8/01/38

     1,500       1,742,355  

Los Angeles Community College District California, GO, Election of 2008, Series C, 5.25%, 8/01/20 (a)

     2,000       2,265,640  

Los Angeles Unified School District, GO, Election of 2008, Series A, 4.00%, 7/01/40

     8,500       8,664,220  

Oak Grove School District, GO, Election of 2008, Series A:

    

5.50%, 8/01/19 (a)

     1,120       1,238,362  

5.50%, 8/01/33

     880       963,213  

Ohlone Community College District, GO, Election of 2010, Series A, 5.25%, 8/01/21 (a)

     7,135       8,297,291  

Pico Rivera Public Financing Authority, RB, 5.75%, 9/01/19 (a)

     6,035       6,729,206  

Riverside Community Properties Development, Inc., RB, Riverside County Law Building Project, 6.00%, 10/15/38

     5,000       5,845,200  

Turlock Irrigation District, Refunding RB, 1st Priority, 5.00%, 1/01/33

     1,750       2,015,807  

West Contra Costa California Unified School District, GO, Election of 2012, Series A, 5.50%, 8/01/39

     2,500       2,906,675  
    

 

 

 
        89,555,660  

Education — 4.7%

 

California Educational Facilities Authority, Refunding RB:

    

Pitzer College, 6.00%, 4/01/40

     2,500       2,826,050  

San Francisco University, 6.13%, 10/01/36

     1,745       2,042,261  

California Municipal Finance Authority, RB, Emerson College, 6.00%, 1/01/42

     2,750       3,119,050  

California School Finance Authority, RB:

    

Alliance College-Ready Public Schools — 2023 Union LLC Project, Series A, 6.00%, 7/01/33

     1,500       1,671,840  
Municipal Bonds   

Par  

(000)

    Value  

California (continued)

 

Education (continued)

 

California School Finance Authority, RB (continued):

    

Alliance College-Ready Public Schools — 2023 Union LLC Project, Series A, 6.30%, 7/01/43

   $ 3,000     $ 3,376,140  

Value Schools, 6.65%, 7/01/33

     595       660,444  

Value Schools, 6.90%, 7/01/43

     1,330       1,487,126  
    

 

 

 
        15,182,911  

Health — 12.8%

 

California Health Facilities Financing Authority, RB:

    

Children’s Hospital, Series A, 5.25%, 11/01/41

     9,700       10,717,821  

Sutter Health, Series B, 6.00%, 8/15/42

     7,530       8,576,218  

California Health Facilities Financing Authority, Refunding RB:

    

Catholic Healthcare West, Series A, 6.00%, 7/01/19 (a)

     10,000       11,111,900  

Sutter Health, Series B, 5.00%, 11/15/36

     280       316,028  

California Statewide Communities Development Authority, RB, Sutter Health, Series A, 6.00%, 8/15/42

     8,110       9,236,803  

Washington Township Health Care District, GO, Election of 2004, Series B, 5.50%, 8/01/38

     1,625       1,859,650  
    

 

 

 
        41,818,420  

Housing — 1.1%

 

County of Santa Clara California Housing Authority, RB, John Burns Gardens Apartments Project, Series A, AMT, 6.00%, 8/01/41

     3,500       3,502,380  

State — 6.7%

 

State of California, GO, Various Purposes, 6.00%, 4/01/38

     2,000       2,194,060  

State of California Public Works Board, LRB:

    

Department of Developmental Services, Potterville, Series C, 6.25%, 4/01/19 (a)

     1,610       1,785,747  

Department of Education, Riverside Campus Project, Series B, 6.50%, 4/01/34

     10,000       11,063,000  

Various Capital Projects, Series I, 5.50%, 11/01/33

     1,510       1,780,562  

Various Capital Projects, Sub-Series I-1, 6.38%, 11/01/19 (a)

     4,400       5,017,056  
    

 

 

 
        21,840,425  

Tobacco — 6.6%

 

Golden State Tobacco Securitization Corp., Refunding RB, Asset-Backed, Senior, Series A-1, 5.75%, 6/01/47

     22,085       21,697,187  

Transportation — 14.3%

 

City & County of San Francisco California Airports Commission, ARB, Series E, 6.00%, 5/01/39

     5,215       5,735,926  

City & County of San Francisco California Airports Commission, Refunding ARB, San Francisco International Airport, 5.00%, 5/01/46

     5,785       6,514,026  

City & County of San Francisco California Airports Commission, Refunding ARB, 2nd Series A, AMT, 5.25%, 5/01/33

     1,440       1,598,198  

City & County of San Francisco California Airports Commission, Refunding ARB, San Francisco International Airport, Series A, AMT, 5.00%, 5/01/46

     2,055       2,252,424  

City of Los Angeles California Department of Airports, ARB, Los Angeles International Airport Series A, AMT, 5.00%, 5/15/42

     3,520       3,873,866  
 

 

See Notes to Financial Statements.

 

                
24    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


Schedule of Investments (continued)

  

BlackRock MuniYield California Fund, Inc. (MYC)

 

Municipal Bonds   

Par  

(000)

    Value  

California ( continued)

 

Transportation (continued)

 

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A, 5.25%, 5/15/39

   $ 3,605     $ 3,903,206  

City of San Jose California, RB, Series A-1, AMT (AGM):

    

5.50%, 3/01/30

     1,000       1,117,620  

5.75%, 3/01/34

     1,000       1,133,100  

City of San Jose California, Refunding ARB, Series A-1, AMT, 6.25%, 3/01/34

     1,400       1,607,564  

County of Sacramento California, Refunding ARB, Senior Series A, 5.00%, 7/01/41

     8,280       9,233,608  

County of Sacramento California, ARB:

    

PFC/Grant, Sub-Series D, 6.00%, 7/01/35

     3,000       3,186,540  

Senior Series B, 5.75%, 7/01/39

     900       952,038  

San Francisco Port Commission California, RB, Series A, 5.13%, 3/01/40

     5,075       5,507,491  
    

 

 

 
        46,615,607  

Utilities — 9.6%

 

City of Los Angeles California Department of Water & Power, RB, Power System, Series A, 5.00%, 7/01/46

     1,000       1,136,990  

City of Los Angeles California Department of Water & Power, Refunding RB, Series A:

    

5.25%, 7/01/39

     4,000       4,519,560  

5.00%, 7/01/46

     2,225       2,539,059  

City of Petaluma California Wastewater, Refunding RB, 6.00%, 5/01/36

     2,645       3,057,594  

Dublin-San Ramon Services District Water Revenue, Refunding RB, 6.00%, 8/01/41

     2,420       2,788,566  

Eastern Municipal Water District, Refunding RB, Series A:

    

5.00%, 7/01/38

     1,930       2,207,090  

5.00%, 7/01/42

     5,000       5,700,450  

Metropolitan Water District of Southern California, RB, Series A, 5.00%, 7/01/37

     4,500       4,570,920  

Oceanside Public Financing Authority, Refunding RB, Series A:

    

5.25%, 5/01/30

     1,245       1,450,014  

5.25%, 5/01/33

     2,810       3,231,640  
    

 

 

 
               31,201,883  
Total Municipal Bonds — 84.6%              275,783,753  
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
 

California — 87.9%

                

County/City/Special District/School District — 41.7%

 

California Health Facilities Financing Authority, RB, Sutter Health, Series A, 5.00%, 11/15/41

     11,000       12,220,890  

Chabot-Las Positas Community College District, GO, Refunding, 4.00%, 8/01/37

     3,410       3,532,828  

City of Los Angeles California, Refunding RB, Series A, 5.00%, 6/01/39

     9,870       10,608,375  

County of Los Angeles California Public Works Financing Authority, Refunding RB, Series A:

    

5.00%, 12/01/39

     17,850       20,046,799  

5.00%, 12/01/44

     14,095       15,757,173  

Los Angeles Community College District California, GO:

    

Election of 2001, Series E-1, 5.00%, 8/01/18

     14,850       15,744,713  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

California (continued)

 

County/City/Special District/School District (continued)

 

Los Angeles Community College District California, GO (continued):

    

Election of 2008, Series C, 5.25%, 8/01/20 (a)(d)

   $ 9,682     $ 10,967,406  

Los Angeles Community College District California, GO, Refunding, Series A, 6.00%, 8/01/19 (a)

     3,828       4,280,910  

Palomar California Community College District, GO, Election of 2006, Series C, 5.00%, 8/01/44

     15,140       17,034,165  

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/19 (a)

     7,732       8,502,073  

San Marcos Unified School District, GO, Election of 2010, Series A, 5.00%, 8/01/38

     15,520       17,257,774  
    

 

 

 
        135,953,106  

Education — 18.9%

 

California State University, Refunding RB, Systemwide, Series A, 4.00%, 11/01/35

     12,250       12,641,755  

University of California, RB, Series AM, 5.25%, 5/15/44

     11,950       13,825,075  

University of California, Refunding RB:

    

5.00%, 5/15/38

     4,000       4,595,240  

Series A, 5.00%, 11/01/43

     5,001       5,686,748  

Series I, 5.00%, 5/15/40

     21,875       24,788,858  
    

 

 

 
        61,537,676  

Health — 12.5%

 

California Statewide Communities Development Authority, Refunding RB, Cottage Health System Obligation, 5.00%, 11/01/43

     26,870       29,279,164  

Regents of the University of California Medical Center Pooled Revenue, Refunding RB, Series L, 5.00%, 5/15/47

     10,280       11,553,075  
    

 

 

 
        40,832,239  

State — 7.9%

 

State of California, GO, Refunding, Various Purposes:

    

4.00%, 9/01/34

     13,790       14,290,163  

5.00%, 9/01/35

     10,115       11,589,240  
    

 

 

 
        25,879,403  

Transportation — 5.4%

 

City of Los Angeles California Department of Airports, ARB, Series A, AMT, 5.00%, 5/15/45

     10,045       11,074,768  

County of San Diego Regional Transportation Commission, Refunding RB, Series A, 5.00%, 4/01/48

     5,750       6,581,163  
    

 

 

 
        17,655,931  

Utilities — 1.5%

 

Eastern Municipal Water District, COP, Series H, 5.00%, 7/01/18 (a)

     4,748       5,014,385  
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 87.9%
      286,872,740  
Total Long-Term Investments
(Cost — $542,979,423) — 172.5%
      562,656,493  
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    JANUARY 31, 2017    25


Schedule of Investments (continued)

  

BlackRock MuniYield California Fund, Inc. (MYC)

 

    
Short-Term Securities
   Shares     Value  

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.50% (e)(f)

     518,658     $ 518,710  
Total Short-Term Securities
(Cost — $518,696) — 0.2%
             518,710  
Total Investments (Cost — $543,498,119) — 172.7%       563,175,203  
Other Assets Less Liabilities — 0.0%       79,249  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (40.3)%

 

    (131,385,166

VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (32.4)%

 

    (105,685,519
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 326,183,767  
    

 

 

 
 
Notes to Schedule of Investments      

 

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

 

(b)   When-issued security.

 

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

 

(d)   All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreement, which expires on August 1, 2018 is $5,101,199. See Note 4 of the Notes to Financial Statements for details.

 

(e)   During the six months ended January 31, 2017, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   Shares Held
at July 31,
2016
    Net
Activity
    Shares Held
at January 31,
2017
    Value at
January 31,
2017
    Income    

Net

Realized
Gain1

    Change in
Unrealized
Appreciation
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

    418,955       99,703       518,658     $ 518,710     $ 2,696     $ 2,523     $ 14  

1   Includes net capital gain distributions.

    

     

 

(f)   Current yield as of period end.

 

 

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

 

Derivative Financial Instruments Outstanding as of Period End      

 

Futures Contracts        
Contracts
Short
       Issue   Expiration   Notional
Value
    Unrealized
Depreciation
        
  (24      5-Year U.S. Treasury Note   March 2017   $ 2,828,812     $ (4,530  
  (124      10-Year U.S. Treasury Note   March 2017   $ 15,434,125       (9,975  
  (97      Long U.S. Treasury Bond   March 2017   $ 14,631,844       (11,378  
  (18      Ultra U.S. Treasury Bond   March 2017   $ 2,892,375       (13,149        
 

Total

    $ (39,032  
          

 

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure      

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

 

Liabilities — Derivative Financial Instruments     Commodity
Contracts
    Credit
Contracts
    Equity
Contracts
    Foreign
Currency
Exchange
Contracts
    Interest
Rate
Contracts
    Other
Contracts
    Total  

Futures contracts

    Net unrealized depreciation 1                            $ 39,032           $ 39,032  

1  Includes cumulative depreciation on futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

   

 

See Notes to Financial Statements.

 

                
26    SEMI-ANNUAL REPORT    JANUARY 31, 2017   


Schedule of Investments (concluded)

  

BlackRock MuniYield California Fund, Inc. (MYC)

 

For the six months ended January 31, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

Net Realized Gain (Loss) from:        Commodity
Contracts
    Credit
Contracts
    Equity
Contracts
    Foreign
Currency
Exchange
Contracts
    Interest
Rate
Contracts
    Other
Contracts
    Total  

Futures contracts

                          $ 858,474           $ 858,474  

Net Change in Unrealized Appreciation (Depreciation) on:

                                                       

Futures contracts