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: 07/31/2017

 


Item 1 – Report to Stockholders

 


JULY 31, 2017

 

 

ANNUAL REPORT

 

    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,

In the 12 months ended July 31, 2017, risk assets, such as stocks and high-yield bonds, continued to deliver strong performance. These markets showed great resilience during a period with big surprises, including the aftermath of the U.K.’s vote to leave the European Union and the outcome of the U.S. presidential election, which brought only brief spikes in equity market volatility. These expressions of isolationism and discontent were countered by the closely watched and less surprising elections in France, the Netherlands and Australia.

Interest rates rose, which worked against high-quality assets with more interest rate sensitivity. Aside from the shortest-term Treasury bills, most U.S. Treasuries posted negative returns, as rising energy prices, modest wage increases and steady job growth led to expectations of higher inflation and anticipation of interest rate increases by the U.S. Federal Reserve (the “Fed”).

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 economic uncertainty. Reflationary expectations accelerated after the U.S. election in November 2016 and continued into the beginning of 2017, stoked by expectations that the new administration’s policies would provide an extra boost to U.S. growth.

The Fed has responded to these positive developments by increasing interest rates three times in the last six months, setting expectations for additional interest rate increases and moving toward normalizing monetary policy. Divergent global monetary policy continued in earnest, as the European Central Bank and the Bank of Japan reiterated their commitments to economic stimulus despite nascent signs of sustained economic growth in both countries.

In recent months, growing skepticism about the near-term likelihood of significant U.S. tax reform and infrastructure spending has tempered enthusiasm around the reflation trade. Similarly, renewed concern about oversupply has weighed on energy prices. Nonetheless, financial markets — and to an extent the Fed — have adopted a “wait-and-see” approach to the economic data and potential fiscal stimulus. Although uncertainty has persisted, benign credit conditions, modest inflation and the positive outlook for economic growth have kept markets relatively tranquil.

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, as well as cyclical factors, such as the Fed moving toward the normalization of monetary policy and the length of the current expansion. Tempered economic growth and high valuations across most assets have set the stage for muted returns going forward. At current valuation levels, potential equity gains will likely be closely tied to the pace of earnings growth, which has remained solid thus far in 2017.

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 July 31, 2017  
    6-month     12-month  

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

    9.51     16.04

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

    5.35       18.45  

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

    13.79       17.77  

Emerging market equities
(MSCI Emerging Markets Index)

    18.98       24.84  

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

    0.35       0.54  

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

    2.33       (5.73

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

    2.51       (0.51

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

    3.40       0.36  

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

    4.57       10.94  
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  

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

    18  

Statements of Assets and Liabilities

    42  

Statements of Operations

    43  

Statements of Changes in Net Assets

    44  

Statements of Cash Flows

    47  

Financial Highlights

    48  

Notes to Financial Statements

    53  

Report of Independent Registered Public Accounting Firm

    63  

Disclosure of Investment Advisory Agreements

    64  

Automatic Dividend Reinvestment Plans

    68  

Officers and Directors

    69  

Additional Information

    72  

 

                
   ANNUAL REPORT    JULY 31, 2017    3


Municipal Market Overview     

 

For the Reporting Period Ended July 31, 2017

Municipal Market Conditions

Municipal bonds experienced modestly positive performance for the period as a result of vastly rising interest rates spurring from generally stronger economic data, signs of inflation pressures, Federal Reserve (“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 continued demand for fixed income investments. More specifically, investors favored the income, attractive relative yield, and stability of municipal bonds amid bouts of interest rate volatility (bond prices rise as rates fall) resulting from geopolitical tensions, the contentious U.S. election, and continued global central bank divergence — i.e., policy easing outside the United States while the Fed slowly engages in policy tightening. During the 12 months ended July 31, 2017, municipal bond funds garnered net inflows of approximately $593 million (based on data from the Investment Company Institute).

For the same 12-month period, total new issuance remained robust from a historical perspective at $412 billion (above the $397 billion issued in the prior 12-month period). A noteworthy portion of new supply during this period was attributable to refinancing activity (roughly 57%) as issuers continued to take advantage of low interest rates and a flat yield curve to reduce their borrowing costs.

 

S&P Municipal Bond Index

Total Returns as of July 31, 2017

  6 months: 3.40%

12 months: 0.36%

 

A Closer Look at Yields

 

LOGO

 

From July 31, 2016 to July 31, 2017, yields on AAA-rated 30-year municipal bonds increased by 62 basis points (“bps”) from 2.12% to 2.74%, while 10-year rates rose by 55 bps from 1.40% to 1.95% and 5-year rates increased 37 bps from 0.84% to 1.21% (as measured by Thomson Municipal Market Data). The municipal yield curve steepened over the 12-month period with the spread between 2- and 30-year maturities steepening by 20 bps.

During the same time period, on a relative basis, tax-exempt

municipal bonds broadly outperformed U.S. Treasuries with the greatest outperformance experienced in the front and intermediate portions of the yield curve. The relative 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. Municipal bonds came under pressure post the November U.S. election as a result of uncertainty surrounding potential tax-reform, though growing expectation that tax reform is likely to be delayed or watered down quickly eased investor concerns. 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 July 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 AMT. 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    ANNUAL REPORT    JULY 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 such leverage proceeds, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.

However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed 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 the Funds’ 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), with 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.

 

 

                
   ANNUAL REPORT    JULY 31, 2017    5


Fund Summary as of July 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 common shareholders with high current income exempt from U.S. 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 U.S. 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 investment adviser to be of comparable quality, at the time of investment. Under normal market conditions, the Fund invests at least 80% of its assets in municipal obligations with 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 July 31, 2017 ($14.07)1

  3.80%

Tax Equivalent Yield2

  7.69%

Current Monthly Distribution per Common Share3

  $0.0445

Current Annualized Distribution per Common Share3

  $0.5340

Economic Leverage as of July 31, 20174

  37%

 

  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 U.S. 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 12 months ended July 31, 2017 were as follows:

 

    Returns Based On  
     Market Price      NAV  

MNE1,2

    (6.47)%        (0.75)%  

Lipper Intermediate Municipal Debt Funds3

    (2.99)%        (0.64)%  

 

  1   

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 

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

 

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

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

 

 

The municipal bond market generated mixed returns in the 12-month reporting period. Municipal bonds initially moved lower in the third calendar quarter of 2016 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 factor in the possibility of faster economic growth and tighter Fed policy. As optimism for meaningful fiscal reforms subsequently waned and the economy failed to experience a significant acceleration, municipal bonds stabilized and retraced the majority of their post-election losses.

 

 

New York municipals slightly outperformed the broader national market during the period. While new issuance in the state was relatively robust, much of it was concentrated in several large issuers. The state’s overall financial prospects are exhibiting positive trends, albeit slightly behind national averages.

 

 

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.

 

 

Allocations to education and project finance bonds made the largest contributions to performance at the sector level.

 

 

Exposure to short-dated maturities, which exhibited less of a price decline relative to longer-dated issues, contributed to performance as yields rose during the period.

 

                
6    ANNUAL REPORT    JULY 31, 2017   


     BlackRock Muni New York Intermediate Duration Fund,  Inc.

 

 

 

While the Fund’s use of leverage enhanced portfolio income, the benefits of this strategy were somewhat reduced given the modest rise in funding costs associated with less accommodative central bank monetary policy. In addition, leverage exacerbated the impact of declining bond prices.

 

 

Positions in intermediate- and longer-dated maturities declined the most in value, as they typically have longer durations relative to shorter maturities. The Fund’s investments in the education and transportation sectors detracted, as did its allocation to bonds rated single-A.

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.

 

Market Price and Net Asset Value Per Share Summary                              

 

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

Market Price

  $ 14.07      $ 15.75        (10.67)%      $ 16.30      $ 13.20  

Net Asset Value

  $ 15.47      $ 16.32        (5.21)%      $ 16.34      $ 14.80  

 

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

 

LOGO

 

 

                
   ANNUAL REPORT    JULY 31, 2017    7


     BlackRock Muni New York Intermediate Duration Fund,  Inc.

 

Overview of the Fund’s Total Investments*

 

Sector Allocation   7/31/17     7/31/16  

Education

    24     21

Transportation

    22       25  

County/City/Special District/School District

    21       21  

Health

    10       12  

State

    10       7  

Utilities

    6       6  

Housing

    3       3  

Corporate

    3       4  

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.

 

 
Call/Maturity Schedule3  

Calendar Year Ended December 31,

 

2017

    2

2018

    5  

2019

    8  

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

AAA/Aaa

    11     10

AA/Aa

    50       48  

A

    20       23  

BBB/Baa

    13       12  

BB/Ba

    2       3  

N/R

    4       4 2  

 

  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 July 31, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade represents 2% of the Fund’s total investments.

 

 

                
8    ANNUAL REPORT    JULY 31, 2017   


Fund Summary as of July 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 U.S. 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 U.S. 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 investment 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

  MZA

Initial Offering Date

  October 29, 1993

Yield on Closing Market Price as of July 31, 2017 ($16.59)1

  4.48%

Tax Equivalent Yield2

  8.29%

Current Monthly Distribution per Common Share3

  $0.0620

Current Annualized Distribution per Common Share3

  $0.7440

Economic Leverage as of July 31, 20174

  37%

 

  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 U.S. 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 12 months ended July 31, 2017 were as follows:

 

    Returns Based On  
     Market Price      NAV  

MZA1,2

    (1.34)%        (0.72)%  

Lipper Other States Municipal Debt Funds3

    (3.77)%        (1.21)%  

 

  1   

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 

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

 

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

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

 

 

The municipal bond market generated mixed returns in the 12-month reporting period. Municipal bonds initially moved lower in the third calendar quarter of 2016 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 factor in the possibility of faster economic growth and tighter Fed policy. As optimism for meaningful fiscal reforms subsequently waned and the economy failed to experience a significant acceleration, municipal bonds stabilized and retraced the majority of their post-election losses.

 

 

Arizona municipal bonds outperformed national municipals during the period. Arizona’s overall financial prospects exhibited positive trends, creating a favorable fundamental underpinning for the market. New issuance in the state continued to be on the lighter side, which was beneficial from a performance aspect. However, it also meant fewer investment opportunities.

 

 

Portfolio income made the most significant positive contribution to performance during a time in which bond prices lost ground. The Fund’s use of leverage, while enhancing income, also exacerbated the impact of declining bond prices.

 

 

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.

 

 

From a sector perspective, the Fund’s exposure to the tobacco and education sectors was a positive contributor. Additionally, exposure to the pre-refunded sector was beneficial as these high-quality, short-duration securities outperformed at a time of rising yields. (Duration is a measure of interest rate sensitivity.)

 

 

The Fund’s exposure to the longer end of the yield curve detracted as longer-term bonds sold off more than the shorter-term issues. Positions in lower coupon securities also generally detracted from performance due to their longer duration characteristics.

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.

 

                
   ANNUAL REPORT    JULY 31, 2017    9


     BlackRock MuniYield Arizona Fund, Inc.

 

 

Market Price and Net Asset Value Per Share Summary

 

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

Market Price

  $ 16.59      $ 17.68        (6.17)%      $ 18.06      $ 13.90  

Net Asset Value

  $ 14.56      $ 15.42        (5.58)%      $ 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   7/31/17     7/31/16  

Education

    23     20

Utilities

    21       22  

County/City/Special District/School District

    19       20  

Health

    12       12  

Corporate

    11       12  

State

    9       9  

Transportation

    3       3  

Tobacco

    2       2  

Housing2

           

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.

 

   
Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2017

    2

2018

    22  

2019

    8  

2020

    8  

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

AAA/Aaa

    9     10

AA/Aa

    55       55  

A

    15       15  

BBB/Baa

    10       10  

BB/Ba

    8       6  

N/R

    3       4 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   

Represents less than 1% of the Fund’s total investments.

 

  3   

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of July 31, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade represents 2% of the Fund’s total investments.

 

 

                
10    ANNUAL REPORT    JULY 31, 2017   


Fund Summary as of July 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 U.S. 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 U.S. 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 investment 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 are considered by the Fund’s investment 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

  MYC

Initial Offering Date

  February 28, 1992

Yield on Closing Market Price as of July 31, 2017 ($15.43)1

  4.82%

Tax Equivalent Yield2

  9.82%

Current Monthly Distribution per Common Share3

  $0.0620

Current Annualized Distribution per Common Share3

  $0.7440

Economic Leverage as of July 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 U.S. 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 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 12 months ended July 31, 2017 were as follows:

 

    Returns Based On  
     Market Price      NAV  

MYC1,2

    (4.96)%        (1.83)%  

Lipper California Municipal Debt Funds3

    (4.75)%        (0.88)%  

 

  1   

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 

  2   

The Fund moved from a premium to NAV to a discount during the period, which accounts for the difference between performance based on price and performance based on NAV.

 

  3  

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

 

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

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

 

 

The municipal bond market generated mixed returns in the 12-month reporting period. Municipal bonds initially moved lower in the third calendar quarter of 2016 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 factor in the possibility of faster economic growth and tighter Fed policy. As optimism for meaningful fiscal reforms subsequently waned and the economy failed to experience a significant acceleration, municipal bonds stabilized and retraced the majority of their post-election losses.

 

 

California municipal bonds performed slightly better than national municipals during the period. California’s 2017—2018 budget demonstrated both spending restraint and growing reserves, with a forecast that projects structural balance through 2019. The state’s economy has grown at a healthy rate in recent years, with median household income and job gains outpacing U.S. growth rates.

 

 

Positions in longer-term bonds, which lagged the broader market, detracted from performance.

 

 

Higher-rated investment-grade holdings (those rated AA and AAA) fared worse than non-investment grade holdings, as fund flows into high yield products led to stronger price appreciation for lower-rated credits.

 

                
   ANNUAL REPORT    JULY 31, 2017    11


     BlackRock MuniYield California Fund, Inc.

 

 

 

The Fund’s positions in the utilities, tax-backed (state) and tax-backed (local) issues — all of which underperformed in the past year — detracted as well. Tobacco credits also lagged as the Food & Drug Administration released plans to curb nicotine levels in cigarettes.

 

 

Holdings that were purchased in a higher-rate environment contributed positively at a time of weak market performance. These positions produced generous income, and they were less sensitive to the negative effects of rising interest rates.

 

 

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 Fund’s use of leverage, while enhancing income, also exacerbated the impact of declining bond prices.

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.

 

Market Price and Net Asset Value Per Share Summary                              

 

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

Market Price

  $ 15.43      $ 17.43        (11.47)%      $ 17.89      $ 14.44  

Net Asset Value

  $ 15.61      $ 17.07        (8.55)%      $ 17.10      $ 14.95  

 

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

 

LOGO

 

                
12    ANNUAL REPORT    JULY 31, 2017   


     BlackRock MuniYield California Fund, Inc.

 

 

Overview of the Fund’s Total Investments*

 

Sector Allocation   7/31/17     7/31/16  

County/City/Special District/School District

    40     39

Health

    16       14  

Education

    14       15  

Transportation

    12       7  

State

    6       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.

 

 
Call/Maturity Schedule3  

Calendar Year Ended December 31,

 

2017

    4

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

AAA/Aaa

    5     4

AA/Aa

    68       71  

A

    21       21  

BBB/Baa

    1       1  

BB/Ba

    1       1  

B/B

    3       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 July 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.

 

 

                
   ANNUAL REPORT    JULY 31, 2017    13


Fund Summary as of July 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 U.S. 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 U.S. 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, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of investment. The Fund may invest up to 20% of its total assets in securities rated below investment grade, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of purchase. The Fund may invest directly in 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 July 31, 2017 ($16.34)1

  5.73%

Tax Equivalent Yield2

  10.12%

Current Monthly Distribution per Common Share3

  $0.0780

Current Annualized Distribution per Common Share3

  $0.9360

Economic Leverage as of July 31, 20174

  40%

 

  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 U.S. 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 12 months ended July 31, 2017 were as follows:

 

    Returns Based On  
     Market Price      NAV  

MYF1,2

    2.10%        (0.88)%  

Lipper General & Insured Municipal Debt Funds (Leveraged)3

    (1.54)%        (0.78)%  

 

  1   

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 

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

 

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

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

 

 

The municipal bond market generated mixed returns in the 12-month reporting period. Municipal bonds initially moved lower in the third calendar quarter of 2016 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 factor in the possibility of faster economic growth and tighter Fed policy. As optimism for meaningful fiscal reforms subsequently waned and the economy failed to experience a significant acceleration, municipal bonds stabilized and retraced the majority of their post-election losses.

 

 

The Fund’s sizable position in short-dated, high-quality, pre-refunded bonds made a positive contribution to performance. These holdings generated above-average income due to their high coupons, and they exhibited little in the way of price volatility during times of 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.

 

 

Long-dated portfolio holdings incurred the largest price declines. Long-term yields rose more than short-term yields during the course of the year, causing bonds with maturities of longer than 20 years to underperform their shorter-date counterparts.

 

 

While the Fund’s use of leverage enhanced portfolio income, the benefits of this strategy were somewhat reduced given the modest rise in funding costs associated with less accommodative central bank monetary policy. In addition, leverage exacerbated the impact of declining bond prices.

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    ANNUAL REPORT    JULY 31, 2017   


     BlackRock MuniYield Investment Fund

 

 

Market Price and Net Asset Value Per Share Summary                              

 

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

Market Price

  $ 16.34      $ 17.02        (4.00)%      $ 17.88      $ 14.32  

Net Asset Value

  $ 14.94      $ 16.03        (6.80)%      $ 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   7/31/17     7/31/16  

Transportation

    28     30

County/City/Special District/School District

    20       19  

Health

    16       14  

Utilities

    14       15  

Education

    8       8  

State

    5       6  

Tobacco

    3       3  

Corporate

    4       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.

 

   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2017

    2

2018

    11  

2019

    28  

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

AAA/Aaa

    8     8

AA/Aa

    50       55  

A

    22       26  

BBB/Baa

    9       6  

BB/Ba

    3       1  

B

    1       1  

N/R2

    7       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 July 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.

 

 

                
   ANNUAL REPORT    JULY 31, 2017    15


Fund Summary as of July 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 U.S. 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 U.S. 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, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of investment. The Fund may invest up to 20% of its total assets in securities rated below investment grade, or are considered by the Fund’s investment adviser to be of comparable quality, at the time of purchase. The Fund may invest directly in 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 July 31, 2017 ($16.58)1

  5.43%

Tax Equivalent Yield2

  10.54%

Current Monthly Distribution per Common Share3

  $0.0750

Current Annualized Distribution per Common Share3

  $0.9000

Economic Leverage as of July 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 U.S. 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 12 months ended July 31, 2017 were as follows:

 

    Returns Based On  
     Market Price      NAV  

MYJ1,2

    0.32%        (0.68)%  

Lipper New Jersey Municipal Debt Funds3

    (4.61)%        (0.95)%  

 

  1   

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 

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

 

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

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

 

 

The municipal bond market generated mixed returns in the 12-month reporting period. Municipal bonds initially moved lower in the third calendar quarter of 2016 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 factor in the possibility of faster economic growth and tighter Fed policy. As optimism for meaningful fiscal reforms subsequently waned and the economy failed to experience a significant acceleration, municipal bonds stabilized and retraced the majority of their post-election losses.

 

 

New Jersey state general obligations and appropriated issues underperformed the broader national market, as the major rating agencies downgraded the state’s credit rating over the past year.

 

 

Portfolio income made the most significant positive contribution during a period in which bond prices lost ground. The Fund’s use of leverage, while enhancing the level of income, also exacerbated the impact of declining bond prices.

 

 

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.

 

 

At the sector level, positions in transportation, corporate and tax-backed (local) issues contributed positively.

 

 

The Fund’s exposure to pre-refunded issues benefited performance, as their low duration enabled them to hold up relatively well at a time of rising yields. (Duration is a measure of interest rate sensitivity.) Conversely, positions in longer-duration bonds detracted.

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

 

                
16    ANNUAL REPORT    JULY 31, 2017   


     BlackRock MuniYield New Jersey Fund, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                              

 

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

Market Price

   $ 16.58      $ 17.49        (5.20 )%     $ 17.62      $ 14.92  

Net Asset Value

   $ 15.89      $ 16.93        (6.14 )%     $ 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   7/31/17     7/31/16  

Transportation

    37     35

Education

    17       18  

County/City/Special District/School District

    16       17  

State

    12       14  

Corporate

    7       7  

Health

    6       6  

Housing

    2       2  

Tobacco

    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.

 

   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2017

    6

2018

    9  

2019

    11  

2020

    6  

2021

    19  

 

  3   

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

 

  *   Excludes short-term securities.
Credit Quality Allocation1   7/31/17     7/31/16  

AAA/Aaa

    4    

 

AA/Aa

    35       44

A

    29       43  

BBB/Baa

    26       10  

BB/Ba

    2       2  

N/R

    4       1 2 

 

  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 July 31, 2016, the market value of unrated securities deemed by the investment adviser to be investment grade represents 1% of the Fund’s total investments.

 

 

                
   ANNUAL REPORT    JULY 31, 2017    17


Schedule of Investments July 31, 2017

  

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

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par
(000)
    Value  
New York — 128.6%               
Corporate — 4.9%  

Build NYC Resource Corp., Refunding RB:

    

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

   $ 385     $ 450,365  

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

     500       530,320  

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

     500       611,325  

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

     500       500,800  

Port Authority of New York & New Jersey, ARB, JFK International Air Terminal LLC Project,
Series 8, 5.00%, 12/01/20

     1,000       1,096,080  
    

 

 

 
               3,188,890  
County/City/Special District/School District — 22.0%  

City of Glen Cove New York, GO:

    

Series A, 5.00%, 1/01/25

     195       228,821  

Series A, 5.00%, 1/01/26

     105       123,764  

City of Glen Cove New York, GO Refunding:

    

5.00%, 1/15/25

     980       1,150,402  

5.00%, 1/15/26

     520       613,116  

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

    

5.25%, 8/01/22

     2,000       2,374,400  

5.00%, 8/01/30

     1,250       1,451,525  

City of New York New York, GO:

    

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

     700       814,310  

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

     1,500       1,614,390  

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

     750       801,645  

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

     1,000       1,002,070  

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

     850       946,347  

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

     490       581,503  

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

     300       349,602  

Hudson Yards Infrastructure Corp., RB, Senior, Fiscal 2012:

    

5.75%, 2/15/21 (b)

     600       695,778  

5.75%, 2/15/47

     400       460,000  

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

     20       23,623  

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

     1,000       1,133,790  
    

 

 

 
               14,365,086  
Municipal Bonds    Par
(000)
    Value  
New York (continued)               
Education — 35.6%  

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

   $ 1,000     $ 1,057,100  

Build NYC Resource Corp., Refunding RB:

    

Manhattan College Project, 5.00%, 8/01/30

     700       829,542  

New York Law School Project, 5.00%, 7/01/33

     2,000       2,220,100  

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

     250       284,290  

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       586,210  

County of Buffalo & Erie New York Industrial Land Development Corp., Refunding RB:

    

Buffalo State College Foundation Housing,
6.00%, 10/01/31

     1,000       1,151,340  

Charter School for Applied Technologies Project, Series A, 4.50%, 6/01/27

     1,000       1,082,550  

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

     1,000       1,164,480  

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       1,100,220  

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

     500       561,670  

State of New York Dormitory Authority, RB:

    

5.00%, 3/15/30

     500       609,125  

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

     500       518,410  

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

     120       136,969  

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

     500       567,380  

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

     1,000       1,143,010  

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

     1,000       1,085,610  

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

     250       297,690  

Series A, 5.00%, 3/15/32

     1,000       1,175,690  

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

     1,000       1,038,700  

State of New York Dormitory Authority, Refunding RB:

    

Fordham University, 5.00%, 7/01/29

     375       439,793  

Fordham University, 5.00%, 7/01/30

     300       349,332  

Pace University, Series A, 5.00%, 5/01/27

     980       1,081,675  

Series B, 5.00%, 7/01/31

     1,500       1,761,915  

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

     1,050       1,226,431  

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

     500       548,620  

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

     1,000       1,150,700  
    

 

 

 
               23,168,552  
 

 

Portfolio Abbreviations

 

AGC    Assured Guarantee Corp.      COP    Certificates of Participation    LRB    Lease Revenue Bonds
AGM    Assured Guaranty Municipal Corp.      EDA    Economic Development Authority    M/F    Multi-Family
AMBAC    American Municipal Bond Assurance Corp.      ERB    Education Revenue Bonds    NPFGC    National Public Finance Guarantee Corp.
AMT    Alternative Minimum Tax (subject to)      GARB    General Airport Revenue Bonds    PILOT    Payment in Lieu of Taxes
ARB    Airport Revenue Bonds      GO    General Obligation Bonds    RB    Revenue Bonds
BAM    Build America Mutual Assurance Co.      HFA    Housing Finance Agency    S/F    Single-Family
BARB    Building Aid Revenue Bonds      IDA    Industrial Development Authority    SONYMA    State of New York Mortgage Agency
CAB    Capital Appreciation Bonds      IDB    Industrial Development Board      

 

See Notes to Financial Statements.      
                
18    ANNUAL REPORT    JULY 31, 2017   


Schedule of Investments (continued)

  

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

 

Municipal Bonds    Par
(000)
    Value  
New York (continued)               
Health — 16.4%  

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

   $ 500     $ 568,055  

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

     215       239,209  

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

     1,000       1,103,910  

County of Monroe Industrial Development Corp., RB, Rochester General Hospital Project, 5.00%, 12/01/29

     660       774,114  

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

    

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

     910       1,022,376  

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

     580       631,736  

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

     205       237,144  

Series B, 6.00%, 11/01/30

     35       38,845  

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

    

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

     250       273,903  

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

     875       973,901  

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

     500       558,250  

State of New York Dormitory Authority, RB, Series A (b):

    

New York State Association for Retarded Children, Inc., 5.30%, 7/01/19

     450       486,819  

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

     1,000       1,111,630  

State of New York Dormitory Authority, Refunding RB:

    

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

     250       270,330  

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

     1,270       1,469,136  

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

     500       553,345  

Orange Regional Medical Center,
5.00%, 12/01/27 (a)

     100       115,238  

Orange Regional Medical Center,
5.00%, 12/01/28 (a)

     200       227,728  
    

 

 

 
               10,655,669  
Housing — 3.2%  

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

    

Series B1, 5.25%, 7/01/30

     500       578,010  

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

     780       788,877  

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

     750       751,995  
    

 

 

 
               2,118,882  
State — 10.9%  

City of New York New York Transitional Finance Authority, BARB:

    

Fiscal 2009, Series S-3, 5.00%, 1/15/23

     575       608,126  

Fiscal 2015, Series S-1, 5.00%, 7/15/37

     1,140       1,311,832  

State of New York Dormitory Authority, RB:

    

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

     1,015       1,154,197  

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

     600       611,034  

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

     1,000       1,067,490  
Municipal Bonds    Par
(000)
    Value  
New York (continued)               
State (continued)  

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

   $ 1,990     $ 2,334,907  
    

 

 

 
               7,087,586  
Tobacco — 1.3%  

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

     500       560,135  

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

     265       297,306  
    

 

 

 
               857,441  
Transportation — 27.8%  

Buffalo & Fort Erie Public Bridge Authority, RB,
5.00%, 1/01/30

     275       331,848  

Metropolitan Transportation Authority, RB:

    

Series A, 5.00%, 11/15/27

     1,000       1,151,580  

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

     500       590,705  

Series B, 5.25%, 11/15/33

     1,000       1,183,030  

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

     860       942,182  

Sub-Series B-1, 5.00%, 11/15/21 (b)

     460       535,003  

Sub-Series B-4, 5.00%, 11/15/21 (b)

     300       348,915  

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

     225       265,824  

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

     1,000       1,074,860  

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

     2,000       2,291,720  

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

     500       515,115  

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

    

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

     1,000       1,126,210  

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

     1,000       1,030,160  

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

    

Series I, 5.00%, 1/01/37

     660       742,691  

Series K, 5.00%, 1/01/32

     1,035       1,210,681  

Triborough Bridge & Tunnel Authority, RB:

    

Series B, 5.00%, 11/15/31

     2,005       2,386,351  

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

     500       589,760  

Triborough Bridge & Tunnel Authority, Refunding RB:

    

Series A, 5.00%, 1/01/27

     500       577,985  

Sub-Series A, 5.00%, 11/15/24

     1,000       1,195,650  
    

 

 

 
               18,090,270  
Utilities — 6.5%  

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       258,813  

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

    

5.50%, 4/01/19 (b)

     500       537,480  

5.00%, 9/01/34

     1,000       1,148,750  

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       1,138,830  
 

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    JULY 31, 2017    19


Schedule of Investments (continued)

  

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

 

Municipal Bonds    Par
(000)
    Value  
New York (continued)               
Utilities (continued)  

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

   $ 1,000     $ 1,173,400  
    

 

 

 
               4,257,273  
Total Municipal Bonds in New York              83,789,649  
    
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       1,423,702  
Total Municipal Bonds — 130.8%              85,213,351  
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
            
New York — 26.7%  
County/City/Special District/School District — 10.5%  

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

     599       646,696  

City of New York New York, GO:

    

Series I, 5.00%, 3/01/32

     991       1,144,620  

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

     750       868,703  

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

     3,540       4,181,271  
    

 

 

 
               6,841,290  
Education — 2.8%  

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

     1,500       1,819,905  
State — 4.5%  

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

     990       1,186,881  

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

     1,499       1,750,794  
    

 

 

 
               2,937,675  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
   Par
(000)
    Value  
New York (continued)  
Transportation — 6.2%  

Hudson Yards Infrastructure Corp., Refunding RB, Series A, 5.00%, 2/15/29

   $ 1,005     $ 1,223,849  

Metropolitan Transportation Authority, RB, Series B,
5.25%, 11/15/19 (b)

     749       822,469  

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

     750       853,192  

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

     991       1,116,061  
    

 

 

 
               4,015,571  
Utilities — 2.7%  

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       1,763,955  
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 26.7%
      17,378,396  
Total Long-Term Investments
(Cost — $96,581,849) — 157.5%
      102,591,747  
    
                  
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.64% (d)(e)

     187,589       187,665  

Total Short-Term Securities

(Cost — $187,646) — 0.3%

             187,665  

Total Investments (Cost — $96,769,495) — 157.8%

 

    102,779,412  

Other Assets Less Liabilities — 1.0%

 

    681,285  

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (13.6)%

 

    (8,880,216

VRDP Shares at Liquidation Value, Net of Deferred
Offering Costs — (45.2)%

 

    (29,454,626
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 65,125,855  
    

 

 

 
 
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 year ended July 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 July 31,
2017
       Value at
July 31,
2017
       Income        Net
Realized
Gain1
       Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

    315,667          (128,078        187,589        $ 187,665        $ 6,243        $ 1,128        $ 19  

1   Includes net capital gain distributions.

    

 

(e)   Current yield as of period end.

 

See Notes to Financial Statements.      
                
20    ANNUAL REPORT    JULY 31, 2017   


Schedule of Investments (continued)

  

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

 

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

Short Contracts

               

5-Year U.S. Treasury Note

    (8      September 2017      $ 945       $ (85

10-Year U.S. Treasury Note

    (25      September 2017        3,147         654  

Long U.S. Treasury Bond

    (9      September 2017        1,377               (3,669

Total

                $ (3,100
               

 

 

 

 

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                           $ 654           $ 654          
Liabilities — Derivative Financial Instruments                                                              

Futures contracts

   Net unrealized depreciation1                           $ 3,754           $ 3,754          

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 Statement of Assets and Liabilities.

    

 

 

For the year ended July 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

                          $ 197,232           $ 197,232  
Net Change in Unrealized Appreciation (Depreciation) on:                                                 

Futures contracts

                          $ 49,795           $ 49,795  

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:  

Average notional value of contracts — long

  $ 40,172  

Average notional value of contracts — short

  $ 6,634,514  

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

           $ 102,591,747              $ 102,591,747  

Short-Term Securities

  $ 187,665                         187,665  
 

 

 

 

Total

  $ 187,665        $ 102,591,747              $ 102,779,412  
 

 

 

 
             

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    JULY 31, 2017    21


Schedule of Investments (concluded)

  

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

 

     Level 1        Level 2        Level 3     Total  
Derivative Financial Instruments2                                      

Assets:

             

Interest rate contracts

  $ 654                       $ 654  

Liabilities:

             

Interest rate contracts

    (3,754                       (3,754
 

 

 

 

Total

  $ (3,100                     $ (3,100
 

 

 

 

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

    

2   Derivative financial instruments are futures contracts which 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

           $ (8,859,171            $ (8,859,171

VRDP Shares at Liquidation Value

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

 

 

 

Total

           $ (38,459,171            $ (38,459,171
 

 

 

 

During the year ended July 31, 2017, there were no transfers between levels.

 

See Notes to Financial Statements.      
                
22    ANNUAL REPORT    JULY 31, 2017   


Schedule of Investments July 31, 2017

  

BlackRock MuniYield Arizona Fund, Inc. (MZA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par
(000)
    Value  
Arizona — 145.2%  
Corporate — 18.3%  

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

   $ 4,350     $ 4,730,756  

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

     1,000       1,071,040  

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

     1,000       1,053,670  

Salt Verde Financial Corp., RB, Senior:

    

5.50%, 12/01/29

     2,000       2,454,160  

5.00%, 12/01/37

     2,500       3,009,550  
    

 

 

 
               12,319,176  
County/City/Special District/School District — 29.8%  

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

     1,000       1,076,540  

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

    

5.50%, 7/01/29

     480       582,706  

5.50%, 7/01/30

     400       483,584  

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

     1,250       1,431,612  

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       1,047,010  

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       1,076,540  

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

     2,000       2,167,620  

Greater Arizona Development Authority, RB, Santa Cruz County Jail, Series 2, 5.25%, 8/01/18 (a)

     1,155       1,204,850  

Marana Municipal Property Corp., RB, Series A, 5.00%, 7/01/18 (a)

     2,500       2,593,800  

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

     3,600       3,902,760  

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

     4,000       4,483,600  
    

 

 

 
               20,050,622  
Education — 35.7%  

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

     2,595       2,906,037  

Arizona IDA, Refunding RB, Basis Schools, Inc. Projects, Series A, 5.13%, 7/01/37 (b)

     500       527,235  

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

    

6.00%, 7/01/18

     970       1,013,495  

6.00%, 7/01/18

     350       365,694  

6.00%, 7/01/18

     425       444,057  

6.00%, 7/01/18

     400       417,936  

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

     2,050       2,386,753  

City of Phoenix Arizona IDA, RB:

    

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

     500       564,100  

Great Hearts Academies - Veritas Projects, 6.30%, 7/01/21 (a)

     500       595,370  

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

     2,000       2,128,440  

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

     440       502,669  

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

     500       510,165  

City of Phoenix Arizona IDA, Refunding RB:

    

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

     1,000       1,032,280  
Municipal Bonds    Par
(000)
    Value  
Arizona (continued)  
Education (continued)  

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

 

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

   $ 1,500     $ 1,547,415  

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

     500       535,380  

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

     500       509,470  

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

     1,000       1,038,590  

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

     1,000       1,016,320  

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

     500       565,185  

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

     3,000       3,339,420  

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

     1,400       1,577,310  

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

     500       536,950  
    

 

 

 
               24,060,271  
Health — 19.9%  

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

     500       537,600  

Arizona Health Facilities Authority, Refunding RB:

    

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

     4,000       4,077,160  

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

     1,000       1,065,810  

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

     1,750       1,959,230  

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

     500       531,840  

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

     170       182,687  

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

    

3.25%, 1/01/37

     640       629,107  

5.00%, 1/01/38

     1,320       1,535,147  

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

     1,000       1,128,100  

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

     500       551,870  

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

     1,000       1,183,950  
    

 

 

 
               13,382,501  
Housing — 0.1%  

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       21,224  

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

     30       30,211  
    

 

 

 
               51,435  
State — 14.0%  

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

     4,000       4,151,600  

Arizona School Facilities Board, COP (a):

    

5.13%, 9/01/18

     1,000       1,045,070  

5.75%, 9/01/18

     2,000       2,103,580  

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

     1,930       2,105,128  
    

 

 

 
               9,405,378  
 

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    JULY 31, 2017    23


Schedule of Investments (continued)

  

BlackRock MuniYield Arizona Fund, Inc. (MZA)

 

Municipal Bonds    Par
(000)
    Value  
Arizona (continued)  
Transportation — 4.3%  

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

   $ 1,000     $ 1,033,880  

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

    

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

     1,000       1,096,950  

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

     700       785,848  
    

 

 

 
               2,916,678  
Utilities — 23.1%  

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

     3,500       3,982,020  

City of Mesa Arizona Utility System Revenue, RB, Utility System, 3.25%, 7/01/40

     1,545       1,533,412  

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

     2,000       2,084,340  

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

     100       134,383  

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

     2,000       2,133,660  

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

     2,500       2,893,500  

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

     500       509,485  

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

     2,000       2,330,420  
    

 

 

 
               15,601,220  
Total Municipal Bonds in Arizona              97,787,281  
    
Puerto Rico — 2.7%  
Tobacco — 2.7%  

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

     1,845       1,810,370  
Total Municipal Bonds — 147.9%              99,597,651  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
   Par
(000)
    Value  
Arizona — 9.8%  
Utilities — 9.8%  

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

   $ 3,000     $ 3,385,140  

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

     3,000       3,229,620  
Total Municipal Bonds Transferred to Tender
Option Bond Trusts — 9.8%
      6,614,760  
Total Long-Term Investments
(Cost — $99,681,947) — 157.7%
      106,212,411  
    
                  
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.64% (d)(e)

     969,095       969,482  

Total Short-Term Securities

(Cost — $969,310) — 1.4%

             969,482  

Total Investments (Cost — $100,651,257) — 159.1%

 

    107,181,893  

Other Assets Less Liabilities — 0.5%

 

    312,000  

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (4.4)%

 

    (3,002,227

VRDP Shares at Liquidation Value, Net of Deferred
Offering Costs — (55.2)%

 

    (37,145,576
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 67,346,090  
    

 

 

 
 
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 year ended July 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 July 31,
2017
       Value at
July 31,
2017
       Income        Net
Realized
Gain1
       Change  in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

    776,573          192,522          969,095        $ 969,482        $ 3,403        $ 146        $ 172  

1    Includes net capital gain distributions.

     

 

(e)   Current yield as of period end.

 

See Notes to Financial Statements.      
                
24    ANNUAL REPORT    JULY 31, 2017   


Schedule of Investments (continued)

  

BlackRock MuniYield Arizona Fund, Inc. (MZA)

 

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

Short Contracts

               

5-Year U.S. Treasury Note

    (5      September 2017      $ 591       $ (53

10-Year U.S. Treasury Note

    (11      September 2017        1,385         288  

Long U.S. Treasury Bond

    (12      September 2017        1,836         (4,892

Ultra U.S. Treasury Bond

    (2      September 2017        329               (2,717

Total

                $ (7,374
               

 

 

 

 

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                           $ 288           $ 288  
Liabilities — Derivative Financial Instruments                                                       

Futures contracts

   Net unrealized depreciation1                           $ 7,662           $ 7,662  

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 Statement of Assets and Liabilities.

    

For the year ended July 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

                       $ 205,920           $ 205,920  
Net Change in Unrealized Appreciation (Depreciation) on:                                                

Futures contracts

                       $ 8,960           $ 8,960  

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

Futures contracts:  

Average notional value of contracts — short

  $ 5,711,658  

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.      
                
   ANNUAL REPORT    JULY 31, 2017    25


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

           $ 106,212,411              $ 106,212,411  

Short-Term Securities

  $ 969,482                         969,482  
 

 

 

 

Total

  $ 969,482        $ 106,212,411              $ 107,181,893  
 

 

 

 
             
Derivative Financial Instruments2                                      

Assets:

             

Interest rate contracts

  $ 288                       $ 288  

Liabilities:

             

Interest rate contracts

    (7,662                       (7,662
 

 

 

 

Total

  $ (7,374                     $ (7,374
 

 

 

 

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

    

2   Derivative financial instruments are futures contracts which 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 year ended July 31, 2017, there were no transfers between levels.

 

See Notes to Financial Statements.      
                
26    ANNUAL REPORT    JULY 31, 2017   


Schedule of Investments July 31, 2017

  

BlackRock MuniYield California Fund, Inc. (MYC)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par
(000)
    Value  
California — 84.1%  
Corporate — 1.3%  

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

   $ 4,000     $ 4,323,680  
County/City/Special District/School District — 26.4%  

California State University, Refunding RB, Systemwide, Series A, 5.00%, 11/01/38

     2,000       2,390,040  

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

     2,000       2,007,220  

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

     2,660       2,938,741  

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

    

6.50%, 5/01/36

     1,520       1,773,688  

6.50%, 5/01/42

     1,860       2,168,965  

County of Los Angeles California Metropolitan Transportation Authority, Refunding RB, Proposition C, Sales Tax Revenue, Series A, 5.00%, 7/01/42

     4,000       4,764,920  

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

     5,000       5,860,400  

County of San Joaquin California Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A, 6.00%, 3/01/21 (a)

     2,440       2,859,924  

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

     16,000       16,561,600  

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

     4,285       4,589,321  

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

     5,500       6,461,730  

Municipal Improvement Corp. of Los Angeles, Refunding RB, Real Property, Series B, 5.00%, 11/01/36

     1,455       1,696,137  

Oak Grove School District, GO, Election of 2008,
Series A, 5.50%, 8/01/33

     880       954,897  

Oakland Unified School District/Alameda County, GO, Refunding, Series C, 5.00%, 8/01/36

     3,000       3,560,670  

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

     7,135       8,294,152  

Orange County Sanitation District, Refunding RB, Series A, 5.00%, 2/01/36

     3,000       3,573,660  

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

     5,300       5,828,145  

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

     5,000       5,921,000  

San Leandro Unified School District, GO, Election of 2016, Series A (BAM), 5.25%, 8/01/42

     2,655       3,193,248  

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

     2,500       2,978,375  
    

 

 

 
               88,376,833  
Education — 4.6%  

California Educational Facilities Authority, Refunding RB:

    

Pitzer College, 6.00%, 4/01/40

     2,500       2,807,100  

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

     1,745       2,061,421  

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

     2,750       3,148,805  
Municipal Bonds    Par
(000)
    Value  
California (continued)  
Education (continued)  

California School Finance Authority, RB:

    

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

   $ 1,500     $ 1,694,520  

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

     3,000       3,419,520  

Value Schools, 6.65%, 7/01/33

     595       668,756  

Value Schools, 6.90%, 7/01/43

     1,330       1,505,773  
    

 

 

 
               15,305,895  
Health — 14.2%  

California Health Facilities Financing Authority, RB:

    

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

     9,700       10,847,801  

Sutter Health, Series A, 5.00%, 11/15/41

     1,000       1,147,350  

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

     7,530       8,566,655  

California Health Facilities Financing Authority, Refunding RB:

    

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

     10,000       10,956,800  

Sutter Health, Series B, 5.00%, 11/15/46

     4,200       4,846,926  

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

     8,110       9,205,661  

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

     1,625       1,986,481  
    

 

 

 
               47,557,674  
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       3,503,185  
State — 6.5%  

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

     2,000       2,161,200  

State of California Public Works Board, LRB:

    

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

     1,610       1,752,421  

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

     10,000       10,888,400  

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

     1,510       1,807,228  

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

     4,400       4,933,192  
    

 

 

 
               21,542,441  
Tobacco — 6.2%  

Golden State Tobacco Securitization Corp., Refunding RB, Asset-Backed:

    

Convertible CAB, Series A-2, 5.30%, 6/01/37 (b)

     695       697,557  

Senior Series A-1, 5.75%, 6/01/47

     16,410       16,410,000  

Series A, 5.00%, 6/01/40

     3,210       3,688,900  
    

 

 

 
               20,796,457  
Transportation — 15.4%  

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

     5,215       5,666,515  

City & County of San Francisco California Airports Commission, Refunding ARB:

    

2nd Series A, AMT, 5.25%, 5/01/33

     1,440       1,658,304  

San Francisco International Airport,
5.00%, 5/01/46

     7,035       8,098,762  
 

 

See Notes to Financial Statements.      
                
   ANNUAL REPORT    JULY 31, 2017    27


Schedule of Investments (continued)

  

BlackRock MuniYield California Fund, Inc. (MYC)

 

Municipal Bonds    Par
(000)
    Value  
California (continued)  
Transportation (continued)  

City & County of San Francisco California Port Commission, RB, Series A, 5.13%, 3/01/40

   $ 5,075     $ 5,500,589  

City of Los Angeles California Department of Airports, ARB, Los Angeles International Airport, AMT:

    

5.00%, 5/15/35

     1,475       1,710,012  

Series A, 5.00%, 5/15/42

     3,520       4,028,006  

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

     3,605       3,867,805  

City of San Jose California, ARB, Norman Y Mineta San Jose International Airport SJC, Series A-1, AMT (AGM):

    

5.50%, 3/01/30

     1,000       1,126,170  

5.75%, 3/01/34

     1,000       1,141,530  

City of San Jose California, Refunding ARB, Norman Y Mineta San Jose International Airport SJC, AMT:

    

Series A, 5.00%, 3/01/36

     1,000       1,157,360  

Series A, 5.00%, 3/01/37

     1,000       1,155,560  

Series A, 5.00%, 3/01/47

     1,000       1,144,860  

Series A-1, 6.25%, 3/01/34

     1,400       1,633,030  

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

     8,280       9,538,974  

County of Sacramento California, ARB:

    

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

     3,000       3,131,550  

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

     900       937,674  
    

 

 

 
               51,496,701  
Utilities — 8.4%  

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

     4,000       4,547,880  

City of Petaluma California Wastewater, Refunding RB, 6.00%, 5/01/21 (a)

     2,645       3,120,889  

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

     2,420       2,804,538  

Eastern Municipal Water District, Refunding RB, Series A, 5.00%, 7/01/42

     5,000       5,862,550  

Los Angeles Department of Water, Refunding RB, Series A, 5.00%, 7/01/41

     2,000       2,371,060  

Los Angeles Department of Water & Power System Revenue, RB, Series B, 5.00%, 7/01/38

     4,000       4,691,720  

Oceanside Public Financing Authority, Refunding RB, Series A:

    

5.25%, 5/01/30

     1,245       1,476,358  

5.25%, 5/01/33

     2,810       3,300,289  
    

 

 

 
               28,175,284  
Total Municipal Bonds in California              281,078,150  
    
Puerto Rico — 0.8%  
Tobacco — 0.8%  

Children’s Trust Fund, Refunding RB, Tobacco Settlement Asset-Backed Bonds:

    

5.50%, 5/15/39

     1,970       1,953,846  

5.63%, 5/15/43

     795       780,078  
Total Municipal Bonds in Puerto Rico              2,733,924  
Total Municipal Bonds — 84.9%              283,812,074  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
   Par
(000)
    Value  
California — 81.9%  
County/City/Special District/School District — 40.0%  

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

   $ 11,000     $ 12,620,850  

City of Los Angeles California, Refunding RB, Series A, 5.00%, 6/01/19 (a)

     9,870       10,597,123  

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

    

5.00%, 12/01/39

     17,850       20,564,093  

5.00%, 12/01/44

     14,095       16,147,320  

Los Angeles Community College District California, GO, Election of 2008 (a):

    

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

     14,850       15,459,890  

Series C, 5.25%, 8/01/20 (d)

     9,682       10,902,695  

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

     3,828       4,214,861  

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

     15,140       17,453,846  

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

     7,732       8,395,183  

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

     15,520       17,458,914  
    

 

 

 
               133,814,775  
Education — 18.9%  

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

     12,250       13,244,945  

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

     11,950       14,137,208  

University of California, Refunding RB:

    

5.00%, 5/15/38

     4,000       4,718,800  

Series A, 5.00%, 11/01/43

     5,001       5,837,923  

Series I, 5.00%, 5/15/40

     21,875       25,303,804  
    

 

 

 
               63,242,680  
Health — 12.5%  

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

     26,870       30,123,957  

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

     10,280       11,813,879  
    

 

 

 
               41,937,836  
State — 3.6%  

State of California, GO, Refunding, Various Purposes, 5.00%, 9/01/35

     10,115       11,977,666  
Transportation — 5.4%  

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

     10,045       11,326,621  

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

     5,750       6,722,095  
    

 

 

 
               18,048,716  
Utilities — 1.5%  

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

     4,748       4,926,961  
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 81.9%
      273,948,634  
Total Long-Term Investments
(Cost — $528,746,130) — 166.8%
      557,760,708  
 

 

See Notes to Financial Statements.      
                
28    ANNUAL REPORT    JULY 31, 2017   


Schedule of Investments (continued)

  

BlackRock MuniYield California Fund, Inc. (MYC)

 

Short-Term Securities    Shares     Value  

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.64% (e)(f)

     1,010,794     $ 1,011,198  
Total Short-Term Securities
(Cost — $1,011,161) — 0.3%
             1,011,198  

Total Investments (Cost — $529,757,291) — 167.1%

 

    558,771,906  

Other Assets Less Liabilities — 1.2%

 

    4,189,546  

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (36.7)%

 

    (122,815,458

VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (31.6)%

 

    (105,689,887
    

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 334,456,107  
    

 

 

 
 
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)   Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end.

 

(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)   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 year ended July 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: