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 811-06660

 

Name of Fund: BlackRock MuniYield Quality Fund, Inc. (MQY)

 

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

 

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniYield Quality 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: 04/30/2011

 

Date of reporting period: 04/30/2011

 

Item 1 – Report to Stockholders

 


 

 

(BLACKROCK LOGO)

April 30, 2011


 

 

 

Annual Report

 

 

 

BlackRock MuniYield Fund, Inc. (MYD)

 

 

 

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

 

 

BlackRock MuniYield Quality Fund II, Inc. (MQT)


 

Not FDIC Insured § No Bank Guarantee § May Lose Value




 


 

Table of Contents


 

 



 

Page



Dear Shareholder

3

Annual Report:

 

Municipal Market Overview

4

Fund Summaries

5

The Benefits and Risks of Leveraging

8

Derivative Financial Instruments

8

Financial Statements:

 

Schedules of Investments

9

Statements of Assets and Liabilities

27

Statements of Operations

28

Statements of Changes in Net Assets

29

Statements of Cash Flows

30

Financial Highlights

31

Notes to Financial Statements

34

Report of Independent Registered Public Accounting Firm

41

Important Tax Information (Unaudited)

42

Automatic Dividend Reinvestment Plans

43

Officers and Directors

44

Additional Information

47


 

 

 

 

 




2

ANNUAL REPORT

APRIL 30, 2011




 


 

Dear Shareholder

Time and again, we have seen how various global events and developing trends can have significant influence on financial markets. I hope you find that the following review of recent market conditions provides additional perspective on the performance of your investments as you read this shareholder report.

Over the past 12 months, we have seen a sluggish, stimulus-driven economic recovery at long last gain real traction, accelerate, and transition into a consumption-driven expansion. For the most part, 2010 was plagued with widely fluctuating economic data, but as the year drew to a close, it became clear that cyclical stimulus had beaten out structural problems as economic data releases generally became more positive and financial markets showed signs of continuing improvement. Although the sovereign debt crisis in Europe and high inflation in developing markets that troubled the global economy in 2010 remain challenges today, overall investor confidence has improved considerably. During the first four months of 2011, that confidence was shaken by political turmoil in the Middle East/North Africa region, soaring prices of oil and other commodities, tremendous natural disasters in Japan and a change in the ratings outlook for US debt. However, strong corporate earnings prevailed and financial markets resumed their course while the global economy continued to garner strength.

Equity markets experienced uneven growth and high volatility in 2010, but ended the year with gains. Following a strong start to 2011, the series of confidence-shaking events brought spurts of heightened volatility to markets worldwide, but was not enough to derail the bull market. Overall, global equities posted strong returns over the past 12 months. Emerging market equities, which had outperformed developed markets earlier in the period, fell prey to heightened inflationary pressures and underperformed developed markets later in the period. In the United States, strong corporate earnings and positive signals from the labor market were sources of encouragement for equity investors, although the housing market did not budge from its slump. Early in 2011, the US Federal Reserve announced that it would continue its Treasury purchase program (“QE2”) through to completion and keep interest rates low for an extended period. This compelled investors to continue buying riskier assets, furthering the trend of small cap stocks outperforming large caps.

While fixed income markets saw yields trend lower (pushing bond prices higher) through most of 2010, the abrupt reversal in investor sentiment and risk tolerance in the fourth quarter drove yields sharply upward. Global credit markets were surprisingly resilient in the face of recent headwinds and yields regained relative stability as the period came to a close. Yield curves globally remained steep by historical standards and higher-risk sectors continued to outperform higher-quality assets. The tax-exempt municipal market enjoyed a powerful rally during the period of low yields in 2010, but when that trend reversed, the market was dealt an additional blow as it became evident that the Build America Bond program would not be extended. Meanwhile, municipal finance troubles raised credit concerns among investors and tax-exempt mutual funds experienced heavy outflows, resulting in wider spreads and falling prices. The new year brought relief from these headwinds and a rebound in the tax-exempt municipal market.

Cash investments, as represented by the 3-month Treasury bill, returned only a fraction over 0% for the 12-month period as short-term interest rates remained low. Yields on money market securities remain near all-time lows.

 

 

 

 

 

 

 

 

Risk Assets Rallied on Growing Investor Confidence: Total Returns as of April 30, 2011

 

6-month

 

12-month

 







US large cap equities (S&P 500® Index)

 

 

16.36

%

 

17.22

%









US small cap equities (Russell 2000® Index)

 

 

23.73

 

 

22.20

 









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

 

 

12.71

 

 

19.18

 









Emerging market equities (MSCI Emerging Markets Index)

 

 

9.74

 

 

20.67

 









3-month Treasury bill (BofA Merrill Lynch 3-Month Treasury Bill Index)

 

 

0.09

 

 

0.17

 









US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index)

 

 

(3.85

)

 

6.37

 









US investment grade bonds (Barclays Capital US Aggregate Bond Index)

 

 

0.02

 

 

5.36

 









Tax-exempt municipal bonds (Barclays Capital Municipal Bond Index)

 

 

(1.68

)

 

2.20

 









US high yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index)

 

 

6.18

 

 

13.32

 










 

 

 

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

While no one can peer into a crystal ball and eliminate the uncertainties presented by the economic landscape and financial markets, BlackRock can offer investors the next best thing: partnership with the world’s largest asset management firm that delivers consistent long-term investment results with fewer surprises. For additional market perspective and investment insight, visit www.blackrock.com/shareholdermagazine, where you’ll find the most recent issue of our award-winning Shareholder® magazine, as well as its quarterly companion newsletter, Shareholder Perspectives. As always, we thank you for entrusting BlackRock with your investments, and we look forward to your continued partnership in the months and years ahead.

 

 

Sincerely,

 

-s- Rob Kapito

 

Rob Kapito

 

President, BlackRock Advisors, LLC

 


 

 

 

 

 

 




THIS PAGE NOT PART OF YOUR FUND REPORT

 

 3




 


 

Municipal Market Overview


 


For the Period Ended April 30, 2011


Twelve months ago, the municipal yield curve was much flatter than it is today, as investor concerns were focused on the possibility of deflation and a double-dip in the US economy. From April through September 2010, rates moved lower (and prices higher) across the curve, reaching historic lows in August when the yield on 5-year issues touched 1.06%, the 10-year reached 2.18%, and the 30-year was 3.67%. The market took a turn in October, with yields drifting higher (and prices lower) amid a “perfect storm” of events that ultimately resulted in the worst quarterly performance the municipal market had seen since the Fed tightening cycle of 1994. Treasury yields lost their support as concerns over the US deficit raised the question whether foreign investors would continue to purchase Treasury securities at historically low yields. Municipal valuations also suffered a quick and severe setback as it became evident that the Build America Bond (“BAB”) program would expire at the end of 2010. The program opened the taxable market to municipal issuers, which had successfully alleviated supply pressure in the traditional tax-exempt marketplace, bringing down yields in that space.

(LINE GRAPH)

The financial media has been replete with interviews, articles and presentations depicting the stress experienced in municipal finance. This has resulted in a loss of confidence among retail investors, the traditional buyers of individual municipal bonds and mutual funds. From the middle of November through year-end, mutual funds specializing in tax-exempt bonds witnessed weekly outflows averaging over $2.5 billion. Long-term and high-yield funds saw the greatest redemptions, followed by state-specific funds at a slower, yet still significant, pace. Political uncertainty surrounding the midterm elections and the approach taken by the new Congress on issues such as income tax rates, alternative minimum tax and the previously mentioned BAB expiration exacerbated the situation. All these conditions, combined with the seasonal illiquidity surrounding year-end holidays and dealers closing their fiscal books, sapped willing market participation from the trading community. December brought declining demand for municipal securities with no comparable reduction in supply. As it became evident that the BAB program would be retired, issuers rushed deals to market in the taxable and, to a lesser degree, traditional tax-exempt space. This imbalance in the supply/demand technicals provided the classic market reaction: wider quality spreads and higher bond yields.

Demand usually is strong at the beginning of a new year, but retail investors continued to move away from municipal mutual funds, with AMG Data Services showing $19.9 billion of redemptions in the first four months of 2011. Since mid-November, outflows persisted for 24 consecutive weeks, totaling $33.4 billion. Fortunately, lower supply in 2011 is offsetting the decline in demand. According to Thomson Reuters, through April, year-to-date new issuance was down 53% compared to the same period last year. Issuers have been reluctant to bring new deals to the market due to a number of factors, including higher interest rates, fiscal policy changes and a reduced need for municipal borrowing given the acceleration of some issuance into 2010 prior to the BAB program’s expiration. Accordingly, estimates for 2011 issuance have ratcheted down more than $100 billion since the beginning of the year, when the initial consensus was $350 billion.

Overall, the municipal yield curve steepened during the period from April 30, 2010 to April 30, 2011. As measured by Thomson Municipal Market Data, 30-year yields on AAA-rated municipals rose 53 basis points (“bps”) to 4.58%, while yields for 5-year maturities rallied by 22 bps to 1.50%, and 10-year maturities rallied by 9 bps to 2.85%.With the exception of the 2- to 5-year range, the spread between maturities increased over the past year, with the greatest increase seen in the 5- to 30-year range, where the spread widened by 75 bps, while overall the slope between 2- and 30-year maturities increased by 66 bps to 402 bps.

The fundamental picture for municipalities will be subject to scrutiny for months to come, as the challenges to state and local budgets are real and need to be addressed with significant cuts to expenses and tax revenue increases. The debates around austerity measures needed to succeed in balancing these budgets are not over whether action needs to be taken, but over the magnitude, approach and political will to accomplish these needs. The heightened attention on municipal finance has the potential to improve this market for the future, especially if these efforts result in greater means toward disclosure and accuracy (and timeliness) of reporting. Progress toward these fundamental changes may be tested in the near future, as California, Illinois and Puerto Rico will soon need to take austerity measures and access financing in the municipal market to address immediate-term fiscal imbalances before their new fiscal year begins in July. As the economy improves, tax receipts for states are rising and have begun to exceed budget projections. BlackRock maintains a constructive view of the municipal market as we look beyond the interim challenges faced by states working to close their June 30 year-end shortfalls.

 

 

 

 

 




4

ANNUAL REPORT

APRIL 30, 2011




 

 



 

 

Fund Summary as of April 30, 2011

BlackRock MuniYield Fund, Inc.


 


Fund Overview


BlackRock MuniYield Fund, Inc.’s (MYD) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years 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.

 


Performance


For the 12 months ended April 30, 2011, the Fund returned 3.27% based on market price and 1.07% based on net asset value (“NAV”). For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (0.60)% based on market price and 0.10% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a discount to NAV to a premium by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. Security selection and sector allocation among corporates, housing and transportation as well as tax-backed issues in the Great Lakes region drove the Fund’s positive performance. Additional benefits were derived from seasoned portfolio holdings with shorter remaining terms to their maturity, which exhibited lower price volatility compared to longer-dated bonds during the period. As interest rates rose and the yield curve steepened in the later part of the period, holdings of longer-dated bonds detracted from performance. In addition, the Fund’s high exposure to the health care sector and low exposure to tax-backed issues in the Far West region had a negative impact on performance.

 

 

 

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.


 


Fund Information



 

 

 

 

 

Symbol on New York Stock Exchange (“NYSE”)

 

 

MYD

 

Initial Offering Date

 

 

November 29, 1991

 

Yield on Closing Market Price as of April 30, 2011 ($13.17)1

 

 

7.52%

 

Tax Equivalent Yield2

 

 

11.57%

 

Current Monthly Distribution per Common Share3

 

 

$0.0825

 

Current Annualized Distribution per Common Share3

 

 

$0.9900

 

Leverage as of April 30, 20114

 

 

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 federal tax rate of 35%.

 

 

 

 

3

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

 

 

 

 

4

Represents Auction Market Preferred Shares (“Preferred Shares”) and tender option bond trusts (“TOBs”) as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to Preferred Shares and TOBs, 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 8.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















 

 

4/30/11

 

4/30/10

 

Change

 

High

 

Low

 













Market Price

 

$

13.17

 

$

13.70

 

 

(3.87

)%

$

15.19

 

$

12.05

 

Net Asset Value

 

$

13.05

 

$

13.87

 

 

(5.91

)%

$

14.63

 

$

12.24

 


















The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

4/30/11

 

4/30/10

 









Health

 

23

%

 

22

%

 

Transportation

 

15

 

 

12

 

 

Corporate

 

15

 

 

16

 

 

State

 

13

 

 

14

 

 

Utilities

 

10

 

 

8

 

 

County/City/Special District/School District

 

9

 

 

9

 

 

Education

 

9

 

 

9

 

 

Housing

 

5

 

 

6

 

 

Tobacco

 

1

 

 

4

 

 










 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

4/30/11

 

4/30/10

 









AAA/Aaa

 

13

%

 

19

%

 

AA/Aa

 

36

 

 

31

 

 

A

 

22

 

 

22

 

 

BBB/Baa

 

12

 

 

10

 

 

BB/Ba

 

2

 

 

2

 

 

B

 

3

 

 

3

 

 

CCC/Caa

 

2

 

 

3

 

 

CC/Ca

 

1

 

 

 

 

Not Rated6

 

9

 

 

10

 

 










 

 

 

 

 

 

 

5

Using the higher of Standard and Poor’s (“S&P’s”) or Moody’s Investor Service (“Moody’s”) ratings.

 

 

 

 

6

The investment advisor has deemed certain of these securities to be of investment grade quality. As of April 30, 2011 and April 30, 2010, the market value of these securities was $3,786,237 representing 0% and $6,821,060 representing 1%, respectively, of the Fund’s long-term investments.


 

 

 




ANNUAL REPORT

APRIL 30, 2011

5




 

 



 

 

Fund Summary as of April 30, 2011

BlackRock MuniYield Quality Fund, Inc.


 


Fund Overview


BlackRock MuniYield Quality Fund, Inc.’s (MQY) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests in municipal bonds which are in the three highest quality rating categories (A or better) or, if unrated, of comparable quality at the time of investment. The Fund invests primarily in long-term municipal bonds with maturities of more than ten years 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.

 


Performance


Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of its assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Insured Municipal Debt Funds (Leveraged) category into the Lipper General Municipal Debt Funds (Leveraged) category. For the 12 months ended April 30, 2011, the Fund returned (3.06)% based on market price and 0.10% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (0.60)% based on market price and 0.10% based on NAV, and the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of 0.17% based on market price and 0.85% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund’s performance was positively impacted by its shorter duration holdings (those with lower sensitivity to interest rate movements) such as advanced refunded bonds and higher coupon bonds pricing to shorter call dates. Shorter duration securities performed well during the period as the shorter end of the yield curve rallied while long-term rates rose. The Fund also benefited from its exposure to the housing and corporate sectors, which performed well during the period. Detracting from performance was the Fund’s exposure to the long end of the yield curve, where interest rates rose sharply. Exposure to lower quality spread sectors also had a negative impact as credit spreads generally widened over the period. The Fund uses interest rate futures contracts to hedge portfolio risk related to movements in interest rates. This strategy had a modestly negative impact on performance during the period.

 

 

 

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.


 


Fund Information



 

 

 

 

 

Symbol on NYSE

 

 

MQY

 

Initial Offering Date

 

 

June 26, 1992

 

Yield on Closing Market Price as of April 30, 2011 ($13.15)1

 

 

7.03%

 

Tax Equivalent Yield2

 

 

10.82%

 

Current Monthly Distribution per Common Share3

 

 

$0.077

 

Current Annualized Distribution per Common Share3

 

 

$0.924

 

Leverage as of April 30, 20114

 

 

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 federal tax rate of 35%.

 

 

 

 

3

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

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to Preferred Shares and TOBs, 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 8.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















 

 

4/30/11

 

4/30/10

 

Change

 

High

 

Low

 













Market Price

 

$

13.15

 

$

14.48

 

 

(9.19

)%

$

15.66

 

$

11.87

 

Net Asset Value

 

$

13.72

 

$

14.63

 

 

(6.22

)%

$

15.31

 

$

12.70

 


















The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

4/30/11

 

4/30/10

 







County/City/Special District/School District

 

25

%

 

24

%

 

Transportation

 

22

 

 

25

 

 

Utilities

 

17

 

 

16

 

 

State

 

15

 

 

14

 

 

Health

 

9

 

 

9

 

 

Education

 

4

 

 

3

 

 

Corporate

 

3

 

 

3

 

 

Housing

 

3

 

 

2

 

 

Tobacco

 

2

 

 

4

 

 








 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

4/30/11

 

4/30/10

 







AAA/Aaa

 

12

%

 

39

%

 

AA/Aa

 

59

 

 

31

 

 

A

 

23

 

 

24

 

 

BBB/Baa

 

6

 

 

5

 

 

Not Rated

 

 

 

1

6

 










 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of April 30, 2010, the market value of these securities was $7,592,058, representing 1% of the Fund’s long-term investments.


 

 

 




6

ANNUAL REPORT

APRIL 30, 2011




 

 



 

 

Fund Summary as of April 30, 2011

BlackRock MuniYield Quality Fund II, Inc.


 


Fund Overview


BlackRock MuniYield Quality Fund II, Inc.’s (MQT) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests in municipal bonds which are in the three highest quality rating categories (A or better) or, if unrated, of comparable quality at the time of investment. The Fund invests primarily in long-term municipal bonds with maturities of more than ten years 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.

 


Performance


Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of its assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Insured Municipal Debt Funds (Leveraged) category into the Lipper General Municipal Debt Funds (Leveraged) category. For the 12 months ended April 30, 2011, the Fund returned (1.07)% based on market price and (0.36)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (0.60)% based on market price and 0.10% based on NAV, and the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of 0.17% based on market price and 0.85% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund’s performance was positively impacted by its shorter duration holdings (those with lower sensitivity to interest rate movements) such as advanced refunded bonds and higher coupon bonds pricing to shorter call dates. Shorter duration securities performed well during the period as the shorter end of the yield curve rallied while long-term rates rose. The Fund also benefited from its exposure to the housing and corporate sectors, which performed well during the period. Detracting from performance was the Fund’s exposure to the long end of the yield curve, where interest rates rose sharply. Exposure to lower quality spread sectors also had a negative impact as credit spreads generally widened over the period. The Fund uses interest rate futures contracts to hedge portfolio risk related to movements in interest rates. This strategy had a modestly negative impact on performance during the period.

 

 

 

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.


 


Fund Information



 

 

 

 

 

Symbol on NYSE

 

 

MQT

 

Initial Offering Date

 

 

August 28, 1992

 

Yield on Closing Market Price as of April 30, 2011 ($11.59)1

 

 

7.04%

 

Tax Equivalent Yield2

 

 

10.83%

 

Current Monthly Distribution per Common Share3

 

 

$0.068

 

Current Annualized Distribution per Common Share3

 

 

$0.816

 

Leverage as of April 30, 20114

 

 

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 federal tax rate of 35%.

 

 

 

 

3

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

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to Preferred Shares and TOBs, 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 8.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

4/30/11

 

4/30/10

 

Change

 

High

 

Low

 













Market Price

 

$

11.59

 

$

12.52

 

 

(7.43

)%

$

13.62

 

$

10.25

 

Net Asset Value

 

$

11.85

 

$

12.71

 

 

(6.77

)%

$

13.32

 

$

10.94

 


















The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

4/30/11

 

4/30/10

 







County/City/Special District/School District

 

29

%

 

26

%

 

Transportation

 

22

 

 

26

 

 

State

 

17

 

 

15

 

 

Utilities

 

13

 

 

11

 

 

Health

 

8

 

 

9

 

 

Housing

 

7

 

 

8

 

 

Education

 

3

 

 

3

 

 

Corporate

 

1

 

 

2

 

 










 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

4/30/11

 

4/30/10

 







AAA/Aaa

 

9

%

 

48

%

 

AA/Aa

 

68

 

 

30

 

 

A

 

19

 

 

18

 

 

BBB/Baa

 

4

 

 

4

 

 










 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.


 

 

 

 





 

ANNUAL REPORT

APRIL 30, 2011

7




 


The Benefits and Risks of Leveraging

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

To leverage, the Funds issue preferred shares (“Preferred Shares”), which pay dividends at prevailing short-term interest rates, and invest the proceeds in long-term municipal bonds. In general, the concept of leveraging is based on the premise that the cost of assets to be obtained from leverage, which will be based on short-term interest rates, will normally be lower than the income earned by each Fund on its longer-term portfolio investments. To the extent that the total assets of each Fund (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Fund’s holders of Common Shares (“Common Shareholders”) will benefit from the incremental net income.

To illustrate these concepts, assume a Fund’s Common Shares capitalization is $100 million and it issues Preferred Shares for an additional $50 million, creating a total value of $150 million available for investment in long-term municipal bonds. If prevailing short-term interest rates are 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Fund pays dividends on the $50 million of Preferred Shares based on the lower short-term interest rates. At the same time, the securities purchased by the Fund with assets received from the Preferred Shares issuance earn income based on long-term interest rates. In this case, the dividends paid to holders of Preferred Shares (“Preferred Shareholders”) are significantly lower than the income earned on the Fund’s long-term investments, and therefore the Common Shareholders are the beneficiaries of the incremental net income.

If short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental net income pickup on the Common Shares will be reduced or eliminated completely. Furthermore, if prevailing short-term interest rates rise above long-term interest rates of 6%, the yield curve has a negative slope. In this case, the Fund pays dividends on the higher short-term interest rates whereas the Fund’s total portfolio earns income based on lower long-term interest rates.

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 redemption value of the Funds’ Preferred Shares does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Funds’ NAV positively or negatively in addition to the impact on Fund performance from leverage from Preferred Shares discussed above.

The Funds may also leverage their assets through the use of TOBs, as described in Note 1 of the Notes to Financial Statements. TOB investments generally will provide the Funds with economic benefits in periods of declining short-term interest rates, but expose the Funds to risks during periods of rising short-term interest rates similar to those associated with Preferred Shares issued by the Funds, as described above. Additionally, fluctuations in the market value of municipal bonds deposited into the TOB trust may adversely affect each Fund’s NAV per share.

The use of leverage may enhance opportunities for increased income to the Funds and Common Shareholders, but as described above, it also creates risks as short or long-term interest rates fluctuate. Leverage also will generally cause greater changes in the Funds’ NAVs, market prices and dividend rates than comparable portfolios without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, the Funds’ net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, each Fund’s net income will be less than if leverage had not been used, and therefore the amount available for distribution to Common Shareholders will be reduced. Each Fund may be required to sell portfolio securities at inopportune times or 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 a Fund to incur losses. The use of leverage may limit each Fund’s ability to invest in certain types of securities or use certain types of hedging strategies, such as in the case of certain restrictions imposed by ratings agencies that rate Preferred Shares issued by the Funds. Each Fund will incur expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares.

Under the Investment Company Act of 1940, the Funds are permitted to issue Preferred Shares in an amount of up to 50% of their total managed assets at the time of issuance. Under normal circumstances, each Fund anticipates that the total economic leverage from Preferred Shares and/or TOBs will not exceed 50% of its total managed assets at the time such leverage is incurred. As of April 30, 2011, the Funds had economic leverage from Preferred Shares and TOBs as a percentage of their total managed assets as follows:

 

 

 

 

 





 

 

Percent of
Leverage

 






MYD

 

 

39%

 

MQY

 

 

40%

 

MQT

 

 

40%

 







 


Derivative Financial Instruments

The Funds may invest in various derivative financial instruments, including financial futures contracts, as specified in Note 2 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such instruments are used to obtain exposure to a market without owning or taking physical custody of securities or to hedge market and/or interest rate risks. Such derivative financial instruments involve risks, including the imperfect correlation between the value of a derivative instrument and the underlying asset or illiquidity of the derivative instrument. The Funds’ ability to use a derivative instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may require the Funds to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation the Funds can realize on an investment, may result in lower dividends paid to shareholders, or may cause the Funds to hold an investment that they might otherwise sell. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.


 

 

 


8

ANNUAL REPORT

APRIL 30, 2011




 

 


 

Schedule of Investments April 30, 2011

BlackRock MuniYield Fund, Inc. (MYD)

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Alabama — 0.8%

 

 

 

 

 

 

 

County of Jefferson Alabama, RB, Series A,
5.50%, 1/01/22

 

$

5,250

 

$

4,610,340

 









Arizona — 10.3%

 

 

 

 

 

 

 

Arizona State Transportation Board, RB, Sub-Series A:

 

 

 

 

 

 

 

5.00%, 7/01/22

 

 

7,030

 

 

7,533,489

 

5.00%, 7/01/23

 

 

5,240

 

 

5,579,342

 

Maricopa County IDA Arizona, RB, Arizona Charter
Schools Project, Series A, 6.75%, 7/01/29

 

 

3,300

 

 

2,174,667

 

Maricopa County IDA Arizona, Refunding RB,

 

 

 

 

 

 

 

Series A-1 (Ginnie Mae):

 

 

 

 

 

 

 

6.00%, 10/20/31

 

 

1,230

 

 

1,269,262

 

6.05%, 10/20/36

 

 

1,230

 

 

1,239,410

 

Phoenix IDA Arizona, Refunding RB, America West
Airlines Inc. Project, AMT:

 

 

 

 

 

 

 

6.25%, 6/01/19

 

 

3,000

 

 

2,591,640

 

6.30%, 4/01/23

 

 

5,090

 

 

4,220,475

 

Pima County IDA, IDRB, Tucson Electric Power,
Series A, 6.38%, 9/01/29

 

 

3,000

 

 

3,005,340

 

Pima County IDA, Refunding IDRB, Tucson Electric
Power, 5.75%, 9/01/29

 

 

2,240

 

 

2,233,258

 

Pima County IDA, Refunding RB, Charter Schools II,
Series A, 6.75%, 7/01/31

 

 

735

 

 

664,308

 

Salt River Project Agricultural Improvement & Power
District, RB, Series A, 5.00%, 1/01/38

 

 

3,975

 

 

4,008,390

 

Salt Verde Financial Corp., RB, Senior:

 

 

 

 

 

 

 

5.00%, 12/01/32

 

 

7,365

 

 

6,344,137

 

5.00%, 12/01/37

 

 

14,190

 

 

11,760,530

 

Vistancia Community Facilities District Arizona, GO:

 

 

 

 

 

 

 

5.50%, 7/15/20

 

 

3,000

 

 

3,144,180

 

5.75%, 7/15/24

 

 

2,125

 

 

2,201,797

 

Yavapai County IDA Arizona, RB, Yavapai Regional
Medical Center, Series A, 6.00%, 8/01/33

 

 

3,900

 

 

3,765,060

 

 

 

 

 

 




 

 

 

 

 

 

61,735,285

 









Arkansas — 0.5%

 

 

 

 

 

 

 

County of Little River Arkansas, Refunding RB,
Georgia-Pacific Corp. Project, AMT, 5.60%,
10/01/26

 

 

3,385

 

 

3,110,950

 









 

 

 

 

 

 

 

 

Municipal Bonds

 

 

Par
(000)

 

Value

 








California — 12.7%

 

 

 

 

 

 

 

California Health Facilities Financing Authority,
Refunding RB:

 

 

 

 

 

 

 

Catholic Healthcare West, Series A, 6.00%,
7/01/34

 

$

3,155

 

$

3,183,048

 

St. Joseph Health System, Series A, 5.75%,
7/01/39

 

 

4,425

 

 

4,138,614

 

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

 

 

6,465

 

 

6,556,221

 

California State Public Works Board, RB, Various

 

 

 

 

 

 

 

Capital Projects, Sub-Series I-1, 6.38%,
11/01/34

 

 

2,385

 

 

2,463,920

 

California Statewide Communities Development
Authority, RB, John Muir Health, 5.13%, 7/01/39

 

 

4,375

 

 

3,955,963

 

Golden State Tobacco Securitization Corp. California,
Refunding RB, Asset-Backed, Senior Series A-1,
5.13%, 6/01/47

 

 

2,090

 

 

1,269,257

 

Los Angeles Department of Airports, RB, Series A,
5.25%, 5/15/39

 

 

1,605

 

 

1,597,954

 

Los Angeles Department of Airports, Refunding RB,
Senior, Los Angeles International Airport, Series A,
5.00%, 5/15/40

 

 

11,970

 

 

11,474,681

 

San Francisco City & County Public Utilities
Commission, RB, Series B, 5.00%, 11/01/39

 

 

19,075

 

 

18,846,481

 

State of California, GO:

 

 

 

 

 

 

 

(AMBAC), 5.00%, 4/01/31

 

 

10

 

 

9,802

 

Various Purpose, 5.25%, 11/01/25

 

 

1,350

 

 

1,368,941

 

Various Purpose, 6.00%, 3/01/33

 

 

5,085

 

 

5,433,068

 

Various Purpose, 6.50%, 4/01/33

 

 

14,075

 

 

15,460,684

 

 

 

 

 

 




 

 

 

 

 

 

75,758,634

 









Colorado — 3.6%

 

 

 

 

 

 

 

City & County of Denver Colorado, RB, Series D, AMT
(AMBAC), 7.75%, 11/15/13

 

 

3,990

 

 

4,364,302

 

Colorado Health Facilities Authority, Refunding RB,
Sisters of Leavenworth, Series A, 5.00%, 1/01/40

 

 

4,435

 

 

4,051,106

 

Colorado Housing & Finance Authority, Refunding
RB, S/F Program, Senior Series D-2, AMT, 6.90%,
4/01/29

 

 

130

 

 

138,336

 


 


Portfolio Abbreviations


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

 

 

ACA

ACA Financial Guaranty Corp.

AGC

Assured Guaranty Corp.

AGM

Assured Guaranty Municipal Corp.

AMBAC

American Municipal Bond Assurance Corp.

AMT

Alternative Minimum Tax (subject to)

ARB

Airport Revenue Bonds

BHAC

Berkshire Hathaway Assurance Corp.

CAB

Capital Appreciation Bonds

CIFG

CDC IXIS Financial Guaranty

COP

Certificates of Participation

EDA

Economic Development Authority

EDC

Economic Development Corp.

ERB

Education Revenue Bonds

FGIC

Financial Guaranty Insurance Co.

FHA

Federal Housing Administration

GAN

Grant Anticipation Notes

GO

General Obligation Bonds

HDA

Housing Development Authority

HFA

Housing Finance Agency

HRB

Housing Revenue Bonds

IDA

Industrial Development Authority

IDRB

Industrial Development Revenue Bonds

ISD

Independent School District

MRB

Mortgage Revenue Bonds

NPFGC

National Public Finance Guarantee Corp.

PSF-GTD

Permanent School Fund Guaranteed

RB

Revenue Bonds

S/F

Single-Family

SAN

State Aid Notes

SO

Special Obligation


 

 

 

See Notes to Financial Statements.

 

 


ANNUAL REPORT

APRIL 30, 2011

9




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Fund, Inc. (MYD)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Colorado (concluded)

 

 

 

 

 

 

 

Plaza Metropolitan District No. 1 Colorado, Tax
Allocation Bonds:

 

 

 

 

 

 

 

Public Improvement Fee, Tax Increment, 8.00%,
12/01/25

 

$

6,850

 

$

6,717,932

 

Subordinate Public Improvement Fee, Tax
Increment, 8.13%, 12/01/25

 

 

1,885

 

 

1,689,017

 

University of Colorado, RB, Series A:

 

 

 

 

 

 

 

5.25%, 6/01/30

 

 

2,250

 

 

2,346,210

 

5.38%, 6/01/32

 

 

1,250

 

 

1,302,762

 

5.38%, 6/01/38

 

 

830

 

 

850,459

 

 

 

 

 

 




 

 

 

 

 

 

21,460,124

 









Connecticut — 1.7%

 

 

 

 

 

 

 

Connecticut State Health & Educational Facility
Authority, RB:

 

 

 

 

 

 

 

Ascension Health Senior Credit, 5.00%,
11/15/40

 

 

2,770

 

 

2,650,558

 

Wesleyan University, 5.00%, 7/01/35

 

 

2,225

 

 

2,259,198

 

Wesleyan University, 5.00%, 7/01/39

 

 

5,000

 

 

5,043,600

 

 

 

 

 

 




 

 

 

 

 

 

9,953,356

 









Delaware — 1.6%

 

 

 

 

 

 

 

County of Sussex Delaware, RB, NRG Energy, Inc.,
Indian River Project, 6.00%, 10/01/40

 

 

2,305

 

 

2,248,920

 

Delaware State EDA, RB, Exempt Facilities, Indian
River Power, 5.38%, 10/01/45

 

 

8,275

 

 

7,105,825

 

 

 

 

 

 




 

 

 

 

 

 

9,354,745

 









District of Columbia — 1.8%

 

 

 

 

 

 

 

Metropolitan Washington Airports Authority, RB:

 

 

 

 

 

 

 

CAB, 2nd Senior Lien, Series B (AGC), 7.00%,
10/01/31 (a)

 

 

9,500

 

 

2,532,320

 

CAB, 2nd Senior Lien, Series B (AGC), 7.03%,
10/01/32 (a)

 

 

15,000

 

 

3,732,300

 

CAB, 2nd Senior Lien, Series B (AGC), 7.05%,
10/01/33 (a)

 

 

13,410

 

 

3,113,266

 

First Senior Lien, Series A, 5.25%, 10/01/44

 

 

1,500

 

 

1,438,455

 

 

 

 

 

 




 

 

 

 

 

 

10,816,341

 









Florida — 8.6%

 

 

 

 

 

 

 

City of Clearwater Florida, RB, Series A, 5.25%,
12/01/39

 

 

3,435

 

 

3,448,980

 

County of Broward Florida, RB, Series A, 5.25%,
10/01/34

 

 

2,155

 

 

2,182,649

 

County of Miami-Dade Florida, RB, Water & Sewer
System, 5.00%, 10/01/34

 

 

11,450

 

 

11,217,336

 

County of Miami-Dade Florida, Refunding RB, Miami
International Airport, Series A-1, 5.38%, 10/01/41

 

 

7,530

 

 

7,138,440

 

Greater Orlando Aviation Authority Florida, RB,
Special Purpose, JetBlue Airways Corp., AMT,
6.50%, 11/15/36

 

 

2,500

 

 

2,253,325

 

Hillsborough County IDA, RB, AMT, National
Gypsum Co.:

 

 

 

 

 

 

 

Series A, 7.13%, 4/01/30

 

 

11,500

 

 

10,068,365

 

Series B, 7.13%, 4/01/30

 

 

5,000

 

 

4,377,550

 

Mid-Bay Bridge Authority, RB, Series A, 7.25%,
10/01/40

 

 

4,615

 

 

4,595,709

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Florida (concluded)

 

 

 

 

 

 

 

Midtown Miami Community Development District,
Special Assessment Bonds, Series B, 6.50%,
5/01/37

 

$

5,170

 

$

4,752,833

 

Santa Rosa Bay Bridge Authority, RB, 6.25%,
7/01/28 (b)(c)

 

 

4,620

 

 

1,666,526

 

 

 

 

 

 




 

 

 

 

 

 

51,701,713

 









Georgia — 1.9%

 

 

 

 

 

 

 

DeKalb Private Hospital Authority, Refunding RB,
Children’s Healthcare, 5.25%, 11/15/39

 

 

1,700

 

 

1,643,849

 

Metropolitan Atlanta Rapid Transit Authority, RB,
Third Series, 5.00%, 7/01/39

 

 

6,945

 

 

6,944,514

 

Private Colleges & Universities Authority, Refunding
RB, Emory University, Series C, 5.00%, 9/01/38

 

 

2,960

 

 

2,983,325

 

 

 

 

 

 




 

 

 

 

 

 

11,571,688

 









Guam — 0.7%

 

 

 

 

 

 

 

Territory of Guam, GO, Series A:

 

 

 

 

 

 

 

6.00%, 11/15/19

 

 

1,270

 

 

1,270,800

 

6.75%, 11/15/29

 

 

1,815

 

 

1,809,791

 

7.00%, 11/15/39

 

 

1,200

 

 

1,226,208

 

 

 

 

 

 




 

 

 

 

 

 

4,306,799

 









Hawaii — 0.5%

 

 

 

 

 

 

 

State of Hawaii, Refunding RB, Series A, 5.25%,
7/01/30

 

 

2,760

 

 

2,783,791

 









Idaho — 1.7%

 

 

 

 

 

 

 

Power County Industrial Development Corp., RB,
FMC Corp. Project, AMT, 6.45%, 8/01/32

 

 

10,000

 

 

10,014,300

 









Illinois — 6.6%

 

 

 

 

 

 

 

Bolingbrook Special Service Area No. 1, Special
Tax Bonds, Forest City Project, 5.90%, 3/01/27

 

 

1,000

 

 

791,200

 

City of Chicago Illinois, Refunding RB, General,
Third Lien, Series C, 6.50%, 1/01/41 (d)

 

 

11,920

 

 

12,702,429

 

Illinois Finance Authority, RB, Navistar International,
Recovery Zone, 6.50%, 10/15/40

 

 

3,130

 

 

3,143,709

 

Illinois Finance Authority, Refunding RB:

 

 

 

 

 

 

 

Central DuPage Health, Series B, 5.50%,
11/01/39

 

 

3,235

 

 

3,074,544

 

Friendship Village Schaumburg, Series A,
5.63%, 2/15/37

 

 

875

 

 

667,144

 

Metropolitan Pier & Exposition Authority, Refunding
RB (AGM), McCormick Place Expansion Project:

 

 

 

 

 

 

 

CAB, Series B, 6.25%, 6/15/46 (a)

 

 

11,405

 

 

1,055,989

 

CAB, Series B, 6.25%, 6/15/47 (a)

 

 

27,225

 

 

2,339,444

 

Series B, 5.00%, 6/15/50

 

 

6,405

 

 

5,588,939

 

Series B-2, 5.00%, 6/15/50

 

 

5,085

 

 

4,334,403

 

Railsplitter Tobacco Settlement Authority, RB:

 

 

 

 

 

 

 

5.50%, 6/01/23

 

 

2,730

 

 

2,634,122

 

6.00%, 6/01/28

 

 

2,335

 

 

2,245,663

 

State of Illinois, RB, Build Illinois, Series B, 5.25%,
6/15/34

 

 

1,275

 

 

1,233,486

 

 

 

 

 

 




 

 

 

 

 

 

39,811,072

 










 

 

 

See Notes to Financial Statements.




10

ANNUAL REPORT

APRIL 30, 2011




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Fund, Inc. (MYD)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Indiana — 1.8%

 

 

 

 

 

 

 

Indiana Finance Authority, RB, Sisters of St. Francis
Health, 5.25%, 11/01/39

 

$

1,690

 

$

1,558,941

 

Indiana Finance Authority, Refunding RB, Parkview
Health System, Series A, 5.75%, 5/01/31

 

 

6,645

 

 

6,687,262

 

Indiana Municipal Power Agency, RB, Series B,
6.00%, 1/01/39

 

 

2,230

 

 

2,286,196

 

 

 

 

 

 




 

 

 

 

 

 

10,532,399

 









Kansas — 1.4%

 

 

 

 

 

 

 

City of Lenexa Kansas, RB, Lakeview Village Inc.,
Series C, 6.88%, 5/15/12 (e)

 

 

1,250

 

 

1,347,150

 

Kansas Development Finance Authority,
Refunding RB:

 

 

 

 

 

 

 

Adventist Health, 5.75%, 11/15/38

 

 

3,970

 

 

4,096,881

 

Sisters of Leavenworth, Series A, 5.00%,
1/01/40

 

 

3,365

 

 

3,216,772

 

 

 

 

 

 




 

 

 

 

 

 

8,660,803

 









Kentucky — 0.4%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority,
Refunding RB, Series A:

 

 

 

 

 

 

 

Norton, 6.63%, 10/01/28

 

 

650

 

 

653,023

 

Owensboro Medical Health System, 6.38%,
6/01/40

 

 

2,040

 

 

1,935,511

 

 

 

 

 

 




 

 

 

 

 

 

2,588,534

 









Louisiana — 4.1%

 

 

 

 

 

 

 

East Baton Rouge Sewerage Commission, RB,
Series A, 5.25%, 2/01/39

 

 

1,610

 

 

1,628,258

 

Louisiana Local Government Environmental
Facilities & Community Development Authority,
RB, Westlake Chemical Corp. Projects, 6.75%,
11/01/32

 

 

9,000

 

 

9,168,300

 

New Orleans Aviation Board, Refunding RB,
Passenger Facility Charge, Series A, 5.25%,
1/01/41

 

 

1,260

 

 

1,189,490

 

Port of New Orleans Louisiana, Refunding RB,
Continental Grain Co. Project, 6.50%, 1/01/17

 

 

13,000

 

 

12,612,860

 

 

 

 

 

 




 

 

 

 

 

 

24,598,908

 









Maine — 0.5%

 

 

 

 

 

 

 

Maine Health & Higher Educational Facilities
Authority, RB, Series A, 5.00%, 7/01/39

 

 

3,140

 

 

3,002,751

 









Maryland — 1.2%

 

 

 

 

 

 

 

County of Prince George’s Maryland, SO, National
Harbor Project, 5.20%, 7/01/34

 

 

1,500

 

 

1,264,845

 

Maryland Community Development Administration,
Refunding RB, Residential, Series A, AMT, 4.65%,
9/01/32

 

 

115

 

 

104,414

 

Maryland EDC, RB, Transportation Facilities Project,
Series A, 5.75%, 6/01/35

 

 

880

 

 

804,936

 

Maryland EDC, Refunding RB, CNX Marine
Terminals, Inc., 5.75%, 9/01/25

 

 

1,690

 

 

1,617,043

 

Maryland Industrial Development Financing
Authority, RB, Our Lady of Good Counsel School,
Series A, 6.00%, 5/01/35

 

 

500

 

 

463,540

 

Maryland State Energy Financing Administration,
RB, Cogeneration, AES Warrior Run, AMT, 7.40%,
9/01/19

 

 

3,000

 

 

2,999,490

 

 

 

 

 

 




 

 

 

 

 

 

7,254,268

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Massachusetts — 1.6%

 

 

 

 

 

 

 

Massachusetts Bay Transportation Authority,
Refunding RB, Senior Series A-1, 5.25%, 7/01/29

 

$

3,250

 

$

3,640,780

 

Massachusetts Development Finance Agency, RB,
Seven Hills Foundation & Affiliates (Radian),
5.00%, 9/01/35

 

 

3,500

 

 

2,670,430

 

Massachusetts Health & Educational Facilities
Authority, Refunding RB, Partners Healthcare,
Series J1, 5.00%, 7/01/39

 

 

3,640

 

 

3,405,256

 

 

 

 

 

 




 

 

 

 

 

 

9,716,466

 









Michigan — 3.3%

 

 

 

 

 

 

 

City of Detroit Michigan, RB, Senior Lien, Series B
(AGM), 7.50%, 7/01/33

 

 

1,835

 

 

2,140,840

 

Kalamazoo Hospital Finance Authority, Refunding
RB, Bronson Methodist Hospital, 5.50%, 5/15/36

 

 

2,795

 

 

2,660,113

 

Michigan State Hospital Finance Authority,
Refunding RB, Hospital, Henry Ford Health,
5.75%, 11/15/39

 

 

6,085

 

 

5,666,778

 

Royal Oak Hospital Finance Authority Michigan,
Refunding RB, William Beaumont Hospital:

 

 

 

 

 

 

 

8.00%, 9/01/29

 

 

2,000

 

 

2,239,440

 

8.25%, 9/01/39

 

 

6,365

 

 

7,216,446

 

 

 

 

 

 




 

 

 

 

 

 

19,923,617

 









Minnesota — 0.6%

 

 

 

 

 

 

 

City of Eden Prairie Minnesota, RB, Rolling Hills
Project, Series A (Ginnie Mae):

 

 

 

 

 

 

 

6.00%, 8/20/21

 

 

420

 

 

442,726

 

6.20%, 2/20/43

 

 

2,000

 

 

2,103,400

 

City of Minneapolis Minnesota, HRB, Gaar Scott
Loft Project, Mandatory Put Bonds, AMT, 5.95%,
5/01/30 (f)

 

 

865

 

 

866,125

 

 

 

 

 

 




 

 

 

 

 

 

3,412,251

 









Mississippi — 0.1%

 

 

 

 

 

 

 

University of Southern Mississippi, RB, Campus
Facilities Improvements Project, 5.38%, 9/01/36

 

 

280

 

 

285,348

 









Montana — 0.4%

 

 

 

 

 

 

 

Montana Facility Finance Authority, Refunding RB,
Sisters of Leavenworth, Series A, 4.75%, 1/01/40

 

 

2,605

 

 

2,376,958

 









New Hampshire — 0.5%

 

 

 

 

 

 

 

New Hampshire Health & Education Facilities
Authority, Refunding RB, Elliot Hospital, Series B,
5.60%, 10/01/22

 

 

3,090

 

 

3,134,558

 









New Jersey — 7.5%

 

 

 

 

 

 

 

New Jersey EDA, RB:

 

 

 

 

 

 

 

Cigarette Tax, 5.50%, 6/15/24

 

 

9,715

 

 

9,035,241

 

Continental Airlines Inc. Project, AMT,
6.25%, 9/15/19

 

 

3,905

 

 

3,692,998

 

Continental Airlines Inc. Project, AMT,
6.25%, 9/15/29

 

 

11,000

 

 

10,026,390

 

First Mortgage, Lions Gate Project, Series A,
5.75%, 1/01/25

 

 

710

 

 

630,913

 

First Mortgage, Lions Gate Project, Series A,
5.88%, 1/01/37

 

 

230

 

 

189,235

 

First Mortgage, Presbyterian Homes, Series A,
6.38%, 11/01/31

 

 

3,000

 

 

2,517,060

 

Motor Vehicle Surcharge, Series A (NPFGC),
5.00%, 7/01/29

 

 

16,650

 

 

16,609,374

 


 

 

 

See Notes to Financial Statements.

 


ANNUAL REPORT

APRIL 30, 2011

11




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Fund, Inc. (MYD)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







New Jersey (concluded)

 

 

 

 

 

 

 

New Jersey Health Care Facilities Financing Authority,
RB, Pascack Valley Hospital Association (b)(c):

 

 

 

 

 

 

 

6.00%, 7/01/13

 

$

1,335

 

$

13

 

6.63%, 7/01/36

 

 

1,835

 

 

18

 

New Jersey Transportation Trust Fund Authority, RB,
CAB, Transportation System, Series C (AMBAC),
5.05%, 12/15/35 (a)

 

 

13,110

 

 

2,418,664

 

 

 

 

 

 




 

 

 

 

 

 

45,119,906

 









New York — 5.2%

 

 

 

 

 

 

 

Dutchess County Industrial Development Agency
New York, Refunding RB, St. Francis Hospital,
Series A, 7.50%, 3/01/29

 

 

2,100

 

 

1,983,723

 

Metropolitan Transportation Authority, Refunding RB:

 

 

 

 

 

 

 

Series B, 5.00%, 11/15/34

 

 

4,910

 

 

4,909,853

 

Transportation, Series D, 5.25%, 11/15/40

 

 

2,465

 

 

2,414,196

 

New York City Industrial Development Agency, RB,
British Airways Plc Project, AMT, 7.63%, 12/01/32

 

 

1,250

 

 

1,254,363

 

New York Liberty Development Corp., Refunding RB,
Second Priority, Bank of America Tower at One
Bryant Park Project, 6.38%, 7/15/49

 

 

2,480

 

 

2,482,331

 

Port Authority of New York & New Jersey, RB, JFK
International Air Terminal:

 

 

 

 

 

 

 

6.00%, 12/01/36

 

 

2,625

 

 

2,533,440

 

6.00%, 12/01/42

 

 

2,555

 

 

2,441,558

 

Triborough Bridge & Tunnel Authority, RB,
Subordinate Bonds, 5.25%, 11/15/30

 

 

10,000

 

 

10,132,600

 

Westchester County Industrial Development Agency
New York, MRB, Kendal on Hudson Project,
Series A, 6.38%, 1/01/24

 

 

3,450

 

 

3,253,246

 

 

 

 

 

 




 

 

 

 

 

 

31,405,310

 









North Carolina — 1.4%

 

 

 

 

 

 

 

North Carolina HFA, RB:

 

 

 

 

 

 

 

Home Ownership, Series 8A, AMT, 6.20%,
7/01/16

 

 

90

 

 

90,140

 

S/F, Series II (FHA), 6.20%, 3/01/16

 

 

465

 

 

466,125

 

North Carolina Medical Care Commission, RB:

 

 

 

 

 

 

 

Duke University Health System, Series A,
5.00%, 6/01/42

 

 

2,805

 

 

2,669,126

 

First Mortgage, Arbor Acres Community Project,
6.38%, 3/01/12 (e)

 

 

1,000

 

 

1,057,550

 

North Carolina Medical Care Commission,
Refunding RB, First Mortgage, Presbyterian Homes,
5.40%, 10/01/27

 

 

5,000

 

 

4,287,100

 

 

 

 

 

 




 

 

 

 

 

 

8,570,041

 









Ohio — 1.1%

 

 

 

 

 

 

 

County of Lucas Ohio, Refunding RB, Sunset
Retirement, Series A, 6.63%, 8/15/30

 

 

2,175

 

 

2,175,674

 

County of Montgomery Ohio, Refunding RB,
Catholic Healthcare, Series A, 5.00%, 5/01/39

 

 

2,840

 

 

2,634,498

 

Toledo-Lucas County Port Authority, RB, St. Mary
Woods Project, Series A:

 

 

 

 

 

 

 

6.00%, 5/15/24

 

 

750

 

 

423,750

 

6.00%, 5/15/34

 

 

2,250

 

 

1,271,250

 

 

 

 

 

 




 

 

 

 

 

 

6,505,172

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Pennsylvania — 4.7%

 

 

 

 

 

 

 

Allegheny County Hospital Development Authority,
Refunding RB, Health System, West Penn, Series A,
5.38%, 11/15/40

 

$

5,490

 

$

4,080,223

 

Montgomery County Higher Education & Health
Authority, Refunding RB, Abington Memorial
Hospital, Series A, 5.13%, 6/01/33

 

 

2,265

 

 

2,121,308

 

Pennsylvania Economic Development Financing
Authority, RB:

 

 

 

 

 

 

 

Aqua Pennsylvania Inc. Project, 5.00%,
11/15/40

 

 

3,805

 

 

3,741,456

 

National Gypsum Co., Series A, AMT, 6.25%,
11/01/27

 

 

5,270

 

 

4,357,605

 

Pennsylvania Turnpike Commission, RB,
Sub-Series B, 5.25%, 6/01/39

 

 

12,905

 

 

12,356,667

 

Philadelphia Authority for Industrial Development,
RB, Commercial Development, AMT, 7.75%,
12/01/17

 

 

1,265

 

 

1,265,607

 

 

 

 

 

 




 

 

 

 

 

 

27,922,866

 









Puerto Rico — 3.6%

 

 

 

 

 

 

 

Commonwealth of Puerto Rico, GO, Refunding,
Public Improvement, Series C, 6.00%, 7/01/39

 

 

6,000

 

 

5,871,720

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.50%, 8/01/44

 

 

10,120

 

 

10,558,196

 

Puerto Rico Sales Tax Financing Corp., Refunding
RB, CAB (a):

 

 

 

 

 

 

 

First Sub-Series C, 6.58%, 8/01/38

 

 

23,695

 

 

3,642,395

 

Series A (AMBAC), 6.46%, 8/01/47

 

 

14,900

 

 

1,277,675

 

 

 

 

 

 




 

 

 

 

 

 

21,349,986

 









Rhode Island — 1.0%

 

 

 

 

 

 

 

Central Falls Detention Facility Corp., Refunding RB,
7.25%, 7/15/35

 

 

4,240

 

 

3,392,763

 

City of Woonsocket Rhode Island, GO (NPFGC):

 

 

 

 

 

 

 

6.00%, 10/01/17

 

 

1,200

 

 

1,209,828

 

6.00%, 10/01/18

 

 

1,195

 

 

1,203,975

 

 

 

 

 

 




 

 

 

 

 

 

5,806,566

 









South Carolina — 1.1%

 

 

 

 

 

 

 

South Carolina State Ports Authority, RB, 5.25%,
7/01/40

 

 

6,695

 

 

6,605,890

 









Tennessee — 0.5%

 

 

 

 

 

 

 

Hardeman County Correctional Facilities Corp.
Tennessee, RB, 7.75%, 8/01/17

 

 

3,235

 

 

3,098,904

 









Texas — 14.2%

 

 

 

 

 

 

 

Alliance Airport Authority Texas, Refunding RB,
American Airlines Inc. Project, AMT, 5.75%,
12/01/29

 

 

3,500

 

 

2,443,245

 

Bexar County Housing Finance Corp., RB, Waters at
Northern Hills Apartments, Series A (NPFGC):

 

 

 

 

 

 

 

6.00%, 8/01/31

 

 

805

 

 

702,749

 

6.05%, 8/01/36

 

 

1,000

 

 

856,630

 

Brazos River Authority, Refunding RB, TXU Electric Co.
Project, Series C, Mandatory Put Bonds, AMT,
5.75%, 5/01/36 (f)

 

 

4,580

 

 

4,485,469

 

City of Dallas Texas, Refunding RB, 5.00%,
10/01/35

 

 

3,060

 

 

3,171,568

 


 

 

 

See Notes to Financial Statements.




12

ANNUAL REPORT

APRIL 30, 2011




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Fund, Inc. (MYD)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Texas (concluded)

 

 

 

 

 

 

 

City of Houston Texas, RB:

 

 

 

 

 

 

 

Senior Lien, Series A, 5.50%, 7/01/39

 

$

3,100

 

$

3,140,021

 

Special Facilities, Continental Airlines, Series E,
AMT, 7.38%, 7/01/22

 

 

3,500

 

 

3,512,845

 

Special Facilities, Continental Airlines, Series E,
AMT, 7.00%, 7/01/29

 

 

3,000

 

 

2,968,620

 

Dallas-Fort Worth International Airport Facilities
Improvement Corp., Refunding RB, American
Airlines Inc. Project, AMT, 5.50%, 11/01/30

 

 

12,500

 

 

8,418,000

 

Gulf Coast IDA, RB, Citgo Petroleum Corp. Project,
Mandatory Put Bonds, AMT, 7.50%, 5/01/25 (f)

 

 

3,900

 

 

3,922,503

 

Houston Industrial Development Corp., RB, Senior,
Air Cargo, AMT, 6.38%, 1/01/23

 

 

1,580

 

 

1,447,154

 

La Vernia Higher Education Finance Corp., RB,
KIPP Inc., 6.38%, 8/15/44

 

 

2,360

 

 

2,319,715

 

Matagorda County Navigation District No. 1 Texas,
Refunding RB, Central Power & Light Co. Project,
Series A, 6.30%, 11/01/29

 

 

4,320

 

 

4,490,510

 

North Texas Tollway Authority, RB:

 

 

 

 

 

 

 

CAB, Special Projects System, Series B,
7.55%, 9/01/37 (a)

 

 

4,110

 

 

672,190

 

Toll, 2nd Tier, Series F, 6.13%, 1/01/31

 

 

12,140

 

 

12,402,710

 

San Antonio Energy Acquisition Public Facility Corp.,
RB, Gas Supply, 5.50%, 8/01/25

 

 

6,365

 

 

6,274,235

 

Texas Private Activity Bond Surface Transportation
Corp., RB, Senior Lien:

 

 

 

 

 

 

 

LBJ Infrastructure Group LLC, LBJ Freeway
Managed Lanes Project, 7.00%, 6/30/40

 

 

8,730

 

 

8,894,822

 

NTE Mobility Partners LLC, North Tarrant Express
Managed Lanes Project, 6.88%, 12/31/39

 

 

7,820

 

 

8,022,538

 

Texas State Public Finance Authority, Refunding ERB,
KIPP Inc., Series A (ACA), 5.00%, 2/15/36

 

 

1,000

 

 

821,680

 

Texas State Turnpike Authority, RB, First Tier, Series A
(AMBAC), 5.50%, 8/15/39

 

 

6,500

 

 

6,092,905

 

 

 

 

 

 




 

 

 

 

 

 

85,060,109

 









U.S. Virgin Islands — 1.0%

 

 

 

 

 

 

 

Virgin Islands Public Finance Authority, RB, Senior
Secured, Hovensa Refinery, AMT, 6.13%, 7/01/22

 

 

6,250

 

 

5,814,187

 









Utah — 1.1%

 

 

 

 

 

 

 

City of Riverton Utah, RB, IHC Health Services Inc.,
5.00%, 8/15/41

 

 

7,310

 

 

6,773,300

 









Virginia — 1.4%

 

 

 

 

 

 

 

James City County EDA, RB, First Mortgage,
Williamsburg Lodge, Series A:

 

 

 

 

 

 

 

5.35%, 9/01/26

 

 

1,500

 

 

1,298,535

 

5.50%, 9/01/34

 

 

2,000

 

 

1,625,880

 

Virginia HDA, RB, Sub-Series H-1 (NPFGC),
5.35%, 7/01/31

 

 

4,550

 

 

4,551,592

 

Winchester IDA Virginia, RB, Westminster-Canterbury,
Series A, 5.20%, 1/01/27

 

 

1,000

 

 

957,540

 

 

 

 

 

 




 

 

 

 

 

 

8,433,547

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Washington — 1.0%

 

 

 

 

 

 

 

Vancouver Housing Authority Washington, HRB,
Teal Pointe Apartments Project, AMT:

 

 

 

 

 

 

 

6.00%, 9/01/22

 

$

945

 

$

849,224

 

6.20%, 9/01/32

 

 

1,250

 

 

1,026,813

 

Washington Health Care Facilities Authority, RB,
Swedish Health Services, Series A, 6.75%,
11/15/41

 

 

4,045

 

 

4,194,018

 

 

 

 

 

 




 

 

 

 

 

 

6,070,055

 









Wisconsin — 4.5%

 

 

 

 

 

 

 

City of Milwaukee Wisconsin, RB, Senior, Air Cargo,
AMT, 6.50%, 1/01/25

 

 

545

 

 

501,433

 

State of Wisconsin, Refunding RB, Series A,
6.00%, 5/01/36

 

 

14,300

 

 

15,370,498

 

Wisconsin Health & Educational Facilities Authority,
RB, Ascension Health Senior Credit Group,
5.00%, 11/15/33

 

 

4,970

 

 

4,675,478

 

Wisconsin Health & Educational Facilities Authority,
Refunding RB, Franciscan Sisters Healthcare,
5.00%, 9/01/26

 

 

6,870

 

 

6,227,174

 

 

 

 

 

 




 

 

 

 

 

 

26,774,583

 









Wyoming — 1.2%

 

 

 

 

 

 

 

County of Sweetwater Wyoming, Refunding RB,
Idaho Power Co. Project, 5.25%, 7/15/26

 

 

6,195

 

 

6,457,048

 

Wyoming Municipal Power Agency, RB, Series A,
5.00%, 1/01/42

 

 

595

 

 

576,811

 

 

 

 

 

 




 

 

 

 

 

 

7,033,859

 









Total Municipal Bonds — 119.4%

 

 

 

 

 

714,820,280

 










 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

 

 

 

 

 

 









Alabama — 0.7%

 

 

 

 

 

 

 

Alabama Special Care Facilities Financing
Authority-Birmingham, Refunding RB, Ascension
Health Senior Credit, Series C-2, 5.00%,
11/15/36

 

 

4,538

 

 

4,373,225

 









California — 3.2%

 

 

 

 

 

 

 

Bay Area Toll Authority, Refunding RB, San Francisco
Bay Area, Series F-1, 5.63%, 4/01/44

 

 

6,581

 

 

6,795,021

 

California Educational Facilities Authority, RB,
University of Southern California, Series B,
5.25%, 10/01/39

 

 

5,310

 

 

5,447,529

 

Los Angeles Community College District California,
GO, Election of 2001, Series A (AGM), 5.00%,
8/01/32

 

 

4,650

 

 

4,613,544

 

San Diego Community College District California,
GO, Election of 2002, 5.25%, 8/01/33

 

 

2,154

 

 

2,189,537

 

 

 

 

 

 




 

 

 

 

 

 

19,045,631

 









Colorado — 2.6%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB (AGM),
Catholic Health:

 

 

 

 

 

 

 

Series C-3, 5.10%, 10/01/41

 

 

7,490

 

 

7,018,055

 

Series C-7, 5.00%, 9/01/36

 

 

4,800

 

 

4,517,328

 

Colorado Health Facilities Authority, Refunding RB,
Catholic Healthcare, Series A, 5.50%, 7/01/34

 

 

4,299

 

 

4,304,104

 

 

 

 

 

 




 

 

 

 

 

 

15,839,487

 










 

 

 

 

See Notes to Financial Statements.

 

 





 

ANNUAL REPORT

APRIL 30, 2011

13




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Fund, Inc. (MYD)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

Par
(000)

 

Value

 









Connecticut — 3.1%

 

 

 

 

 

 

 

Connecticut State Health & Educational Facility
Authority, RB, Yale University:

 

 

 

 

 

 

 

Series T-1, 4.70%, 7/01/29

 

$

9,130

 

$

9,363,454

 

Series X-3, 4.85%, 7/01/37

 

 

9,270

 

 

9,320,429

 

 

 

 

 

 




 

 

 

 

 

 

18,683,883

 









Georgia — 1.1%

 

 

 

 

 

 

 

Private Colleges & Universities Authority, Refunding
RB, Emory University, Series C, 5.00%, 9/01/38

 

 

6,398

 

 

6,448,291

 









New Hampshire — 0.7%

 

 

 

 

 

 

 

New Hampshire Health & Education Facilities
Authority, Refunding RB, Dartmouth College,
5.25%, 6/01/39

 

 

4,048

 

 

4,193,491

 









New York — 3.4%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority,
RB, Series FF-2, 5.50%, 6/15/40

 

 

3,194

 

 

3,329,869

 

New York State Dormitory Authority, ERB, Series F,
5.00%, 3/15/35

 

 

16,724

 

 

16,746,001

 

 

 

 

 

 




 

 

 

 

 

 

20,075,870

 









North Carolina — 3.7%

 

 

 

 

 

 

 

North Carolina Capital Facilities Finance Agency,
Refunding RB:

 

 

 

 

 

 

 

Duke University Project, Series A, 5.00%,
10/01/41

 

 

18,897

 

 

19,039,435

 

Wake Forest University, 5.00%, 1/01/38

 

 

3,120

 

 

3,151,481

 

 

 

 

 

 




 

 

 

 

 

 

22,190,916

 









Ohio — 4.6%

 

 

 

 

 

 

 

State of Ohio, Refunding RB, Cleveland Clinic Health,
Series A, 5.50%, 1/01/39

 

 

27,900

 

 

27,662,571

 









South Carolina — 2.9%

 

 

 

 

 

 

 

Charleston Educational Excellence Finance Corp.,
RB, Charleston County School (AGC):

 

 

 

 

 

 

 

5.25%, 12/01/28

 

 

7,795

 

 

7,956,902

 

5.25%, 12/01/29

 

 

6,920

 

 

7,038,055

 

5.25%, 12/01/30

 

 

2,510

 

 

2,542,505

 

 

 

 

 

 




 

 

 

 

 

 

17,537,462

 









Tennessee — 1.9%

 

 

 

 

 

 

 

Shelby County Health Educational & Housing
Facilities Board, Refunding RB, St. Jude’s
Children’s Research Hospital, 5.00%, 7/01/31

 

 

11,240

 

 

11,341,160

 









Virginia — 9.0%

 

 

 

 

 

 

 

Fairfax County IDA Virginia, Refunding RB, Health
Care, Inova Health System, Series A, 5.50%,
5/15/35

 

 

6,266

 

 

6,289,631

 

University of Virginia, Refunding RB, General,
5.00%, 6/01/40

 

 

10,620

 

 

10,867,659

 

Virginia HDA, RB, Sub-Series H-1 (NPFGC),
5.38%, 7/01/36

 

 

30,930

 

 

30,943,609

 

Virginia Small Business Financing Authority,
Refunding RB, Sentara Healthcare, 5.00%,
11/01/40

 

 

6,075

 

 

5,892,556

 

 

 

 

 

 




 

 

 

 

 

 

53,993,455

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

Par
(000)

 

Value

 







Washington — 0.9%

 

 

 

 

 

 

 

Central Puget Sound Regional Transit Authority, RB,
Series A (AGM), 5.00%, 11/01/32

 

$

5,384

 

$

5,482,623

 









Wisconsin — 1.8%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority,
Refunding RB, Froedtert & Community Health Inc.,
5.25%, 4/01/39

 

 

11,458

 

 

10,487,373

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 39.6%

 

 

 

 

 

237,355,438

 









Total Long-Term Investments
(Cost — $976,296,877) — 159.0%

 

 

 

 

 

952,175,718

 










 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 









FFI Institutional Tax-Exempt Fund, 0.23% (h)(i)

 

 

16,277,332

 

 

16,277,332

 










 

 

 

 

 

 

 

 

 

 

Par
(000
)

 

 

 

 








Michigan Finance Authority, RB, SAN, Detroit Schools,
Series A-1, 6.45%, 2/20/12

 

$

6,640

 

 

6,681,633

 









Total Short-Term Securities
(Cost — $22,917,332) — 3.8%

 

 

 

 

 

22,958,965

 









Total Investments (Cost — $999,214,209*) — 162.8%

 

 

 

 

 

975,134,683

 

Other Assets Less Liabilities — 0.1%

 

 

 

 

 

521,534

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (20.9)%

 

 

 

 

 

(125,194,206

)

Preferred Shares, at Redemption Value — (42.0)%

 

 

 

 

 

(251,485,694

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

598,976,317

 

 

 

 

 

 




 

 

 

 

 

 

 

 










 

 

*

The cost and unrealized appreciation (depreciation) of investments as of April 30, 2011, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

872,686,486

 

 

 




Gross unrealized appreciation

 

$

16,794,237

 

Gross unrealized depreciation

 

 

(39,443,353

)

 

 




Net unrealized depreciation

 

$

(22,649,116

)

 

 





 

 

(a)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(b)

Issuer filed for bankruptcy and/or is in default of interest payments.

 

 

(c)

Non-income producing security.

 

 

(d)

When-issued security. Unsettled when-issued transactions were as follows:


 

 

 

 

 

 

 

 









Counterparty

 

Value

 

Unrealized
Appreciation

 









Citigroup Global Markets

 

$

12,702,429

 

$

128,259

 










 

 

(e)

US 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.

 

 

(f)

Variable rate security. Rate shown is as of report date.

 

 

(g)

Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

See Notes to Financial Statements.

 




14

ANNUAL REPORT

APRIL 30, 2011




 

 



 

 

Schedule of Investments (concluded)

BlackRock MuniYield Fund, Inc. (MYD)


 

 

(h)

Investments in companies considered to be an affiliate of the Fund during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Affiliate

 

Shares Held at
April 30, 2010

 

Net
Activity

 

Shares Held at
April 30, 2011

 

Income

 











FFI Institutional Tax-Exempt Fund

 

 

2,366,896

 

 

13,910,436

 

 

16,277,332

 

$

15,317

 
















 

 

(i)

Represents the current yield as of report date.


 

 

Financial futures contracts sold as of April 30,2011 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Contracts

 

Issue

 

Exchange

 

Expiration

 

Notional
Value

 

Unrealized
Depreciation

 













439

 

10-Year U.S.
Treasury Note

 

Chicago Board
of Trade

 

June 2011

 

$

52,027,525

 

$

(1,153,209

)
















 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs are summarized in three broad levels for financial statement purposes as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

 

 

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

The following tables summarize the inputs used as of April 30, 2011 in determining the fair valuation of the Fund’s investments and derivative financial instruments:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

952,175,718

 

 

 

$

952,175,718

 

Short-Term Securities

 

$

16,277,332

 

 

6,681,633

 

 

 

 

22,958,965

 

 

 













Total

 

$

16,277,332

 

$

958,857,351

 

 

 

$

975,134,683

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 















Derivative Financial Instruments2

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

(1,153,209

)

 

 

 

 

$

(1,153,209

)
















 

 

 

 

2

Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.


 

 

 

 

See Notes to Financial Statements.

 

 





 

ANNUAL REPORT

APRIL 30, 2011

15




 

 


 

 

Schedule of Investments April 30, 2011

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Alabama — 2.3%

 

 

 

 

 

 

 

County of Jefferson Alabama, RB, Series A, 4.75%,
1/01/25

 

$

3,000

 

$

2,415,480

 

University of Alabama, RB, Series A (NPFGC), 5.00%,
7/01/34

 

 

7,125

 

 

7,188,911

 

 

 

 

 

 




 

 

 

 

 

 

9,604,391

 









Alaska — 1.3%

 

 

 

 

 

 

 

Alaska Housing Finance Corp., RB, General Housing,
Series B (NPFGC), 5.25%, 12/01/30

 

 

600

 

 

603,258

 

Borough of Matanuska-Susitna Alaska, RB, Goose
Creek Correctional Center (AGC), 6.00%, 9/01/32

 

 

4,425

 

 

4,786,036

 

 

 

 

 

 




 

 

 

 

 

 

5,389,294

 









Arizona — 0.6%

 

 

 

 

 

 

 

State of Arizona, COP, Department of Administration,
Series A (AGM):

 

 

 

 

 

 

 

5.00%, 10/01/27

 

 

1,850

 

 

1,876,603

 

5.25%, 10/01/28

 

 

800

 

 

821,320

 

 

 

 

 

 




 

 

 

 

 

 

2,697,923

 









California — 18.9%

 

 

 

 

 

 

 

Alameda Corridor Transportation Authority, Refunding
RB, CAB, Subordinate Lien, Series A (AMBAC),
5.52%, 10/01/25 (a)

 

 

4,150

 

 

3,262,771

 

Cabrillo Community College District, GO, CAB,
Election of 2004, Series B (NPFGC) (b):

 

 

 

 

 

 

 

5.18%, 8/01/37

 

 

3,250

 

 

521,203

 

4.87%, 8/01/38

 

 

7,405

 

 

1,073,947

 

California Health Facilities Financing Authority,
Refunding RB:

 

 

 

 

 

 

 

St. Joseph Health System, Series A, 5.75%,
7/01/39

 

 

775

 

 

724,842

 

Sutter Health, Series B, 5.88%, 8/15/31

 

 

1,500

 

 

1,535,970

 

California State University, RB, Systemwide, Series A
(NPFGC), 5.00%, 11/01/35

 

 

2,130

 

 

1,947,502

 

Carlsbad Unified School District, GO, Election of 2006,
Series B, 6.09%, 5/01/34 (a)

 

 

5,000

 

 

2,960,500

 

Chino Valley Unified School District, GO, Election of
2002, Series C (NPFGC), 5.25%, 8/01/30

 

 

1,200

 

 

1,213,572

 

City of San Jose California, Refunding RB, Series A,
AMT (AMBAC), 5.50%, 3/01/32

 

 

5,100

 

 

4,874,376

 

Coast Community College District California, GO,
Refunding, CAB, Election of 2002, Series C (AGM),
5.53%, 8/01/13 (a)

 

 

2,800

 

 

2,324,252

 

El Monte Union High School District California, GO,
Election of 2002, Series C (AGM), 5.25%, 6/01/28

 

 

6,110

 

 

6,265,927

 

Fresno Unified School District California, GO, Election
of 2001, Series E (AGM), 5.00%, 8/01/30

 

 

1,230

 

 

1,188,586

 

Grossmont-Cuyamaca Community College District
California, GO, Refunding, CAB, Election of 2002,
Series C (AGC), 5.80%, 8/01/30 (b)

 

 

10,030

 

 

2,798,671

 

Hartnell Community College District California, GO,
CAB, Election of 2002, Series D, 7.43%,
8/01/34 (a)

 

 

4,125

 

 

2,022,570

 

Los Angeles Community College District California,
GO, Election of 2008, Series C, 5.25%, 8/01/39

 

 

2,500

 

 

2,525,350

 

Los Angeles Municipal Improvement Corp., RB,
Series B1 (NPFGC), 4.75%, 8/01/37

 

 

3,210

 

 

2,773,600

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









California (concluded)

 

 

 

 

 

 

 

Metropolitan Water District of Southern California, RB,
Series B-1 (NPFGC):

 

 

 

 

 

 

 

5.00%, 10/01/29

 

$

4,000

 

$

4,062,720

 

5.00%, 10/01/36

 

 

2,275

 

 

2,281,598

 

Mount Diablo Unified School District California, GO,
Election of 2002 (NPFGC), 5.00%, 7/01/27

 

 

1,750

 

 

1,753,798

 

Orange County Sanitation District, COP,
Series B (AGM):

 

 

 

 

 

 

 

5.00%, 2/01/30

 

 

3,500

 

 

3,584,070

 

5.00%, 2/01/31

 

 

1,200

 

 

1,224,552

 

Port of Oakland, RB, Series K, AMT (NPFGC), 5.75%,
11/01/29

 

 

2,405

 

 

2,348,819

 

Poway Redevelopment Agency California,
Tax Allocation Bonds, Refunding, Paguay
Redevelopment Project (AMBAC), 5.13%, 6/15/33

 

 

2,000

 

 

1,617,420

 

Sacramento Unified School District California, GO,
Election of 2002 (NPFGC), 5.00%, 7/01/30

 

 

2,500

 

 

2,503,550

 

San Bernardino Community College District
California, GO, CAB, Election of 2008, Series B,
6.52%, 8/01/34 (a)

 

 

10,000

 

 

5,982,200

 

San Diego County Water Authority, COP, Refunding,
Series 2008-A (AGM), 5.00%, 5/01/38

 

 

3,000

 

 

2,934,750

 

San Diego Unified School District California, GO,
CAB, Election of 2008, Series C, 6.85%,
7/01/38 (b)

 

 

2,200

 

 

348,260

 

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

 

 

900

 

 

949,158

 

San Jose Unified School District Santa Clara County
California, GO, Election of 2002, Series B (NPFGC),
5.00%, 8/01/29

 

 

2,825

 

 

2,853,871

 

San Mateo County Community College District, GO,
Election of 2001, Series A (NPFGC), 5.00%,
9/01/26

 

 

2,725

 

 

2,762,796

 

State of California, GO:

 

 

 

 

 

 

 

5.13%, 6/01/27

 

 

30

 

 

30,005

 

5.50%, 4/01/28

 

 

5

 

 

5,033

 

Ventura County Community College District, GO,
Election of 2002, Series B (NPFGC), 5.00%,
8/01/30

 

 

3,150

 

 

3,149,748

 

Yosemite Community College District, GO, CAB,
Election of 2004, Series D, 6.55%, 8/01/36 (b)

 

 

15,000

 

 

2,528,100

 

 

 

 

 

 




 

 

 

 

 

 

78,934,087

 









Colorado — 1.5%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Covenant
Retirement Communities, Series A (Radian):

 

 

 

 

 

 

 

5.50%, 12/01/27

 

 

1,600

 

 

1,464,720

 

5.50%, 12/01/33

 

 

900

 

 

784,539

 

E-470 Public Highway Authority Colorado, Refunding
RB, CAB, Series B (NPFGC), 5.57%, 9/01/29 (b)

 

 

9,000

 

 

2,150,640

 

Regional Transportation District, COP, Series A,
5.38%, 6/01/31

 

 

1,885

 

 

1,912,653

 

 

 

 

 

 




 

 

 

 

 

 

6,312,552

 










 

 

 

See Notes to Financial Statements.

 




16

ANNUAL REPORT

APRIL 30, 2011




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Florida — 9.3%

 

 

 

 

 

 

 

City of Tallahassee Florida, RB (NPFGC), 5.00%,
10/01/32

 

$

2,700

 

$

2,671,893

 

County of Duval Florida, COP, Master Lease Program
(AGM), 5.00%, 7/01/33

 

 

4,050

 

 

3,877,065

 

County of Miami-Dade Florida, GO, Building Better
Communities Program, Series B, 6.38%, 7/01/28

 

 

3,300

 

 

3,667,323

 

County of Miami-Dade Florida, RB, Water & Sewer
System (AGM), 5.00%, 10/01/39

 

 

4,000

 

 

3,881,760

 

County of Miami-Dade Florida, Refunding RB,
Miami International Airport, AMT (AGC), 5.00%,
10/01/40

 

 

8,200

 

 

7,144,004

 

County of Orange Florida, Refunding RB, Series B
(NPFGC), 5.13%, 1/01/32

 

 

2,200

 

 

2,168,122

 

Florida State Department of Environmental
Protection, RB, Series B (NPFGC), 5.00%,
7/01/27

 

 

2,545

 

 

2,603,306

 

Highlands County Health Facilities Authority, RB,
Adventist Health System/Sunbelt, Series B,
6.00%, 11/15/37

 

 

1,250

 

 

1,278,437

 

Orange County School Board, COP, Series A:

 

 

 

 

 

 

 

(AGC), 5.50%, 8/01/34

 

 

3,550

 

 

3,577,761

 

(NPFGC), 5.00%, 8/01/31

 

 

5,000

 

 

4,943,150

 

Sarasota County Public Hospital District, RB,
Sarasota Memorial Hospital Project, Series A,
5.63%, 7/01/39

 

 

375

 

 

374,704

 

South Florida Water Management District, COP
(AGC), 5.00%, 10/01/22

 

 

2,700

 

 

2,810,592

 

 

 

 

 

 




 

 

 

 

 

 

38,998,117

 









Georgia — 0.9%

 

 

 

 

 

 

 

Augusta-Richmond County Georgia, RB (AGM),
5.25%, 10/01/39

 

 

2,820

 

 

2,835,651

 

Gwinnett County Hospital Authority, Refunding RB,
Gwinnett Hospital System, Series D (AGM),
5.50%, 7/01/41

 

 

1,125

 

 

1,081,721

 

 

 

 

 

 




 

 

 

 

 

 

3,917,372

 









Illinois — 22.0%

 

 

 

 

 

 

 

Chicago Board of Education Illinois, GO, Refunding,
Chicago School Reform Board, Series A (NPFGC),
5.50%, 12/01/26

 

 

2,000

 

 

2,016,280

 

Chicago Park District, GO, Harbor Facilities, Series C,
5.25%, 1/01/40

 

 

750

 

 

746,640

 

City of Chicago Illinois, ARB, General, Third Lien,
Series B-2, AMT:

 

 

 

 

 

 

 

(AGM), 5.75%, 1/01/23

 

 

3,400

 

 

3,485,850

 

(AGM), 5.75%, 1/01/24

 

 

4,000

 

 

4,103,000

 

(Syncora), 6.00%, 1/01/29

 

 

3,300

 

 

3,338,544

 

City of Chicago Illinois, GO, CAB, City Colleges
(NPFGC), 5.90%, 1/01/31 (b)

 

 

13,000

 

 

3,475,290

 

City of Chicago Illinois, RB, Series A (AGC), 5.00%,
1/01/38

 

 

4,000

 

 

3,812,920

 

City of Chicago Illinois, Refunding ARB, General,
Third Lien, Series A-2, AMT (AGM), 5.75%,
1/01/21

 

 

2,665

 

 

2,749,161

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Illinois (concluded)

 

 

 

 

 

 

 

City of Chicago Illinois, Refunding RB, General
Airport, Third Lien, Series A, AMT (NPFGC):

 

 

 

 

 

 

 

5.75%, 1/01/21

 

$

13,665

 

$

13,744,257

 

5.38%, 1/01/32

 

 

10,000

 

 

9,231,000

 

County of Cook Illinois, GO, Capital Improvement,
Series C (AMBAC), 5.50%, 11/15/12 (c)

 

 

5,080

 

 

5,469,026

 

Illinois Sports Facilities Authority, RB, State Tax
Supported (AMBAC), 5.50%, 6/15/30

 

 

28,525

 

 

28,356,132

 

Metropolitan Pier & Exposition Authority, RB, CAB,
McCormick Place Expansion Project, Series A
(NPFGC), 5.82%, 6/15/30 (b)

 

 

15,000

 

 

4,537,200

 

Metropolitan Pier & Exposition Authority, Refunding
RB, CAB, McCormick Place Expansion Project,
Series B (AGM) (b):

 

 

 

 

 

 

 

5.83%, 6/15/27

 

 

1,750

 

 

671,317

 

6.25%, 6/15/44

 

 

4,625

 

 

493,534

 

Railsplitter Tobacco Settlement Authority, RB,
6.00%, 6/01/28

 

 

900

 

 

865,566

 

Regional Transportation Authority, RB, Series B
(NPFGC), 5.75%, 6/01/33

 

 

3,200

 

 

3,318,080

 

State of Illinois, RB, Build Illinois, Series B, 5.25%,
6/15/34

 

 

1,700

 

 

1,644,648

 

 

 

 

 

 




 

 

 

 

 

 

92,058,445

 









Indiana — 3.9%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, RB:

 

 

 

 

 

 

 

Series A (NPFGC), 5.00%, 1/01/37

 

 

2,750

 

 

2,587,062

 

Series B, 5.75%, 1/01/34

 

 

550

 

 

555,638

 

Indianapolis Local Public Improvement Bond Bank,
Refunding RB:

 

 

 

 

 

 

 

Airport Authority Project, Series B, AMT (NPFGC),
5.25%, 1/01/28

 

 

2,370

 

 

2,298,142

 

Airport Authority Project, Series B, AMT (NPFGC),
5.25%, 1/01/30

 

 

5,055

 

 

4,784,103

 

Waterworks Project, Series A, 5.75%, 1/01/38

 

 

1,300

 

 

1,323,257

 

Waterworks Project, Series A (AGC), 5.25%,
1/01/29

 

 

2,350

 

 

2,438,430

 

Waterworks Project, Series A (AGC), 5.50%,
1/01/38

 

 

2,450

 

 

2,489,616

 

 

 

 

 

 




 

 

 

 

 

 

16,476,248

 









Iowa — 1.9%

 

 

 

 

 

 

 

Iowa Finance Authority, RB, Series A (AGC),
5.63%, 8/15/37

 

 

7,700

 

 

7,742,350

 









Louisiana — 0.5%

 

 

 

 

 

 

 

Louisiana Public Facilities Authority, Refunding RB,
Christus Health, Series B (AGC), 6.50%, 7/01/30

 

 

1,800

 

 

1,943,964

 









Massachusetts — 2.9%

 

 

 

 

 

 

 

Massachusetts HFA, RB, AMT (AGM):

 

 

 

 

 

 

 

Rental Mortgage, Series C, 5.60%, 1/01/45

 

 

4,000

 

 

3,945,960

 

S/F Housing, Series 128, 4.80%, 12/01/27

 

 

2,200

 

 

2,075,788

 

Massachusetts HFA, Refunding RB, Series C, AMT:

 

 

 

 

 

 

 

5.00%, 12/01/30

 

 

3,000

 

 

2,794,110

 

5.35%, 12/01/42

 

 

1,525

 

 

1,393,240

 

Massachusetts Water Resources Authority, Refunding
RB, General, Series A (NPFGC), 5.00%, 8/01/34

 

 

1,800

 

 

1,831,770

 

 

 

 

 

 




 

 

 

 

 

 

12,040,868

 










 

 

 

See Notes to Financial Statements.

 


ANNUAL REPORT

APRIL 30, 2011

17




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Michigan — 8.7%

 

 

 

 

 

 

 

City of Detroit Michigan, RB, System, Second Lien,
Series B (NPFGC), 5.00%, 7/01/36

 

$

3,150

 

$

2,803,059

 

City of Detroit Michigan, Refunding RB:

 

 

 

 

 

 

 

Second Lien, Series E (BHAC), 5.75%, 7/01/31

 

 

8,300

 

 

8,485,007

 

Series D (NPFGC), 5.00%, 7/01/28

 

 

6,000

 

 

5,439,540

 

Series D (NPFGC), 5.00%, 7/01/33

 

 

1,000

 

 

886,010

 

Kalamazoo Hospital Finance Authority, RB, Bronson
Methodist Hospital (AGM), 5.25%, 5/15/36

 

 

575

 

 

535,630

 

Michigan Higher Education Student Loan Authority,
Refunding RB, Student Loan, Series XVII-G, AMT
(AMBAC), 5.20%, 9/01/20

 

 

2,140

 

 

2,150,999

 

Michigan State HDA, RB, Series C, AMT, 5.50%,
12/01/28

 

 

1,455

 

 

1,400,976

 

Michigan Strategic Fund, RB, Detroit Edison Co.
Project, Series C, AMT (Syncora), 5.45%,
12/15/32

 

 

5,800

 

 

5,456,698

 

Michigan Strategic Fund, Refunding RB, Detroit
Edison Co. Project, Series A, AMT (Syncora),
5.50%, 6/01/30

 

 

1,700

 

 

1,628,260

 

Royal Oak Hospital Finance Authority Michigan,
Refunding RB, William Beaumont Hospital,
8.25%, 9/01/39

 

 

3,510

 

 

3,979,533

 

State of Michigan, RB, GAN (AGM), 5.25%, 9/15/26

 

 

3,350

 

 

3,501,018

 

 

 

 

 

 




 

 

 

 

 

 

36,266,730

 









Minnesota — 0.7%

 

 

 

 

 

 

 

City of Minneapolis Minnesota, Refunding RB,
Fairview Health Services, Series B (AGC), 6.50%,
11/15/38

 

 

2,700

 

 

2,876,796

 









Nevada — 8.4%

 

 

 

 

 

 

 

City of Carson City Nevada, RB, Carson-Tahoe
Hospital Project, Series A (Radian), 5.50%,
9/01/33

 

 

4,100

 

 

3,537,972

 

City of Las Vegas Nevada, GO, Limited Tax,
Performing Arts Center, 6.00%, 4/01/34

 

 

1,150

 

 

1,221,323

 

County of Clark Nevada, RB (NPFGC):

 

 

 

 

 

 

 

Southwest Gas Corp. Project, Series D, AMT,
5.25%, 3/01/38

 

 

10,400

 

 

9,195,264

 

Subordinate Lien, Series A-2, 5.00%, 7/01/30

 

 

2,000

 

 

1,895,900

 

Subordinate Lien, Series A-2, 5.00%, 7/01/36

 

 

19,100

 

 

17,299,252

 

Las Vegas Valley Water District, GO, Refunding,
Series A (NPFGC), 5.00%, 6/01/24

 

 

2,050

 

 

2,127,839

 

 

 

 

 

 




 

 

 

 

 

 

35,277,550

 









New Jersey — 7.5%

 

 

 

 

 

 

 

New Jersey EDA, RB:

 

 

 

 

 

 

 

Cigarette Tax (Radian), 5.75%, 6/15/29

 

 

710

 

 

645,284

 

Cigarette Tax (Radian), 5.50%, 6/15/31

 

 

1,285

 

 

1,122,229

 

Motor Vehicle Surcharge, Series A (NPFGC),
5.25%, 7/01/31

 

 

20,065

 

 

20,092,489

 

School Facilities Construction, Series O, 5.13%,
3/01/30

 

 

7,500

 

 

7,477,050

 

New Jersey Transportation Trust Fund Authority, RB,
Transportation System, Series A (NPFGC), 5.75%,
6/15/25

 

 

2,000

 

 

2,171,720

 

 

 

 

 

 




 

 

 

 

 

 

31,508,772

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









New York — 0.5%

 

 

 

 

 

 

 

New York State Dormitory Authority, ERB, Series B,
5.75%, 3/15/36

 

$

2,000

 

$

2,160,040

 









North Carolina — 0.4%

 

 

 

 

 

 

 

North Carolina Medical Care Commission, RB, Novant
Health Obligation, Series A, 4.75%, 11/01/43

 

 

2,300

 

 

1,860,424

 









Ohio — 0.5%

 

 

 

 

 

 

 

County of Lucas Ohio, Refunding RB, Promedica
Healthcare, Series A, 6.50%, 11/15/37

 

 

725

 

 

756,451

 

Ohio Higher Educational Facility Commission,
Refunding RB, Summa Health System, 2010 Project
(AGC), 5.25%, 11/15/40

 

 

1,400

 

 

1,316,700

 

 

 

 

 

 




 

 

 

 

 

 

2,073,151

 









Pennsylvania — 0.7%

 

 

 

 

 

 

 

Pennsylvania HFA, Refunding RB, Series 99A, AMT,
5.25%, 10/01/32

 

 

2,000

 

 

1,944,780

 

Pennsylvania Turnpike Commission, RB, Subordinate,
Special Motor License Fund, 6.00%, 12/01/36

 

 

775

 

 

832,815

 

 

 

 

 

 




 

 

 

 

 

 

2,777,595

 









Puerto Rico — 2.3%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.38%, 8/01/39

 

 

4,700

 

 

4,871,644

 

Puerto Rico Sales Tax Financing Corp., Refunding RB:

 

 

 

 

 

 

 

CAB, Series A (NPFGC), 5.73%, 8/01/41 (b)

 

 

28,000

 

 

3,740,800

 

First Sub-Series C, 6.00%, 8/01/39

 

 

1,050

 

 

1,052,835

 

 

 

 

 

 




 

 

 

 

 

 

9,665,279

 









South Carolina — 0.7%

 

 

 

 

 

 

 

South Carolina Jobs-EDA, Refunding RB, Palmetto
Health, Series A (AGM), 6.50%, 8/01/39 (d)

 

 

320

 

 

324,742

 

South Carolina Transportation Infrastructure Bank,
RB, Series A, 5.25%, 10/01/40

 

 

2,500

 

 

2,466,700

 

 

 

 

 

 




 

 

 

 

 

 

2,791,442

 









Texas — 12.1%

 

 

 

 

 

 

 

Bell County Health Facility Development Corp. Texas,
RB, Lutheran General Health Care System, 6.50%,
7/01/19 (e)

 

 

1,000

 

 

1,227,320

 

City of Houston Texas, Refunding RB, Combined,
First Lien, Series A (AGC), 6.00%, 11/15/35

 

 

2,850

 

 

3,121,690

 

Comal ISD, GO, School Building (PSF-GTD), 5.00%,
2/01/36

 

 

2,500

 

 

2,535,700

 

Dallas-Fort Worth International Airport Facilities
Improvement Corp., Refunding RB, Joint Series A,
AMT (NPFGC):

 

 

 

 

 

 

 

5.88%, 11/01/17

 

 

1,835

 

 

1,873,315

 

5.88%, 11/01/18

 

 

2,145

 

 

2,189,788

 

5.88%, 11/01/19

 

 

2,385

 

 

2,415,695

 

Lewisville ISD Texas, GO, Refunding, CAB, School
Building (NPFGC), 4.67%, 8/15/24 (b)

 

 

4,150

 

 

2,169,744

 

Lone Star College System, GO, 5.00%, 8/15/33

 

 

4,800

 

 

4,950,528

 

Mansfield ISD Texas, GO, School Building (PSF-GTD),
5.00%, 2/15/33

 

 

2,300

 

 

2,367,390

 

North Texas Tollway Authority, Refunding RB, First Tier:

 

 

 

 

 

 

 

Series A, 6.00%, 1/01/28

 

 

3,380

 

 

3,568,672

 

System (NPFGC), 5.75%, 1/01/40

 

 

12,300

 

 

11,945,883

 

Texas State Turnpike Authority, RB, First Tier,
Series A (AMBAC):

 

 

 

 

 

 

 

5.75%, 8/15/38

 

 

7,200

 

 

7,006,104

 

5.00%, 8/15/42

 

 

6,045

 

 

5,168,294

 

 

 

 

 

 




 

 

 

 

 

 

50,540,123

 










 

 

 

See Notes to Financial Statements.

 




18

ANNUAL REPORT

APRIL 30, 2011




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Utah — 4.1%

 

 

 

 

 

 

 

City of Salt Lake City Utah, Refunding RB, IHC
Hospitals Inc. (NPFGC), 6.30%, 2/15/15 (e)

 

$

15,000

 

$

16,923,900

 









Vermont — 0.00%

 

 

 

 

 

 

 

Vermont HFA, Refunding RB, Multiple Purpose,
Series C, AMT (AGM), 5.50%, 11/01/38 (f)

 

 

75

 

 

75,571

 









Virginia — 1.7%

 

 

 

 

 

 

 

Roanoke Economic Development Authority,
Refunding RB, Carilion Health System, Series B
(AGM), 5.00%, 7/01/38

 

 

5,250

 

 

4,973,587

 

Virginia HDA, RB, Sub-Series H-1 (NPFGC),
5.35%, 7/01/31

 

 

2,125

 

 

2,125,744

 

 

 

 

 

 




 

 

 

 

 

 

7,099,331

 









Washington — 0.5%

 

 

 

 

 

 

 

Washington Health Care Facilities Authority, RB,
Providence Health & Services, Series A:

 

 

 

 

 

 

 

5.00%, 10/01/39

 

 

1,525

 

 

1,354,063

 

5.25%, 10/01/39

 

 

850

 

 

784,116

 

 

 

 

 

 




 

 

 

 

 

 

2,138,179

 









Wisconsin — 0.4%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority,
RB, Ascension Health Senior Credit Group,
5.00%, 11/15/33

 

 

1,850

 

 

1,740,369

 









Total Municipal Bonds — 115.2%

 

 

 

 

 

481,890,863

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

 

 

 

 

 

 









California — 11.3%

 

 

 

 

 

 

 

Anaheim Public Financing Authority California, RB,
Electric System Distribution Facilities, Series A
(AGM), 5.00%, 10/01/31

 

 

1,244

 

 

1,241,138

 

California State University, Refunding RB, Systemwide,
Series A (AGM), 5.00%, 11/01/32

 

 

7,000

 

 

6,671,980

 

Golden State Tobacco Securitization Corp., RB,
Enhanced Asset-Backed, Series B (CIFG),
5.63%, 6/01/13 (c)

 

 

10,000

 

 

10,993,700

 

Los Angeles Community College District California,
GO, Series A:

 

 

 

 

 

 

 

Election of 2001 (NPFGC), 5.00%, 8/01/32

 

 

6,120

 

 

6,056,352

 

Election of 2008, 6.00%, 8/01/33

 

 

2,639

 

 

2,848,590

 

Orange County Sanitation District, COP (NPFGC),
5.00%, 2/01/33

 

 

2,749

 

 

2,758,459

 

San Diego Community College District California, GO,
Election of 2002, 5.25%, 8/01/33

 

 

509

 

 

516,974

 

San Diego County Water Authority, COP, Refunding:

 

 

 

 

 

 

 

Series 2002-A (NPFGC), 5.00%, 5/01/32

 

 

9,003

 

 

9,013,316

 

Series 2008-A (AGM), 5.00%, 5/01/33

 

 

5,170

 

 

5,176,049

 

Tamalpais Union High School District California, GO,
Election of 2001 (AGM), 5.00%, 8/01/28

 

 

1,950

 

 

1,953,998

 

 

 

 

 

 




 

 

 

 

 

 

47,230,556

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

Par
(000)

 

Value

 







Colorado — 0.3%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, Refunding RB,
Catholic Healthcare, Series A, 5.50%, 7/01/34

 

$

1,220

 

$

1,221,164

 









District of Columbia — 0.3%

 

 

 

 

 

 

 

District of Columbia, RB, Series A, 5.50%, 12/01/30

 

 

1,320

 

 

1,435,658

 









Florida — 9.9%

 

 

 

 

 

 

 

City of Tallahassee Florida, RB (NPFGC), 5.00%,
10/01/37

 

 

6,000

 

 

5,828,400

 

County of Miami-Dade Florida, RB, Water & Sewer
System (AGM), 5.00%, 10/01/39

 

 

8,728

 

 

8,470,125

 

County of Seminole Florida, Refunding RB, Series B
(NPFGC), 5.25%, 10/01/31

 

 

6,300

 

 

6,499,836

 

Florida State Board of Education, GO, Series D,
5.00%, 6/01/37

 

 

2,399

 

 

2,420,196

 

Jacksonville Electric Authority Florida, RB,
Sub-Series A, 5.63%, 10/01/32

 

 

4,310

 

 

4,532,698

 

Miami-Dade County School Board, COP, Refunding,
Series B (AGC), 5.25%, 5/01/27

 

 

11,350

 

 

11,485,633

 

Orange County School Board, COP, Series A (NPFGC),
5.00%, 8/01/30

 

 

2,000

 

 

1,990,060

 

 

 

 

 

 




 

 

 

 

 

 

41,226,948

 









Georgia — 3.5%

 

 

 

 

 

 

 

Augusta-Richmond County Georgia, RB (AGM),
5.25%, 10/01/34

 

 

5,000

 

 

5,057,450

 

City of Atlanta Georgia, RB, General, Subordinate
Lien, Series C (AGM), 5.00%, 1/01/33

 

 

10,000

 

 

9,753,800

 

 

 

 

 

 




 

 

 

 

 

 

14,811,250

 









Hawaii — 1.5%

 

 

 

 

 

 

 

Honolulu City & County Board of Water Supply, RB,
Series A (NPFGC), 5.00%, 7/01/33

 

 

6,000

 

 

6,050,340

 









Illinois — 3.9%

 

 

 

 

 

 

 

City of Chicago Illinois, Refunding RB, Second Lien
(AGM), 5.25%, 11/01/33

 

 

14,429

 

 

14,481,987

 

Illinois State Toll Highway Authority, RB, Series B,
5.50%, 1/01/33

 

 

2,000

 

 

2,021,733

 

 

 

 

 

 




 

 

 

 

 

 

16,503,720

 









Massachusetts — 4.0%

 

 

 

 

 

 

 

Massachusetts School Building Authority, RB,
Series A (AGM), 5.00%, 8/15/30

 

 

16,500

 

 

16,901,517

 









Nevada — 1.9%

 

 

 

 

 

 

 

City of Las Vegas Nevada, GO, Limited Tax, Performing
Arts Center, 6.00%, 4/01/39

 

 

5,007

 

 

5,287,534

 

Clark County Water Reclamation District, GO, Series B,
5.75%, 7/01/34

 

 

2,429

 

 

2,617,544

 

 

 

 

 

 




 

 

 

 

 

 

7,905,078

 









New Hampshire — 2.4%

 

 

 

 

 

 

 

New Hampshire Health & Education Facilities
Authority, RB, Dartmouth-Hitchcock Obligation
(AGM), 5.50%, 8/01/27

 

 

10,000

 

 

10,226,200

 










 

 

 

See Notes to Financial Statements.

 

 




ANNUAL REPORT

APRIL 30, 2011

19




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

Par
(000)

 

Value

 









New York — 5.6%

 

 

 

 

 

 

 

Erie County Industrial Development Agency, RB,
City School District of Buffalo Project, Series A
(AGM), 5.75%, 5/01/28

 

$

2,007

 

$

2,162,501

 

New York City Municipal Water Finance Authority, RB,
Fiscal 2009, Series A, 5.75%, 6/15/40

 

 

3,509

 

 

3,765,067

 

New York State Dormitory Authority, ERB, Series B,
5.75%, 3/15/36

 

 

1,545

 

 

1,668,631

 

New York State Thruway Authority, RB, Series G
(AGM), 5.00%, 1/01/32

 

 

14,200

 

 

14,283,922

 

Triborough Bridge & Tunnel Authority, RB, General,
Series A-2, 5.25%, 11/15/34

 

 

1,500

 

 

1,534,635

 

 

 

 

 

 




 

 

 

 

 

 

23,414,756

 









North Carolina — 0.5%

 

 

 

 

 

 

 

North Carolina HFA, RB, Series 31-A, AMT, 5.25%,
7/01/38

 

 

2,369

 

 

2,241,157

 









Ohio — 0.2%

 

 

 

 

 

 

 

State of Ohio, RB, Cleveland Clinic Health, Series B,
5.50%, 1/01/34

 

 

780

 

 

775,936

 









South Carolina — 1.2%

 

 

 

 

 

 

 

South Carolina State Public Service Authority, RB,
Santee Cooper, Series A, 5.50%, 1/01/38

 

 

4,695

 

 

4,921,956

 









Texas — 2.7%

 

 

 

 

 

 

 

Clear Creek ISD Texas, GO, Refunding, School
Building (PSF-GTD), 5.00%, 2/15/33

 

 

5,900

 

 

6,159,305

 

Cypress-Fairbanks ISD, GO, Refunding, Schoolhouse
(PSF-GTD), 5.00%, 2/15/32

 

 

4,750

 

 

4,911,263

 

 

 

 

 

 




 

 

 

 

 

 

11,070,568

 









Virginia — 0.1%

 

 

 

 

 

 

 

Fairfax County IDA Virginia, Refunding RB,
Health Care, Inova Health System, Series A,
5.50%, 5/15/35

 

 

450

 

 

451,409

 









Washington — 0.6%

 

 

 

 

 

 

 

Central Puget Sound Regional Transit Authority, RB,
Series A (AGM), 5.00%, 11/01/32

 

 

2,504

 

 

2,550,412

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 49.9%

 

 

 

 

 

208,938,625

 









Total Long-Term Investments
(Cost — $706,155,471) — 165.1%

 

 

 

 

 

690,829,488

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 








FFI Institutional Tax-Exempt Fund, 0.23% (h)(i)

 

 

4,098,484

 

 

4,098,484

 









Total Short-Term Securities
(Cost — $4,098,484) — 1.0%

 

 

 

 

 

4,098,484

 









Total Investments (Cost — $710,253,955*) — 166.1%

 

 

 

 

 

694,927,972

 

Other Assets Less Liabilities — 1.8%

 

 

 

 

 

7,754,791

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (25.7)%

 

 

 

 

 

(107,688,619

)

Preferred Shares, at Redemption Value — (42.2)%

 

 

 

 

 

(176,648,151

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

418,345,993

 

 

 

 

 

 





 

 

*

The cost and unrealized appreciation (depreciation) of investments as of April 30, 2011, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

 

 

Aggregate cost

 

$

602,790,710

 

 

 

 




 

Gross unrealized appreciation

 

$

10,647,665

 

 

Gross unrealized depreciation

 

 

(26,100,189

)

 

 

 




 

Net unrealized depreciation

 

$

(15,452,524

)

 

 

 





 

 

(a)

Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date.

 

 

(b)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(c)

US 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.

 

 

(d)

When-issued security. Unsettled when-issued transactions were as follows:


 

 

 

 

 

 

 

 

 

 







 

Counterparty

 

Value

 

Unrealized
Appreciation

 

 







 

Bank of America Merrill Lynch

 

$

324,742

 

$

9,866

 

 










 

 

(e)

Security is collateralized by Municipal or US Treasury obligations.

 

 

(f)

Variable rate security. Rate shown is as of report date.

 

 

(g)

Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

 

(h)

Investments in companies considered to be an affiliate of the Fund during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

Affiliate

 

Shares Held at
April 30, 2010

 

Net
Activity

 

Shares Held at
April 30, 2011

 

Income

 

 











 

FFI Institutional Tax-Exempt Fund

 

 

8,066,496

 

 

(3,968,012

)

 

4,098,484

 

$

12,694

 

 
















 

 

(i)

Represents the current yield as of report date.

 

 

Financial futures contracts sold as of April 30,2011 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

Contracts

 

Issue

 

Exchange

 

Expiration

 

Notional
Value

 

Unrealized
Depreciation

 

 













 

235

 

10-Year U.S.

 

Chicago Board

 

June 2011

 

$

27,850,725

 

$

(617,321

)

 

 

 

Treasury Note

 

of Trade

 

 

 

 

 

 

 

 

 

 
















 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs are summarized in three broad levels for financial statement purposes as follows:

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)


 

 

 

See Notes to Financial Statements.

 




20

ANNUAL REPORT

APRIL 30, 2011




 

 



 

 

Schedule of Investments (concluded)

BlackRock MuniYield Quality Fund, Inc. (MQY)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the inputs used as of April 30, 2011 in determining the fair valuation of the Fund’s investments and derivative financial instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

 

$

690,829,488

 

 

 

$

690,829,488

 

Short-Term
Securities

 

$

4,098,484

 

 

 

 

 

 

4,098,484

 

 

 













Total

 

$

4,098,484

 

$

690,829,488

 

 

 

$

694,927,972

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Derivative Financial
Instruments2

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate
contracts

 

$

(617,321

)

 

 

 

 

$

(617,321

)
















 

 

 

 

2

Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.


 

 

 

See Notes to Financial Statements.

 

 




ANNUAL REPORT

APRIL 30, 2011

21




 

 


 

 

Schedule of Investments April 30, 2011

BlackRock MuniYield Quality Fund II, Inc. (MQT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Alabama — 0.9%

 

 

 

 

 

 

 

Birmingham Special Care Facilities Financing
Authority, RB, Children’s Hospital (AGC), 6.00%,
6/01/39

 

$

650

 

$

679,842

 

County of Jefferson Alabama, RB, Series A, 4.75%,
1/01/25

 

 

2,000

 

 

1,610,320

 

 

 

 

 

 




 

 

 

 

 

 

2,290,162

 









Arizona — 1.2%

 

 

 

 

 

 

 

State of Arizona, COP, Department of Administration,
Series A (AGM):

 

 

 

 

 

 

 

5.00%, 10/01/27

 

 

2,300

 

 

2,333,074

 

5.00%, 10/01/29

 

 

925

 

 

928,746

 

 

 

 

 

 




 

 

 

 

 

 

3,261,820

 









California — 16.9%

 

 

 

 

 

 

 

Alameda Corridor Transportation Authority, Refunding
RB, CAB, Subordinate Lien, Series A (AMBAC),
5.44%, 10/01/25 (a)

 

 

7,150

 

 

5,621,401

 

Antelope Valley Community College District, GO,
Election of 2004, Series B (NPFGC), 5.25%,
8/01/39

 

 

550

 

 

536,976

 

Cabrillo Community College District, GO, CAB,
Election of 2004, Series B (NPFGC) (b):

 

 

 

 

 

 

 

5.18%, 8/01/37

 

 

2,100

 

 

336,777

 

4.87%, 8/01/38

 

 

4,800

 

 

696,144

 

California Health Facilities Financing Authority,
Refunding RB:

 

 

 

 

 

 

 

St. Joseph Health System, Series A, 5.75%,
7/01/39

 

 

500

 

 

467,640

 

Sutter Health, Series B, 5.88%, 8/15/31

 

 

1,000

 

 

1,023,980

 

Coast Community College District California, GO,
Refunding, CAB, Election of 2002, Series C (AGM),
5.53%, 8/01/13 (a)

 

 

1,800

 

 

1,494,162

 

East Side Union High School District, GO, CAB (AGM),
4.92%, 8/01/29 (b)

 

 

15,000

 

 

4,273,200

 

El Monte Union High School District California, GO,
Election of 2002, Series C (AGM), 5.25%, 6/01/28

 

 

4,000

 

 

4,102,080

 

Fairfield-Suisun Unified School District California, GO,
Election of 2002 (NPFGC), 5.50%, 8/01/28

 

 

2,770

 

 

2,899,165

 

Fresno Unified School District California, GO, Election
of 2001, Series E (AGM), 5.00%, 8/01/30

 

 

800

 

 

773,064

 

Los Angeles Community College District California, GO,
Election of 2001, Series A (AGM), 5.00%, 8/01/32

 

 

2,200

 

 

2,182,752

 

Metropolitan Water District of Southern California, RB,
Series B-1 (NPFGC):

 

 

 

 

 

 

 

5.00%, 10/01/29

 

 

2,600

 

 

2,640,768

 

5.00%, 10/01/36

 

 

1,475

 

 

1,479,277

 

Monterey Peninsula Community College District, GO,
CAB, Series C (AGM), 5.08%, 8/01/28 (b)

 

 

11,975

 

 

3,815,115

 

Palm Springs Financing Authority, Refunding RB,
Convention Center Project, Series A (NPFGC),
5.50%, 11/01/29

 

 

2,900

 

 

2,908,178

 

Port of Oakland, RB, Series K, AMT (NPFGC),
5.75%, 11/01/29

 

 

2,000

 

 

1,953,280

 

Poway Redevelopment Agency California, Tax
Allocation Bonds, Refunding, Paguay Redevelopment
Project (AMBAC), 5.13%, 6/15/33

 

 

1,250

 

 

1,010,888

 

Sacramento Unified School District California, GO,
Election of 2002 (NPFGC), 5.00%, 7/01/30

 

 

1,600

 

 

1,602,272

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









California (concluded)

 

 

 

 

 

 

 

San Diego County Water Authority, COP, Refunding,
Series 2008-A (AGM), 5.00%, 5/01/38

 

$

2,015

 

$

1,971,174

 

San Diego Unified School District California, GO, CAB,
Election of 2008, Series C, 6.85%, 7/01/38 (b)

 

 

1,400

 

 

221,620

 

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

 

 

575

 

 

606,407

 

State of California, GO, 5.13%, 6/01/27

 

 

20

 

 

20,003

 

Ventura County Community College District, GO,
Election of 2002, Series B (NPFGC), 5.00%,
8/01/30

 

 

2,025

 

 

2,024,838

 

Yosemite Community College District, GO, CAB,
Election of 2004, Series D, 6.55%, 8/01/36 (b)

 

 

2,000

 

 

337,080

 

 

 

 

 

 




 

 

 

 

 

 

44,998,241

 









Colorado — 1.0%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Covenant
Retirement Communities, Series A (Radian):

 

 

 

 

 

 

 

5.50%, 12/01/27

 

 

200

 

 

183,090

 

5.50%, 12/01/33

 

 

675

 

 

588,404

 

E-470 Public Highway Authority Colorado, Refunding
RB, CAB, Series B (NPFGC), 5.63%, 9/01/32 (b)

 

 

5,500

 

 

1,022,945

 

Regional Transportation District, COP, Series A,
5.38%, 6/01/31

 

 

1,000

 

 

1,014,670

 

 

 

 

 

 




 

 

 

 

 

 

2,809,109

 









Florida — 19.6%

 

 

 

 

 

 

 

Broward County School Board Florida, COP, Series A
(AGM), 5.25%, 7/01/33

 

 

1,400

 

 

1,381,842

 

County of Duval Florida, COP, Master Lease Program
(AGM), 5.00%, 7/01/33

 

 

2,600

 

 

2,488,980

 

County of Miami-Dade Florida, RB:

 

 

 

 

 

 

 

Jackson Health System (AGC), 5.63%, 6/01/34

 

 

1,000

 

 

1,011,270

 

Water & Sewer System (AGM), 5.00%, 10/01/39

 

 

6,900

 

 

6,696,036

 

County of Miami-Dade Florida, Refunding RB, Miami
International Airport, AMT (AGC), 5.00%, 10/01/40

 

 

12,550

 

 

10,933,811

 

County of Orange Florida, Refunding RB, Series B
(NPFGC), 5.13%, 1/01/32

 

 

1,575

 

 

1,552,178

 

Highlands County Health Facilities Authority, RB:

 

 

 

 

 

 

 

Adventist Health System/Sunbelt, Series B,
6.00%, 11/15/37

 

 

550

 

 

562,513

 

Adventist, Series C, 5.25%, 11/15/36 (c)

 

 

4,525

 

 

4,241,101

 

Hillsborough County Aviation Authority Florida, RB,
Series A, AMT (AGC), 5.38%, 10/01/33

 

 

3,250

 

 

3,141,027

 

Miami-Dade County Expressway Authority, RB,
Series A (AGC), 5.00%, 7/01/35

 

 

5,000

 

 

4,829,550

 

Miami-Dade County School Board, COP, Refunding,
Series B (AGC), 5.25%, 5/01/31

 

 

725

 

 

728,371

 

Orange County School Board, COP, Series A:

 

 

 

 

 

 

 

(AGC), 5.50%, 8/01/34

 

 

3,400

 

 

3,426,588

 

(NPFGC), 5.00%, 8/01/31

 

 

9,000

 

 

8,897,670

 

Sarasota County Public Hospital District, RB,
Sarasota Memorial Hospital Project, Series A,
5.63%, 7/01/39

 

 

250

 

 

249,803

 

South Florida Water Management District, COP (AGC),
5.00%, 10/01/22

 

 

1,800

 

 

1,873,728

 

 

 

 

 

 




 

 

 

 

 

 

52,014,468

 










 

 

 

See Notes to Financial Statements.

 


22

ANNUAL REPORT

APRIL 30, 2011




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund II, Inc (MQT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Georgia — 1.0%

 

 

 

 

 

 

 

Augusta-Richmond County Georgia, RB (AGM),
5.25%, 10/01/39

 

$

1,880

 

$

1,890,434

 

Gwinnett County Hospital Authority, Refunding RB,
Gwinnett Hospital System, Series D (AGM), 5.50%,
7/01/41

 

 

730

 

 

701,917

 

 

 

 

 

 




 

 

 

 

 

 

2,592,351

 









Illinois — 21.5%

 

 

 

 

 

 

 

Chicago Board of Education Illinois, GO, Refunding,
Chicago School Reform Board, Series A (NPFGC),
5.50%, 12/01/26

 

 

2,500

 

 

2,520,350

 

Chicago Park District, GO, Harbor Facilities, Series C,
5.25%, 1/01/40

 

 

500

 

 

497,760

 

City of Chicago Illinois, ARB, General, Third Lien,
Series B-2, AMT:

 

 

 

 

 

 

 

(AGM), 5.75%, 1/01/23

 

 

5,200

 

 

5,331,300

 

(Syncora), 6.00%, 1/01/29

 

 

2,200

 

 

2,225,696

 

City of Chicago Illinois, GO, CAB, City Colleges (NPFGC),
5.90%, 1/01/31 (b)

 

 

8,370

 

 

2,237,552

 

City of Chicago Illinois, GO, Refunding, Series A (AGM),
5.00%, 1/01/25

 

 

5,000

 

 

4,975,200

 

City of Chicago Illinois, RB, Series A (AGC), 5.00%,
1/01/38

 

 

4,000

 

 

3,812,920

 

City of Chicago Illinois, Refunding RB, General Airport,
Third Lien, Series A, AMT (NPFGC), 5.50%, 1/01/22

 

 

5,000

 

 

5,017,900

 

County of Cook Illinois, GO, Capital Improvement,
Series C (AMBAC), 5.50%, 11/15/12 (d)

 

 

2,460

 

 

2,648,387

 

Illinois Finance Authority, Refunding RB, Central
DuPage Health, Series B, 5.50%, 11/01/39

 

 

2,070

 

 

1,967,328

 

Illinois Sports Facilities Authority, RB, State Tax
Supported (AMBAC), 5.50%, 6/15/30

 

 

19,675

 

 

19,558,524

 

Metropolitan Pier & Exposition Authority, RB, CAB,
McCormick Place Expansion Project, Series A
(NPFGC), 6.00%, 12/15/36 (b)

 

 

10,000

 

 

1,810,900

 

Metropolitan Pier & Exposition Authority, Refunding
RB, CAB, McCormick Place Expansion Project,
Series B (AGM) (b):

 

 

 

 

 

 

 

5.83%, 6/15/27

 

 

1,125

 

 

431,561

 

6.25%, 6/15/44

 

 

2,980

 

 

317,996

 

Railsplitter Tobacco Settlement Authority, RB,
6.00%, 6/01/28

 

 

575

 

 

553,000

 

Regional Transportation Authority, RB, Series B
(NPFGC), 5.75%, 6/01/33

 

 

2,000

 

 

2,073,800

 

State of Illinois, RB, Build Illinois, Series B, 5.25%,
6/15/34

 

 

1,125

 

 

1,088,370

 

 

 

 

 

 




 

 

 

 

 

 

57,068,544

 









Indiana — 1.5%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, RB, Series B,
5.75%, 1/01/34

 

 

350

 

 

353,587

 

Indianapolis Local Public Improvement Bond Bank,
Refunding RB, Waterworks Project, Series A:

 

 

 

 

 

 

 

5.75%, 1/01/38

 

 

2,000

 

 

2,035,780

 

(AGC), 5.50%, 1/01/38

 

 

1,575

 

 

1,600,468

 

 

 

 

 

 




 

 

 

 

 

 

3,989,835

 









Iowa — 1.9%

 

 

 

 

 

 

 

Iowa Finance Authority, RB, Series A (AGC), 5.63%,
8/15/37

 

 

4,925

 

 

4,952,088

 









 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Kentucky — 0.8%

 

 

 

 

 

 

 

Kentucky State Property & Buildings Commission,
Refunding RB, Project No. 93 (AGC), 5.25%,
2/01/29

 

$

2,000

 

$

2,066,720

 









Louisiana — 0.9%

 

 

 

 

 

 

 

Jefferson Parish Home Mortgage Authority, RB,
Series B-1, AMT (NPFGC), 6.65%, 12/01/33

 

 

1,125

 

 

1,201,286

 

Louisiana Public Facilities Authority, Refunding RB,
Christus Health, Series B (AGC), 6.50%, 7/01/30

 

 

1,150

 

 

1,241,977

 

 

 

 

 

 




 

 

 

 

 

 

2,443,263

 









Massachusetts — 9.2%

 

 

 

 

 

 

 

Massachusetts HFA, RB, AMT (AGM):

 

 

 

 

 

 

 

Rental Mortgage, Series F, 5.25%, 1/01/46

 

 

15,550

 

 

14,742,799

 

S/F Housing, Series 128, 4.80%, 12/01/27

 

 

1,500

 

 

1,415,310

 

Massachusetts HFA, Refunding RB, Series C, AMT:

 

 

 

 

 

 

 

5.00%, 12/01/30

 

 

5,000

 

 

4,656,850

 

5.35%, 12/01/42

 

 

975

 

 

890,760

 

Massachusetts Water Resources Authority, Refunding
RB, General, Series A (NPFGC), 5.00%, 8/01/34

 

 

2,700

 

 

2,747,655

 

 

 

 

 

 




 

 

 

 

 

 

24,453,374

 









Michigan — 8.4%

 

 

 

 

 

 

 

City of Detroit Michigan, RB:

 

 

 

 

 

 

 

Second Lien, Series B (AGM), 6.25%, 7/01/36

 

 

350

 

 

372,505

 

Second Lien, Series B (AGM), 7.00%, 7/01/36

 

 

200

 

 

224,126

 

System, Second Lien, Series A (BHAC), 5.50%,
7/01/36

 

 

5,500

 

 

5,484,655

 

System, Second Lien, Series B (NPFGC), 5.00%,
7/01/36

 

 

3,000

 

 

2,669,580

 

City of Detroit Michigan, Refunding RB:

 

 

 

 

 

 

 

Second Lien, Series E (BHAC), 5.75%, 7/01/31

 

 

2,200

 

 

2,249,038

 

Series D (NPFGC), 5.00%, 7/01/28

 

 

4,000

 

 

3,626,360

 

Series D (NPFGC), 5.00%, 7/01/33

 

 

1,000

 

 

886,010

 

Kalamazoo Hospital Finance Authority, RB, Bronson
Methodist Hospital (AGM), 5.25%, 5/15/36

 

 

375

 

 

349,324

 

Michigan Higher Education Student Loan Authority,
Refunding RB, Student Loan, Series XVII-G, AMT
(AMBAC), 5.20%, 9/01/20

 

 

1,000

 

 

1,005,140

 

Michigan State HDA, RB, Series C, AMT, 5.50%,
12/01/28

 

 

900

 

 

866,583

 

Michigan Strategic Fund, RB, Detroit Edison Co.
Project, Series C, AMT (Syncora), 5.45%, 12/15/32

 

 

3,900

 

 

3,669,159

 

Michigan Strategic Fund, Refunding RB, Detroit
Edison Co. Project, Series A, AMT (Syncora),
5.50%, 6/01/30

 

 

1,000

 

 

957,800

 

 

 

 

 

 




 

 

 

 

 

 

22,360,280

 









Minnesota — 0.7%

 

 

 

 

 

 

 

City of Minneapolis Minnesota, Refunding RB,
Fairview Health Services, Series B (AGC),
6.50%, 11/15/38

 

 

1,800

 

 

1,917,864

 

Dakota County Community Development Agency,
RB, Mortgage-Backed Securities Program, Series B,
AMT (Ginnie Mae), 5.15%, 12/01/38

 

 

(e)

 

4

 

 

 

 

 

 




 

 

 

 

 

 

1,917,868

 










 

 

 

 

See Notes to Financial Statements.

 

 


 

ANNUAL REPORT

APRIL 30, 2011

23




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund II, Inc. (MQT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Nevada — 4.0%

 

 

 

 

 

 

 

City of Carson City Nevada, RB, Carson-Tahoe Hospital
Project, Series A (Radian), 5.50%, 9/01/33

 

$

2,800

 

$

2,416,176

 

County of Clark Nevada, RB:

 

 

 

 

 

 

 

Las Vegas-McCarran International Airport,
Series A (AGC), 5.25%, 7/01/39

 

 

1,700

 

 

1,595,467

 

Subordinate Lien, Series A-2 (NPFGC),
5.00%, 7/01/30

 

 

1,500

 

 

1,421,925

 

Subordinate Lien, Series A-2 (NPFGC),
5.00%, 7/01/36

 

 

2,700

 

 

2,445,444

 

System, Subordinate Lien, Series C (AGM),
5.00%, 7/01/26

 

 

1,275

 

 

1,272,221

 

Las Vegas Valley Water District, GO, Refunding,
Series A (NPFGC), 5.00%, 6/01/24

 

 

1,350

 

 

1,401,259

 

 

 

 

 

 




 

 

 

 

 

 

10,552,492

 









New Jersey — 7.3%

 

 

 

 

 

 

 

New Jersey EDA, RB:

 

 

 

 

 

 

 

Cigarette Tax (Radian), 5.75%, 6/15/29

 

 

870

 

 

790,700

 

Cigarette Tax (Radian), 5.50%, 6/15/31

 

 

85

 

 

74,233

 

Motor Vehicle Surcharge, Series A (NPFGC),
5.25%, 7/01/33

 

 

8,200

 

 

8,146,290

 

New Jersey EDA, RB:

 

 

 

 

 

 

 

School Facilities Construction, Series O,
5.13%, 3/01/28

 

 

2,750

 

 

2,759,790

 

School Facilities Construction, Series P,
5.13%, 9/01/28

 

 

4,000

 

 

4,015,920

 

New Jersey EDA, Refunding RB, School Facilities
Construction, Series N-1 (AGM), 5.50%, 9/01/25

 

 

2,000

 

 

2,139,480

 

New Jersey Transportation Trust Fund Authority, RB,
Transportation System, Series A (NPFGC), 5.75%,
6/15/25

 

 

1,400

 

 

1,520,204

 

 

 

 

 

 




 

 

 

 

 

 

19,446,617

 









New York — 1.2%

 

 

 

 

 

 

 

New York City Transitional Finance Authority, RB,
Fiscal 2009, Series S-4, 5.50%, 1/15/33

 

 

3,035

 

 

3,154,488

 









North Carolina — 0.6%

 

 

 

 

 

 

 

North Carolina Medical Care Commission, RB, Novant
Health Obligation, Series A, 4.75%, 11/01/43

 

 

2,020

 

 

1,633,938

 









Ohio — 2.9%

 

 

 

 

 

 

 

County of Lucas Ohio, Refunding RB, Promedica
Healthcare, Series A, 6.50%, 11/15/37

 

 

460

 

 

479,955

 

New Albany Plain Local School District, GO, Refunding:

 

 

 

 

 

 

 

(FGIC), 6.00%, 6/01/11 (d)

 

 

5,120

 

 

5,146,112

 

(NPFGC), 6.00%, 12/01/20

 

 

1,170

 

 

1,175,288

 

Ohio Higher Educational Facility Commission,
Refunding RB, Summa Health System, 2010
Project (AGC), 5.25%, 11/15/40

 

 

900

 

 

846,450

 

 

 

 

 

 




 

 

 

 

 

 

7,647,805

 









Pennsylvania — 1.7%

 

 

 

 

 

 

 

Pennsylvania HFA, Refunding RB, Series 99A, AMT,
5.25%, 10/01/32

 

 

1,340

 

 

1,303,003

 

Pennsylvania Turnpike Commission, RB:

 

 

 

 

 

 

 

CAB, Sub-Series E, 6.48%, 12/01/38 (a)

 

 

2,100

 

 

1,450,176

 

Subordinate, Special Motor License Fund,
6.00%, 12/01/36

 

 

500

 

 

537,300

 

Philadelphia School District, GO, Series E, 6.00%,
9/01/38

 

 

1,300

 

 

1,343,459

 

 

 

 

 

 




 

 

 

 

 

 

4,633,938

 









 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Puerto Rico — 1.9%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.38%, 8/01/39

 

$

3,000

 

$

3,109,560

 

Puerto Rico Sales Tax Financing Corp., Refunding RB:

 

 

 

 

 

 

 

CAB, Series A (NPFGC), 5.74%, 8/01/41 (b)

 

 

10,000

 

 

1,336,000

 

First Sub-Series C, 6.00%, 8/01/39

 

 

725

 

 

726,957

 

 

 

 

 

 




 

 

 

 

 

 

5,172,517

 









South Carolina — 1.3%

 

 

 

 

 

 

 

South Carolina Jobs-EDA, Refunding RB, Palmetto
Health, Series A (AGM), 6.50%, 8/01/39 (f)

 

 

200

 

 

202,964

 

South Carolina Transportation Infrastructure Bank, RB,
Series A, 5.25%, 10/01/40

 

 

3,420

 

 

3,374,446

 

 

 

 

 

 




 

 

 

 

 

 

3,577,410

 









Texas — 9.5%

 

 

 

 

 

 

 

Dallas-Fort Worth International Airport Facilities
Improvement Corp., RB, Series A, AMT (NPFGC),
5.50%, 11/01/33

 

 

5,000

 

 

4,794,600

 

Lewisville ISD Texas, GO, Refunding, CAB, School
Building (NPFGC), 4.67%, 8/15/24 (b)

 

 

3,915

 

 

2,046,879

 

Lone Star College System, GO, 5.00%, 8/15/33

 

 

3,000

 

 

3,094,080

 

Mansfield ISD Texas, GO, School Building (PSF-GTD),
5.00%, 2/15/33

 

 

1,065

 

 

1,096,205

 

North Texas Tollway Authority, RB, System, First Tier,
Series K-1 (AGC), 5.75%, 1/01/38

 

 

3,400

 

 

3,437,502

 

North Texas Tollway Authority, Refunding RB, First Tier:

 

 

 

 

 

 

 

Series A, 6.00%, 1/01/28

 

 

2,415

 

 

2,549,805

 

System (NPFGC), 5.75%, 1/01/40

 

 

3,600

 

 

3,496,356

 

Texas State Turnpike Authority, RB, First Tier, Series A
(AMBAC), 5.75%, 8/15/38

 

 

4,800

 

 

4,670,736

 

 

 

 

 

 




 

 

 

 

 

 

25,186,163

 









Virginia — 0.5%

 

 

 

 

 

 

 

Virginia HDA, RB, Sub-Series H-1 (NPFGC), 5.35%,
7/01/31

 

 

1,225

 

 

1,225,429

 









Vermont — 0.8%

 

 

 

 

 

 

 

Vermont HFA, Refunding RB, Multiple Purpose,
Series C, AMT (AGM), 5.50%, 11/01/38 (c)

 

 

2,155

 

 

2,171,400

 









Washington — 1.3%

 

 

 

 

 

 

 

Washington Health Care Facilities Authority, RB,
Providence Health & Services, Series A:

 

 

 

 

 

 

 

5.00%, 10/01/39

 

 

1,000

 

 

887,910

 

5.25%, 10/01/39

 

 

550

 

 

507,370

 

Washington Health Care Facilities Authority,
Refunding RB, Providence Health, Series D (AGM),
5.25%, 10/01/33

 

 

2,000

 

 

1,989,480

 

 

 

 

 

 




 

 

 

 

 

 

3,384,760

 









Wisconsin — 0.4%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority,
RB, Ascension Health Senior Credit Group,
5.00%, 11/15/33

 

 

1,200

 

 

1,128,888

 









Total Municipal Bonds — 118.9%

 

 

 

 

 

316,133,968

 










 

 

 

See Notes to Financial Statements.

 


24

ANNUAL REPORT

APRIL 30, 2011




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund II, Inc. (MQT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

Par
(000)

 

Value

 







Arizona — 0.4%

 

 

 

 

 

 

 

Phoenix Civic Improvement Corp., RB, Junior Lien,
Series A, 5.00%, 7/01/34

 

$

1,000

 

$

1,018,740

 









California — 6.4%

 

 

 

 

 

 

 

Anaheim Public Financing Authority California, RB,
Electric System Distribution Facilities, Series A
(AGM), 5.00%, 10/01/31

 

 

3,808

 

 

3,798,183

 

Los Angeles Community College District California,
GO, Series A:

 

 

 

 

 

 

 

Election of 2001 (NPFGC), 5.00%, 8/01/32

 

 

4,330

 

 

4,284,968

 

Election of 2008, 6.00%, 8/01/33

 

 

1,699

 

 

1,834,319

 

Orange County Sanitation District, COP (NPFGC),
5.00%, 2/01/33

 

 

2,300

 

 

2,307,075

 

San Diego Community College District California, GO,
Election of 2002, 5.25%, 8/01/33

 

 

359

 

 

364,923

 

San Diego County Water Authority, COP, Refunding,
Series 2008-A (AGM), 5.00%, 5/01/33

 

 

3,030

 

 

3,033,545

 

Tamalpais Union High School District California, GO,
Election of 2001 (AGM), 5.00%, 8/01/28

 

 

1,320

 

 

1,322,706

 

 

 

 

 

 




 

 

 

 

 

 

16,945,719

 









Colorado — 0.3%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, Refunding RB,
Catholic Healthcare, Series A, 5.50%, 7/01/34

 

 

780

 

 

780,745

 









District of Columbia — 1.0%

 

 

 

 

 

 

 

District of Columbia, RB, Series A, 5.50%, 12/01/30

 

 

855

 

 

929,915

 

District of Columbia Water & Sewer Authority, RB,
Series A, 6.00%, 10/01/35

 

 

1,580

 

 

1,729,379

 

 

 

 

 

 




 

 

 

 

 

 

2,659,294

 









Florida — 4.3%

 

 

 

 

 

 

 

City of Tallahassee Florida, RB (NPFGC), 5.00%,
10/01/37

 

 

4,000

 

 

3,885,600

 

County of Seminole Florida, Refunding RB, Series B
(NPFGC), 5.25%, 10/01/31

 

 

4,200

 

 

4,333,224

 

Florida State Board of Education, GO, Series D,
5.00%, 6/01/37

 

 

1,189

 

 

1,200,014

 

Miami-Dade County Expressway Authority, RB,
Series A (AGC), 5.00%, 7/01/35

 

 

2,100

 

 

2,028,411

 

 

 

 

 

 




 

 

 

 

 

 

11,447,249

 









Georgia — 7.4%

 

 

 

 

 

 

 

City of Atlanta Georgia, RB, General (AGM):

 

 

 

 

 

 

 

Series B, 5.25%, 1/01/33

 

 

4,999

 

 

5,002,830

 

Subordinate Lien, Series C, 5.00%, 1/01/33

 

 

15,000

 

 

14,630,700

 

 

 

 

 

 




 

 

 

 

 

 

19,633,530

 









Hawaii — 1.9%

 

 

 

 

 

 

 

Honolulu City & County Board of Water Supply, RB,
Series A (NPFGC), 5.00%, 7/01/33

 

 

5,000

 

 

5,041,950

 









Illinois — 8.0%

 

 

 

 

 

 

 

City of Chicago Illinois, Refunding RB, Second Lien
(AGM), 5.25%, 11/01/33

 

 

2,549

 

 

2,558,592

 

Illinois State Toll Highway Authority, RB, Series B,
5.50%, 1/01/33

 

 

3,499

 

 

3,538,033

 

Metropolitan Pier & Exposition Authority, RB,
McCormick Place Expansion Project, Series A
(NPFGC), 5.00%, 12/15/28

 

 

3,500

 

 

3,499,790

 

Regional Transportation Authority, RB (NPFGC),
6.50%, 7/01/26

 

 

10,000

 

 

11,570,182

 

 

 

 

 

 




 

 

 

 

 

 

21,166,597

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

Par
(000)

 

Value

 







Louisiana — 1.7%

 

 

 

 

 

 

 

State of Louisiana, RB, Series A (AGM), 5.00%,
5/01/36

 

$

4,600

 

$

4,600,000

 









Massachusetts — 2.8%

 

 

 

 

 

 

 

Massachusetts School Building Authority, RB,
Series A (AGM), 5.00%, 8/15/30

 

 

7,195

 

 

7,369,989

 









Nevada — 1.9%

 

 

 

 

 

 

 

City of Las Vegas Nevada, GO, Limited Tax, Performing
Arts Center, 6.00%, 4/01/39

 

 

3,298

 

 

3,482,807

 

Clark County Water Reclamation District, GO, Series B,
5.75%, 7/01/34

 

 

1,574

 

 

1,696,556

 

 

 

 

 

 




 

 

 

 

 

 

5,179,363

 









New York — 2.3%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB,
Fiscal 2009, Series A, 5.75%, 6/15/40

 

 

1,050

 

 

1,126,302

 

New York State Dormitory Authority, ERB, Series B,
5.75%, 3/15/36

 

 

1,005

 

 

1,085,420

 

New York State Thruway Authority, RB, Series G (AGM),
5.00%, 1/01/32

 

 

2,700

 

 

2,715,957

 

Triborough Bridge & Tunnel Authority, RB, General,
Series A-2, 5.25%, 11/15/34

 

 

1,200

 

 

1,227,708

 

 

 

 

 

 




 

 

 

 

 

 

6,155,387

 









Ohio — 0.2%

 

 

 

 

 

 

 

State of Ohio, RB, Cleveland Clinic Health, Series B,
5.50%, 1/01/34

 

 

500

 

 

497,395

 









South Carolina — 2.7%

 

 

 

 

 

 

 

Charleston Educational Excellence Finance Corp., RB,
Charleston County School (AGC):

 

 

 

 

 

 

 

5.25%, 12/01/28

 

 

2,725

 

 

2,781,598

 

5.25%, 12/01/29

 

 

2,425

 

 

2,466,370

 

5.25%, 12/01/30

 

 

880

 

 

891,396

 

South Carolina State Public Service Authority, RB,
Santee Cooper, Series A, 5.50%, 1/01/38

 

 

1,125

 

 

1,179,383

 

 

 

 

 

 




 

 

 

 

 

 

7,318,747

 









Texas — 4.3%

 

 

 

 

 

 

 

Clear Creek ISD Texas, GO, Refunding, School Building
(PSF-GTD), 5.00%, 2/15/33

 

 

1,900

 

 

1,983,505

 

Cypress-Fairbanks ISD, GO, Refunding, Schoolhouse
(PSF-GTD), 5.00%, 2/15/32

 

 

5,250

 

 

5,428,237

 

Harris County Cultural Education Facilities Finance
Corp., RB, Hospital, Texas Children’s Hospital Project,
5.50%, 10/01/39

 

 

4,000

 

 

3,965,720

 

 

 

 

 

 




 

 

 

 

 

 

11,377,462

 









Virginia — 0.1%

 

 

 

 

 

 

 

Fairfax County IDA Virginia, Refunding RB, Health Care,
Inova Health System, Series A, 5.50%, 5/15/35

 

 

300

 

 

300,939

 









Wisconsin — 0.4%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority,
Refunding RB, Froedtert & Community Health Inc.,
5.25%, 4/01/39

 

 

1,250

 

 

1,143,911

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 46.1%

 

 

 

 

 

122,637,017

 









Total Long-Term Investments
(Cost — $452,888,368) — 165.0%

 

 

 

 

 

438,770,985

 










 

 

 

See Notes to Financial Statements.


ANNUAL REPORT

APRIL 30, 2011

25




 

 


 

 

Schedule of Investments (concluded)

BlackRock MuniYield Quality Fund II, Inc. (MQT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

Value

 







FFI Institutional Tax-Exempt Fund, 0.23% (h)(i)

 

 

3,066,084

 

$

3,066,084

 









Total Short-Term Securities
(Cost — $3,066,084) — 1.2%

 

 

 

 

 

3,066,084

 









Total Investments (Cost — $455,954,452*) — 166.2%

 

 

 

 

 

441,837,069

 

Other Assets Less Liabilities — 1.9%

 

 

 

 

 

5,057,177

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (24.2)%

 

 

 

 

 

(64,383,547

)

Preferred Shares, at Redemption Value — (43.9)%

 

 

 

 

 

(116,592,512

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

265,918,187

 

 

 

 

 

 





 

 


*

The cost and unrealized appreciation (depreciation) of investments as of April 30, 2011, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

392,453,749

 

 

 




Gross unrealized appreciation

 

$

4,758,996

 

Gross unrealized depreciation

 

 

(19,704,699

)

 

 




Net unrealized depreciation

 

$

(14,945,703

)

 

 





 

 

(a)

Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date.

 

 

(b)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(c)

Variable rate security. Rate shown is as of report date.

 

 

(d)

US 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.

 

 

(e)

Amount is less than $1,000.

 

 

(f)

When-issued security. Unsettled when-issued transactions were as follows:


 

 

 

 

 

 

 

 







Counterparty

 

Value

Unrealized
Appreciation







Bank of America Merrill Lynch

 

$

202,964

 

$

6,166

 










 

 

(g)

Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

 

(h)

Investments in companies considered to be an affiliate of the Fund during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Affiliate

 

Shares Held at
April 30, 2010

 

Net
Activity

 

Shares Held at
April 30, 2011

 

Income

 











FFI Institutional
Tax-Exempt Fund

 

 

6,152,712

 

 

(3,086,628

)

 

3,066,084

 

$

8,268

 
















 

 

(i)

Represents the current yield as of report date.

 

 

Financial futures contracts sold as of April 30, 2011 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Contracts

 

 

Issue

 

 

Exchange

 

 

Expiration

 

Notional
Value

 

Unrealized
Depreciation

 


















150

 

 

10-Year U.S.
Treasury Note

 

 

Chicago Board
of Trade

 

 

June 2011

 

$

17,777,059

 

$

(394,035

)



















 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs are summarized in three broad levels for financial statement purposes as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

 

 

 

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to the Note 1 of the Notes to Financial Statements.

 

 

 

The following tables summarize the inputs used as of April 30, 2011 in determining the fair valuation of the Fund’s investments and derivative financial instruments:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

 

$

438,770,985

 

 

 

$

438,770,985

 

Short-Term
Securities

 

$

3,066,084

 

 

 

 

 

 

3,066,084

 

 

 













Total

 

$

3,066,084

 

$

438,770,985

 

 

 

$

441,837,069

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Derivative Financial
Instruments2

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate
contracts

 

$

(394,035

)

 

 

 

 

$

(394,035

)
















 

 

 

 

2

Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.


 

 

 

See Notes to Financial Statements.


26

ANNUAL REPORT

APRIL 30, 2011




 


 

Statements of Assets and Liabilities


 

 

 

 

 

 

 

 

 

 

 

 

April 30, 2011

 

BlackRock
MuniYield
Fund, Inc.
(MYD)

 

BlackRock
MuniYield
Quality
Fund, Inc.
(MQY)

 

BlackRock
MuniYield
Quality
Fund II, Inc.
(MQT)

 









Assets

 

 

 

 

 

 

 

 

 

 












Investments at value — unaffiliated1

 

$

958,857,351

 

$

690,829,488

 

$

438,770,985

 

Investments at value — affiliated2

 

 

16,277,332

 

 

4,098,484

 

 

3,066,084

 

Cash pledged as collateral for financial futures contracts

 

 

845,000

 

 

455,000

 

 

290,000

 

Interest receivable

 

 

16,496,983

 

 

10,416,096

 

 

6,622,971

 

Investments sold receivable

 

 

186,794

 

 

5,000

 

 

180,000

 

Income receivable — affiliated

 

 

384

 

 

215

 

 

 

Prepaid expenses

 

 

55,482

 

 

33,623

 

 

20,612

 

Other assets

 

 

112,035

 

 

80,604

 

 

 

 

 










Total assets

 

 

992,831,361

 

 

705,918,510

 

 

448,950,652

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Accrued Liabilities

 

 

 

 

 

 

 

 

 

 












Bank overdraft

 

 

384

 

 

647

 

 

 

Investments purchased payable

 

 

12,574,170

 

 

314,877

 

 

196,798

 

Income dividends payable — Common Shares

 

 

3,786,014

 

 

2,347,295

 

 

1,525,753

 

Investment advisory fees payable

 

 

409,298

 

 

294,015

 

 

186,785

 

Officer’s and Directors’ fees payable

 

 

115,657

 

 

83,379

 

 

1,120

 

Interest expense and fees payable

 

 

96,893

 

 

98,833

 

 

54,524

 

Margin variation payable

 

 

82,312

 

 

44,062

 

 

28,125

 

Other accrued expenses payable

 

 

207,309

 

 

151,472

 

 

117,825

 

 

 










Total accrued liabilities

 

 

17,272,037

 

 

3,334,580

 

 

2,110,930

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Other Liabilities

 

 

 

 

 

 

 

 

 

 












Trust certificates3

 

 

125,097,313

 

 

107,589,786

 

 

64,329,023

 

 

 










Total Liabilities

 

 

142,369,350

 

 

110,924,366

 

 

66,439,953

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Preferred Shares at Redemption Value

 

 

 

 

 

 

 

 

 

 












$25,000 per share liquidation preference, plus unpaid dividends4,5

 

 

251,485,694

 

 

176,648,151

 

 

116,592,512

 

 

 










Net Assets Applicable to Common Shareholders

 

$

598,976,317

 

$

418,345,993

 

$

265,918,187

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Net Assets Applicable to Common Shareholders Consist of

 

 

 

 

 

 

 

 

 

 












Paid-in capital6

 

$

629,444,763

 

$

427,068,944

 

$

287,556,661

 

Undistributed net investment income

 

 

13,709,447

 

 

8,470,469

 

 

6,096,397

 

Accumulated net realized loss

 

 

(18,945,158

)

 

(1,250,116

)

 

(13,223,453

)

Net unrealized appreciation/depreciation

 

 

(25,232,735

)

 

(15,943,304

)

 

(14,511,418

)

 

 










Net Assets Applicable to Common Shareholders

 

$

598,976,317

 

$

418,345,993

 

$

265,918,187

 

 

 










Net asset value per Common Share

 

$

13.05

 

$

13.72

 

$

11.85

 

 

 










 

 

 

 

 

 

 

 

 

 

 

 

1 Investments at cost — unaffiliated

 

$

982,936,877

 

$

706,155,471

 

$

452,888,368

 

 

 

 










 

2 Investments at cost — affiliated

 

$

16,277,332

 

$

4,098,484

 

$

3,066,084

 

 

 

 










 

3 Represents short-term floating rate certificates issued by TOBs.

 

 

 

 

 

 

 

 

 

 

 

4 Preferred Shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Par value $0.05 per share

 

 

10,058

 

 

7,065

 

 

4,371

 

 

 

 










 

Par value $0.10 per share

 

 

 

 

 

 

292

 

 

 

 










 

5 Preferred Shares authorized

 

 

13,720

 

 

10,000

 

 

6,400

 

 

 

 










 

6 Common Shares outstanding, 200 million shares authorized, $0.10 par value

 

 

45,891,080

 

 

30,484,353

 

 

22,437,548

 

 

 

 











 

 

 

See Notes to Financial Statements.

 

 




ANNUAL REPORT

APRIL 30, 2011

27




 


 

Statements of Operations


 

 

 

 

 

 

 

 

 

 

 

Year Ended April 30, 2011

 

BlackRock
MuniYield
Fund, Inc.
(MYD)

 

BlackRock
MuniYield
Quality
Fund, Inc.
(MQY)

 

BlackRock
MuniYield
Quality
Fund II, Inc.
(MQT)

 









Investment Income

 

 

 

 

 

 

 

 

 

 












Interest

 

$

54,526,241

 

$

35,418,851

 

$

22,628,789

 

Income — affiliated

 

 

23,810

 

 

18,820

 

 

8,268

 

 

 










Total income

 

 

54,550,051

 

 

35,437,671

 

 

22,637,057

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Expenses

 

 

 

 

 

 

 

 

 

 












Investment advisory

 

 

4,978,559

 

 

3,581,194

 

 

2,281,238

 

Commissions for Preferred Shares

 

 

379,697

 

 

266,345

 

 

174,899

 

Professional

 

 

260,490

 

 

135,563

 

 

100,689

 

Accounting services

 

 

158,890

 

 

120,625

 

 

86,356

 

Transfer agent

 

 

85,812

 

 

59,538

 

 

51,656

 

Officer and Directors

 

 

81,965

 

 

58,514

 

 

31,100

 

Printing

 

 

46,121

 

 

52,955

 

 

26,214

 

Custodian

 

 

45,308

 

 

34,470

 

 

23,899

 

Registration

 

 

16,434

 

 

10,631

 

 

15,770

 

Miscellaneous

 

 

118,736

 

 

90,287

 

 

55,795

 

 

 










Total expenses excluding interest expense and fees

 

 

6,172,012

 

 

4,410,122

 

 

2,847,616

 

Interest expense and fees1

 

 

945,654

 

 

823,233

 

 

479,736

 

 

 










Total expenses

 

 

7,117,666

 

 

5,233,355

 

 

3,327,352

 

Less fees waived by advisor

 

 

(4,492

)

 

(3,374

)

 

(2,354

)

 

 










Total expenses after fees waived

 

 

7,113,174

 

 

5,229,981

 

 

3,324,998

 

 

 










Net investment income

 

 

47,436,877

 

 

30,207,690

 

 

19,312,059

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Realized and Unrealized Gain (Loss)

 

 

 

 

 

 

 

 

 

 












Net realized gain (loss) from:

 

 

 

 

 

 

 

 

 

 

Investments

 

 

1,117,297

 

 

2,481,746

 

 

120,505

 

Financial futures contracts

 

 

15,906

 

 

(236,952

)

 

(144,097

)

 

 










 

 

 

1,133,203

 

 

2,244,794

 

 

(23,592

)

 

 










Net change in unrealized appreciation/depreciation on:

 

 

 

 

 

 

 

 

 

 

Investments

 

 

(38,682,450

)

 

(30,327,363

)

 

(19,651,031

)

Financial futures contracts

 

 

(1,153,209

)

 

(617,321

)

 

(394,035

)

 

 










 

 

 

(39,835,659

)

 

(30,944,684

)

 

(20,045,066

)

 

 










Total realized and unrealized loss

 

 

(38,702,456

)

 

(28,699,890

)

 

(20,068,658

)

 

 










 

 

 

 

 

 

 

 

 

 

 












Dividends to Preferred Shareholders From

 

 

 

 

 

 

 

 

 

 












Net investment income

 

 

(1,436,987

)

 

(1,106,520

)

 

(559,128

)

 

 










Net Increase (Decrease) in Net Assets Applicable to Common Shareholders Resulting from Operations

 

$

7,297,434

 

$

401,280

 

$

(1,315,727

)

 

 











 

 

 

 

1

Related to TOBs.


 

 

 

See Notes to Financial Statements.


28

ANNUAL REPORT

APRIL 30, 2011




 


 

Statements of Changes in Net Assets


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock
MuniYield Fund, Inc. (MYD)

 

BlackRock
MuniYield Quality Fund, Inc. (MQY)

 

 

 


 



 

 

Year Ended April 30,

 

Year Ended April 30,

 

 

 


 



Increase (Decrease) in Net Assets Applicable to Common Shareholders:

 

2011

 

2010

 

2011

 

2010

 











Operations

 

 

 

 

 

 

 

 

 

 

 

 

 















Net investment income

 

$

47,436,877

 

$

47,470,630

 

$

30,207,690

 

$

30,084,046

 

Net realized gain (loss)

 

 

1,133,203

 

 

(4,571,300

)

 

2,244,794

 

 

(886,041

)

Net change in unrealized appreciation/depreciation

 

 

(39,835,659

)

 

102,778,505

 

 

(30,944,684

)

 

38,430,188

 

Dividends to Preferred Shareholders from net investment income

 

 

(1,436,987

)

 

(1,562,302

)

 

(1,106,520

)

 

(1,193,624

)

 

 






 







Net increase in net assets applicable to Common Shareholders resulting from operations

 

 

7,297,434

 

 

144,115,533

 

 

401,280

 

 

66,434,569

 

 

 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 















Dividends to Common Shareholders From

 

 

 

 

 

 

 

 

 

 

 

 

 















Net investment income

 

 

(44,688,438

)

 

(38,074,020

)

 

(28,084,072

)

 

(25,070,412

)

 

 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 















Capital Share Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 















Reinvestment of common dividends

 

 

5,759,400

 

 

976,688

 

 

868,555

 

 

 

 

 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 















Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 















Net increase (decrease) in net assets applicable to Common Shareholders

 

 

(31,631,604

)

 

107,018,201

 

 

(26,814,237

)

 

41,364,157

 

Beginning of year

 

 

630,607,921

 

 

523,589,720

 

 

445,160,230

 

 

403,796,073

 

 

 






 







End of year

 

$

598,976,317

 

$

630,607,921

 

$

418,345,993

 

$

445,160,230

 

 

 






 







Undistributed net investment income

 

$

13,709,447

 

$

12,398,563

 

$

8,470,469

 

$

7,532,809

 

 

 






 








 

 

 

 

 

 

 

 

 

 

BlackRock
MuniYield Quality Fund II, Inc. (MQT)

 

 

 



 

 

Year Ended April 30,

 

 

 



Increase (Decrease) in Net Assets Applicable to Common Shareholders:

 

2011

 

2010

 







Operations

 

 

 

 

 

 

 









Net investment income

 

$

19,312,059

 

$

19,621,434

 

Net realized loss

 

 

(23,592

)

 

(1,652,401

)

Net change in unrealized appreciation/depreciation

 

 

(20,045,066

)

 

25,078,147

 

Dividends to Preferred Shareholders from net investment income

 

 

(559,128

)

 

(620,113

)

 

 







Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

 

 

(1,315,727

)

 

42,427,067

 

 

 







 

 

 

 

 

 

 

 









Dividends to Common Shareholders From

 

 

 

 

 

 

 









Net investment income

 

 

(18,056,525

)

 

(16,294,309

)

 

 







 

 

 

 

 

 

 

 









Capital Share Transactions

 

 

 

 

 

 

 









Reinvestment of common dividends

 

 

895,133

 

 

 

 

 







 

 

 

 

 

 

 

 









Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 









Total increase (decrease) in net assets applicable to Common Shareholders

 

 

(18,477,119

)

 

26,132,758

 

Beginning of year

 

 

284,395,306

 

 

258,262,548

 

 

 







End of year

 

$

265,918,187

 

$

284,395,306

 

 

 







Undistributed net investment income

 

$

6,096,397

 

$

5,445,245

 

 

 








 

 

 

See Notes to Financial Statements.

 

 




ANNUAL REPORT

APRIL 30, 2011

29




 


 

Statements of Cash Flows


 

 

 

 

 

 

 

 

 

 

 

Year Ended April 30, 2011

 

BlackRock
MuniYield
Fund, Inc.
(MYD)

 

BlackRock
MuniYield
Quality
Fund, Inc.
(MQY)

 

BlackRock
MuniYield
Quality
Fund II, Inc.
(MQT)

 









Cash Provided by Operating Activities

 

 

 

 

 

 

 

 

 

 












Net increase (decrease) in net assets resulting from operations, excluding dividends to Preferred Shareholders

 

$

8,734,421

 

$

1,507,800

 

$

(756,599

)

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in interest receivable

 

 

476,886

 

 

(563,244

)

 

(272,696

)

Increase in other assets

 

 

(19,114

)

 

(12,902

)

 

 

Decrease in prepaid expenses

 

 

19,932

 

 

10,262

 

 

10,592

 

(Increase) decrease in income receivable — affiliated

 

 

(33

)

 

41

 

 

 

Increase in cash pledged as collateral for financial futures contracts

 

 

(845,000

)

 

(455,000

)

 

(290,000

)

Decrease in investment advisory fees payable

 

 

(24,024

)

 

(21,898

)

 

(15,641

)

Increase (decrease) in interest expense and fees payable

 

 

1,059

 

 

(8,561

)

 

(8,670

)

Decrease in other affiliates payable

 

 

(6,095

)

 

(4,463

)

 

(2,868

)

Increase in other accrued expenses payable

 

 

72,907

 

 

66,780

 

 

31,021

 

Increase in margin variation payable

 

 

82,312

 

 

44,062

 

 

28,125

 

Increase in Officer’s and Directors’ fees payable

 

 

20,662

 

 

14,199

 

 

159

 

Net realized and unrealized gain on investments

 

 

37,584,267

 

 

27,858,519

 

 

19,530,526

 

Amortization of premium and accretion of discount on investments

 

 

153,927

 

 

(922,437

)

 

(752,237

)

Proceeds from sales of long-term investments

 

 

167,339,577

 

 

81,670,435

 

 

45,711,014

 

Purchases of long-term investments

 

 

(162,569,075

)

 

(87,754,207

)

 

(49,743,487

)

Net proceeds from sales (purchases) of short-term securities

 

 

(20,550,436

)

 

3,968,012

 

 

3,086,628

 

 

 










Cash provided by operating activities

 

 

30,472,173

 

 

25,397,398

 

 

16,555,867

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Cash Used for Financing Activities

 

 

 

 

 

 

 

 

 

 












Cash receipts from trust certificates

 

 

14,308,690

 

 

7,063,409

 

 

2,199,490

 

Cash payments for trust certificates

 

 

(4,480,000

)

 

(4,214,996

)

 

(1,060,000

)

Cash dividends paid to Common Shareholders

 

 

(38,621,440

)

 

(27,134,904

)

 

(17,134,223

)

Cash dividends paid to Preferred Shareholders

 

 

(1,441,835

)

 

(1,111,296

)

 

(561,134

)

Increase (decrease) in bank overdraft

 

 

(237,588

)

 

389

 

 

 

 

 










Cash used for financing activities

 

 

(30,472,173

)

 

(25,397,398

)

 

(16,555,867

)

 

 










 

 

 

 

 

 

 

 

 

 

 












Cash

 

 

 

 

 

 

 

 

 

 












Net change in cash

 

 

 

 

 

 

 

Cash at beginning of year

 

 

 

 

 

 

 

 

 










Cash at end of year

 

 

 

 

 

 

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Cash Flow Information

 

 

 

 

 

 

 

 

 

 












Cash paid during the year for interest and fees

 

$

944,595

 

$

831,794

 

$

488,406

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Noncash Financing Activities

 

 

 

 

 

 

 

 

 

 












Capital shares issued in reinvestment of dividends paid to Common Shareholders

 

$

5,759,400

 

$

868,555

 

$

895,133

 

 

 











 

 

 

A Statement of Cash Flows is presented when a Fund had a significant amount of borrowing during the year, based on the average borrowing outstanding in relation to average total assets.


 

 

 

See Notes to Financial Statements.


30

ANNUAL REPORT

APRIL 30, 2011




 

 


 

 

Financial Highlights

BlackRock MuniYield Fund, Inc. (MYD)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2008 to,
April 30,
2009

 

 

 

 

 

 

 

 

 

Year Ended
April 30,

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended October 31,

 

 

 


 

 



 

 

2011

 

2010

 

 

2008

 

2007

 

2006

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

13.87

 

$

11.53

 

$

10.70

 

$

14.36

 

$

14.98

 

$

14.48

 

 

 



















Net investment income1

 

 

1.04

 

 

1.04

 

 

0.49

 

 

1.03

 

 

1.05

 

 

1.08

 

Net realized and unrealized gain (loss)

 

 

(0.85

)

 

2.17

 

 

0.77

 

 

(3.62

)

 

(0.57

)

 

0.61

 

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.03

)

 

(0.03

)

 

(0.04

)

 

(0.27

)

 

(0.28

)

 

(0.25

)

Net realized gain

 

 

 

 

 

 

 

 

 

 

 

 

(0.00

)2

 

 



















Net increase (decrease) from investment operations

 

 

0.16

 

 

3.18

 

 

1.22

 

 

(2.86

)

 

0.20

 

 

1.44

 

 

 



















Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.98

)

 

(0.84

)

 

(0.39

)

 

(0.80

)

 

(0.82

)

 

(0.94

)

Net realized gain

 

 

 

 

 

 

 

 

 

 

 

 

(0.00

)2

 

 



















Total dividends and distributions to Common Shareholders

 

 

(0.98

)

 

(0.84

)

 

(0.39

)

 

(0.80

)

 

(0.82

)

 

(0.94

)

 

 



















Capital charges with respect to issuance of Preferred Shares

 

 

 

 

 

 

 

 

 

 

 

 

0.00

3

 

 



















Net asset value, end of period

 

$

13.05

 

$

13.87

 

$

11.53

 

$

10.70

 

$

14.36

 

$

14.98

 

 

 



















Market price, end of period

 

$

13.17

 

$

13.70

 

$

11.45

 

$

9.66

 

$

13.72

 

$

15.76

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

1.07

%

 

28.44

%

 

11.76

%5

 

(20.69

)%

 

1.40

%

 

10.30

%

 

 



















Based on market price

 

 

3.27

%

 

27.75

%

 

22.93

%5

 

(25.06

)%

 

(7.91

)%

 

18.33

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses6

 

 

1.15

%

 

1.14

%

 

1.25

%7

 

1.38

%

 

1.23

%

 

1.29

%

 

 



















Total expenses after fees waived6

 

 

1.15

%

 

1.14

%

 

1.24

%7

 

1.38

%

 

1.22

%

 

1.29

%

 

 



















Total expenses after fees waived and excluding interest expense and fees6,8

 

 

0.99

%

 

1.01

%

 

1.09

%7

 

1.06

%

 

1.01

%

 

1.01

%

 

 



















Net investment income6

 

 

7.64

%

 

8.08

%

 

9.20

%7

 

7.65

%

 

7.14

%

 

7.35

%

 

 



















Dividends to Preferred Shareholders

 

 

0.23

%

 

0.27

%

 

0.74

%7

 

1.99

%

 

1.88

%

 

1.71

%

 

 



















Net investment income to Common Shareholders

 

 

7.41

%

 

7.81

%

 

8.46

%7

 

5.66

%

 

5.26

%

 

5.64

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net assets applicable to Common Shareholders, end of period (000)

 

$

598,976

 

$

630,608

 

$

523,590

 

$

484,945

 

$

647,574

 

$

672,367

 

 

 



















Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)

 

$

251,450

 

$

251,450

 

$

271,500

 

$

271,500

 

$

343,000

 

$

343,000

 

 

 



















Portfolio turnover

 

 

16

%

 

35

%

 

7

%

 

20

%

 

18

%

 

32

%

 

 



















Asset coverage per Preferred Share at $25,000 liquidation preference, end of period

 

$

84,556

 

$

87,701

 

$

73,217

 

$

69,695

 

$

72,218

 

$

74,034

 

 

 




















 

 

1

Based on average shares outstanding.

 

 

2

Amount is less than $(0.01) per share.

 

 

3

Amount is less than $0.01 per share.

 

 

4

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

5

Aggregate total investment return.

 

 

6

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

7

Annualized.

 

 

8

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

See Notes to Financial Statements.


ANNUAL REPORT

APRIL 30, 2011

31




 

 


 

 

Financial Highlights

BlackRock MuniYield Quality Fund, Inc. (MQY)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2008 to,
April 30,
2009

 

 

 

 

 

 

 

 

 

Year Ended
April 30,

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended October 31,

 

 

 


 

 



 

 

2011

 

2010

 

 

2008

 

2007

 

2006

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

14.63

 

$

13.27

 

$

11.68

 

$

14.88

 

$

15.32

 

$

15.02

 

 

 



















Net investment income1

 

 

0.99

 

 

0.99

 

 

0.46

 

 

0.97

 

 

0.97

 

 

0.99

 

Net realized and unrealized gain (loss)

 

 

(0.94

)

 

1.23

 

 

1.51

 

 

(3.12

)

 

(0.42

)

 

0.37

 

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.04

)

 

(0.04

)

 

(0.04

)

 

(0.27

)

 

(0.30

)

 

(0.27

)

Net realized gain

 

 

 

 

 

 

 

 

(0.03

)

 

 

 

 

 

 



















Net increase (decrease) from investment operations

 

 

0.01

 

 

2.18

 

 

1.93

 

 

(2.45

)

 

0.25

 

 

1.09

 

 

 



















Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.92

)

 

(0.82

)

 

(0.34

)

 

(0.68

)

 

(0.69

)

 

(0.79

)

Net realized gain

 

 

 

 

 

 

 

 

(0.07

)

 

 

 

 

 

 



















Total dividends and distributions to Common Shareholders

 

 

(0.92

)

 

(0.82

)

 

(0.34

)

 

(0.75

)

 

(0.69

)

 

(0.79

)

 

 



















Capital charges with respect to issuance of Preferred Shares

 

 

 

 

 

 

 

 

 

 

 

 

(0.00

)2

 

 



















Net asset value, end of period

 

$

13.72

 

$

14.63

 

$

13.27

 

$

11.68

 

$

14.88

 

$

15.32

 

 

 



















Market price, end of period

 

$

13.15

 

$

14.48

 

$

12.32

 

$

10.90

 

$

13.20

 

$

14.48

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

0.10

%

 

17.12

%

 

17.07

%4

 

(16.79

)%

 

2.00

%

 

7.78

%

 

 



















Based on market price

 

 

(3.06

)%

 

24.86

%

 

16.47

%4

 

(12.47

)%

 

(4.26

)%

 

7.22

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses5

 

 

1.21

%

 

1.20

%

 

1.43

%6

 

1.76

%

 

1.71

%

 

1.76

%

 

 



















Total expenses after fees waived5

 

 

1.21

%

 

1.20

%

 

1.42

%6

 

1.75

%

 

1.71

%

 

1.75

%

 

 



















Total expenses after fees waived and excluding interest expense and fees5,7

 

 

1.02

%

 

1.02

%

 

1.13

%6

 

1.10

%

 

1.04

%

 

1.04

%

 

 



















Net investment income5

 

 

6.97

%

 

6.98

%

 

7.58

%6

 

6.89

%

 

6.46

%

 

6.61

%

 

 



















Dividends to Preferred Shareholders

 

 

0.25

%

 

0.28

%

 

0.69

%6

 

1.92

%

 

2.01

%

 

1.80

%

 

 



















Net investment income to Common Shareholders

 

 

6.72

%

 

6.70

%

 

6.89

%6

 

4.97

%

 

4.45

%

 

4.81

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net assets applicable to Common Shareholders, end of period (000)

 

$

418,346

 

$

445,160

 

$

403,796

 

$

355,459

 

$

452,657

 

$

466,002

 

 

 



















Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)

 

$

176,625

 

$

176,625

 

$

192,000

 

$

192,000

 

$

250,000

 

$

250,000

 

 

 



















Portfolio turnover

 

 

12

%

 

19

%

 

13

%

 

20

%

 

24

%

 

33

%

 

 



















Asset coverage per Preferred Share at $25,000 liquidation preference, end of period

 

$

84,217

 

$

88,013

 

$

77,582

 

$

71,318

 

$

70,282

 

$

71,614

 

 

 




















 

 

1

Based on average shares outstanding.

 

 

2

Amount is less than $(0.01) per share.

 

 

3

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

4

Aggregate total investment return.

 

 

5

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

6

Annualized.

 

 

7

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

See Notes to Financial Statements.


32

ANNUAL REPORT

APRIL 30, 2011




 

 


 

 

Financial Highlights

BlackRock MuniYield Quality Fund II, Inc. (MQT)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2008 to,
April 30,
2009

 

 

 

 

 

 

 

 

 

Year Ended
April 30,

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended October 31,

 

 

 


 

 



 

 

2011

 

2010

 

 

2008

 

2007

 

2006

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

12.71

 

$

11.55

 

$

10.17

 

$

13.17

 

$

13.64

 

$

13.36

 

 

 



















Net investment income1

 

 

0.86

 

 

0.88

 

 

0.41

 

 

0.86

 

 

0.86

 

 

0.86

 

Net realized and unrealized gain (loss)

 

 

(0.89

)

 

1.04

 

 

1.31

 

 

(3.00

)

 

(0.46

)

 

0.37

 

Dividends to Preferred Shareholders from net investment income

 

 

(0.02

)

 

(0.03

)

 

(0.04

)

 

(0.26

)

 

(0.26

)

 

(0.24

)

 

 



















Net increase (decrease) from investment operations

 

 

(0.05

)

 

1.89

 

 

1.68

 

 

(2.40

)

 

0.14

 

 

0.99

 

 

 



















Dividends to Common Shareholders from net investment income

 

 

(0.81

)

 

(0.73

)

 

(0.30

)

 

(0.60

)

 

(0.61

)

 

(0.71

)

 

 



















Capital charges with respect to issuance of Preferred Shares

 

 

 

 

 

 

 

 

 

 

 

 

0.00

2

 

 



















Net asset value, end of period

 

$

11.85

 

$

12.71

 

$

11.55

 

$

10.17

 

$

13.17

 

$

13.64

 

 

 



















Market price, end of period

 

$

11.59

 

$

12.52

 

$

10.16

 

$

8.75

 

$

11.60

 

$

12.93

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

(0.36

)%

 

17.15

%

 

17.27

%4

 

(18.42

)%

 

1.39

%

 

7.98

%

 

 



















Based on market price

 

 

(1.07

)%

 

31.18

%

 

19.90

%4

 

(20.31

)%

 

(5.79

)%

 

6.34

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses5

 

 

1.21

%

 

1.21

%

 

1.52

%6

 

1.80

%

 

1.73

%

 

1.66

%

 

 



















Total expenses after fees waived5

 

 

1.20

%

 

1.21

%

 

1.52

%6

 

1.79

%

 

1.72

%

 

1.66

%

 

 



















Total expenses after fees waived and excluding interest expense and fees5,7

 

 

1.03

%

 

1.04

%

 

1.18

%6

 

1.12

%

 

1.06

%

 

1.05

%

 

 



















Net investment income5

 

 

7.00

%

 

7.13

%

 

7.86

%6

 

6.96

%

 

6.39

%

 

6.44

%

 

 



















Dividends to Preferred Shareholders

 

 

0.20

%

 

0.23

%

 

0.68

%6

 

2.08

%

 

1.97

%

 

1.78

%

 

 



















Net investment income to Common Shareholders

 

 

6.80

%

 

6.90

%

 

7.18

%6

 

4.88

%

 

4.42

%

 

4.66

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net assets applicable to Common Shareholders, end of period (000)

 

$

265,918

 

$

284,395

 

$

258,263

 

$

227,551

 

$

294,661

 

$

305,111

 

 

 



















Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)

 

$

116,575

 

$

116,575

 

$

128,250

 

$

128,250

 

$

160,000

 

$

160,000

 

 

 



















Portfolio turnover

 

 

10

%

 

25

%

 

9

%

 

17

%

 

20

%

 

37

%

 

 



















Asset coverage per Preferred Share at $25,000 liquidation preference, end of period

 

$

82,031

 

$

85,994

 

$

75,349

 

$

69,420

 

$

71,065

 

$

72,693

 

 

 




















 

 

1

Based on average shares outstanding.

 

 

2

Amount is less than $0.01 per share.

 

 

3

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

4

Aggregate total investment return.

 

 

5

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

6

Annualized.

 

 

7

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

See Notes to Financial Statements.


ANNUAL REPORT

APRIL 30, 2011

33




 


 

Notes to Financial Statements

1. Organization and Significant Accounting Policies:

BlackRock MuniYield Fund, Inc. (“MYD”), BlackRock MuniYield Quality Fund, Inc. (“MQY”) and BlackRock MuniYield Quality Fund II, Inc. (“MQT”) (collectively the “Funds”) are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as non-diversified, closed-end management investment companies. The Funds are organized as Mary-land corporations. The Funds’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The Funds determine and make available for publication the net asset values of their Common Shares on a daily basis.

The following is a summary of significant accounting policies followed by the Funds:

Valuation: US GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds fair value their financial instruments at market value using independent dealers or pricing services under policies approved by each Fund’s Board of Directors (the “Board”). Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. Financial futures contracts traded on exchanges are valued at their last sale price. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value. Investments in open-end investment companies are valued at net asset value each business day.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the market value of such investment or is not available, the investment will be valued in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the investment advisor and/or the sub-advisor seeks to determine the price that each Fund might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof.

Forward Commitments and When-Issued Delayed Delivery Securities: The Funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Funds may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Funds may be required to pay more at settlement than the security is worth. In addition, the Funds are not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, the Funds’ maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Schedules of Investments.

Zero-Coupon Bonds: The Funds may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.

Municipal Bonds Transferred to TOBs: The Funds leverage their assets through the use of TOBs. A TOB is established by a third party sponsor forming a special purpose entity, into which one or more funds, or an agent on behalf of the funds, transfers municipal bonds. Other funds managed by the investment advisor may also contribute municipal bonds to a TOB into which a Fund has contributed bonds. A TOB typically issues two classes of beneficial interests: short-term floating rate certificates, which are sold to third party investors, and residual certificates (“TOB Residuals”), which are generally issued to the participating funds that made the transfer. The TOB Residuals held by a Fund include the right of a Fund (1) to cause the holders of a proportional share of the short-term floating rate certificates to tender their certificates at par, including during instances of a rise in short-term interest rates, and (2) to transfer, within seven days, a corresponding share of the municipal bonds from the TOB to a Fund. The TOB may also be terminated without the consent of a Fund upon the occurrence of certain events as defined in the TOB agreements. Such termination events may include the bankruptcy or default of the municipal bond, a substantial downgrade in credit quality of the municipal bond, the inability of the TOB to obtain quarterly or annual renewal of the liquidity support agreement, a substantial decline in market value of the municipal bond or the inability to remarket the short-term floating rate certificates to third party investors. During the year ended April 30, 2011, no TOBs that the Funds participated in were terminated without the consent of the Funds.

 

 

 




34

ANNUAL REPORT

APRIL 30, 2011




 


 

Notes to Financial Statements (continued)

The cash received by the TOB from the sale of the short-term floating rate certificates, less transaction expenses, is paid to a Fund, which typically invests the cash in additional municipal bonds. Each Fund’s transfer of the municipal bonds to a TOB is accounted for as a secured borrowing, therefore the municipal bonds deposited into a TOB are presented in the Funds’ Schedules of Investments and the proceeds from the issuance of the short-term floating rate certificates are shown as trust certificates in the Statements of Assets and Liabilities.

Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by the Funds on an accrual basis. Interest expense incurred on the secured borrowing and other expenses related to remarketing, administration and trustee services to a TOB are shown as interest expense and fees in the Statements of Operations. The short-term floating rate certificates have interest rates that generally reset weekly and their holders have the option to tender certificates to the TOB for redemption at par at each reset date. At April 30, 2011, the aggregate value of the underlying municipal bonds transferred to TOBs, the related liability for trust certificates and the range of interest rates on the liability for trust certificates were as follows:

 

 

 

 

 

 

 

 

 

 

 












 

 

Underlying
Municipal
Bonds
Transferred
to TOBs

 

Liability
for Trust
Certificates

 

Range of
Interest
Rates

 









MYD

 

$

237,355,438

 

$

125,097,313

 

 

0.26% – 0.33

%

MQY

 

$

208,938,625

 

$

107,589,786

 

 

0.24% – 0.41

%

MQT

 

$

122,637,017

 

$

64,329,023

 

 

0.26% – 0.41

%













For the year ended April 30, 2011, the Funds’ average trust certificates outstanding and the daily weighted average interest rate, including fees, were as follows:

 

 

 

 

 

 

 

 









 

 

Average Trust
Certificates
Outstanding

 

Daily Weighted
Average
Interest Rate

 







MYD

 

$

124,688,632

 

 

0.76

%

MQY

 

$

107,249,581

 

 

0.77

%

MQT

 

$

64,097,630

 

 

0.75

%









Should short-term interest rates rise, the Funds’ investments in TOBs may adversely affect the Funds’ net investment income and dividends to Common Shareholders. Also, fluctuations in the market values of municipal bonds deposited into the TOB may adversely affect the Funds’ net asset values per share.

Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that the Funds either deliver collateral or segregate assets in connection with certain investments (e.g., financial futures contracts) the Funds will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on their books and records cash or other liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, each party to such transactions has requirements to deliver/deposit securities as collateral for certain investments.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.

Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. The amount and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 7.

Income Taxes: It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.

Each Fund files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Funds’ US federal tax returns remains open for the two years ended April 30, 2011, the period ended April 30, 2009 and the year ended October 31, 2008. Management does not believe there are any uncertain tax positions that require recognition of a tax liability.

Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each Fund’s Board, independent Directors (“Independent Directors”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Directors. This has approximately the same economic effect for the Independent Directors as if the Independent Directors had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.

 

 

 




ANNUAL REPORT

APRIL 30, 2011

35




 


 

Notes to Financial Statements (continued)

The deferred compensation plan is not funded and obligations there-under represent general unsecured claims against the general assets of each Fund. Each Fund may, however, elect to invest in common shares of certain other BlackRock Closed-End Funds selected by the Independent Directors in order to match its deferred compensation obligations. Investments to cover each Fund’s deferred compensation liability, if any, are included in other assets in the Statements of Assets and Liabilities. Dividends and distributions from the BlackRock Closed-End Fund investments under the plan are included in income — affiliated in the Statements of Operations.

Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods. The Funds have an agreement with the custodians whereby fees may be reduced by credits earned on uninvested cash balances, which if applicable are shown as fees paid indirectly in the Statements of Operations. The custodians impose fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

2. Derivative Financial Instruments:

The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and to economically hedge, or protect, their exposure to certain risks such as interest rate risk. These contracts may be transacted on an exchange.

Losses may arise if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument or if the counterparty does not perform under the contract. Counterparty risk related to exchange-traded financial futures contracts and options is deemed to be minimal due to the protection against defaults provided by the exchange on which these contracts trade.

Financial Futures Contracts: The Funds purchase or sell financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between the Fund and counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Funds as unrealized appreciation or depreciation. When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.

Derivative Financial Instruments Categorized by Risk Exposure:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















Fair Values of Derivative Financial Instruments as of April 30, 2011

 





 

 

Liability Derivatives

 

 




 

 

 

 

MYD

 

MQY

 

MQT

 

 










 

 

Statements of
Assets and
Liabilities
Location

 

Value

 







Interest rate
contracts

 

 

Net unrealized
appreciation/
depreciation*

 

$

1,153,209

 

$

617,321

 

$

394,035

 
















 

 

 

 

*

Includes cumulative appreciation/depreciation on financial futures contracts as reported in the Schedules of Investments. Only current day’s margin variation is reported within the Statements of Assets and Liabilities.


 

 

 

 

 

 

 

 

 

 

 












The Effect of Derivative Financial Instruments in the Statements of Operations
Year Ended April 30, 2011

 





 

 

Net Realized Gain (Loss) from

 

 

 



 

 

MYD

 

MQY

 

MQT

 

 

 







Interest rate contracts:
Financial futures contracts

 

$

15,906

 

$

(236,952

)

$

(144,097

)













 

 

 

 

 

 

 

 

 

 

 

 

 

Net Change in Unrealized
Appreciation/Depreciation on

 

 

 



 

 

MYD

 

MQY

 

MQT

 

 

 







Interest rate contracts:

 

 

 

 

 

 

 

Financial futures contracts

 

$

(1,153,209

)

$

(617,321

)

$

(394,035

)












For the year ended April 30, 2011, the average quarterly balances of outstanding derivative financial instruments were as follows:

 

 

 

 

 

 

 

 

 

 

 












 

 

MYD

 

MQY

 

MQT

 









Financial futures contracts:

 

 

 

 

 

 

 

 

 

 

Average number of
contracts sold

 

 

110

 

 

81

 

 

51

 

Average notional value of
contracts sold

 

$

13,006,881

 

$

9,699,897

 

$

6,117,008

 












3. Investment Advisory Agreement and Other Transactions with Affiliates:

As of April 30, 2011, The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays Bank PLC (“Barclays”) were the largest stockholders of BlackRock, Inc. (“BlackRock”). Due to the ownership structure, PNC is an affiliate of the Funds for 1940 Act purposes, but BAC and Barclays are not.

 

 

 




36

ANNUAL REPORT

APRIL 30, 2011




 


 

Notes to Financial Statements (continued)

Each Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Funds’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of each Fund’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Fund. For such services, each Fund pays the Manager a monthly fee at an annual rate of 0.50% of the respective Fund’s average daily net assets. Average daily net assets are the average daily value of each Fund’s total assets minus the sum of its accrued liabilities.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds, however the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid through each Fund’s investment in other affiliated investment companies, if any. These amounts are shown as fees waived by advisor in the Statements of Operations.

The Manager entered into a sub-advisory agreement with BlackRock Investment Management, LLC (“BIM”), an affiliate of the Manager. The Manager pays BIM for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Fund to the Manager.

For the period May 1, 2010 through December 31, 2010, each Fund reimbursed the Manager for certain accounting services, which are included in accounting services in the Statements of Operations. The reimbursements were as follows:

 

 

 

 

 






MYD

 

$

12,968

 

MQY

 

$

9,330

 

MQT

 

$

5,945

 






Effective January 1, 2011, the Funds no longer reimburse the Manager for accounting services.

Certain officers and/or directors of the Funds are officers and/or directors of BlackRock or its affiliates. The Funds reimburse the Manager for compensation paid to the Funds’ Chief Compliance Officer.

4. Investments:

Purchases and sales of investments, excluding short-term securities, for the year ended April 30, 2011, were as follows:

 

 

 

 

 

 

 

 







 

 

Purchases

 

Sales

 







MYD

 

$

155,333,652

 

$

164,398,577

 

MQY

 

$

86,411,992

 

$

81,551,151

 

MQT

 

$

48,868,049

 

$

45,714,544

 









5. Income Tax Information:

Reclassifications: US GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of April 30, 2011 attributable to amortization methods on fixed income securities and the sale of bonds received from tender option bond trusts were reclassified to the following accounts:

 

 

 

 

 

 

 

 

 

 

 









 

 

MYD

 

MQY

 

MQT

 









Paid-in capital

 

 

 

$

(103,427

)

 

 

Undistributed net investment income

 

$

(568

)

$

(79,438

)

$

(45,254

)

Accumulated net realized loss

 

$

568

 

$

182,865

 

$

45,254

 












 

 

 

 

 

 

 

 

 

 

 

The tax character of distributions paid during the fiscal years ended April 30, 2011 and April 30, 2010 was as follows:

 









 

 

MYD

 

MQY

 

MQT

 









Tax-exempt income

 

 

 

 

 

 

 

 

 

 

4/30/2011

 

$

46,034,397

 

$

29,175,117

 

$

18,615,653

 

4/30/2010

 

 

39,636,322

 

 

26,264,036

 

 

16,914,422

 

Ordinary income

 

 

 

 

 

 

 

 

 

 

4/30/2011

 

 

91,028

 

 

15,475

 

 

 












Total distributions

 

 

 

 

 

 

 

 

 

 

4/30/2011

 

$

46,125,425

 

$

29,190,592

 

$

18,615,653

 

 

 










4/30/2010

 

$

39,636,322

 

$

26,264,036

 

$

16,914,422

 

 

 










 

 

 

 

 

 

 

 

 

 

 

As of April 30, 2011, the tax components of accumulated net losses were as follows:

 









 

 

MYD

 

MQY

 

MQT

 









Undistributed tax-exempt income

 

$

13,423,349

 

$

8,327,252

 

$

5,707,344

 

Undistributed ordinary income

 

 

42,852

 

 

12,810

 

 

33,332

 

Capital loss carryforwards

 

 

(17,485,818

)

 

(1,267,442

)

 

(11,622,712

)

Net unrealized losses*

 

 

(26,448,829

)

 

(15,795,571

)

 

(15,756,438

)

 

 










Total

 

$

(30,468,446

)

$

(8,722,951

)

$

(21,638,474

)

 

 











 

 

 

 

*

The differences between book-basis and tax-basis net unrealized losses were attributable primarily to the tax deferral of losses on wash sales, amortization methods for premiums and discounts on fixed income securities, the accrual of income on securities in default, the realization for tax purposes of unrealized gains/losses on certain futures contracts, the deferral of post-October capital losses for tax purposes, the treatment of residual interests in tender option bond trusts and the deferral of compensation to directors.


 

 

 


ANNUAL REPORT

APRIL 30, 2011

37




 


 

Notes to Financial Statements (continued)

 

As of April 30, 2011, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates:


 

 

 

 

 

 

 

 

 

 

 












Expires April 30,

 

MYD

 

MQY

 

MQT

 









2012

 

 

 

 

 

$

5,561,802

 

2016

 

$

11,743,926

 

$

346,339

 

 

493,401

 

2017

 

 

4,065,755

 

 

704,337

 

 

3,726,056

 

2018

 

 

1,196,450

 

 

216,766

 

 

66,689

 

2019

 

 

479,687

 

 

 

 

1,774,764

 

 

 










Total

 

$

17,485,818

 

$

1,267,442

 

$

11,622,712

 

 

 










Under the recently enacted Regulated Investment Company Modernization Act of 2010, capital losses incurred by the Fund after April 30, 2011 will not be subject to expiration. In addition, these losses must be utilized prior to the losses incurred in pre-enactment taxable years.

6. Concentration, Market and Credit Risk:

Each Fund invests a substantial amount of their assets in issuers located in a single state or limited number of states. Please see the Schedules of Investments for concentrations in specific states.

Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counter-party credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Funds’ Statements of Assets and Liabilities, less any collateral held by the Funds.

As of April 30, 2011, MYD invested a significant portion of its assets in the Health sector. MQY and MQT each invested a significant portion of their assets in the County/City/Special District/School District and Transportation sectors. Changes in economic conditions affecting the Health, County/City/Special District/School District and Transportation sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.

7. Capital Share Transactions:

Each Fund is authorized to issue 200 million shares, all of which were initially classified as Common Shares. The par value for each Fund’s Common Shares is $0.10. The par value for each Fund’s Preferred Shares is $0.05, except MQT Series D, which is $0.10. Each Board is authorized, however, to reclassify any unissued shares without approval of Common Shareholders.

Common Shares

For the years shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

 

 

 

 

 

 

 

 









 

 

Year Ended

 

 

 


 

 

 

2011

 

2010

 







MYD

 

 

421,588

 

 

77,563

 

MQY

 

 

59,095

 

 

 

MQT

 

 

70,618

 

 

 









Shares issued and outstanding remained constant for MQY and MQT for the year ended April 30, 2010.

Preferred Shares

The Preferred Shares are redeemable at the option of each Fund, in whole or in part, on any dividend payment date at their liquidation preference per share plus any accumulated and unpaid dividends whether or not declared. The Preferred Shares are also subject to mandatory redemption at their liquidation preference plus any accumulated and unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of a Fund, as set forth in each Fund’s Articles of Supplementary (the “Governing Instrument”) are not satisfied.

From time to time in the future, each Fund may effect repurchases of its Preferred Shares at prices below their liquidation preference as agreed upon by the Fund and seller. Each Fund also may redeem its Preferred Shares from time to time as provided in the applicable Governing Instrument. Each Fund intends to effect such redemptions and/or repurchases to the extent necessary to maintain applicable asset coverage requirements or for such other reasons as the Board may determine.

 

 

 




38

ANNUAL REPORT

APRIL 30, 2011




 


 

Notes to Financial Statements (continued)

The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Directors for each Fund. In addition, the 1940 Act requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Fund’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.

The Funds had the following series of Preferred Shares outstanding, effective yields and reset frequency as of April 30, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

Series

 

Preferred
Shares

 

Effective
Yield

 

Reset
Frequency Days

 











MYD

 

 

A

 

1,320

 

 

0.37

%

 

28

 

 

 

 

 

B

 

1,320

 

 

0.38

%

 

28

 

 

 

 

 

C

 

1,320

 

 

0.40

%

 

28

 

 

 

 

 

D

 

1,320

 

 

0.40

%

 

28

 

 

 

 

 

E

 

2,052

 

 

0.40

%

 

7

 

 

 

 

 

F

 

1,260

 

 

0.41

%

 

7

 

 

 

 

 

G

 

1,466

 

 

1.46

%

 

7

 

 















MQY

 

 

A

 

1,413

 

 

0.37

%

 

28

 

 

 

 

 

B

 

1,413

 

 

0.40

%

 

7

 

 

 

 

 

C

 

1,413

 

 

0.40

%

 

28

 

 

 

 

 

D

 

1,413

 

 

0.41

%

 

7

 

 

 

 

 

E

 

1,413

 

 

1.46

%

 

7

 

 















MQT

 

 

A

 

1,457

 

 

0.37

%

 

28

 

 

 

 

 

B

 

1,457

 

 

0.38

%

 

28

 

 

 

 

 

C

 

1,457

 

 

0.40

%

 

7

 

 

 

 

 

D

 

292

 

 

1.46

%

 

7

 

 















Dividends on seven-day and 28-day Preferred Shares are cumulative at a rate, which is reset every seven or 28 days, respectively, based on the results of an auction. If the Preferred Shares fail to clear the auction on an auction date, each Fund is required to pay the maximum applicable rate on the Preferred Shares to holders of such shares for successive dividend periods until such time as the shares are successfully auctioned. The maximum applicable rate on all series of Preferred Shares (except MYD Series G, MQY Series E and MQT Series D) is the higher of 110% of the AA commercial paper rate or 100% of 90% of the Kenny S&P 30-day High Grade Index divided by 1.00 minus the marginal tax rate. The maximum applicable rate on the Preferred Shares of MYD Series G, MQY Series E and MQT Series D is the higher of 110% of the Telerate/BBA LIBOR or 110% of 90% of the Kenney S&P 30-day High Grade Index rate divided by 1.00 minus the marginal tax rate. The low, high and average dividend rates on the Preferred Shares for each Fund for the year ended April 30, 2011 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

Series

 

Low

 

High

 

Average

 











MYD

 

 

A

 

0.37

%

 

0.46

%

 

0.42

%

 

 

 

 

B

 

0.35

%

 

0.49

%

 

0.42

%

 

 

 

 

C

 

0.38

%

 

0.47

%

 

0.45

%

 

 

 

 

D

 

0.38

%

 

0.50

%

 

0.46

%

 

 

 

 

E

 

0.35

%

 

0.50

%

 

0.42

%

 

 

 

 

F

 

0.37

%

 

0.50

%

 

0.43

%

 

 

 

 

G

 

1.43

%

 

1.56

%

 

1.48

%

 















MQY

 

 

A

 

0.35

%

 

0.47

%

 

0.41

%

 

 

 

 

B

 

0.35

%

 

0.50

%

 

0.42

%

 

 

 

 

C

 

0.38

%

 

0.50

%

 

0.42

%

 

 

 

 

D

 

0.35

%

 

0.50

%

 

0.41

%

 

 

 

 

E

 

1.43

%

 

1.56

%

 

1.48

%

 















MQT

 

 

A

 

0.35

%

 

0.46

%

 

0.40

%

 

 

 

 

B

 

0.37

%

 

0.50

%

 

0.42

%

 

 

 

 

C

 

0.35

%

 

0.50

%

 

0.41

%

 

 

 

 

D

 

1.43

%

 

1.56

%

 

1.48

%

 















Since February 13, 2008, the Preferred Shares of the Funds failed to clear any of their auctions. As a result, the Preferred Shares dividend rates were reset to the maximum applicable rate, which ranged from 0.35% to 1.56% for the year ended April 30, 2011. A failed auction is not an event of default for the Funds but it has a negative impact on the liquidity of Preferred Shares. A failed auction occurs when there are more sellers of a Fund’s auction rate preferred shares than buyers. A successful auction for the Funds’ Preferred Shares may not occur for some time, if ever, and even if liquidity does resume, Preferred Shareholders may not have the ability to sell the Preferred Shares at their liquidation preference.

The Funds may not declare dividends or make other distributions on Common Shares or purchase any such shares if, at the time of the declaration, distribution or purchase, asset coverage with respect to the outstanding Preferred Shares is less than 200%.

The Funds pay commissions of 0.15% on the aggregate principal amount of all shares that fail to clear their auctions and 0.25% on the aggregate principal amount of all shares that successfully clear their auctions. Certain broker dealers have individually agreed to reduce commissions for failed auctions.

 

 

 




ANNUAL REPORT

APRIL 30, 2011

39




 


 

 

Notes to Financial Statements (concluded)

During the year ended April 30, 2010, the Funds announced the following redemptions of Preferred Shares at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

Series

 

Redemption
Date

 

Shares
Redeemed

 

Aggregate
Principal

 











MYD

 

 

A

 

 

7/29/09

 

 

105

 

$

2,625,000

 

 

 

 

B

 

 

7/08/09

 

 

105

 

$

2,625,000

 

 

 

 

C

 

 

7/22/09

 

 

105

 

$

2,625,000

 

 

 

 

D

 

 

7/15/09

 

 

105

 

$

2,625,000

 

 

 

 

E

 

 

7/08/09

 

 

164

 

$

4,100,000

 

 

 

 

F

 

 

7/09/09

 

 

101

 

$

2,525,000

 

 

 

 

G

 

 

7/06/09

 

 

117

 

$

2,925,000

 















MQY

 

 

A

 

 

8/04/09

 

 

123

 

$

3,075,000

 

 

 

 

B

 

 

7/14/09

 

 

123

 

$

3,075,000

 

 

 

 

C

 

 

7/17/09

 

 

123

 

$

3,075,000

 

 

 

 

D

 

 

7/10/09

 

 

123

 

$

3,075,000

 

 

 

 

E

 

 

7/06/09

 

 

123

 

$

3,075,000

 















MQT

 

 

A

 

 

8/03/09

 

 

146

 

$

3,650,000

 

 

 

 

B

 

 

7/13/09

 

 

146

 

$

3,650,000

 

 

 

 

C

 

 

7/13/09

 

 

146

 

$

3,650,000

 

 

 

 

D

 

 

7/07/09

 

 

29

 

$

725,000

 















The Funds financed the Preferred Share redemptions with cash received from TOB transactions.

Preferred Shares issued and outstanding remained constant during the year ended April 30, 2011.

8. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:

Each Fund paid a net investment income dividend on June 1, 2011 to Common Shareholders of record on May 16, 2011 as follows:

 

 

 

 

 






 

 

Common
Dividend
Per Share

 





MYD

 

$

0.0825

 

MQY

 

$

0.0770

 

MQT

 

$

0.0680

 






The dividends declared on Preferred Shares for the period May 1, 2011 to May 31, 2011 were as follows:

 

 

 

 

 

 

 

 









 

 

Series

 

Dividends
Declared

 







MYD

 

 

A

 

$

9,928

 

 

 

 

B

 

$

9,750

 

 

 

 

C

 

$

10,258

 

 

 

 

D

 

$

9,963

 

 

 

 

E

 

$

14,606

 

 

 

 

F

 

$

8,993

 

 

 

 

G

 

$

42,771

 









MQY

 

 

A

 

$

10,287

 

 

 

 

B

 

$

10,275

 

 

 

 

C

 

$

10,614

 

 

 

 

D

 

$

9,877

 

 

 

 

E

 

$

41,222

 









MQT

 

 

A

 

$

10,591

 

 

 

 

B

 

$

10,677

 

 

 

 

C

 

$

10,525

 

 

 

 

D

 

$

8,533

 









Each Fund will pay a net investment income dividend on July 1, 2011 to Common Shareholders of record on June 15, 2011 as follows:

 

 

 

 

 






 

 

Common
Dividend
Per Share

 





MYD

 

$

0.0825

 

MQY

 

$

0.0770

 

MQT

 

$

0.0680

 







 

 

 




40

ANNUAL REPORT

APRIL 30, 2011




 


 

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of BlackRock MuniYield Fund, Inc., BlackRock MuniYield Quality Fund, Inc. and BlackRock MuniYield Quality Fund II, Inc.:

We have audited the accompanying statements of assets and liabilities of BlackRock MuniYield Fund, Inc., BlackRock MuniYield Quality Fund, Inc., and BlackRock MuniYield Quality Fund II, Inc. (collectively, the “Funds”), including the schedules of investments, as of April 30, 2011, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended, the period November 1, 2008 to April 30, 2009 and each of the three years in the period ended October 31, 2008. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2011, by correspondence with the custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of BlackRock MuniYield Fund, Inc., BlackRock MuniYield Quality Fund, Inc., and BlackRock MuniYield Quality Fund II, Inc. as of April 30, 2011, the results of their operations and cash flows for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended, the period November 1, 2008 to April 30, 2009, and each of the three years in the period ended October 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Princeton, New Jersey
June 24, 2011

 

 

 




ANNUAL REPORT

APRIL 30, 2011

41




 


 

Important Tax Information (Unaudited)

The following table summarizes the taxable per share distributions paid by MYD and MQY during the taxable year ended April 30, 2011:

 

 

 

 

 

 

 

 









MYD

 

Payable
Date

 

Ordinary
Income*

 







Common Shareholders

 

 

12/31/10

 

$

0.001924

 









Preferred Shareholders:

 

 

 

 

 

 

 

Series A

 

 

12/15/10

 

$

0.22

 

Series B

 

 

12/22/10

 

$

0.22

 

Series C

 

 

12/08/10

 

$

0.13

 

Series C

 

 

1/05/11

 

$

0.09

 

Series D

 

 

12/01/10

 

$

0.13

 

Series D

 

 

12/29/10

 

$

0.10

 

Series E

 

 

12/08/10

 

$

0.13

 

Series E

 

 

12/15/10

 

$

0.09

 

Series F

 

 

12/09/10

 

$

0.13

 

Series F

 

 

12/16/10

 

$

0.09

 

Series G

 

 

12/13/10

 

$

0.79

 









MYQ

 

 

 

 

 

 

 









Common Shareholders

 

 

12/31/10

 

$

0.000487

 









Preferred Shareholders:

 

 

 

 

 

 

 

Series A

 

 

12/21/10

 

$

0.06

 

Series B

 

 

12/07/10

 

$

0.06

 

Series C

 

 

12/03/10

 

$

0.06

 

Series D

 

 

12/03/10

 

$

0.06

 

Series E

 

 

12/06/10

 

$

0.21

 










 

 

 

 

*

Additionally, all ordinary income distributions are comprised of interest related dividends for non-US residents and are eligible for exemption from US withholding tax for nonresident aliens and foreign corporations.

All other net investment income distributions paid by MYD and MQY during the taxable year ended April 30, 2011 qualify as tax-exempt interest dividends for federal income tax purposes.

All of the net investment income distributions paid by MQT during the taxable year ended April 30, 2011 qualify as tax-exempt interest dividends for federal income tax purposes.

 

 

 




42

ANNUAL REPORT

APRIL 30, 2011




 


 

Automatic Dividend Reinvestment Plans

Pursuant to each Fund’s Dividend Reinvestment Plan (the “Reinvestment Plan”), Common Shareholders are automatically enrolled to have all distributions of dividends and capital gains reinvested by BNY Mellon Share-owner Services for MYD and MQT and Computershare Trust Company, N.A. for MQY (individually, the “Reinvestment Plan Agent” or together, the “Reinvestment Plan Agents”) in the respective Fund’s shares pursuant to the Reinvestment Plan. Shareholders who do not participate in the Reinvestment Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Reinvestment Plan Agent, which serves as agent for the shareholders in administering the Reinvestment Plan.

After the Funds declare a dividend or determine to make a capital gain distribution, the Reinvestment Plan Agent will acquire shares for the participants’ accounts, depending upon the following circumstances, either (i) through receipt of unissued but authorized shares from the Fund (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market, on the Fund’s primary exchange (“open-market purchases”). If, on the dividend payment date, the NAV per share is equal to or less than the market price per share plus estimated brokerage commissions (such condition often referred to as a “market premium”), the Reinvestment Plan Agent will invest the dividend amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV per share is less than 95% of the market price on the payment date, the dollar amount of the dividend will be divided by 95% of the market price on the payment date. If, on the dividend payment date, the NAV per share is greater than the market value per share plus estimated brokerage commissions (such condition often referred to as a “market discount”), the Reinvestment Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. If the Reinvestment Plan Agents are unable to invest the full dividend amount in open market purchases, or if the market discount shifts to a market premium during the purchase period, the Reinvestment Plan Agents will invest any un-invested portion in newly issued shares.

Participation in the Reinvestment Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Reinvestment Plan Agent prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.

The Reinvestment Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by each Fund. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Reinvestment Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any federal income tax that may be payable on such dividends or distributions.

Each Fund reserves the right to amend or terminate the Reinvestment Plan. There is no direct service charge to participants in the Reinvestment Plan; however, each Fund reserves the right to amend the Reinvestment Plan to include a service charge payable by the participants. Participants that request a sale of shares through Computershare Trust Company, N.A. are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission. Participants that request a sale of shares through BNY Mellon Shareowner Services are subject to a $0.02 per share sold brokerage commission. All correspondence concerning the Reinvestment Plan should be directed to the respective Reinvestment Plan Agent: BNY Mellon Share-owner Services, P.0. Box 358035, Pittsburgh, PA 15252-8035,Telephone: (866) 216-0242 for shareholders of MYD and MQT or Computershare Trust Company, N.A., P.O. Box 43078, Providence, RI 02940-3078,Telephone: (800) 699-1BFM or overnight correspondence should be directed to the Reinvestment Plan Agent at 250 Royall Street, Canton, MA 02021 for shareholders of MQY.

 

 

 


ANNUAL REPORT

APRIL 30, 2011

43




 


 

Officers and Directors


 

 

 

 

 

 

 

 

 

 

 

Name, Address
and Year of Birth

 

Position(s)
Held with
Funds

 

Length
of Time
Served as
a Director2

 

Principal Occupation(s) During Past Five Years

 

Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen

 

Public
Directorships


Independent Directors1


Richard E. Cavanagh
55 East 52nd Street
New York, NY 10055
1946

 

Chair of the Board and Director

 

Since 2007

 

Trustee, Aircraft Finance Trust from 1999 to 2009; Director, The Guardian Life Insurance Company of America since 1998; Trustee, Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005 to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof since 1996; Adjunct Lecturer, Harvard University since 2007; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007.

 

95 RICs consisting of 95 Portfolios

 

Arch Chemical (chemical and allied products)


Karen P. Robards
55 East 52nd Street
New York, NY 10055
1950

 

Vice Chair of the Board, Chair of the Audit Committee and Director

 

Since 2007

 

Partner of Robards & Company, LLC (financial advisory firm) since 1987; Co-founder and Director of the Cooke Center for Learning and Development (a not-for-profit organization) since 1987; Director of Care Investment Trust, Inc. (health care real estate investment trust) from 2007 to 2010; Director of Enable Medical Corp. from 1996 to 2005; Investment Banker at Morgan Stanley from 1976 to 1987.

 

95 RICs consisting of 95 Portfolios

 

AtriCure, Inc. (medical devices)


Michael Castellano
55 East 52nd Street
New York, NY 10055
1946

 

Director and Member of the Audit Committee

 

Since 2011

 

Managing Director and Chief Financial Officer of Lazard Group LLC from 2001 to 2011; Chief Financial Officer of Lazard Ltd from 2004 to 2011; Director, Support Our Aging Religions (non-profit) since 2009; Director, National Advisory Board of Church Management at Villanova University since 2010.

 

95 RICs consisting of 95 Portfolios

 

None


Frank J. Fabozzi
55 East 52nd Street
New York, NY 10055
1948

 

Director and Member of the Audit Committee

 

Since 2007

 

Consultant/Editor of The Journal of Portfolio Management since 2006; Professor in the Practice of Finance and Becton Fellow, Yale University, School of Management since 2006; Adjunct Professor of Finance and Becton Fellow, Yale University from 1994 to 2006.

 

95 RICs consisting of 95 Portfolios

 

None


Kathleen F. Feldstein
55 East 52nd Street
New York, NY 10055
1941

 

Director

 

Since 2007

 

President of Economics Studies, Inc. (private economic consulting firm) since 1987; Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee Emeritus thereof since 2008; Member of the Board of Partners Community Healthcare, Inc. from 2005 to 2009; Member of the Corporation of Partners HealthCare since 1995; Trustee, Museum of Fine Arts, Boston since 1992; Member of the Visiting Committee to the Harvard University Art Museum since 2003; Director, Catholic Charities of Boston since 2009.

 

95 RICs consisting of 95 Portfolios

 

The McClatchy Company (publishing); Bell South (telecommunications); Knight Ridder (publishing)


James T. Flynn
55 East 52nd Street
New York, NY 10055
1939

 

Director and Member of the Audit Committee

 

Since 2007

 

Chief Financial Officer of JPMorgan & Co., Inc. from 1990 to 1995.

 

95 RICs consisting of 95 Portfolios

 

None


Jerrold B. Harris
55 East 52nd Street
New York, NY 10055
1942

 

Director

 

Since 2007

 

Trustee, Ursinus College since 2000; Director, Troemner LLC (scientific equipment) since 2000; Director of Delta Waterfowl Foundation since 2001; President and Chief Executive Officer, VWR Scientific Products Corporation from 1990 to 1999.

 

95 RICs consisting of 95 Portfolios

 

BlackRock Kelso Capital Corp. (business development company)



 

 

 




44

ANNUAL REPORT

APRIL 30, 2011




 


 

Officers and Directors (continued)


 

 

 

 

 

 

 

 

 

 

 

Name, Address
and Year of Birth

 

Position(s)
Held with
Funds

 

Length
of Time
Served as
a Director2

 

Principal Occupation(s) During Past Five Years

 

Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen

 

Public
Directorships


Independent Directors1 (concluded)


R. Glenn Hubbard
55 East 52nd Street
New York, NY 10055
1958

 

Director

 

Since 2007

 

Dean, Columbia Business School since 2004; Columbia faculty member since 1988; Co-Director, Columbia Business School’s Entrepreneurship Program from 1997 to 2004; Chairman, U.S. Council of Economic Advisers under the President of the United States from 2001 to 2003; Chairman, Economic Policy Committee of the OECD from 2001 to 2003.

 

95 RICs consisting of 95 Portfolios

 

ADP (data and information services); KKR Financial Corporation (finance); Metropolitan Life Insurance Company (insurance)


W. Carl Kester
55 East 52nd Street
New York, NY 10055
1951

 

Director and Member of the Audit Committee

 

Since 2007

 

George Fisher Baker Jr. Professor of Business Administration, Harvard Business School; Deputy Dean for Academic Affairs from 2006 to 2010; Chairman of the Finance Department, Harvard Business School from 2005 to 2006; Senior Associate Dean and Chairman of the MBA Program of Harvard Business School from 1999 to 2005; Member of the faculty of Harvard Business School since 1981.

 

95 RICs consisting of 95 Portfolios

 

None


 

 

 

 


 

1

Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.

 

 

2

Date shown is the earliest date a person has served for the Funds covered by this annual report. Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows certain Directors as joining the Funds’ board in 2007, each Director first became a member of the Board of Directors of other legacy MLIM or legacy BlackRock Funds as follows: Richard E. Cavanagh, 1994; Frank J. Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 2004; W. Carl Kester, 1995; and Karen P. Robards, 1998.


 

 

 

 

 

 

 

 

 

 

 


Interested Directors3


Richard S. Davis
55 East 52nd Street
New York, NY 10055
1945

 

Director

 

Since 2007

 

Managing Director, BlackRock, Inc. since 2005; Chief Executive Officer, State Street Research & Management Company from 2000 to 2005; Chairman of the Board of Trustees, State Street Research Mutual Funds from 2000 to 2005.

 

165 RICs consisting of 290 Portfolios

 

None












Henry Gabbay
55 East 52nd Street
New York, NY 10055
1947

 

Director

 

Since 2007

 

Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007; Treasurer of certain closed-end funds in the BlackRock fund complex from 1989 to 2006.

 

165 RICs consisting of 290 Portfolios

 

None


 

 

 

 


 

3

Mr. Davis is an “interested person,” as defined in the 1940 Act, of the Funds based on his position with BlackRock, Inc. and its affiliates. Mr. Gabbay is an “interested person” of the Funds based on his former positions with BlackRock, Inc. and its affiliates as well as his ownership of BlackRock, Inc. and The PNC Financial Services Group, Inc. securities. Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.


 

 

 


ANNUAL REPORT

APRIL 30, 2011

45




 


 

Officers and Directors (concluded)


 

 

 

 

 

 

 

Name, Address
and Year of Birth

 

Position(s)
Held with
Funds

 

Length
of Time
Served

 

Principal Occupation(s) During Past Five Years


Officers1


John M. Perlowski
55 East 52nd Street
New York, NY 10055
1964

 

President and Chief Executive Officer

 

Since 2011

 

Managing Director of BlackRock, Inc. since 2009; Global Head of BlackRock Fund Administration since 2009; Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual Funds from 2003 to 2009 and Senior Vice President thereof from 2007 to 2009; Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director, Family Resource Network (charitable foundation) since 2009.


Anne Ackerley
55 East 52nd Street
New York, NY 10055
1962

 

Vice President

 

Since 20072

 

Managing Director of BlackRock, Inc. since 2000; President and Chief Executive Officer of the BlackRock-advised funds from 2009 to 2011; Vice President of the BlackRock-advised funds from 2007 to 2009; Chief Operating Officer of BlackRock’s Global Client Group since 2009; Chief Operating Officer of BlackRock’s U.S. Retail Group from 2006 to 2009; Head of BlackRock’s Mutual Fund Group from 2000 to 2006.


Brendan Kyne
55 East 52nd Street
New York, NY 10055
1977

 

Vice President

 

Since 2009

 

Managing Director of BlackRock, Inc. since 2010; Director of BlackRock, Inc. from 2008 to 2009; Head of Product Development and Management for BlackRock’s U.S. Retail Group since 2009, Co-head thereof from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008.


Neal Andrews
55 East 52nd Street
New York, NY 10055
1966

 

Chief Financial Officer

 

Since 2007

 

Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006.


Jay Fife
55 East 52nd Street
New York, NY 10055
1970

 

Treasurer

 

Since 2007

 

Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Assistant Treasurer of the MLIM and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.


Brian Kindelan
55 East 52nd Street
New York, NY 10055
1959

 

Chief Compliance Officer

 

Since 2007

 

Chief Compliance Officer of the BlackRock-advised Funds since 2007; Managing Director and Senior Counsel of BlackRock, Inc. since 2005.


Ira P. Shapiro
55 East 52nd Street
New York, NY 10055
1963

 

Secretary

 

Since 2010

 

Managing Director of BlackRock, Inc. since 2009; Managing Director and Associate General Counsel of Barclays Global Investors from 2008 to 2009 and Principal thereof from 2004 to 2008.


 

 

 

 


 

1

Officers of the Funds serve at the pleasure of the Board.

 

 

2

Ms. Ackerley was President and Chief Executive Officer from 2009 to 2011.

 


 

Investment Advisor

BlackRock Advisors, LLC

Wilmington, DE 19809

 

Sub-Advisor

BlackRock Investment

Management, LLC

Plainsboro, NJ 08536

 

Custodians

The Bank of

New York Mellon3

New York, NY 10286

 

State Street Bank and

Trust Company4

Boston, MA 02111

 

Transfer Agent

Common Shares:

BNY Mellon Shareowner Services3

Jersey City, NJ 07310

 

Computershare Trust Company, N.A.4

Providence, RI 02940

 

Auction Agent

Preferred Shares:

The Bank of New York Mellon

New York, NY 10286

 

Accounting Agent

State Street Bank and

Trust Company

Princeton, NJ 08540

 

Independent Registered

Public Accounting Firm

Deloitte & Touche LLP

Princeton, NJ 08540

 

Legal Counsel

Skadden, Arps, Slate,

Meagher & Flom LLP

New York, NY 10036

 

Address of the Funds

100 Bellevue Parkway

Wilmington, DE 19809


 

 

 

 

3

For MYD and MQT.

 

 

4

For MQY.


 

 

 

   

Effective November 10, 2010, Ira P. Shapiro became Secretary of the Funds.

Effective February 11, 2011, John M. Perlowski became President and Chief Executive Officer of the Funds.

Effective April 14, 2011, Michael Castellano became a Director of the Funds and a Member of the Audit Committee.

 

 

 

 


 

 

 




46

ANNUAL REPORT

APRIL 30, 2011




 


Additional Information

 


Fund Certification


The Funds are listed for trading on the NYSE and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. Each Fund filed with the SEC the certification of their chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.

 


Dividend Policy


The Funds’ dividend policy is to distribute all or a portion of their net investment income to their shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Funds may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Funds for any particular month may be more or less than the amount of net investment income earned by the Funds during such month. The Funds’ current accumulated but undistributed net investment income, if any, is disclosed in the Statement of Assets and Liabilities, which comprises part of the financial information included in this report.

 

 

 




ANNUAL REPORT

APRIL 30, 2011

47




 


Additional Information (continued)

 


General Information


On August 11, 2010, the Manager announced that a derivative complaint had been filed by shareholders of MYD on August 4, 2010 in the Supreme Court of the State of New York, New York County. The complaint names the Manager, BlackRock, Inc., and certain of the directors, officers and portfolio managers of MYD (collectively, the “Defendants”) as defendants. The complaint alleges, among other things, that the Defendants breached fiduciary duties owed to MYD and its Common Shareholders by redeeming Preferred Shares at their liquidation preference. The complaint seeks unspecified damages for losses purportedly suffered by MYD as a result of the prior redemptions and injunctive relief preventing MYD from redeeming AMPS at their liquidation preference in the future. The Defendants believe that the claims asserted in the complaint are without merit and intend to vigorously defend themselves in the litigation.

The Funds do not make available copies of their Statements of Additional Information because the Funds’ shares are not continuously offered, which means that the Statement of Additional Information of each Fund has not been updated after completion of the respective Fund’s offerings and the information contained in each Fund’s Statement of Additional Information may have become outdated.

Other than the revisions discussed in the Board approvals on page 49, there were no material changes in the Funds’ investment objectives or policies or to the Funds’ charters or by-laws that were not approved by the shareholders or in the principal risk factors associated with investment in the Funds. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Funds’ portfolio.

Quarterly performance, semi-annual and annual reports and other information regarding the Funds may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website into this report.

Electronic Delivery

Electronic copies of most financial reports are available on the Funds’ websites or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Funds’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Funds will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call (800) 441-7762.

Availability of Quarterly Schedule of Investments

Each Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. Each Fund’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

Availability of Fund Updates

BlackRock will update performance and certain other data for the Funds on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com. Investors and others are advised to periodically check the website for updated performance information and the release of other material information about the Funds.

 

 

 




48

ANNUAL REPORT

APRIL 30, 2011




 


Additional Information (continued)

 


Board Approval


On September 1, 2010, the Board of Directors (the “Boards”) of MQT and MQY (the “Funds”) approved changes to certain investment policies of the Funds.

Historically, under normal market conditions, each Fund has been required to invest at least 80% of its assets in municipal bonds either (i) insured under an insurance policy purchased by the Fund or (ii) insured under an insurance policy obtained by the issuer of the municipal bond or any other party. In September 2008, the Funds adopted an amended investment policy of purchasing only municipal bonds insured by insurance providers with claims-paying abilities rated investment grade at the time of investment (the “Insurance Investment Policy”).

Following the onset of the credit and liquidity crises, the claims-paying ability rating of most of the municipal bond insurance providers has been lowered by the rating agencies. These downgrades have called into question the long-term viability of the municipal bond insurance market, which has the potential to severely limit the ability of BlackRock Advisors, LLC, the Fund’s investment advisor (the “Manager”), to manage the Funds under the Insurance Investment Policy.

As a result, on September 1, 2010, the Manager recommended, and the Board approved, the removal of the Insurance Investment Policy. As a result of this investment policy change, the Funds will not be required to dispose of assets currently held within the Funds. The Funds will maintain, and have no current intention to amend, their investment policy of, under normal market conditions, generally investing in municipal obligations rated investment grade at the time of investment.

As each Fund increases the amount of its assets that are invested in municipal obligations that are not insured, each Fund’s shareholders will be exposed to the risk of the failure of such securities’ issuers to pay interest and repay principal and will not have the benefit of protection provided under municipal bond insurance policies. As a result, shareholders will be more dependent on the analytical ability of the Manager to evaluate the credit quality of issuers of municipal obligations in which each Fund invests. The Board believes that the amended investment policy is in the best interests of each Fund and its shareholders because it believes that the potential benefits from increased flexibility outweigh the potential increase in risk from the lack of insurance policies provided by weakened insurance providers. The new investment policy cannot assure that each Fund will achieve its investment objective.

As disclosed in each Fund’s prospectus, each Fund is required to provide shareholders 60 days notice of a change to the Insurance Investment Policy. Accordingly, a notice describing the changes discussed above was mailed to shareholders of record as of September 1, 2010. The new investment policy took effect on November 9, 2010.

The Manager has been gradually repositioning each Fund’s portfolio over time, and during such period, each Fund may continue to hold a substantial portion of its assets in insured municipal bonds. At this time the repositioning of each Fund’s portfolio is still taking place, and the Funds will continue to be subject to risks associated with investing a substantial portion of their assets in insured municipal bonds until the repositioning is complete. No action is required by shareholders of the Funds in connection with this change.

The approved changes did not alter any Fund’s investment objective.

 

 

 




ANNUAL REPORT

APRIL 30, 2011

49




 


Additional Information (concluded)

 


BlackRock Privacy Principles


BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

 

 

 




50

ANNUAL REPORT

APRIL 30, 2011



This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Funds have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in the short-term dividend rates of the Preferred Shares, currently set at the maximum reset rate as a result of failed auctions, may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

 

 

(GO PAPERLESS LOGO)

 

 

 

#MYQII-4/11

(BLACKROCK LOGO)


Item 2 –

Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer, or controller, or persons performing similar functions. During the period covered by this report, there have been no amendments to or waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com.

 

 

Item 3 –

Audit Committee Financial Expert – The registrant’s board of directors (the “board of directors”), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent:

 

 

 

Frank J. Fabozzi

 

James T. Flynn

 

W. Carl Kester

 

Karen P. Robards

 

 

 

The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.

 

 

 

Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements.

 

 

 

Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.

 

 

 

Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.

 


Item 4 –

Principal Accountant Fees and Services

 

 

 

The following table presents fees billed by Deloitte & Touche LLP (“D&T”) in each of the last two fiscal years for the services rendered to the Fund:

 

 

(a) Audit Fees

(b) Audit-Related Fees1

(c) Tax Fees2

(d) All Other Fees3

Entity Name

Current Fiscal Year End

Previous Fiscal Year End

Current Fiscal Year End

Previous Fiscal Year End

Current Fiscal Year End

Previous Fiscal Year End

Current Fiscal Year End

Previous Fiscal Year End

 

 

 

 

 

 

 

 

 

BlackRock MuniYield Quality Fund, Inc.

$37,800

$36,700

$3,500

$3,500

$16,100

$6,100

$0

$0

 

     

The following table presents fees billed by D&T that were required to be approved by the registrant’s audit committee (the “Committee”) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (“Investment Adviser”) and entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (“Fund Service Providers”):

 

 

Current Fiscal Year End

Previous Fiscal Year End

(b) Audit-Related Fees1

$0

$0

(c) Tax Fees2

$0

$0

(d) All Other Fees3

$3,030,000

$2,950,000

 

1 The nature of the services include assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees.

2 The nature of the services include tax compliance, tax advice and tax planning.

3 The nature of the services include a review of compliance procedures and attestation thereto.

 

 

     

(e)(1) Audit Committee Pre-Approval Policies and Procedures:

 

 

 

The Committee has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the Investment Adviser and Fund Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.

 


     

Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.

 

 

 

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

 

 

 

(f) Not Applicable

 

 

 

(g) The aggregate non-audit fees paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Fund Service Providers were:

 

Entity Name

Current Fiscal Year End

Previous Fiscal Year End

 

 

 

BlackRock MuniYield Quality Fund, Inc.

$19,600

$20,377

 

 

 

Additionally, SAS No. 70 fees for the current and previous fiscal years of $3,030,000 and $2,950,000, respectively, were billed by D&T to the Investment Adviser.

 

 

 

(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser (not including any non-affiliated sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by the registrant’s investment adviser), and the Fund Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

 

 

Item 5 –

Audit Committee of Listed Registrants

 

     

(a) 

The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):

 

 

 

 

 

Michael Castellano

 

 

Frank J. Fabozzi

 

 

James T. Flynn

 

 

W. Carl Kester

 

 

Karen P. Robards

 

 

 

 

(b) 

Not Applicable

 


Item 6 –

Investments

 

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.

 

(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

 

 

Item 7 –

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The board of directors has delegated the voting of proxies for the Fund’s portfolio securities to the Investment Adviser pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov.

 

 

Item 8 –

Portfolio Managers of Closed-End Management Investment Companies – as of April 30, 2011.

 

     

(a)(1)

The registrant is managed by a team of investment professionals comprised of Michael Kalinoski, Director at BlackRock, Inc. (“BlackRock”), Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock and Walter O’Connor, Managing Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Each is jointly responsible for the day-to-day management of the registrant’s portfolio, which includes setting the registrant’s overall investment strategy, overseeing the management of the registrant and/or selection of its investments. Messrs. Kalinoski, Jaeckel and O’Connor have been members of the registrant’s portfolio management team since 2000, 2006 and 2006, respectively.

 

Portfolio Manager

Biography

Michael Kalinoski

Director of BlackRock since 2006; Director of Merrill Lynch Investment Management, L.P. (“MLIM”) from 1999 to 2006.

Theodore R. Jaeckel, Jr.

Managing Director at BlackRock since 2006; Managing Director of MLIM from 2005 to 2006; Director of MLIM from 1997 to 2005.

Walter O’Connor

Managing Director of BlackRock since 2006; Managing Director of MLIM from 2003 to 2006; Director of MLIM from 1998 to 2003.

 


 

(a)(2)

As of April 30, 2011:

 

 

(ii) Number of Other Accounts Managed

and Assets by Account Type

(iii) Number of Other Accounts and

Assets for Which Advisory Fee is

Performance-Based

(i) Name of

Portfolio Manager

Other

Registered

Investment

Companies

Other Pooled

Investment

Vehicles

Other

Accounts

Other

Registered

Investment

Companies

Other Pooled

Investment

Vehicles

Other

Accounts

Michael Kalinoski

7

0

0

0

0

0

 

$3.60 Billion

$0

$0

$0

$0

$0

Theodore R. Jaeckel, Jr.

68

0

0

0

0

0

 

$19.24 Billion

$0

$0

$0

$0

$0

Walter O’Connor

68

0

0

0

0

0

 

$19.24 Billion

$0

$0

$0

$0

$0

 

 

(iv)

Potential Material Conflicts of Interest

 

     

BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund.  In addition, BlackRock, its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund.  BlackRock, or any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities.  Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information.  Certain portfolio managers also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund.  It should also be noted that portfolio managers may manage certain accounts that are subject to performance fees.  In addition, portfolio managers may assist in managing certain hedge funds and may be entitled to receive a portion of any incentive fees earned on such funds and a portion of such incentive fees may be voluntarily or involuntarily deferred.  Additional portfolio managers may in the future manage other such accounts or funds and may be entitled to receive incentive fees.

 


    

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly.  When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties.  BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment.  To this end, BlackRock has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.

 

 

(a)(3)

As of April 30, 2011:

 

      

Portfolio Manager Compensation Overview

 

 

 

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.

 

 

 

Base compensation. Generally, portfolio managers receive base compensation based on their position with the firm.

 

 

 

Discretionary Incentive Compensation

 

 

 

Discretionary incentive compensation is a function of several components: the performance of BlackRock, the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s performance and contribution to the overall performance of these portfolios and BlackRock.  In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured.  BlackRock’s Chief Investment Officers determine the benchmarks against which the performance of funds and other accounts managed by each portfolio manager is compared and the period of time over which performance is evaluated.  With respect to the portfolio managers, such benchmarks include a combination of market-based indices (e.g., Barclays Capital Municipal Bond Index), certain customized indices and certain fund industry peer groups.

 

 

 

Among other things, BlackRock’s Chief Investment Officers make a subjective determination with respect to each portfolio manager’s compensation based on the performance of the Funds and other accounts managed by each portfolio manager relative to the various benchmarks. 

 

 

 

Performance of fixed income funds is measured on both a pre-tax and after-tax basis over various time periods including 1-, 3-, 5- and 10-year periods, as applicable. With respect to the performance of the other listed Index and Multi-Asset Funds, performance is measured on, among other things, a pre-tax basis over various time periods including 1-, 3- and 5-year periods, as applicable.

 


 

Distribution of Discretionary Incentive Compensation

 

 

 

Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock restricted stock units which vest ratably over a number of years. For some portfolio managers, discretionary incentive compensation is also distributed in deferred cash awards that notionally track the returns of select BlackRock investment products they manage and that vest ratably over a number of years. The BlackRock restricted stock units, upon vesting, will be settled in BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods. Providing a portion of annual bonuses in deferred cash awards that notionally track the BlackRock investment products they manage provides direct alignment with investment product results.

 

 

 

Long-Term Incentive Plan Awards — From time to time long-term incentive equity awards are granted to certain key employees to aid in retention, align their interests with long-term shareholder interests and motivate performance.  Equity awards are generally granted in the form of BlackRock restricted stock units that, once vested, settle in BlackRock common stock. Messrs. Jaeckel and O’Connor have each received long-term incentive awards.

 

 

         

Deferred Compensation Program — A portion of the compensation paid to eligible BlackRock employees may be voluntarily deferred into an account that tracks the performance of certain of the firm’s investment products. Each participant in the deferred compensation program is permitted to allocate his deferred amounts among various BlackRock investment options. All of the portfolio managers have participated in the deferred compensation program.

 

 

 

Other compensation benefits. In addition to base compensation and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:

 

 

 

Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation.  The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into an index target date fund that corresponds to, or is closest to, the year in which the participant attains age 65.  The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date.  Annual participation in the ESPP is limited to the purchase of 1,000 shares or a dollar value of $25,000.  Each portfolio manager is eligible to participate in these plans.

 

 

(a)(4)

Beneficial Ownership of Securities – As of April 30, 2011.

 

Portfolio Manager

Dollar Range of Equity Securities
of the Fund Beneficially Owned

Michael Kalinoski

None

Theodore R. Jaeckel, Jr.

None

Walter O’Connor

None

 

      

(b) Not Applicable

 


Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report.

 

 

Item 10 –

Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.

 

 

Item 11 –

Controls and Procedures

 

 

 

(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

 

 

 

(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

 

Item 12 –

Exhibits attached hereto

 

 

 

(a)(1) – Code of Ethics – See Item 2

 

 

 

(a)(2) – Certifications – Attached hereto

 

 

 

(a)(3) – Not Applicable

 

 

 

(b) – Certifications – Attached hereto

 


    

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

BlackRock MuniYield Quality Fund, Inc.

 

 

  By: /s/ John M. Perlowski  
    John M. Perlowski
    Chief Executive Officer (principal executive officer) of
    BlackRock MuniYield Quality Fund, Inc.
   
  Date: July 5, 2011
   
  Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
   
  By: /s/ John M. Perlowski  
    John M. Perlowski
    Chief Executive Officer (principal executive officer) of
    BlackRock MuniYield Quality Fund, Inc.
   
  Date: July 5, 2011
   
  By: /s/ Neal J. Andrews  
    Neal J. Andrews
    Chief Financial Officer (principal financial officer) of
    BlackRock MuniYield Quality Fund, Inc.
     
  Date: July 5, 2011